Imagine a property with such mineral potential as to have its own mining company created. At the heart of Zacatecas’ Fresnillo district, the high-grade Juanicipio property has a significant silver, gold, lead and zinc vein system that meant it was worth the effort of creating Minera Juanicipio. After being discovered by tenured Geologist Peter Megaw, MAG Silver entered a JV with Fresnillo in a 44/56 percent partnership to further explore and develop the asset.
But what is so mesmerizing about Juanicipio? Expected to start production 1H20, the annual average anticipated total output reaches 30 million silver ounces and 30,000 gold ounces. The asset also has attributable and inferred resources of 248 million silver ounces and 1.4 million gold ounces over a 19-year total mine life.
Based on 2017’s PEA, Juanicipio appears to be an economically robust project with minimum financial or development risks. The report highlights a 4,000t/d production rate on a 100-percent project basis. Also, the initial forecasted capital cost of US$360 million from Jan. 1, 2018 to starting production in 2020 is expected to be returned in less than two years after plant start-up. The property still requires a significant amount of infrastructure development, including a new plant and tailings location on flat open ground, an underground crusher, an ore conveyor system and several ramp expansions.
While Minera Juanicipio has its own Board of Directors and Technical Committees to design and approve exploration and development programs, both are being carried by the property’s operator, Fresnillo, with an estimated pre-operative CAPEX of US$305 million. Underground development on the asset began in October 2013 and has been since mainly focused on the ramp decline to the main vein, Valdecañas.
So far, the drilling of the property’s deep zone is ongoing, but has already confirmed continuous mineralization extending to the Valdecañas Bonanza zone in East and West veins. The 30,944m drilled reported by Fresnillo yielded results with a 33.7 percent and 9.9 percent increase in gold and silver resources, respectively due to a 38.9 percent increase in tonnage. There was a 3.8 percent and 20.8 percent reduction in gold and silver grades, respectively compared to those measured in 2016. Fresnillo’s next step for the property considers a 20,000m drilling program.