This first development material was processed through the nearby Fresnillo processing plant with the lead and zinc concentrates treated at market terms under off-take agreements with Met-Mex Peñoles in Mexico. The revenue from this production, net of processing and treatment costs, will be used by the joint venture to offset cash requirements of the initial project capital. “This first production from Juanicipio is a major milestone for the company,” MAG Silver President and CEO George Paspalas said. “The successful processing of development material not only provides cash flow to offset capex, but further de-risks the project as it heads toward commercial production.

“We are looking forward to the first production stope coming online in Q4 2020, and our potential to continue to produce cash whilst we complete the process plant construction.” Fresnillo expects to process an average of 16,000 mt per month of mineralized material from the joint venture through its processing facility to mid-2021, at which time the Juanicipio beneficiation plant is scheduled for commissioning.

Development continues on site and the final preparation of the first production stope was concluded during the third quarter. Also during the quarter, progress was achieved on the construction of the Juanicipio processing plant.