Vancouver-based MAG Silver Corp (TSX: MAG) (NYSE American: MAG) and Mexico’s Fresnillo plc (LON: FRES) have had the necessary testing completed by Mexican electrical authorities to connect their silver mine to the national power grid.
The companies announced news of the milestone on Wednesday and say the entire system at the site is now energized and commissioning of the project has formally started. MAG and Fresnillo say once the commissioning is concluded ore will be processed at the site.
The news follows Fresnillo installing substation equipment at the site on behalf of both companies which is compatible with older infrastructure from the national power company. Production there will now be slowly ramped up with the intention of reaching full nameplate capacity (maximum output) by April 2023.
The Juanicipio project contains high-grade silver along with gold, lead and zinc. MAG says the site is only 5 per cent explored and has a strong financial position.
“Connection to the power grid is a long-awaited milestone for the Juanicipio Project, our stakeholders and shareholders alike, and we are thankful for the understanding and patience as the final steps to connect the plant to the national power grid were concluded,” said George Paspalas, President and CEO of MAG Silver.
“We now turn to working with Fresnillo to maximize value generation from Juanicipio as we head into ramp-up and full-scale operations with Juanicipio graduating into a Tier-1 silver producer.”
MAG Silver has a 44 per cent stake at Juanicipio and Fresnillo has the other 66 per cent share.
Fresnillo says Juanicipio is its next major growth project and that from next year onward the site will be a major influence in its operations. The company also says it expects an annual silver production rate of 11.7 moz and a gold production rate of 42.5 koz per annum over the course of the mine’s life.
MAG Silver stock decreased by 2.23 per cent today to $21.08 on the Toronto Stock Exchange.
Fresnillo stock increased by 1.74 per cent today to £8.42 on the London Stock Exchange.