Canadian exploration and development company MAG Silver has announced first production from Mexico’s Juanicipio Project, which is operated by Fresnillo with a 56% interest while the remaining 44% is held by MAG Silver.

The project comprises high-grade silver-gold-lead-zinc epithermal vein deposits.

As planned, during the quarter ended 30 September, development material from the project started processing at the Fresnillo beneficiation plant.

Fresnillo reported that during the quarter, 42,476t were processed, with total production of 394 thousand silver ounces, 610 gold ounces, 138t of lead and 174t of zinc.

MAG Silver president and CEO George Paspalas said: “This first production from Juanicipio is a major milestone for the company. 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.”

The lead and zinc concentrates have been treated at market terms as part of off-take agreements signed with Met-Mex Peñoles in Torreón.

The Fresnillo-MAG joint venture (JV) will use the revenue from this production, net of processing and treatment costs to offset cash requirements of the initial project capital.

Through its processing facility, Fresnillo expects to process an average of 16,000t per month of mineralised material from the JV to mid-2021.

The Juanicipio beneficiation plant is slated for commissioning during that time.

MAG Silver noted that development on site will continue.

In April last year, the boards of Fresnillo and MAG Silver approved the development of the $395m silver/gold Juanicipio project located in the Fresnillo District, Zacatecas State.