The top primary silver mining company in the world, Fresnillo LLC saw its averge silver yield decline 13% in 2012. The large percentage of the decline came from its flagship Fresnillo mine whose average silver ore grade fell from 396 g/t in 2011 to 328 g/t in 2012.
The figures for the chart above came from Fresnillo LLC’s two primary silver mines, Fresnillo and Saucito. Fresnillo’s average silver yield declined from 11.7 oz/t in 2011 to 9.6 oz/t in 2012, whereas Saucito actually increased its average yield from 7.2 oz/t in 2011 to 7.8 oz/t in 2012.
According to Fresnillo’s 2012 Annual Report:
Annual silver production at Fresnillo decreased 12.9% from 2011 due to the expected and natural decline in ore grades. Based on current assumptions, we expect ore grades to decline to approximately 300 g/t level in 2013, then to remain within in the range between 300 g/t and 325 g/t for four years before declining in the following years towards the ore grade in reserve (281 g/t).
As I mentioned before, as ore grades decline, it takes more energy to produce the same or less metal. The company has been working on upgrading the milling capacity from 8,000 to 10,000 tonnes per day at Fresnillo to make up for the declining ore grade. However, they have decided to analyze the situation and to see how to best develop the project to the benefit of all operations within the district.