San Francisco Ramp-Up Nearing Completion and on Track to Return to Full Scale Commercial Production by June 2021
April 13, 2021
Toronto, Ontario – April 13, 2021 – Magna Gold Corp. (TSXV: MGR, OTCQB: MGLQF) (“Magna” or the “Company”) is pleased to announce its preliminary operating results for the three months ended March 31, 2021.
The operational ramp-up at the San Francisco mine has been progressing well. Production levels have benefited from the accelerated stripping program, which has increased productivity and efficiency at the mine. As a result, Q1 2021 has shown progressive month-to-month growth in gold production with 3,085 ounces in January, 2,670 ounces in February and 4,030 ounces in March. Magna continues to see growth in production post Q1 2021 and anticipates the mine will return to full scale commercial production by June 2021, starting H2 at a production run rate of over 6,000 ounces per month and exiting the year with over 7,500 ounces per month, resulting in meaningful growth to sustained free cash flow generation. Magna reiterates that it remains on track to achieve its 2021 production guidance of 55,000 to 65,000 ounces of gold.
Key operating highlights:
- Gold and silver production during the three months ended March 31, 2021 was 9,785 ounces and 8,093 ounces, respectively. Compared to the three months ended December 31, 2020, this represents a material increase of 31% and 76% to gold and silver production, respectively.
- Average gold grade of fresh ore processed from open pit over the three months ended March 31, 2021 was 0.32 g/t compared to an average gold grade of 0.25 g/t over the three months ended December 31, 2020, representing an increase of 28% largely driven by the accelerated stripping of waste.
- Gold placed on the leach pads, including ore from the open pits and from the underground mine development, during the three months ended March 31, 2021 was 12,177 ounces, representing an increase of 29% compared to 9,411 ounces placed on the pads during the three months ended December 31, 2020.
- Strip ratio over the three months ended March 31, 2021 was 8.4:1, representing a modest increase from a strip ratio of 6.9:1 over the three months ended December 31, 2020 due to the accelerated waste stripping program implemented by the Company. The strip ratio is expected to decline to 3.5 during H2 2021 once operational steady state is achieved and average 2.5 over the life-of mine.
- Ongoing operational improvements were realized from addressing the deficiencies of the past, including leach solution imbalances that affected costs and gold recoveries, as well as extensive repair and refurbishment of the plant and equipment, which had not received proper maintenance by the prior operator for an extended period of time.
Summary of Q1 2021 Operating Results
|Ore mined (dry kt)||619||427||192||45%|
|Ore mined grade (g/t Au)||0.34||0.30||0.04||13%|
|Waste mined (kt)||5,195||2,954||2,241||76%|
|Total mined (kt)||5,814||3,381||2,433||72%|
|Avg. total mined (t/d)||64,597||36,746||27,851||76%|
|CRUSHING AND PROCESSING|
|Ore processed (kt) – From open pit||611||416||195||47%|
|Ore processed grade (g/t Au) – From open pit||0.32||0.25||0.07||28%|
|Ore processed (kt) – All sources||744||746||(2)||(0%)|
|Ore processed grade (g/t Au) – All sources||0.51||0.39||0.12||31%|
|Gold placed on pad (ozs) – All sources||12,177||9,411||2,766||29%|
|Gold ounces produced (ozs)||9,785||7,485||2,300||31%|
|Silver ounces produced (ozs)||8,093||4,609||3,484||76%|
|Gold ounces sold (ozs)||8,430||7,827||603||8%|
|Silver ounces sold (ozs)||6,961||3,756||3,205||85%|
Mr. Arturo Bonillas, President & CEO of Magna commented, “We are extremely proud of our progress at San Francisco – our team has made considerable progress during ramp-up and we are well on our way to establishing San Francisco as a stable free cash flow generator. The evident turnaround of the San Francisco Mine, considered by many as an impossible task one year ago, shows our team’s resourcefulness and commitment to executing our mission to become a profitable precious metal producer. In addition to achieving commercial production at San Francisco in the coming months, we will remain focused on realizing further operational efficiencies, expanding mineral reserves and resources and seeking growth opportunities externally and within our significant pipeline of projects.”
The Company intends to provide an update to its ongoing drill program in Q3, which is already showing a positive potential impact to current internal 2021 and 2022 gold production expectations.