VANCOUVER (miningweekly.com) – Mexican precious metals producer Fresnillo has revealed that the start-up date for its 56%-owned Juanicipio project is likely to be pushed out to the first half of 2019, instead of the previously targeted mid-2018 start date.

Management stated on an analyst conference call on Tuesday morning that the operation, which is a joint venture with MAG Silver, would likely also be bigger than the 2 600 t/d originally planned in 2012.

Fresnillo is now considering a 4 000 t/d operation, with a 15-year mine life. It is working on updating the capital expenditure (capex) budget and on determining the additional equipment and infrastructure needs for the proposed expanded operation. The potential change of scope is underpinned by the recent discovery of significantly higher tonnes of relatively good grade ore at depth.

Fresnillo expects to have a board decision on the construction of the new mine plan in the next three to four months.

In response to analyst questions regarding the ownership of the project, Fresnillo CEO Octavio Alvídrez said the company was comfortable working with MAG in a joint venture and was not looking to buy MAG's stake in the project.

“In our view, this larger scope will likely push MAG back into an underfunded position due to a likely higher capex budget. However, from our previous note on the most recent drill results, we continue to believe the market will support a larger capex budget, as we expect the economics to show considerable upside from the 2012 report,” Desjardins Capital Markets analyst Michael Parkin said in a note to clients.

Fresnillo also on Tuesday reported a 556.5% year-on-year increase in net profit to $425-million for the 2016 financial year.

Silver output rose 7.1% year-on-year to 50.3-million ounces, while gold output increased 22.8% to 935 513 oz in 2016.

Revenue was up 31.9% for the full year at $1.9-billion, with net cash from operating activities up 65.4% to $898-million, compared with $542.9-million in 2015.