STRENGTHENED BY

Our innovation strategy focuses on developing new markets, products and applications, as well as on designing processes and optimizing the existing ones, to strenghen our competitiveness.

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women perform key functions in the Central Laboratory and the Technology Research & Development Center, contributing their talents and skills.

ENERGY AND TECHNOLOGY

Our Technology Research & Development Center continued to support operations and projects to improve efficiency and productivity. The highlights for each area of activity in 2020 are described below:

Mineral processing

  • Support for the startup and stabilization of processes at the new Capela mine to obtain high-grade lead, copper and zinc concentrates.
  • Experimentation with ore obtained in the latest phase of exploration at the Orisyvo project to confirm process parameters and determine gold and silver recoveries versus head grade.
  • Geo-metallurgical assessment of ore from various operating units to determine in advance how it will perform in the flotation and cyanidation plants. Plant 2 at the Sabinas unit currently produces copper and zinc concentrates, and head grade of lead is expected to rise in the short term, so a sequential flotation process was developed to efficiently obtain lead concentrates, in addition to copper and zinc.
  • Support for the startup and operation of activated carbon columns at Noche Buena to make recoveries of dissolved gold more efficient.
  • Analysis of ore from Fresnillo, Ciénega and Saucito in order to determine a finer grade for milling and thus improve gold and silver recoveries and reduce impurities in the concentrates.
  • Chemical and mineralogical specification of tailings, both at operating mines and closed facilities.
  • Follow-up on the evaluation of new technologies like the Jameson Cell process for improving concentration in fine particles from high-impact crushers and preconcentration of ore through X-ray sensors.
The Technology Research & Development Center supported the startup and stabilization of the Capela mining unit.

Metallurgical processes

  • Basic engineering of a pyrometallurgical process to recover gold, silver and lead from the lead-silver cement generated at the zinc plant.
  • Industrial-level evaluation of a pyrometallurgical process for recovering gold, silver and lead from byproducts at the lead smelter.
  • A technological pre-feasibility study that found high potential for recovering gold, silver, lead and zinc by processing slag stored in the high-temperature blast furnaces. This study will be validated in pilot testing.
  • At the start of operations of the Silver II recovery plant, ammonia was replaced with sodium ion to precipitate jarosite without gold and silver, which reduced operating costs. Validation of the process to add consistency to the jarosite and activities to optimize the direct leaching process for high iron content zinc concentrates.
  • Development of a laboratory-level process to remove elemental sulfur from the residue from direct leaching of copper concentrates, in order to improve gold and silver recovery.

Chemical processes

  • Updating of a simulator to predict the behavior of the brine deposit under different operating scenarios.
  • Laboratory testing on obtaining potassium sulfate from brine at Química del Rey. In 2021 this process will be pilot tested.
  • Development of an alternative process for producing magnesium hydroxide with special characteristics in order to meet the needs of our clients; this will produce high-purity sodium chloride as a byproduct.
  • Support in setting up a laboratory at Química del Rey for onsite validation of magnesium hydroxide performance.

We carried out a technological pre-feasibility study for recovering metallic values from slag stored in the high-temperature blast furnaces.
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CONTENTS

2020 brought us great challenges and lessons. Our Annual Report highlights the strengths that have allowed us to overcome difficulties while generating value to our stakeholders.

The following abbreviations will be used throughout the report:

oz =
lb =
Mm3 =
Ml =
Mlb =
Mlbe =
Moz =
koz =
t =
Mt =
kt =
MI =
US$B =
US$M =
US$/t =
US$/oz =
US¢/lb =
US¢/lbe =
ounces
pounds
million cubic meters
million liters
million pounds
million pounds equivalent
million ounces
thousand ounces
metric tons
million metric tons
thousand metric tons
million liters
billion dollars
million dollars
dollars per metric ton
dollars per ounce
dollar cents per pound
dollar cents per pound equivalent

PROFILE
We are a proud Mexican company, committed to our country, with presence in the international market.

FINANCIAL HIGHLIGHTS
In a complex environment, we focused on preserving liquidity, while continuing our priority investments.

MANAGEMENT REPORTS
We manage our business responsibly and prudently, with a long-term vision.

PERFORMANCE
Our operations faced great challenges during the year. We improved our processes and sought cost reduction.

ENERGY AND TECHNOLOGY
We incorporated new technologies to increase productivity and efficiency.

CORPORATE GOVERNANCE
Our corporate governance ensures transparency, the compliance with organizational values and accountability.

INFORMATION FOR SHAREHOLDERS
Contacts available for our shareholders

FINANCIAL STATEMENTS
We present our audited financial information in thousand US dollars.



DISCLAIMER
This Annual Report contains certain forward-looking information relating to Industrias Peñoles, S.A.B. de C.V. and its subsidiaries (Peñoles or the Company) that is based on assumptions made by its management. Such information, as well as the statements with respect to future events and expectations are subject to certain risks, uncertainties and factors that could cause the actual results, performance or achievements of the Company to be materially different at any time. Such factors include changes in general economic, governmental policy and/or business conditions nationally and globally, as well as changes in interest rates, inflation rates, exchange rates, mining performance in general, metal demand and quotations, and raw material and fuel prices, among others. Due to these risks and factors, actual results may vary materially from the estimates described herein, for which reason Peñoles does not assume any obligation with respect to such variations or to information provided by official sources.