17/01/2022 - 13:01

S32 carves out 'next-gen' mine

17/01/2022 - 13:01


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South32 has unveiled initial analysis for a potential $US1.7bn multi-decade metals development at its Hermosa project in Arizona.

S32 carves out 'next-gen' mine
S32 chief executive Graham Kerr. Photo: Attila Csaszar

South32 has unveiled initial analysis for a potential $US1.7bn multi-decade metals development at its Hermosa project in Arizona.

The BHP spin-out informed the market today it had completed a pre-feasibility study for the zinc-lead-silver Taylor deposit, its first development option at the US project.

The asset is hoped to become a significant global metals producer for South32, which is banking on metals such as zinc, lead and silver and their part to play a low carbon future.

S32 said it has designed the operation as its first next-generation mine, planning to use automation and technology to trim carbon emissions and minimise its environmental impact.

It is estimated to cost $US1.7 billion (about $A2.3 billion) to get the Taylor deposit up and running.

The deposit is believed to contain about 138 million tonnes, averaging 3.82 per cent zinc, 4.25 per cent lead and 81 grams per tonne of silver, with production slated for 2027.

The plans mark the latest in a string of S32 spending to increase exposure to less carbon-intensive commodities, after entering agreements to buy a 45 per cent stake in the Sierra Gorda copper mine in Chile for $2.8 billion last year and hatching new plans to revive Brazil Aluminium.

Once operational, S32 estimates annual average production for the Taylor deposit to sit around 111 kilotonnes of zinc, 138kt of lead and 7.3moz of silver.

In addition, South32 completed a scoping study for the Clark deposit, which sits within the project, as potential for a manganese, zinc and silver mining operation.

S32 chief executive Graham Kerr said Hermosa had immense potential.

“Completing the pre-feasibility study for the Taylor deposit is an important milestone that demonstrates its potential to be a globally significant and sustainable producer of base and precious metals in the industry’s first cost quartile,” Mr Kerr said in a statement.

“The future development of Taylor provides a platform from which to realise Hermosa’s immense potential.

“It will further strengthen our portfolio and align with the already substantial growth in production of metals critical to a low-carbon future that we have embedded in the portfolio over the past six months.”

South32 will look to push ahead to complete a feasibility study for the Taylor deposit by 2023.

South32 shares are down 3.35 per cent to trade at $4.04.


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