Hudbay says preliminary economic assessment delivers ‘robust’ project economics for the Copper World Complex in Arizona
(Kitco News) - On Wednesday, Hudbay Minerals (TSX: HBM) announced the results of the preliminary economic assessment ("PEA") of its 100%-owned Copper World Complex in Arizona, which includes the recently discovered Copper World deposits along with the Rosemont deposit.
The company said that the Copper World Complex is planned to be a traditional open pit shovel and truck operation with a copper sulfide mineral processing plant and an oxide leach processing facility producing copper cathode, molybdenum concentrate and silver doré.
The Copper World Complex PEA contemplates a two-phased mine plan with the first phase reflecting a standalone operation with processing infrastructure on Hudbay's private land and mining occurring on patented mining claims.
According to the study, Phase I is expected to require only state and local permits and reflects a 16-year mine life. Phase II extends the mine life to 44 years through an expansion onto federal land to mine the entire deposits. Phase II would be subject to the federal permitting process.
Phase I contemplates average annual copper production of up to 100,000 tonnes over a 16-year mine life, including approximately 86,000 tonnes of copper from mined resources at average cash costs and sustaining cash costs of $1.15 and $1.44 per pound of copper, respectively.
The company noted that at a copper price of $3.50 per pound, the after-tax net present value of Phase I using a 10% discount rate is $741 million and the internal rate of return is 17%.
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With the inclusion of Phase II and assuming a copper price of $3.50 per pound, the after-tax net present value of the total project using a 10% discount rate increases to $1,296 million and the internal rate of return is 18%.
"The Copper World Complex PEA represents the next leg of copper growth at Hudbay, generating significant value for all of our stakeholders with robust project economics and many benefits for the community and local economy in Arizona," said President and CEO Peter Kukielski.
He added that the Copper World Complex is expected to be the next major copper operation in the United States, delivering the copper needed to meet domestic electrification and decarbonization supply chain needs.
Hudbay also announced it expects to advance a pre-feasibility study for Phase I of the Copper World Complex in the second half of 2022, which will focus on converting the remaining inferred mineral resources to measured and indicated and evaluating many of the project optimization and upside opportunities.
Hudbay is a diversified mining company primarily producing copper concentrate (containing copper, gold and silver), zinc metal and silver/gold doré. Directly and through its subsidiaries, Hudbay owns three polymetallic mines, four ore concentrators and a zinc production facility in northern Manitoba and Saskatchewan (Canada) and Cusco (Peru), and copper projects in Arizona and Nevada (United States).