Tag Archives: Hermosa

South32 signs off on ‘next generation’ Taylor mine development plan at Hermosa

The feasibility study for the Taylor deposit, part of South32’s Hermosa project in Arizona, USA, has lived up to the mining company’s expectations, with final investment approval to develop this resource granted to the tune of $2.16 billion.

Hermosa was the first mining project added to the US Government’s FAST-41 process and is currently the only advanced project in the USA, which could supply two federally designated critical minerals, according to South32.

It is a project that is also set to apply ‘next generation mine’ design principles using automation and technology to drive efficiencies and lower operational greenhouse gas emissions. This includes a plan to incorporate battery-electric LHDs, drilling and ancillary fleets. This strategy, included in the feasibility study, results in improved efficiency, reduced diesel consumption and greenhouse emissions compared with the prefeasibility study on the project.

As well as this, the company plans to develop an integrated remote operations centre (iROC) in Santa Cruz County. The iROC will monitor and control mining, processing, maintenance and engineering to ensure the integration of activities and to optimise the entire value chain. Dry-stack tailings are also included in this development plan.

The feasibilty study highlighted a circa-4.3 Mt/y operation with average payable zinc-equivalent output of circa-253,000 t/y over a 28-year mine life. First production could occur in South32’s 2027 financial year.

The mine design for Taylor is a dual shaft underground mine, employing longhole open stoping with paste backfill. The mine development schedule has been aligned to a federal permitting process under FAST-41, which enables earlier access to multiple mining areas and an efficient ramp up to nameplate processing capacity of 4.3 Mt/y, it says. Shaft sinking is on-track to commence in the first quarter of South32’s 2025 financial year.

South32 Chief Executive Officer, Graham Kerr, said: “Final investment approval to develop Taylor is a major milestone aligned with our strategy to reshape our portfolio toward commodities that are critical for a low-carbon future.

“Taylor is expected to deliver attractive returns over multiple decades, with the feasibility study confirming the potential for a long-life, low-cost, low-carbon operation, with an initial operating life of circa-28 years, an average EBITDA margin of circa-50% and an internal rate of return of circa-12%.”

Kerr added: “As the first phase of a regional scale opportunity at Hermosa, Taylor’s infrastructure including dewatering, power, roads and site facilities, will unlock value for future growth options. These include Clark, our battery-grade manganese deposit, and potential discoveries in our highly prospective regional land package, which has already returned high-grade copper and zinc results from Peake and Flux.”

South32 eyes teleremote loading, dry stacking, ore sorting for Hermosa

South32’s Hermosa project in Arizona, USA, continues to make progress, and recently provided updates on the latest developments in construction, efforts to support local workforce development and benchmarking community health metrics to support future sustainability and safety initiatives.

The feasibility study and an independent peer review for Hermosa’s Taylor deposit is on track for completion by the end of the month, with a final investment decision in the March 2024 quarter.

In May, the Hermosa team began initial excavation for the main exploration shaft and the ventilation shaft to provide underground access to the zinc resource.

Pre-sink activities for both shafts remain on track, with 50 ft (15 m) excavated for the main exploration shaft and 115 ft excavated for a ventilation shaft. This construction will allow the creation of infrastructure needed for safe passage of people and vehicles underground, while total depth of the shafts will be approximately 2,900 ft (884 m).

Taylor will use tele-remote semi-autonomous mucking for production stopes, including for development prior to production mining, South32 says. This will enable operation from the remote operating centre and would ‘engineer out’ vehicle and pedestrian interactions in the production mining area.

The project is also looking to make use of other advanced mining methods such as dry stack tailings, advanced process control, and the use of ore sensing and ore sorting, the company added.

Hermosa Vice President Project Delivery, Andy Thompson, said: “This advanced, underground mining method enables reduced surface impact and the amount of tailings resulting in a more sustainable mine.”

The South32 Hermosa Workforce Development Taskforce has been formed to identify the skills needed and local facilities available to help train, develop and expand the region’s workforce. The taskforce enables the Hermosa team to work with local education experts to develop a clear pathway for training local residents to fill skilled jobs at Hermosa, South32 says.

Skylie Estep, Human Resources Director North America, said “The first step in helping transform the local economy is partnering with community members whose expertise and understanding of our region’s educational needs can help create opportunities, so that the next generation can stay in Santa Cruz County.”

South32 says the Hermosa team has engaged Ramboll, a global consulting firm, to guide a baseline community health assessment and outreach to local public health institutions.

“Protecting the health of our workforce and the local community is our priority, and partnering with third-party public health organisations to regularly monitor and report findings ensures transparency and accountability on this critical metric,” the company said.

A baseline assessment will help Hermosa team to understand what levels of manganese and other minerals already exist in the community and environment, it said. By conducting this assessment before operations begin, the company says it can make sure health and safety controls are in place, better understand any changes over time, and ensure controls remain effective throughout the life of the project.

South32 and Redpath kick off shaft sinking works at Hermosa

South32 has now broken ground on one of two exploration shafts at the Hermosa project in southern Arizona, USA, in a sign of major progress at the base and battery metal project.

This milestone achievement commemorates the initial surface excavation that will be continued by Redpath USA to a planned depth of 900 m, the contractor stated in a LinkedIn post. Redpath and South32 signed a “limited notice to proceed” for shaft engineering and design at Hermosa last year.

Redpath said in this latest post: “The shafts will enable underground access for continued exploration of a world-class deposit containing the US critical mineral zinc as well as lead and silver – minerals needed for supporting electrification and renewable energy.”

In South32’s March quarter results, the company said it invested $176 million over the last nine months as it continued critical path activity and study work for the Taylor zinc-lead-silver deposit and the Clark battery-grade manganese-zinc-silver deposit. It also directed $12 million to capitalised exploration in the nine months ended March 2023 as it continued exploration programs at Taylor and Clark and the copper-lead-zinc-silver Peake prospect 8.

Just last month, the Hermosa project was confirmed by the United States Federal Permitting Improvement Steering Council, an independent federal agency, as the first mining project added to the FAST-41 process, which is focused on supporting informed decision-making while reducing and eliminating unnecessary and costly delays associated with projects.

South32 making engineering and design headway at Hermosa project

A stellar set of annual financial results has provided the ideal backdrop for South32 to update shareholders on its rapidly progressing Hermosa project in Arizona, USA.

Released late last month, the company’s 2022 financial year results showed off record earnings of $2.6 billion, record free cash flow from operations of $2.6 billion and record return on invested capital of 30.1%.

With group copper-equivalent production expected to increase by 14% in the next financial year, South32 looked to be well leveraged to in-demand metal markets at the right time.

The company has progressively been repositioning its portfolio toward metals critical for a low-carbon future, having already established a pipeline of high-quality development options. One of these high-quality development options is Hermosa.

Hermosa, which the company acquired outright back in 2018 as part of a takeover of Arizona Mining, is key to the company’s critical metals pursuit, having exposure to base and battery metals that are expected to grow in demand – both domestically in the US and internationally.

It is being designed as South32’s first ‘next generation mine’, according to Hermosa President, Pat Risner, with a series of technical reports highlighting its use of automation and technology to minimise its impact on the environment and target a carbon-neutral mining scenario in support of the group’s goal of achieving net zero operational greenhouse gas emissions by 2050.

These same reports also highlighted the potential to develop a sustainable, low-cost operation producing zinc, lead and silver from the Taylor deposit, with the bonus of possible battery-grade manganese output for rapidly growing domestic markets from the Clark deposit.

In the latest results, the company said it was devoting $290 million of growth capital expenditure in the 2023 financial year to progressing Hermosa as it invests in infrastructure to support critical path dewatering and progress study work for the Taylor Deposit. This is ahead of a planned final investment decision expected in mid-2023, which should coincide with the feasibility study.

South32 is devoting $290 million of growth capital expenditure in the 2023 financial year to progress Hermosa

Some $110 million of this was assigned to construction of a second water treatment plant (WTP2) to support orebody dewatering at the asset, alongside dewatering wells, piping systems and dewatering power infrastructure.

An additional $95 million was slated for engineering and initial construction ahead of shaft sinking at the operation, plus work to support power infrastructure and road construction.

The remaining amount was expected to support work across the broader Hermosa project, including Clark study costs and the Taylor feasibility study.

All signs from these results are that the company is laying the groundwork to develop this project ahead of that mid-2023 deadline.

In another sign of progress, South32 recently signed a “limited notice to proceed” for shaft engineering and design at Hermosa with contractor Redpath, Risner confirmed, adding that the award represented a positive step forward for the project.

“We look forward to continuing our engagement with local communities and all of our stakeholders as we make further progress with the project,” he said.

Redpath will no doubt be evaluating the technical studies that have been signed off to this point and informing future reports.

The PFS design for Taylor is a dual shaft mine which prioritises early access to higher grade mineralisation, supporting zinc-equivalent average grades of approximately 12% in the first five years of the mine plan. The proposed mining method, longhole open stoping, is similar to that used at Cannington, in Australia, and maximises productivity and enables a single stage ramp-up to the miner’s preferred development scenario of up to 4.3 Mt/y.

Yet, the Clark deposit opportunity – which has become even more tantalising with the US Government invoking the Defense Production Act and supporting the production of critical metals including manganese – could see the plan change.

The company says it may accelerate the prefeasibility study for the Clark deposit, which is spatially linked to the Taylor deposit. A scoping study has previously confirmed the potential for a separate, integrated underground mining operation producing battery-grade manganese, as well as zinc and silver from the deposit.

South32 previously said Clark has the potential to underpin a second development stage at Hermosa, with future studies to consider the opportunity to integrate its development with Taylor, potentially unlocking further operating and capital efficiencies.

With a PFS selection study expected later this year, investors and interested parties will soon know the role Clark could play in the wider Hermosa project.

What is easy to gauge already is that Hermosa is progressing on a track that many other development projects in in-demand sectors have gone down.