South32 Ltd. (ASX, LSE, JSE: S32) announced on Monday the completion of a pre-feasibility study (PFS) for the Taylor deposit, part of the company's 100% owned Hermosa property in Arizona.
Hermosa is a polymetallic development project situated in the Patagonia Mountains, about 80 km southeast of Tucson. It comprises two major mineral deposits: the Taylor zinc-lead-silver sulphide deposit and the Clark zinc-manganese-silver oxide deposit.
Taylor is the first development option at Hermosa. The deposit has an estimated mineral resource of 138 million tonnes averaging 3.82% zinc, 4.25% lead and 81 g/t silver.
The newly completed PFS for Taylor outlines the potential for a large-scale, highly productive underground mine with estimated yearly production of 111,000t zinc, 138,000t lead and 7.3moz silver. The current resource supports a mine life of 22 years and a nameplate capacity of 4.3 million tonnes.
According to South32, the PFS results support Taylor’s potential to be the first development of a multi-decade operation, establishing Hermosa as "a globally significant producer" of metals critical to a low-carbon future, delivering attractive returns over multiple stages.
An initial development case demonstrates a sustainable, highly productive zinc-lead-silver underground mine and conventional process plant, in the first quartile of the industry cost curve, the diversified miner added.
“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," South32 CEO Graham Kerr commented in Monday's press release.
Continuing with the sustainability theme, Kerr also said: “We are designing the Taylor deposit to be our first ‘next generation mine’, using automation and technology to minimize our impact on the environment and to target a carbon neutral operation in line with our goal of achieving net zero operational carbon emissions by 2050."
The Taylor deposit will now progress to a feasibility study, including work streams designed to unlock additional value by optimizing operating and capital costs, extending the life of the resource and further assessing options identified to target a carbon neutral operation.
To maintain the preferred development path in the PFS, critical path items including construction and installation of infrastructure to support additional orebody dewatering are planned to start in the second half of this year.
South32 will spend about $55 million in H2 2022 as part of its pre-commitment capital expenditure associated with dewatering. Further investment in Taylor is expected in 2023.
Based on the PFS schedule, and subject to a final investment decision and approvals, shaft development is expected to start in 2024, with first production targeted in 2027.
Meanwhile, a scoping study for the spatially linked Clark deposit has confirmed the potential for a separate, integrated underground mining operation producing battery-grade manganese, as well as zinc and silver.
South32 believes 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.
A PFS for the Clark deposit is due later this year. Its mineral resource is currently estimated at 55 million tonnes averaging 9.08% manganese, 2.31% zinc and 78 g/t silver.
"Beyond Taylor, Clark offers the potential to realize further value from our investment in Hermosa through the production of battery-grade manganese, a mineral designated as critical in the US," CEO Kerr said.
“Additional exploration targets around Taylor and Clark are indicative of further upside while the broader land package contains highly prospective areas for polymetallic and copper mineralization," he added. Continued exploration of this regional-scale land package will be the company's third focus.
Through the completion of surface geophysics, soil sampling, mapping and interpretation of recently acquired data, South32 has identified a highly prospective corridor that will be prioritized for future drilling.
This article was originally posted on www.Mining.com.