Name of the Project
Hermosa zinc/lead/silver project.

Location
Santa Cruz County, Arizona, in the US.

Project Owner/s
Diversified miner South32.

Project Description
Hermosa is a polymetallic development comprising the zinc/lead/silver Taylor sulphide deposit, the zinc/manganese/silver Clark oxide deposit and an extensive, highly prospective land package, with the potential for further polymetallic and copper mineralisation.

Taylor
A prefeasibility study (PFS) has tipped the deposit to be the first development of a multidecade operation, establishing the project as a globally significant producer of metals critical to a low carbon future. The deposit is being designed as South32’s first ‘next-generation mine’, with automation and technology used to minimise its impact on the environment and target a carbon-neutral operation, in line with South32’s goal of achieving net-zero operational carbon emissions by 2050.

The PFS is based on a dual-shaft underground zinc/lead/silver mine development using longhole open stoping and a conventional sulphide ore flotation circuit, producing separate zinc and lead concentrates, with silver by-product credits. The PFS estimates average production of 111 000 t/y of zinc, 138 000 t/y of lead and 7.3-million ounces a year of silver, with the current resource supporting a mine life of 22 years and a nameplate capacity of 4.3-million tonnes.

Clark
The deposit, adjacent to and up-dip of the Taylor deposit, can underpin a second development stage at Hermosa. The deposit has a mineral resource estimate of 55-million tonnes averaging 9.08% manganese, 2.31% zinc and 78% g/t silver. A scoping study has confirmed the potential for a separate, integrated underground mining operation producing battery-grade manganese, as well as zinc and silver.

Potential Job Creation
Once in operation, the project is expected to support up to 900 jobs at peak production and make a long-term contribution to the regional economy.

Net Present Value/Internal Rate of Return
Not stated.

Capital Expenditure
$1.23-billion.

Planned Start/End Date
According to the PFS production schedule, first ore is expected in the 2027 financial year, with a single-stage ramp-up to nameplate production expected in the 2030 financial year.

Latest Developments
The US Forest Service has released a final record of decision, completing the federal National Environmental Policy Act (Nepa) process needed for the project's ancillary infrastructure development on National Forest Service land after years of environmental study, public input and stakeholder consultation.

The Nepa process paves the way for South32 to fully develop the project beyond its privately held land, including building ancillary infrastructure, such as a primary access road and a secondary dry-stack tailings facility, and allowing utility UniSource Energy Services to build a portion of an 138 kV power line on Coronado National Forest land.

Construction is halfway complete on private land. Hermosa was the first mining project added to, and covered under, the federal FAST-41 permitting programme, a process reserved for infrastructure projects that must meet certain rigorous criteria to demonstrate how they will benefit the nation.

Hermosa’s advancement under FAST-41 has not reduced the robustness of environmental review or limit public input. Rather, the process has helped to improve interagency coordination, transparency and accountability across federal agencies while ensuring the project advances through permitting in a timely and disciplined manner.

Key Contracts, Suppliers and Consultants
Fluor (process plant and on-site infrastructure); SRK Consulting (geological and technical reviews); Stantec (mining studies); NewFields (hydrogeology studies); Montgomery & Associates (dewatering and tailings); Black and Veatch, and BQE (water treatment design); CPE (off-site roads); Worley (engineering and procurement services for the underground infrastructure and the surface nonprocess facilities of the zinc/lead/silver Taylor deposit at Hermosa); and Metso (grinding equipment).

Contact Details for Project Information
South32, email InvestorRelations@south32.net.