Canadian diversified miner Hudbay has unveiled the preliminary economic assessment (PEA) for its Copper World project, in Arizona, which represents the next leg of the company’s copper growth strategy.

The Copper World project, which will be developed in two phases, has an aftertax net present value (NPV) of $1.3-billion and generates an 18% internal rate of return (IRR) at $3.50/lb.

“We have been successfully executing an alternative Arizona strategy since 2019 to deliver this attractive project, which is significantly de-risked and has the potential to nearly double our annual copper production while maintaining Hudbay’s first quartile cash cost positioning,” said CEO Peter Kukielski.

Hudbay delivered Copper World as an alternative to its Rosemont project, which faces legal difficulties. Three years ago, the US District Court ruled against the final record of decision that the US Forest Service issued for the Rosemont copper deposit. That approval was based upon a standalone development plan for the Rosemont deposit using federal land as set forth in Hudbay’s 2017 feasibility study and technical report.

Copper World will only venture onto federal land in the second phase.

Phase 1 is a standalone operation on private land and patented mining claims, with a 16-year mine life, producing 86 000 t/y at cash costs and sustaining cash costs of $1.15/lb and $1.44/lb, respectively, generating an after-tax NPV of $741-million and an IRR of 17%.

Phase 1 includes a 60 000 t/d sulphide concentrator, a 20 000 t/d oxide heap leach, a solvent extraction and electrowinning facility and a concentrate leach facility with an initial capital cost estimate of about $1.9-billion.

The concentrator is intended to expand to 90 000 t/d in Phase 2.

The processing facilities will have a production capacity of 100 000 t/y of copper cathode during Phase I, expanding to 125 000 t/y of copper cathode during Phase 2.

In Phase 2, when mining activities will move onto federal land, the mine life will be extended to 44 years with average copper production of 101 000 t/y at cash costs and sustaining cash costs of $1.11/lb and $1.42/lb copper, respectively.

Phase 2 provides additional optionality with an after-tax NPV of $555-million and an IRR of 49%. The projected NPV at the time of sanctioning Phase 2 is $2.8-billion.

“Phase 1 represents an attractive standalone operation on our private land and Phase 2 provides significant long-term growth potential in this prolific district. Through applying our core competencies of exploration, mine planning and project development, 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,” said Kukielski.

Hudbay is evaluating opportunities to optimise the project, including the potential to expand Phase 1 beyond 16 years with additions to the company’s private land package for tailings and waste rock storage and the potential to accelerate Phase 2 if federal permits are received earlier than as outlined in the PEA.