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

Location
Santa Cruz County, in Arizona, in the US.

Project Owner/s
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) on the Taylor deposit has tipped it 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 deposit has total mineral resources of 138-million tonnes grading at 3.82% of zinc, 4.25% lead and 81 g/t silver.

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 Clark manganese/zinc/silver oxide deposit, located adjacent to and up-dip of the Taylor deposit, has the potential to underpin a second development stage at Hermosa. The 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
Not stated.

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 Taylor deposit is progressing to a feasibility study, which is expected to be completed in 2023. A final investment decision to construct Taylor is expected in mid-2023. Meanwhile, the Clark deposit has advanced to a PFS for a potential underground mine development using longhole open stoping accessed from existing patented mining claims. The first phase of the PFS is expected to be completed in late 2022, at which point a preferred development pathway will be selected. Many areas of the PFS, including mine planning, hydrogeology, infrastructure, sustainability and permitting, will benefit from work completed in the Taylor PFS.

The PFS will also review the potential to pursue an integrated development of Taylor and Clark.

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); and CPE (off-site roads).

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