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

Location
Santa Cruz County, 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) 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
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 project has been selected for a $166-million financial grant from the United States Department of Energy’s (DoE's) Battery Materials Processing and Battery Manufacturing Programme to support the potential development of a commercial-scale manganese production facility.

“We welcome this grant,” South32 CEO Graham Kerr has said, describing it as recognition of the promise of Hermosa’s Clark deposit to likely supply battery-grade manganese to the emerging North American market.

“Following the final investment approval earlier in the year, construction of our large-scale, long-life Taylor zinc/lead/silver project is progressing as planned.

“Our investment in Taylor will unlock value for future growth options, including Clark, by establishing significant shared infrastructure.”

A decline at Clark to enable bulk sampling through a demonstration plant and further underground exploration is under construction and decline access is scheduled for the end of 2025. This work is being supported through a $20-million grant through the Defence Production Act Investment Programme.

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.