Hudbay tables enhanced Copper World PFS

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HudBay Minerals Inc.  [HBM-TSX, NYSE] has announced the results of an enhanced pre-feasibility (PFS) study for Phase 1 of its 100%-owned Copper World, copper-molybdenum-silver deposit in Arizona.

Total initial capital costs are estimated a US$1.3 billion for Phase 1, including the cost associated with construction of a concentrator and associated infrastructure. That compares to an earlier estimate of US$1.9 billion.

“The PFS for Phase 1 of Copper World significantly enhances the economics and de-risks the project through higher levels of engineering, a simplified project design, lower upfront capex and a longer mine life,’’ said Hudbay President and CEO Peter Kukielski.

Phase 1 is a standalone operation requiring state and local permits only. It envisages a mine life of 20 years, which is four years longer than the Phase 1 mine life presented in a preliminary economic assessment published in June, 2022 due to an increase in the capacity for tailings and waste disposition as a result of optimizing the site layout.

The second phase of the project is expected to involve an expansion onto federal lands with an extended mine life and enhanced project economics. Phase 11 would be subject to a federal permitting process and has not been included in the PFS results.

Phase 1 contemplates average annual copper production of 85,000 tonnes over a 20-year-mine life, at average cash costs and sustaining costs of US$1.41 and US$1.81 per pound of copper.

A variable cut-off grade strategy allows for higher mill head grades in the first 10 years, which increases annual production to approximately 92,000 tonnes of copper average cash cost and sustaining cash costs of US$1.52 and US$1.95 per pound respectively.

Copper World is planned to be a traditional open pit shovel and truck operation with a conventional flotation concentrator producing copper and molybdenum concentrate, with an expansion of the processing facility to include a copper concentrate leach facility in year five, producing copper cathode and silver/gold dore.

The overall mining operation is expected to consist of four open pits and the construction of three tailings storage facilities in Phase 1. The construction of the concentrate leach facility in year four is pegged at US$367 million and includes the cost of an SX/EW plant, acid plant, sulfur burner and precious metals plant.

Hudbay has said it sees the Copper World discovery as a “very interesting, either alternative or add-on” to the adjacent Rosemont project, which has been in legal limbo for over two years after a U.S. Federal Court blocked construction. The court overturned the Final Record of Decision issued by the U.S. Forest Service in mid-2017.

Copper World is made up of seven discrete deposits that contain a mix of both sulphide and oxide ore.

On Friday, Hudbay shares eased 1.32% or $0.085 to $6.35 on volume of 118,050. The shares are trading in a 52-week range of $8.47 and $5.00.

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