HudBay tables maiden Copper World estimate

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HudBay Minerals Inc.  [HBM-TSX, NYSE] has announced a maiden resource estimate for its recently discovered Copper World copper-molybdenum-silver deposit in Arizona

HudBay is an integrated mining company, primarily producing copper concentrate (containing copper, gold and silver), zinc concentrate and zinc metal. The company owns four polymetallic mines, four ore concentrators and a zinc production facility.

The operations are located in northern Manitoba and Saskatchewan, Peru and Arizona.

Hudbay said it sees the Copper World discovery in Arizona as a “very interesting, either alternative or add-on” to the adjacent Rosemont project, which remains in legal limbo, two years 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.

HudBay said the initial resource estimate for Copper World consists of an indicated mineral resource of 272 million tonnes at 0.36% copper and an inferred resource of 142 million tonnes at 0.36% copper, containing 3.3 billion pounds of copper.

This resource estimate includes near surface, higher grade indicated mineral resources of 96 million tonnes at 0.57% copper and inferred resources of 31 million tonnes at 0.71% copper, containing 1.7 billion pounds of copper with the potential to be mined earlier in the life of a production cycle.

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

The company said a preliminary economic assessment (PEA) for the project remains on track for the first half of 2022, to be immediately followed by a pre-feasibility study.

Copper World is located within seven kilometres of the undeveloped Rosemont copper project and is located on private land, which should allow for a markedly smoother permitting pathway.

On Wednesday HudBay shares eased 4% or 35 cents to $8.34 on volume of 971,390. The shares currently trade in a 52-week range of $11.26 and $6.70.

Rosemont is one of the world’s best undeveloped copper projects, one that delivers at 15.5% after-tax unlevered IRR at a copper price of US$3.00 a pound, based on the results of a 2017 feasibility study by HudBay.

It was expected to produce approximately 127,000 tonnes of copper annually at a cash cost of US$1.14 per pound (net of by-product credits) over the first 10 years of operations.

Rosemont requires federal permits and has been significantly challenged.

The Court ruling was a setback for Wheaton Precious Metals Corp. (WPM-TSX, WPM-NYSE), which has a precious metals purchasing agreement with HudBay. The deal entitles Wheaton to 100% of the payable silver and gold production from the mine.

However, HudBay has said it intends to push Copper World “very hard.”


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