Taylor development at South32's Hermosa project estimated to cost $1.7B

A pre-feasibility study on the Taylor deposit at South32 Ltd.'s Hermosa project in Arizona estimated annual production averaging 111,000 tonnes of zinc, 138,000 tonnes of lead and 7.3 million ounces of silver.

Capital costs were estimated at $1.7 billion, comprising about $1.23 billion in direct costs and $470 million in indirect costs, while sustaining capital was estimated at about $40 million per year.

"Taylor is the first development option of what we anticipate will be many opportunities here," South32 CEO Graham Kerr said during a Jan. 17 call. "Completing the pre-feasibility study for the Taylor deposit is an important milestone in that it demonstrates its potential to be a globally significant and sustainable producer of metals critical to the green energy transition in the industry's first quartile."

The Taylor deposit is expected to have a nameplate throughput capacity of 4.3 million tonnes per year over a 22-year resource life. Measured, indicated and inferred resources were estimated at 138 Mt grading 3.82% zinc, 4.25% lead and 81 g/t of silver, in line with an estimate completed in July 2021.

Taylor operations will use automation technology to reduce environmental impact as part of South32's long-term goal of achieving net-zero operations by 2050, according to Kerr.

Completion of a feasibility study and a final investment decision for Taylor is expected in mid-2023. Shaft excavation is scheduled to begin in 2024, with the first stoping ore anticipated by 2027, according to Pat Risner, the president of the Hermosa project.

South32 also completed a scoping study for the nearby Clark deposit at Hermosa. The study confirmed the potential for a separate, integrated underground operation producing battery-grade manganese as well as zinc and silver, with a pre-feasibility study underway.