PERTH (miningweekly.com) – Diversified miner South32 on Monday tapped the Taylor deposit, at its Hermosa project in Arizona, as its first next generation mine.

A prefeasibility study (PFS) into the polymetallic metals project has estimated yearly average production of 111 000 t of zinc, 138 000 t of lead and 7.3-million ounces of silver, with the current resource life supporting a mine life of 22 years and a nameplate capacity of 4.3-million tonnes.

The PFS estimated a capital cost of $1.23-billion of direct costs and $470-million of indirect costs to establish the first development option at Hermosa, with the sustaining capital estimated at $40-million a year.

Operating costs have been estimated at $81/t of ore milled.

South32 told shareholders that there was potential to realise capital efficiencies through an integrated development of the Taylor and Clark deposits.

“The Taylor deposit provides an important first development option for our Hermosa project in Arizona,” said South32 CEO Graham Kerr.

“The project has the potential to sustainably produce the metals critical for a low carbon future across multiple decades from different deposits. Completing the PFS for the Taylor deposit is an important milestone that demonstrates its potential to be a globally significant and sustainable producer of base and precious metals in the industry’s first cost quartile.

“Beyond Taylor, Clark offers the potential to realise further value from our investment in Hermosa through the production of battery-grade manganese, a mineral designated as critical in the US. Additional exploration targets around Taylor and Clark are indicative of further upside while the broader land package contains highly prospective areas for polymetallic and copper mineralisation,” said Kerr.

A separate scoping study for the Clark deposit has confirmed the potential for a separate, integrated underground mining operation producing battery-grade manganese, as well as zinc and silver. Clark has the potential to underpin a second development stage at Hermosa, with future studies to consider the opportunity to integrate its development with Taylor, potentially unlocking further operating and capital efficiencies.

A PFS on the Clark deposit is due in late 2022.

“We are designing the Taylor deposit to be our first next-generation mine, using automation and technology to minimise our impact on the environment and to target a carbon neutral operation in line with our goal of achieving net zero operational carbon emissions by 2050,” Kerr said on Monday.

“The future development of Taylor provides a platform from which to realise Hermosa’s immense potential. It will further strengthen our portfolio and align with the already substantial growth in production of metals critical to a low carbon future that we have embedded in the portfolio over the past six months.”

South32 will now progress the Taylor deposit to a feasibility study, with a targeted completion of mid-2023.

To maintain the preferred development path in the PFS, critical path items, including construction and installation of infrastructure to support additional orebody dewatering, are planned to start in the second half of 2022. South32 will spend about $55-million in the second half of 2022 as part of its pre-commitment capital expenditure associated with dewatering. Further investment in Taylor is expected in 2023.

Based on the PFS schedule, and subject to a final investment decision and approvals, shaft development is expected to start in 2024, with first production targeted in 2027.