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 deposit has total mineral resources of 138-million tonnes grading at 3.82% of zinc, 4.25% lead and 81 g/t silver.

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, located adjacent to and up-dip of the Taylor deposit, has the potential to 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 Hermosa metals project has been confirmed by the US Federal Permitting Improvement Steering Council (FPISC) as the first mining project added to the FAST-41 process.

The federal government will now create a comprehensive and integrated permitting timetable for the project, which is publicly available, and within 21 days of being added to the FAST-41 dashboard.

The US Forest Service must identify all agencies likely to have any review responsibilities and invite them to participate in the process and to set a deadline for their responses.

Within 60 days of being added to the FAST-41 dashboard, the US Forest Service must establish a comprehensive permitting timetable, which includes intermediate and final completion dates for all federal environmental reviews and authorisations for full project development.

To qualify for the FAST-41 process, complex critical infrastructure projects must meet rigorous criteria to demonstrate benefit to the nation.

Hermosa is currently the only advanced mine development project in the US that could produce two federally designated critical minerals – manganese and zinc, which are essential minerals for powering the world’s clean energy future.

The current phase of study work for Hermosa’s Clark deposit has confirmed its potential to supply battery-grade manganese to the rapidly forming North American electric vehicle supply chain.

The deposit is currently the only advanced project in the US that has a viable pathway to produce battery-grade manganese for the domestic market from locally sourced ore.

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); and CPE (off-site roads).

Contact Details for Project Information
South32, email InvestorRelations@south32.net.