Name of the Project
Hermosa zinc/lead/silver project.

Location
Santa Cruz County, Arizona, in the US.

Project Owner/s
Diversified miner 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 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, adjacent to and up-dip of the Taylor deposit, can 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
Once in operation, the project is expected to support up to 900 jobs at peak production and make a long-term contribution to the regional economy.

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
South32 has taken another step towards gaining federal approval for the project, after the US Forest Service issued the project’s final environmental-impact statement (EIS) and a draft record of decision (RoD) supporting the development on March 9.

The draft RoD indicates that the agency intends to allow for the project to expand onto National Forest Service land, following several years of environmental assessments, public consultation and coordination with other government bodies.

If the project receives final approval, South32 will be able to fully develop Hermosa beyond its privately owned land. This includes building important infrastructure such as a main access road, a dry-stack tailings facility and part of a 138 kV power line that UniSource Energy Services plans to build on Coronado National Forest land.

Hermosa is expected to produce several federally recognised critical minerals, including zinc, silver and manganese. It is also the first mining project to be included in the federal FAST-41 permitting programme. The streamlines federal environmental reviews for major infrastructure projects, including renewable energy, mining, and broadband.

The draft RoD reflects years of engagement, collaboration and meaningful project changes influenced by community input. The draft decision supports the company’s design and development approach, including the mitigation measures outlined in the final EIS, which were shaped through consultation with agencies and the public.

As part of the federal permitting process, the US Forest Service reviewed the project’s 2024 mine plan of operations, together with baseline environmental information and public submissions made under the National Environmental Policy Act.

The final EIS found that the preferred development option would achieve the project’s goals while reducing environmental impacts as far as possible. Proposed measures include a main access road designed to keep traffic away from the town of Patagonia, a dry-stack tailings facility, and the release of treated water high in the Patagonia mountains to help replenish aquifers and support wildlife.

South32 has already obtained the state permits needed from the Arizona Department of Environmental Quality for initial infrastructure work on private land.

Hermosa environment and permitting director Brent Musslewhite has said the outcome has shown that South32’s project design and commitments are consistent with the long-term management of public land and have laid the groundwork for the final approval process. The findings have also demonstrated that the federal government’s independent review has worked as intended and resulted in a science-based decision informed by public input.

The draft RoD now opens a 45-day objection period, followed by a further 45-day resolution phase, after which the Forest Service may issue its final decision, expected in July.

South32 has said that Hermosa has been designed to limit environmental impacts and has estimated that its water use will be about 90% lower than that of many other mines in the region.

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); CPE (off-site roads); Worley (engineering and procurement services for the underground infrastructure and the surface nonprocess facilities of the zinc/lead/silver Taylor deposit at Hermosa); and Metso (grinding equipment).

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