The document was released only two weeks after a US court cleared the way for the company to continue its planned copper world mine.
Hudbay’s other major copper mine project in Arizona, the larger and neighboring Rosemont, suffered a major setback in early May after a judge confirmed a 2019 ruling and stopped the $2 billion project on environmental grounds.
According to the company, the after-tax net present value of Copper World’s two-phase mine plan is close to $1.3 billion, which will generate an internal rate of return of 18% based on the copper price of $3.50 per pound.
The total project capital cost included in the PEA of the first phase of Copper World is estimated to be $1.9 billion, including $572 million in owner cost related to mining equipment and pre-stripping activities, and all operating costs capitalized before production starts, Hudbay said.
The Toronto-based miner said it didn’t think the first phase of the complex mine plan needed any federal permission because it was on private land, not federal land.
"The risk of the [Copper World] project has been significantly reduced, which may nearly double our annual copper production while maintaining Hudbay’s first quartile cash cost positioning," CEO Peter Kukielski said in a statement.
The first phase focuses on the independent operation of processing infrastructure on private land in Hudbay.
During its 16-year life, the mine is expected to produce as much as 100,000 tons of copper every year. Including about 86,000 tons of copper from mining resources, the average cash cost and cash maintenance cost are $1.15 and $1.44 per pound of copper, respectively.
In the second stage, an investment of 885 million US dollars will be needed to cover the costs related to the expansion of crushing facilities and flotation plants to accommodate the higher sulfide throughput and the owner’s cost of 264 million US dollars related to the construction of new tailings facilities.
Hudbay said that the second phase will increase the average annual copper production to about 125,000 tons during the remaining mine life, including about 101,000 tons of copper from mining resources.
Sikeng
The copper world complex project is a traditional open-pit excavator and truck operation, with a copper sulfide mineral processing plant and an oxide leaching treatment facility for producing cathode copper, molybdenum concentrate and silver.
The whole mining operation is expected to include four open pit mines in the first phase, two of which will be extended to federal land in the second phase.
Hudbay is expected to promote the pre-feasibility study of the first phase of the Copper World Complex in the second half of 2022, which will focus on transforming the remaining inferred mineral resources into measurable and indicative mineral resources.
The company expects to complete the final feasibility study of the first phase in 2023 and obtain all state and local permits required for the first phase.
The development of copper mines is considered to be the key to the world’s transition to a green economy, in which electric vehicles and renewable energy will occupy a central position.
The demand for copper is expected to increase as a result, and analysts warn that the global industry needs to spend more than 100 billion US dollars to build mines that can solve the possible annual supply shortage of 4.7 million tons by 2030.