On June 8, Hudbay announced its preliminary economic assessment for its Copper World Complex in Arizona, featuring a two-phase mine plan that, according to Hudbay, would give the mine a projected after-tax value of US$1.3 billion.

The complex, upon its realization, would consist of four open pits, traditional truck and shovel operations and a copper sulfide mineral processing plant. An oxide leach processing facility would also produce copper cathode, molybdenum concentrate and silver doré.

The first phase of the plan projects a 16-year mine life, which would yield an annual average copper production of up to 86,000 tonnes of copper at average cash costs and sustaining cash costs of $1.15 and $1.44 per pound of copper, respectively. At a copper price of US$3.50 per pound, the after-tax net present value of the first phase, using a 10 per cent discount rate, would be US$741 million, with an internal rate of return at 17 per cent.

The second phase of the plan would expand onto federal land to mine all of the deposits, pushing the life of mine to an expected 44 years. Phase II would entail an expansion of the processing facilities to increase annual copper production up to roughly 125,000 tonnes. Holding the same US$3.50 copper price, the plans for the second phase bump the project’s after-tax net present value to US$1.3 billion.

The first phase of the project’s capital costs are projected around US$1.9 billion, including costs for building the onsite facilities and mining equipment. The second phase would cost approximately US$885 million to account for the planned expansions of the crushing facility and flotation plant, as well as the construction of a new tailings facility.

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The measured and indicated resource estimate for Copper World are listed at 4.8 million tonnes of copper from 1.17 billion tonnes of ore grading at 0.41 per cent copper. Inferred resources come in a 957,000 tonnes copper from 262 million tonnes grading at 0.37 per cent.

The planned complex encompasses Hudbay’s Copper World and Rosemont deposits. However, the latter is still currently barred from development after the U.S. Court of Appeals did not overturn a 2019 Arizona District Court ruling rejecting the validity of its unpatented mining claims as stated in the final environmental impact assessment. While Hudbay owns valid mining rights for the land where Rosemont is located, the Court found that its claims to the 2,447 acres of National Forest land where it would have dumped waste rock were invalid.

The plan presented by the preliminary economic assessment represents Hudbay’s alternative strategy for developing its Arizona assets. The company has been acquiring land in the area since the ruling, now holding 4,500 acres of private land and patented mining claims, which it anticipates will be enough to support the first 16 years of waste, tailings and leach pads at the Copper World Complex. Proceeding to the second phase, however, will require the necessary federal permits to mine and deposit waste on its unpatented mining claims. According to Hudbay, the 9^th Circuit Court Ruling allowing Hudbay to proceed with Copper World also “clarified the permitting path for Phase II,” which the company said it will continue to pursue.

“We have been successfully executing an alternative Arizona strategy since 2019 to deliver this attractive project, which is significantly de-risked and has the potential to nearly double our annual copper production,” said Hudbay president and CEO Peter Kukielski. “The Copper World Complex is expected to be the next major copper operation in the United States, delivering the copper needed to meet domestic electrification and decarbonization supply chain needs.”