Hudbay Minerals has received the last key permit it needs to start building its Rosemont mine in Arizona.
The U.S. Army Corps of Engineers issued a Section 404 water permit for the project, which a feasibility study in 2017 forecast would have a mine life of 19 years and produce 112,000 tonnes of copper in concentrate a year at a life-of-mine cash cost of $1.29 per lb.
Now that the 404 Permit has been issued, Hudbay expects to receive Rosemont’s mine plan of operations from the U.S. Forest Service shortly and then move into development.
Rosemont has already received the Final Record of Decision from the USFS, a process that involved 17 co-operating agencies at various levels of government, 16 hearings, over 1,000 studies, and 245 days of public comment resulting in more than 43,000 comments.
“The Forest Service is expected to issue the MPO in approximately one month, which will authorize early works starting in the second half of 2019, leading up to the first full year of construction in 2020,” Pierre Vaillancourt, a mining analyst who covers the company for Haywood Securities, wrote in a research commentary, noting that construction is expected to take about 33 months.
The project comes with an initial capex of $1.92 billion and life-of-mine sustaining costs of $61 million.
“Based on the capex of $1.92 billion, $230 million in financing would come from a Silver Wheaton streaming deal for gold and silver production, and $200 million from equipment financing, leaving $1.1 billion to finance Hudbay’s 80% interest,” Vaillancourt writes. “Given that joint-venture partner KORES intends to sell its interest for up to 20%, a new joint-venture deal for a permitted project for up to 40% of Rosemont could further reduce the financial burden for Hudbay.”
This article first appeared in The Northern Miner.
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