Arizona

In July 2014, Hudbay acquired control of Augusta Resource Corporation and its Rosemont project, an open-pit copper/molybdenum/silver porphyry/skarn deposit located in Arizona. The Rosemont project is located near a number of large porphyry type producing copper mines and is expected to be one of the largest copper mines in the United States, accounting for approximately 10% of total U.S. copper production. 



Key Facts

  • Ownership: 80%1 
  • Location: Pima Country, approximately 50 kilometres  southeast of Tucson, Arizona
  • Property: Approximately 20,100 acres of patented and unpatented claims and fee land
  • Primary metals: copper
  • Secondary metals: molybdenum, silver
  • Contemplated type of mining: open pit
  • March 2017 feasibility study demonstrates robust project economics
  • 19 year mine life generating 15.5% after-tax project IRR and 17.7% IRR to Hudbay at $3.00/lb
  • Years 1-10 average annual production of 140,000 tons (127,000 metric tonnes) copper at cash cost of $1.14/lb

1.Assumes joint venture partners complete buy-in

Average Life of Mine1

Strip ratio

2.0

Avg. annual Cu production2

112,000 tons

Unit operating cost3

$7.92/t

Cash cost per Cu lb4

$1.29/lb

Annual sustaining capital5

$61 million

Sustaining cash cost6

$1.65/lb

Current mine life

19 years

Source: Hudbay company disclosure

Note: "Tons" or "t" on this page refer to short tons, not metric tonnes, unless otherwise noted.

1. Life of Mine as per NI 43-101 Technical Report on the Rosemont Project dated March 30, 2017
2. Production is contained metal in concentrate
3. Combined mine, mill and G&A unit operating costs per tonne of ore processed (after impact of capitalized stripping)
4. Net of by-products. Includes impact of precious metal stream. Metal prices per the previous metals stream agreement are as follows: $3.90/oz Ag, $450/oz Au. Other metal price assumptions as follows: $3.00/lb Cu, $11.00/lb Mo, $18/oz Ag.
5. Sustaining capital includes capitalized stripping costs
6. Sustaining cash cost per pound copper produced, includes sustaining capital costs and royalties

Overview

Rosemont is a copper development project, located in Pima County, Arizona, approximately 50 kilometres southeast of Tucson. Our ownership in the Rosemont project is subject to an Earn-In Agreement with UCM, pursuant to which UCM has earned a 7.95% interest in the project and may earn up to a 20% interest.

Since the acquisition of the Rosemont project in 2014, we have completed an extensive work program, including in-fill drilling, detailed metallurgical test work, and a bottom-up approach to cost estimation, along with other feasibility-level work. The Rosemont project will be an open pit, shovel and truck operation and has an expected 19-year mine life. Rosemont is expected to generate an after-tax, unlevered internal rate of return of 15.5%, using a long-term copper price of $3.00 per pound of copper, and has a capital cost estimate of $1,921 million (on a 100% basis).

Mineral Reserves and Resources 

Arizona Mineral Reserves as at March 30, 20171

Category Tonnes Cu (%) Mo (%) Ag (g/t)
Arizona Mine 
Proven 426,100,000 0.48 0.012 4.96
Probable 111,000,000 0.31 0.010 3.09
Total Mineral Reserve 537,100,000  0.45 0.012   4.5 

Arizona Mineral Resources as at March 30, 20171

Category Tonnes Cu (%) Mo (%) Ag (g/t)
Measured 161,300,000 0.38 0.009 2.72
  Indicated 374,900,000 0.25 0.011 2.60
Total Measured & Indicated 536,200,000  0.29 0.011   2.64 
Inferred 374,900,000 0.30 0.010 1.58
1 Based on 100% ownership of the Rosemont project, Hudbay currently owns a 92.05% interest in the project and its ownership interest is subject to an Earn-In Agreement with UCM, pursuant to which UCM has earned a 7.95% interest in the project and may earn up to a 20% interest.

 

(For more detailed information about reserves and resources, please see Reserves and Resources.) 

History

2014 – Hudbay acquires the Rosemont project

2017 – U.S. Forest Service issues Final Record of Decision  


Rosemont NI 43-101 Technical Report

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