InvestmentHighlights

In July 2014, Hudbay acquired control of the 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 Reserves1 as at March 30, 2017

 

Category

Tonnes

Cu (%)

Mo (%)

Ag (g/t)

Proven

426,100,000

0.48

0.012

4.96

Probable

111,000,000

0.31

0.010

3.09

Total 2P Reserves

537,100,000

0.45

0.012

4.5


 

Arizona Mineral Resources1 as at March 30, 2017

 

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.) 

 

Project Status

Following the successful completion of a 10 year permitting process by the U.S. Forest Service and 17 other cooperating federal and state agencies, Rosemont will be one of the most environmentally sensitive and advanced operations ever permitted in the United States.

Those permits are the result of a 10+ year permitting process by the U.S. Forest Service and 17 other cooperating federal and state agencies.

Over 10 years the permitting review process generated:

  • Over 1,000 technical studies
  • 16 days of public hearings
  • 245 days of public comment
  • Over 36,000 public comments submitted and reviewed by the agencies
  • Final Environmental Impact Statement on Rosemont 2,600+ pages long
  • Nearly 50,000 documents in the U.S. Forest Service Record of Decision
  • Over $100 million spent to support the permitting process

Rosemont submitted an updated Mine Plan of Operations (MPO) to the Forest Service based on their June 2017 Record of Decision. It is over 4,000 pages long. The Forest Service is currently reviewing the MPO submittal.

History

2014 – Hudbay acquires the Rosemont project

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



Schematic of Rosemont Project primary crusher

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