공지 • May 03
South32 Limited Provides Hermosa Project Update
South32 Limited provided an update on the Taylor zinc-lead-silver project (Taylor), the first development at the Hermosa project in Arizona, United States. The updated assessment of project execution reaffirmed Taylor's potential to deliver shareholders attractive returns from its long-life, low-cost production of zinc, silver and lead. Taylor's initial operating life has been extended by 5 years to approximately 33 years since final investment approval, driven by successful infill drilling programs. The deposit remains open in several directions, providing further growth potential, with life extensions beyond the mine plan of operations subject to future regulatory approvals. At the adjacent Peake deposit, continued exploration success has underpinned a 32% increase in its Mineral Resource estimate to 33Mt, supporting the expectation that Peake will become a source of future copper production and mine life extension within the Taylor development. Recently completed study work for the co-located Clark deposit confirmed the opportunity for additional Taylor orebody access from Clark's decline infrastructure, improving operational flexibility and unlocking value across the life of mine. This approach will enable first production ahead of shaft commissioning and increase ore handling capacity by approximately 25%, providing potential to increase production above current design capacity. First production is expected in Second Half Fiscal Year 2028 and nameplate capacity by Fiscal Year 2031, reflecting revised expectation for shaft construction, due to contractor performance and productivity challenges. Targeted measures have been implemented to improve shaft construction productivity, and the latest assessment determined that these measures will only partially mitigate the impact of contractor underperformance. Expected growth capital expenditure for Taylor has been updated to approximately USD 3,300 million. This includes scope changes with the addition of decline access, revised shaft construction costs, materially higher inflation, industry-wide increases in key input costs such as steel, piping, concrete and electrical, and United States tariffs. Based on updated assumptions, Taylor continues to demonstrate its quality, with expected steady-state EBITDA of approximately USD 650 million per annum and a net present value of approximately USD 3,100 million. These returns increase further to steady-state EBITDA of approximately USD 800 million per annum and a net present value of approximately USD 4,500 million, at spot commodity prices. The assessment reaffirmed Taylor's potential to deliver attractive returns as a large-scale, long-life, low-cost producer of zinc, silver and lead. Taylor is expected to operate as a highly productive underground mine and a conventional process plant with a nameplate capacity of 4.3Mtpa. Work completed since final investment approval in February 2024 supported an extension of Taylor's mine life and confirmed potential for future copper production from the adjacent Peake deposit. Following completion of the exploration decline for the co-located Clark deposit in the December 2025 quarter, the feasibility of providing additional access to the Taylor orebody via the Clark exploration decline was assessed. This work highlighted significant benefits from an integrated underground development standpoint, including the potential to access the Taylor orebody ahead of full shaft commissioning, and an increase in ore handling capacity of approximately 25%. Over the next 12-months, surface infrastructure de-bottlenecking options will be assessed, which combined with additional ore handling capacity, have the potential to increase production above current design rates. First ore mined from Taylor via the Clark decline is expected in mid-Fiscal Year 2028, with first production expected in Second Half Fiscal Year 2028. First production from the shafts is now expected from First Half Fiscal Year 2029, reflecting recently revised timing for shaft completion. This revised schedule is inclusive of targeted measures that have been implemented to improve shaft construction productivity, including strengthening contractor leadership, engaging specialist performance advisors, and bringing critical scope under direct owner management. These measures have improved performance in shaft sinking rates, and the latest assessment determined that these measures will only partially mitigate the impact of contractor underperformance. As a result, a more gradual ramp up to nameplate capacity is now planned, with full capacity expected in Fiscal Year 2031 (previously Fiscal Year 2030). Expected growth capital expenditure for Taylor has been increased by approximately USD 1,100 million, compared to final investment approval, to approximately USD 3,300 million (from 1 January 2024), reflecting a change in scope with the addition of decline infrastructure (approximately USD 100 million), revised shaft construction costs (approximately USD 450 million), materially higher inflation, industry-wide increases in key inputs including steel, piping, concrete and electrical components, and United States tariff impacts (approximately USD 500 million). Key outcomes of the project update include: 52% increase in the Taylor Ore Reserve to 99Mt, supported by successful infill drilling programs; 10% increase in the Taylor Mineral Resource to 169Mt, which remains open at depth and laterally; 32% increase in the Peake Mineral Resource to 33Mt, with ongoing drilling to test the potential for a continuous mineralised system connecting Peake and Taylor Deeps; an increase in Taylor's initial operating life from approximately 28 years to approximately 33 years, with life extensions beyond the mine plan of operations subject to future regulatory approvals; 17% increase in life of mine production to 10.4Mt ZnEq (3.7Mt zinc, 4.6Mt lead, 247Moz silver); annual average steady-state production of 346kt ZnEq (123kt zinc, 155kt lead, 8.2Moz silver); growth capital expenditure revised to approximately USD 3,300 million, with approximately USD 2,100 million to be spent over Fourth Quarter Fiscal Year 2026 to Second Half Fiscal Year 2028; sustaining capital expenditure revised to average approximately USD 50 million per annum, including spend on the decline and underground infrastructure over Fiscal Year 2028 to Fiscal Year 2030; operating unit costs revised to approximately USD 100 per tonne, reflecting general inflation and higher assumed energy costs. Summary financial outcomes: Key estimated financial outcomes from the project update are summarised below. Unless stated otherwise, currency is in USD (real) and units are metric. Estimated project update outcomes - Taylor stage one: Project update reflects values in real terms as at 1 July 2026. Feasibility study reflects values in real terms as at 1 January 2024.
