Key points
- South32 has completed the pre-feasibility study of its Taylor Deposit
- Results show potential for Taylor to be a multi-decade operation through its zinc-lead-silver underground mine
- Operation will leverage automation and technology to be carbon neutral
In morning trade, the South32 Ltd (ASX: S32) share price is edging lower on Monday.
At the time of writing, the mining giant's shares are down 0.5% to $4.15.
Why is the South32 share price falling?
The South32 share price is falling on Monday after weakness in the materials sector offset an announcement relating to its Hermosa project in the United States.
According to the release, the company has completed its pre-feasibility study (PFS) for the Taylor Deposit at the 100% owned Hermosa project in Arizona.
Pleasingly, the PFS support Taylor's potential to be the first development of a multi-decade operation aiming to establish Hermosa as a globally significant producer of metals critical to a low carbon future and delivering attractive returns over multiple stages.
The release notes that an initial development case demonstrates a sustainable, highly productive zinc-lead-silver underground mine and conventional process plant, in the first quartile of the industry cost curve.
As a result, the Taylor Deposit will now progress to a feasibility study, including work streams designed to unlock additional value. This will be by optimising operating and capital costs, extending the life of the resource, and the further assessment of options identified to target a carbon neutral operation. Completion of the feasibility study and a final investment decision to construct Taylor are expected in mid 2023.
"An important first development option"
South32's Chief Executive Officer, Graham Kerr, said: "The Taylor Deposit provides an important first development option for our Hermosa project in Arizona, USA. The project has the potential to sustainably produce the metals critical for a low carbon future across multiple decades from different deposits."
"Completing the pre-feasibility study for the Taylor Deposit is an important milestone that demonstrates its potential to be a globally-significant and sustainable producer of base and precious metals in the industry's first cost quartile. Beyond Taylor, [the] Clark [depost] offers the potential to realise further value from our investment in Hermosa through the production of battery-grade manganese, a mineral designated as critical in the United States."
Mr Kerr also revealed that the company intends for the Taylor Deposit operation to leverage automation and other technologies in order to be carbon neutral.
He explained: "We are designing the Taylor Deposit to be our first 'next generation mine', using automation and technology to minimise our impact on the environment and to target a carbon neutral operation in line with our goal of achieving net zero operational carbon emissions by 2050."
