Hudbay Receives Aquifer Protection Permit for Copper World
Hudbay Minerals (TSX, NYSE: HBM) has received an Aquifer Protection Permit for its Copper World project from the Arizona Department of Environmental Quality. This marks a significant milestone in the project's advancement, which is expected to produce 85,000 tonnes of copper annually over a 20-year mine life. The company is now awaiting the Air Quality Permit, the last key state-level permit required.
Copper World is projected to increase Hudbay's consolidated annual copper production by over 50% and contribute to the U.S. domestic copper supply chain. The project is expected to create more than 400 direct jobs and up to 3,000 indirect jobs in Arizona, while contributing an estimated $850 million in U.S. taxes over its initial mine life.
Hudbay has made significant progress in its financial planning, reducing net debt and improving its balance sheet flexibility. The company plans to commence a minority joint venture partner process after receiving the final permit, with a potential sanctioning decision expected in early 2026.
Hudbay Minerals (TSX, NYSE: HBM) ha ricevuto un Permesso di Protezione delle Acque Sotterranee per il suo progetto Copper World dal Dipartimento della Qualità Ambientale dell'Arizona. Questo segna una pietra miliare significativa nell'avanzamento del progetto, che si prevede produca 85.000 tonnellate di rame all'anno per una durata mineraria di 20 anni. L'azienda sta ora aspettando il Permesso per la Qualità dell'Aria, l'ultimo permesso chiave a livello statale richiesto.
Copper World dovrebbe aumentare la produzione annuale consolidata di rame di Hudbay di oltre il 50% e contribuire alla catena di approvvigionamento di rame nazionale degli Stati Uniti. Si prevede che il progetto creerà oltre 400 posti di lavoro diretti e fino a 3.000 posti di lavoro indiretti in Arizona, contribuendo nel contempo con un totale stimato di 850 milioni di dollari in tasse negli Stati Uniti durante la sua durata mineraria iniziale.
Hudbay ha fatto significativi progressi nella sua pianificazione finanziaria, riducendo il debito netto e migliorando la flessibilità del suo bilancio. L'azienda prevede di avviare un processo di partnership con un socio in minoranza dopo aver ricevuto il permesso finale, con una decisione di autorizzazione prevista per l'inizio del 2026.
Hudbay Minerals (TSX, NYSE: HBM) ha recibido un Permiso de Protección de Acuíferos para su proyecto Copper World del Departamento de Calidad Ambiental de Arizona. Esto marca un hito significativo en el avance del proyecto, que se espera produzca 85.000 toneladas de cobre anuales durante una vida útil de la mina de 20 años. La compañía ahora espera el Permiso de Calidad del Aire, el último permiso clave a nivel estatal requerido.
Se proyecta que Copper World aumentará la producción anual consolidada de cobre de Hudbay en más del 50% y contribuirá a la cadena de suministro de cobre en Estados Unidos. Se espera que el proyecto genere más de 400 empleos directos y hasta 3,000 empleos indirectos en Arizona, mientras contribuye con un estimado de 850 millones de dólares en impuestos en EE. UU. durante su vida útil inicial de la mina.
Hudbay ha hecho avances significativos en su planificación financiera, reduciendo la deuda neta y mejorando la flexibilidad de su balance. La compañía planea iniciar un proceso de asociación con un socio minoritario después de recibir el permiso final, con una decisión de sanción esperada para principios de 2026.
Hudbay Minerals (TSX, NYSE: HBM)는 애리조나 환경 품질 부서로부터 Copper World 프로젝트에 대한 수자원 보호 허가서를 받았습니다. 이는 프로젝트의 발전에서 중요한 이정표로, 20년의 광산 수명 동안 연간 85,000톤의 구리를 생산할 것으로 예상됩니다. 회사는 현재 마지막 주요 주정부 허가인 공기 품질 허가서를 기다리고 있습니다.
Copper World는 Hudbay의 연간 구리 생산량을 50% 이상 증가시키고 미국 국내 구리 공급망에 기여할 것으로 예상됩니다. 이 프로젝트는 애리조나에서 400개 이상의 직접 일자리와 최대 3,000개의 간접 일자리를 창출할 것으로 예상되며, 초기 광산 수명 동안 약 8억 5천만 달러의 미국 세금에 기여할 것으로 추정됩니다.
Hudbay는 재무 계획에서 상당한 진전을 이루었으며, 순부채를 줄이고 재무 유연성을 개선하였습니다. 회사는 최종 허가를 받은 후 소수 지분 공동 투자자 프로세스를 시작할 계획이며, 승인 결정은 2026년 초로 예상됩니다.
Hudbay Minerals (TSX, NYSE: HBM) a reçu un Permis de Protection des Aquifères pour son projet Copper World du Département de la Qualité Environnementale de l'Arizona. Cela représente une étape importante dans l'avancement du projet, qui devrait produire 85 000 tonnes de cuivre par an pendant une durée de vie de la mine de 20 ans. L'entreprise attend maintenant le Permis de Qualité de l'Air, le dernier permis clé requis à l'échelle étatique.
Le projet Copper World devrait augmenter la production annuelle consolidée de cuivre de Hudbay de plus de 50% et contribuer à la chaîne d'approvisionnement intérieure du cuivre aux États-Unis. Le projet devrait créer plus de 400 emplois directs et jusqu'à 3 000 emplois indirects en Arizona, tout en contribuant pour un total estimé de 850 millions de dollars en taxes américaines durant sa vie minière initiale.
Hudbay a réalisé des progrès significatifs dans sa planification financière, réduisant sa dette nette et améliorant sa flexibilité financière. L'entreprise prévoit de lancer un processus de partenariat avec un investisseur minoritaire après avoir reçu le permis final, avec une décision d'autorisation attendue au début de 2026.
Hudbay Minerals (TSX, NYSE: HBM) hat von der Arizona Department of Environmental Quality eine Genehmigung zum Schutz von Aquiferen für sein Copper World-Projekt erhalten. Dies stellt einen bedeutenden Meilenstein in der Weiterentwicklung des Projekts dar, das voraussichtlich jährlich 85.000 Tonnen Kupfer über eine Lebensdauer von 20 Jahren produzieren wird. Das Unternehmen wartet nun auf die Genehmigung zur Luftqualität, die letzte wichtige Genehmigung auf staatlicher Ebene.
Es wird erwartet, dass Copper World die konsolidierte jährliche Kupferproduktion von Hudbay um mehr als 50% steigert und zur amerikanischen Kupferversorgungskette beiträgt. Das Projekt soll mehr als 400 direkte Arbeitsplätze und bis zu 3.000 indirekte Arbeitsplätze in Arizona schaffen und voraussichtlich 850 Millionen Dollar an US-Steuern während seiner anfänglichen Lebensdauer der Mine beitragen.
Hudbay hat bedeutende Fortschritte in seiner Finanzplanung gemacht, die Nettoverschuldung reduziert und die Flexibilität der Bilanz verbessert. Das Unternehmen plant, nach Erhalt der endgültigen Genehmigung einen Prozess für eine Minderheitsjoint-Venture-Partnerschaft einzuleiten, mit einer möglichen Genehmigungsentscheidung, die Anfang 2026 erwartet wird.
- Received Aquifer Protection Permit for Copper World project
- Expected to produce 85,000 tonnes of copper annually over 20-year mine life
- Projected to increase consolidated annual copper production by over 50%
- Anticipated to create over 400 direct jobs and up to 3,000 indirect jobs in Arizona
- Expected to contribute $850 million in U.S. taxes over initial mine life
- Reduced net debt by $559 million for twelve months ending June 30, 2024
- Improved net debt to adjusted EBITDA ratio to 0.8x
- Achieved 1.2x net debt to adjusted EBITDA ratio target ahead of schedule
- Additional $25 million in 2024 growth capital spending for Arizona
- Sanctioning decision not expected until early 2026
Insights
The approval of the Aquifer Protection Permit for Hudbay's Copper World project is a significant milestone in the company's growth strategy. This permit, along with the anticipated Air Quality Permit, are important for project sanctioning. The project's expected annual production of
Financially, Copper World is projected to contribute
Copper World's strategic importance extends beyond Hudbay, potentially impacting the broader U.S. copper market. As the third-largest cathode producer in the U.S., the project aligns with growing domestic demand driven by increased manufacturing, infrastructure development and the transition to green energy. The "Made-in-America" aspect could provide a competitive advantage in light of recent geopolitical trends favoring domestic supply chains.
The project's job creation potential - 400 direct and 3,000 indirect jobs - could have a positive ripple effect on the local economy. Support from local unions and partnerships with workforce training programs indicate strong community engagement, which often correlates with smoother project execution and reduced operational risks. The market should view these factors favorably, potentially enhancing Hudbay's long-term growth prospects and market position in the U.S. copper industry.
The issuance of the Aquifer Protection Permit represents a significant de-risking event for Copper World from a legal perspective. Hudbay's proactive engagement with the Arizona Department of Environmental Quality (ADEQ) demonstrates a commitment to regulatory compliance and environmental stewardship. This approach likely contributed to the successful permit acquisition and may set a positive precedent for future regulatory interactions.
The dismissal of the legal challenge to the Mined Land Reclamation Plan in May 2023 further strengthens Hudbay's position. However, investors should note that environmental permits can still face legal challenges even after issuance. The ongoing Air Quality Permit process, including the public comment period, will be important to watch. Hudbay's hiring of Robert Comer, with his extensive U.S. permitting and mining law experience, indicates the company's recognition of the importance of navigating the complex regulatory landscape effectively.
TORONTO, Aug. 29, 2024 (GLOBE NEWSWIRE) -- Hudbay Minerals Inc. (“Hudbay” or the “Company”) (TSX, NYSE: HBM) is pleased to announce that it has received an Aquifer Protection Permit for the Copper World project (“Copper World”) from the Arizona Department of Environmental Quality (“ADEQ”). The company proactively engaged with the ADEQ, ensuring a transparent and thorough permitting process by providing comprehensive and detailed information. The issuance of this permit is a key milestone in the advancement of Copper World, which is a standalone operation requiring state and local permits and is expected to produce 85,000 tonnes of copper per year over a 20-year mine life.
“Receiving the Aquifer Protection Permit is a significant de-risking event for Copper World as it brings us one step closer to being fully permitted,” said Peter Kukielski, President and Chief Executive Officer. “The last key state-level permit, the Air Quality Permit, continues to progress as planned and will mark the completion of one of the three key prerequisites in the company’s prudent sanctioning plan for the project. Copper World represents Hudbay’s next significant copper growth project and is expected to increase consolidated annual copper production by more than
Once in production, Copper World is expected to be a meaningful copper producer in the U.S. domestic copper supply chain, which will be required to help secure growing U.S. metal demand related to increased manufacturing capacity, infrastructure development, increased energy independence and domestic battery supply chain and production needs. The “Made-in-America” copper cathode anticipated to be produced at Copper World is expected to be sold entirely to domestic U.S. customers and would make Copper World the third largest cathode producer in the U.S.i
Copper World Permitting on Track
There are three key state permits required for Copper World sanctioning:
- Mined Land Reclamation Plan – Completed – the Mined Land Reclamation Plan was initially approved by the Arizona State Mine Inspector in October 2021 and was subsequently amended and approved to reflect a larger private land project footprint. This approval was challenged in state court, but the challenge was dismissed in May 2023.
- Aquifer Protection Permit – Completed – the Aquifer Protection Permit was received on August 29, 2024 from the ADEQ following a robust process that included detailed analysis by the agency and Hudbay, along with a public comment period that was completed in the second quarter of 2024.
- Air Quality Permit – On Track – the Air Quality Permit application was submitted to the ADEQ in late 2022 and follows a similar robust process, including a public comment period that commenced in July and is scheduled to conclude in September 2024.
Hudbay is pleased with the level of local support received at the public comment meetings and looks forward to providing significant social and environmental benefits for the community and local economy in Arizona. Over the proposed initial 20-year mine life, the company expects to contribute more than
Advancing Prudent Financing Plan with Disciplined Capital Allocation
As part of Hudbay’s disciplined financial planning approach to Copper World, in October 2022, the company introduced a three prerequisites plan (“3-P”), as shown in Figure 1, including specific leverage targets and other criteria that would need to be achieved prior to making a project sanctioning decision for Copper World. The 3-P plan has the following components:
- Permits – receipt of all required state level permits
- Plan – completion of a definitive feasibility study with an internal rate of return of greater than
15% - Prudent Financing Strategy – multi-faceted financing strategy, including a committed minority joint venture partner, a renegotiated precious metals stream agreement optimized for the current project, net debt to EBITDA ratio of less than 1.2 times, a minimum cash balance of
$600 million , and limited non-recourse project level debt.
Since the release of the 3-P plan, Hudbay has taken prudent measures to transform its balance sheet in preparation for a sanctioning decision, through strong cash flow generation, deleveraging initiatives and the completion of a successful equity offering. Hudbay has generated
With the receipt of the Aquifer Protection Permit, the company expects to commence activities related to the preparation of feasibility studies for Copper World. As a result, 2024 growth capital spending in Arizona is expected to increase by an additional
Hudbay intends to commence a minority joint venture partner process after receiving the last outstanding permit. The company expects the potential joint venture partner to participate in the funding of definitive feasibility study activities in 2025 as well as in the final project design and construction for Copper World.
The opportunity to sanction Copper World is not expected until early 2026 based on current estimated timelines. The decision to sanction Copper World will ultimately be evaluated against other competing investment opportunities as part of Hudbay’s capital allocation process.
Bolstering the Arizona Team
With the significant progress achieved to-date and the continued advancement of Copper World towards a project sanctioning decision, Hudbay has been actively expanding its local team in Arizona to build project bench strength and establish key leadership roles.
Hudbay’s Senior Vice President of the U.S. Business Unit, Javier Del Rio, has been focusing his time solely on leading the Copper World project, leveraging his project development and operational expertise as the former head of Hudbay’s South America Business Unit where he oversaw the development and operation of the company’s flagship Constancia mine in Peru. In addition, Warren Flannery, Hudbay’s Vice President of Business Planning and Reclamation, will relocate to Arizona to take on the role of Vice President of Copper World. In his new role, Mr. Flannery will lead the operational readiness of Copper World as the company commences early feasibility work and plans to complete a definitive feasibility study in 2025.
Adding to the team’s U.S. expertise, Hudbay has hired Robert Comer as Executive Director, External Affairs & Legal in Arizona. Mr. Comer brings more than 30 years of U.S. permitting and mining law experience. During his career, Mr. Comer has held senior leadership positions with businesses and the federal government and has successfully advanced numerous resource projects, including through environmental and land use compliance, defending permits through litigation, NEPA permitting and government relations. He will be a significant asset to Copper World as Hudbay continues to advance towards a sanctioning decision.
About Copper World
The
In September 2023, Hudbay released its enhanced pre-feasibility study (“PFS”) for Copper World reflecting the results of further technical work on Phase I of the project. Phase I has a mine life of 20 years, which is four years longer than the Phase I mine life that was presented in the PEA, largely due to an increase in the capacity for tailings and waste deposition as a result of optimizing the site layout. Phase II is expected to involve an expansion onto federal lands with a significantly longer mine life and enhanced project economics. Phase II would be subject to the federal permitting process and was not included in the PFS results.
Based on the PFS, Phase I contemplates average annual copper production of 85,000 tonnes over a 20-year mine life, at average cash costs and sustaining cash costs of
The estimated total initial funding requirement for Phase I of Copper World, net of the stream agreement, amounts to approximately
Copper World is one of the highest-grade open pit copper projects in the Americasiv with proven and probable mineral reserves of 385 million tonnes at
Qualified Person and NI 43-101
The technical and scientific information in this news release related to the company’s Copper World project has been approved by Olivier Tavchandjian, P. Geo, Hudbay’s Senior Vice President, Exploration and Technical Services. Mr. Tavchandjian is a qualified person pursuant to Canadian Securities Administrators’ National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”).
A copy of the Copper World PFS is available on Hudbay’s SEDAR+ profile at www.sedarplus.ca and on Hudbay’s EDGAR profile at www.sec.gov.
Cautionary Note to United States Investors
This news release has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws. Canadian reporting requirements for disclosure of mineral properties are governed NI 43-101.
For this reason, information contained in this news release in respect of the Copper World project may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder. For further information on the differences between the disclosure requirements for mineral properties under the United States federal securities laws and NI 43-101, please refer to the company’s annual information form, a copy of which has been filed under Hudbay’s profile on SEDAR+ at www.sedarplus.ca and the company’s Form 40-F, a copy of which has been filed under Hudbay’s profile on EDGAR at www.sec.gov.
Forward-Looking Information
This news release contains forward-looking information within the meaning of applicable Canadian and United States securities legislation. Forward-looking information includes, but is not limited to, Hudbay’s expectations regarding the remaining permits for Copper World, expectations around the timing and amount of future spending at Copper World, intentions with respect to Hudbay’s 3-P plan for sanctioning Copper World and expectations regarding the economics for the Copper World project. Forward-looking information is not, and cannot be, a guarantee of future results or events. Forward-looking information is based on, among other things, opinions, assumptions, estimates and analyses that, while considered reasonable by the company at the date the forward-looking information is provided, inherently are subject to significant risks, uncertainties, contingencies and other factors that may cause actual results and events to be materially different from those expressed or implied by the forward-looking information.
The material factors or assumptions that Hudbay identified and were applied by the company in drawing conclusions or making forecasts or projections set out in the forward-looking information include, but are not limited to, obtaining the final permits for Copper World Phase I, no significant unanticipated litigation or delays to the advancement of Copper World, maintaining the company’s 3-P plan for sanctioning Copper World, no change in laws, renegotiating the precious metals stream agreement for Copper World and the availability of a minority partner and financing to develop Copper World.
The risks, uncertainties, contingencies and other factors that may cause actual results to differ materially from those expressed or implied by the forward-looking information may include, but are not limited to, risks generally associated with the mining industry, such as economic factors (including future commodity prices, currency fluctuations, energy prices and general cost escalation), litigation, regulatory and landholding risks associated with the development and operation of Copper World as well as the risks discussed under the heading “Risk Factors” in Hudbay’s most recent Annual Information Form.
Should one or more risk, uncertainty, contingency or other factor materialize or should any factor or assumption prove incorrect, actual results could vary materially from those expressed or implied in the forward-looking information. Accordingly, you should not place undue reliance on forward-looking information. Hudbay does not assume any obligation to update or revise any forward-looking information after the date of this news release or to explain any material difference between subsequent actual events and any forward-looking information, except as required by applicable law.
About Hudbay
Hudbay (TSX, NYSE: HBM) is a copper-focused mining company with three long-life operations and a world-class pipeline of copper growth projects in tier-one mining-friendly jurisdictions of Canada, Peru and the United States.
Hudbay’s operating portfolio includes the Constancia mine in Cusco (Peru), the Snow Lake operations in Manitoba (Canada) and the Copper Mountain mine in British Columbia (Canada). Copper is the primary metal produced by the company, which is complemented by meaningful gold production. Hudbay’s growth pipeline includes the Copper World project in Arizona (United States), the Mason project in Nevada (United States), the Llaguen project in La Libertad (Peru) and several expansion and exploration opportunities near its existing operations.
The value Hudbay creates and the impact it has is embodied in its purpose statement: “We care about our people, our communities and our planet. Hudbay provides the metals the world needs. We work sustainably, transform lives and create better futures for communities.” Hudbay’s mission is to create sustainable value and strong returns by leveraging its core strengths in community relations, focused exploration, mine development and efficient operations.
For further information, please contact:
Candace Brûlé
Vice President, Investor Relations
(416) 814-4387
investor.relations@hudbay.com
Figure 1: Prudently Advancing Copper World with Disciplined 3-P Plan for Project Sanctioning
In late 2022, Hudbay unveiled a prudent financial plan with three key prerequisites to be achieved prior to a potential project sanctioning decision, including a Plan with robust economics from a definitive feasibility study, Permits from the state issuing agencies and a Prudent financing strategy.
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i Sourced from Wood Mackenzie (Q2 2024 dataset).
ii Adjusted EBITDA, net debt, and net debt to adjusted EBITDA ratio are non-IFRS financial performance measures with no standardized definition under IFRS. For further information and detailed reconciliation, please see the “Non-IFRS Financial Performance Measures” in the latest earnings news release or management's discussion and analysis for each reporting period.
iii Cash costs and sustaining cash costs are non-IFRS financial performance measures with no standardized definition under IFRS. For further details on why Hudbay believes cash costs are a useful performance indicator, please refer to the company's most recent management's discussion and analysis for the period ended June 30, 2024.
iv Sourced from S&P Global, August 2024.
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/a87f0b74-63c0-46b1-be89-e739c3d4f7b7
FAQ
What permits has Hudbay received for the Copper World project?
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What is Hudbay's (HBM) financial position for the Copper World project?
When is Hudbay (HBM) expected to make a sanctioning decision for Copper World?
How many jobs is the Copper World project expected to create in Arizona?
