HudBay expands drill program at Copper World in Arizona

Drilling at Hudbay Minerals’ (TSX: HBM; NYSE: HBM) Copper World project in Arizona this year has identified three new deposits bringing the total number to seven, with a combined strike length of over seven kilometres.  The exploration success resulted in the company raising its 2021 exploration budget from US$10 million to US$34 million and increasing the drill program from 21,336 metres to over 60,960 metres.

The company has four drill rigs turning and plans to release an initial resource estimate for the seven deposits before the end of the year, a preliminary economic assessment (PEA) in the first half of 2022 and a prefeasibility study in the second half of next year.

“We should be able to get to a prefeasibility study before the end of 2022, based on the PEA and the resource we come out with,” Cashel Meagher, Hudbay’s senior vice president and chief operating officer said in an interview, adding that he believes about half of the initial resource estimate will be in the indicated category.

The Copper World project. Credit: Hudbay.

Copper World is situated on wholly owned private land about 7 km from Hudbay’s Rosemont open-pit copper project, which is currently suspended due to legal challenges over its plan to put some of the project’s mining infrastructure on federal land. The company is waiting for the matter to be decided in the ninth circuit in the court of appeals. If put into production, Rosemont will be one of the largest copper mines in the United States.

Hudbay released the latest batch of assay results from the Copper World project in late September and noted that the mineralization identified so far occurs at depths shallower than those at Rosemont, which could mean a lower strip ratio. The three deposits discovered this year—Bolsa, South Limb and North Limb—join the previously known group of Copper World, Broad Top Butte, and the Peach and Elgin deposits.

The near-term focus will be on the Bolsa deposit as it “finds itself between Broad Top Butte and the actual Rosemont deposit,” Meagher says, “and it’s coming in with a higher proportion of oxide and probably higher grade.”

“We’ve identified about 1500 feet between where we know the southern limit of Bolsa is and where the northern limit of Rosemont is, so we’re busy moving our drills down to test the connectivity between Rosemont and Bolsa and we believe the area is more or less continuously mineralized. The 1500 feet from Bolsa to the north of Rosemont has inspired a few of our geologists to go back and do a reinterpretation of the geology at Rosemont.”

A PEA for the Copper World project is due in the first half of next year. Credit: Hudbay Minerals.

Highlights from the Bolsa deposit released on September 22 included drillhole 186, which intersected 80.2 metres of 1.11% copper starting at surface; drillhole 190, which returned 62.5 metres of 1.39% copper starting from surface; and drillhole 191, which cut 123.1 metres of 1.50% copper from surface.

Other drill results came from the South and North Limb deposits, Broad Top Butte, Copper World and the Peach and Elgin deposits.

Assays from the South and North Limb deposits included drillhole 72, which intersected 32 metres of 0.69% from 55 metres; drillhole 132, which returned 23.5 metres grading 0.88% copper from 32.6 metres; and drillhole 139, which cut 38 metres of 1.34% copper from 1.5 metres.

Results from the Broad Top Butte deposit included drillhole 117 which cut 229 metres of 0.60% copper starting at surface, including 137.2 metres of 0.72% copper; and drillhole 195, which returned 192 metres of 0.48% copper, including 67.1 metres of 0.77% copper starting at surface.

Copper World assays included drillhole 70 which cut 82.3 metres of 0.69%, including 44.2 metres of 1% copper starting from surface and drillhole 118, which intersected 88.4 metres of 0.75% copper, including 49 metres of 1.15% copper. At the Peach and Elgin deposits, drillhole 76 returned 39.6 metres of 0.87% copper.

In October, Hudbay received approval from the Arizona State Mine Inspector for its Mined Land Reclamation Plan for Copper World. The MLRP is one of three key state permits and the approval includes the requirement for reclamation cost bonding prior to initiating work on the company’s private lands and represents the first step in the state-level permitting process for a private land operation.

“We submitted the application for the permit in June and we got notification in October; it is fast,” Meagher says. “The MLRP is one of three major permits that the state requires for mining — the others are the Aquifer Protection Plan and the Arizona Air Permit. We are drafting the applications for the other two permits and we’ll be applying for those over the next several months.”

In September, the company announced that it has increased its private land package to about 2,400 acres (971.3 hectares) in the west, which together with patented mining claims, now totals about 4,500 acres (1821.1 hectares) to support an operation entirely on private land.

Meagher notes that Hudbay will likely find that some of the seven deposits at Copper World are interconnected. “There could be some other smaller isolated ones [deposits], but what I think will happen is we’ll focus on those seven and find some connectivity between them.”

Hudbay picked up Copper World via its September 2014 acquisition of Augusta Resources. The Copper World land package included patented mining claims that held about 20 small pick and shovel underground mines that had operated between the mid-1800s and mid-1900s and produced about 440,000 tons of copper at an average grade of 4.42%.

At presstime in Toronto Hudbay was trading at $8.97 per share within a 52-week trading range of $6.57 and $11.62.

Hudbay’s Copper World project. Credit: Hudbay