Hudbay expects all state permits for Copper World this year, seeks JV partner

Hudbay Minerals (TSX: HBM; NYSE: HBM) has moved closer to developing its Copper World complex in Arizona as it now has confirmed that these deposits, which are situated on private land, won’t face the same water permit issue that stymied its Rosemont project located on public land to the east.

In an update on Wednesday, Hudbay said it has received confirmation from the Army Corps of Engineers (ACOE) that Hudbay’s previous surrender of the Section 404 Clean Water Act permit for the former Rosemont project was formally accepted and revoked as requested.

The ACOE also reaffirmed the validity of the March 2021 approved jurisdictional determinations, whereby the ACOE determined there are no U.S. waters on the property, and therefore, a 404 permit is not required.

Hudbay started the state permitting process for Copper World in June 2021 with the submission of its mined land reclamation plan, which has been approved. Then, in April 2022, Hudbay surrendered the 404 permit to the ACOE as there is no evidence of jurisdictional waters of the U.S. on the former Rosemont project site.

A judge from the U.S. District Court for the District of Arizona later affirmed that Hudbay’s surrender of the 404 permit was effective, and that the new Copper World project is not connected to the previous federal permitting process.

In late 2022, Hudbay submitted the state-level applications for an aquifer protection permit and an air quality permit to the Arizona Department of Environmental Quality (ADEQ). The company expects to receive these two remaining state permits in 2023.

In January 2023, Hudbay received an approved right-of-way from the Arizona State Land Department that will allow for infrastructure, such as roads, pipelines and powerlines, to connect between the properties in the company’s private land package at Copper World. Clearing and grading work to prepare for the site, including the construction of roads and other facilities, is underway.

The project’s first phase would see a 16-year standalone operation with processing infrastructure on Hudbay’s private lands and mining occurring on patented mining claims, requiring only state and local permits. During that span, the open-pit mine is expected to produce 86,000 tonnes of copper annually, according to the preliminary economic assessment released in June 2022.

Prefeasibility activities for the private land first phase of Copper World are well advanced, says Hudbay, with the study expected to be released in mid-2023. A second phase would extend the mine life to 44 years with estimated annual production of 101,000 tonnes through an expansion onto federal land to mine the entire deposits, but would be subject to the federal permitting process.

Once it receives permits for Copper World’s first phase, the company also expects to conduct a bulk sampling program to test grade continuity, variable cut-off effectiveness and metallurgical strategies.

Hudbay also intends to seek a minority joint venture partner to participate in the design and funding of definitive feasibility study activities in 2024.

Shares of Hudbay Minerals rose 3.7% by 1 p.m. ET, giving the Toronto-based copper and zinc miner a market capitalization of US$1.4 billion in New York.