South32 has undertaken a review of the carrying value of the Hermosa Project consisting of the Taylor Zn-Pb-Ag deposit and the Clark Mn deposit.  South 32 acquired the Hermosa Project through the all-cash offer for TSX listed Arizona Mining Inc. in August 2018, paying C$6.20 per share.  This was a 50% premium to market which implied a total equity value of Arizona Mining of C$2.1 billion. 

As a result of the review of carrying value, South32’s FY23 financial statements will include a non-cash impairment expense of US$1.3 billion in relation to the Taylor deposit. Following this impairment expense, the carrying value of the Hermosa project will be US$1 billion, with US$482M for the Taylor deposit. The carrying value of the Clark deposit and regional exploration land package is unchanged at US$519M.

The Arizona Mining, 2018 PEA, estimated CAPEX of US$1.2 billion, a post-tax NPV(7) of US$2 billion and an IRR of 48%.

Since concluding the acquisition in 2018, South32 have posted US$900 million in accruals to the Hermosa Project, which would appear singularly excessive for a discrete project which has yet to complete a Feasibility Study or report ore reserves. The very significant delay in progressing the project since 2018, has negatively impacted project economics and shareholder value.

Location

The Property is located approximately 50 miles (81 km) southeast of Tucson, Arizona; 15 miles (24 km) northeast of Nogales in Santa Cruz County, Arizona, and eight miles (13 km) north of the international border with Mexico.

Geology and Mineralization

The Taylor deposit is predominantly hosted in Permian carbonates of the Pennsylvanian Naco Group of south­eastern Arizona. It is a CRD (Carbonate Replacement Deposit) style Zn-Pb-Ag massive sulphide deposit. The deposit comprises upper Taylor Sulphide and lower Taylor Deeps domains that have a general northerly dip of 30° and are separated by a low angle thrust fault. Mineralisation within the stacked profile of the thrusted host stratigraphy extends 1,200m from near-surface and is open at depth. Mineralisation is modelled for multiple litho-structural domains for an approximate strike of 2,500m and width of 1,900m.

Continue reading The Taylor Zn-Pb-Ag Deposit – South32 Writes off Acquisition Cost →

MINES AND MINING
The Brisbane Courier
June 30^th 1923

The Cloncurry Field

There is no question that the future of the Cloncurry copper field is of vital moment, not only to Queensland, but to Australia.  Here we have some of the richest copper deposits in the British empire, but, possibly, through lack of co-operation and proper co-ordination of their owners, practically nothing is being produced.

Apart altogether from the proven areas there is an enormous amount of country to the northwest of proven ground which is known to carry copper, and its examination and development will merely be a matter of time once operations are resumed on the proven orebodies. An encouraging sign that better times are on the way was the recent visit to the north of prominent mining men connected with the Mt Elliot Company, Mr. W. L. Baillieu, of Melbourne, who was with the party, stated on his return from Cloncurry that he strongly favoured co-operation in the development of the field.  Along that line prosperity may lie.

Continue reading Mining News and Developments – Cloncurry and Gympie, Queensland, 1923 →