South32 (ASX:S32) will spend an extra US$1.1 billion ($1.5 billion) at its Taylor Zinc-Lead-Silver Project in Arizona, US.
The global mining and metals company estimates its growth capital expenditure will be US$3.3 billion ($4.6 billion).
The estimate is 50% higher than the previously approved US$2.2 billion ($3.1 billion) final investment for Taylor, which is the first development at the broader Hermosa Project.
The increased spending is due to US$100 million (A$140.4 million) in new underground decline infrastructure, US$450 million ($631.9 million) in updated shaft construction costs, higher inflation, and US$500 million ($702.09 million) in US tariffs. Industry-wide increases in steel, piping, concrete, electrical components, and other key inputs have also contributed to the costs.
The Taylor ore reserve has jumped by 52% to 99 million tonnes (Mt), following positive infill drilling program results.
The project’s mineral resource is up by 10% to 169Mt. The initial operating lifespan has risen by four years to 33 years, with potential for further extensions, depending on regulatory approvals.
Life-of-mine production also grew 17% to 3.7Mt of zinc, 4.6Mt of lead, and 247 million ounces of silver.
A combined 95 infill holes have been drilled at Taylor to enhance orebody definition work.
“Our investment in Hermosa has established a regional-scale project with the potential to produce critical minerals over several decades,” CEO Graham Kerr says.
“Recently completed study work for the co-located Clark deposit has confirmed the opportunity for additional Taylor orebody access from Clark’s decline infrastructure … which will enable first production ahead of shaft commissioning and increase ore handling capacity by approximately 25%.”
First production is expected during the second half of the 2028 financial year.
South32 is a global mining and metals company with assets primarily in Australia, Southern Africa, and South America.
Write to Richard Szabo at Mining.com.au
Images: South32
