South32 Ltd. · ASX:S32
South32 — Corporate Update (January 2022)
31 slides from South32's corporate update, Jan 17, 2022
Slide 1: Hermosa Project Update Presentation
17 January 2022 South32 Limited (Incorporated in Australia under the Corporations Act 2001 (Cth)) (ACN 093 732 597) ASX / LSE / JSE Share Code: S32 ADR: SOUHY ISIN: AU000000S320 south32.net HERMOSA PROJECT UPDATE PRESENTATION South32 Limited (ASX, LSE, JSE: S32; ADR: SOUHY) (South32) will hold a con
Slide 2: Hermosa Project Update
HERMOSA PROJECT UPDATE 17 January 2022
Slide 3: Important Notices
IMPORTANT NOTICES This presentation should be read in conjunction with the “Hermosa Project Update” announcement released on 17 January 2022, which is available on South32’s website (www.south32.net) and any other disclosures made to the stock exchanges since this date. Figures in italics indicate t
Slide 4: Hermosa Highlights
HERMOSA HIGHLIGHTS Taylor PFS demonstrates its potential to be Hermosa’s A low carbon, low impact Preferred configuration of a first development and option in the first quartile conventional 4.3Mtpa plant deliver attractive returns of the industry’s cost curve and dual shaft access(a) over multiple
Slide 5: Reshaping Our Portfolio
RESHAPING OUR PORTFOLIO Taylor’s development(a) would further increase our leverage to the metals critical to a low carbon future Our portfolio already has significant exposure to the commodities We have substantial production growth focused on green metals which benefit from the uptake of low carbo
Slide 6: Hermosa Project
HERMOSA PROJECT A large regional landholding hosting multiple development options and exploration targets Hermosa land package Patented • 138Mt zinc-lead-silver sulphide Mineral Resource with a Unpatented Hermosa Exploration Target ranging from 10 to 95Mt(a) Prospects Taylor is an attractive base •
Slide 7: Our Approach to Hermosa's Sustainable Development
OUR APPROACH TO HERMOSA’S SUSTAINABLE DEVELOPMENT Our commitment to sustainable development is embedded in our approach to project development • We are investing in local programs and partnerships that reflect Partnering with local the priorities of the communities around Hermosa communities • We ha
Slide 8: Taylor PFS Summary
TAYLOR PFS SUMMARY Potential for a large scale, low-cost, multi-decade operation adopting a conventional processing circuit PFS summary information Taylor site map Mine design Longhole open stoping underground mine with paste backfill plant Process design Conventional sulphide ore flotation circuit
Slide 9: Taylor Mineral Resource
TAYLOR MINERAL RESOURCE Taylor’s large Mineral Resource is expected to underpin Hermosa’s first phase of development Taylor Deposit geology and mineralisation (looking south-west) Taylor Deposit • 138Mt Mineral Resource with a zinc equivalent grade of 8.61%(a) • Large orebody with a strike length of
Slide 10: Hermosa Exploration Potential
HERMOSA EXPLORATION POTENTIAL Our resource range analysis work supports the potential for further resource growth Taylor Deposit and Exploration Target • A highly prospective mineralised system, open at depth and laterally • We have completed resource range analysis work aimed at developing an uncon
Slide 11: Hermosa Exploration Potential
HERMOSA EXPLORATION POTENTIAL A new exploration target prospective for copper mineralisation Peake prospect Peake prospect(a) • Exploration drilling has identified near-mine exploration targets, including the Peake prospect Clark Deposit Taylor Deposit • High-grade copper-lead-zinc-silver mineralisa
Slide 12: PFS Mine Design
PFS MINE DESIGN Our PFS mine design employs conventional methods, delivering high productivity from multiple faces Taylor Deposit underground mine design Dual shaft access prioritises Ventilation shaft higher grade ore in early years 0 Main shaft Proposed mining method is low technical risk, employi
Slide 13: PFS Process Design
PFS PROCESS DESIGN Conventional sulphide ore flotation circuit that produces separate zinc and lead concentrates with silver credits LEAD CIRCUIT CONCENTRATE HAULAGE ORE MINING CONCENTRATE HAULAGE Lead rougher circuit feeds into the zinc rougher circuit Lead thickener produces lead concentrate CRUSH
Slide 14: Site Infrastructure
SITE INFRASTRUCTURE Project’s initial water treatment plant and tailings storage facility are already established Existing water and tailings infrastructure Water • Additional capital required to establish water wells and a second water treatment plant • The first water treatment plant is installed
Slide 15: Transport and Logistics
TRANSPORT AND LOGISTICS Hermosa is well located with the potential to serve multiple markets from established infrastructure Transport logistics Concentrate readily exported to Asian and European smelters Phoenix United States of America Tucson Access to multiple North American ports Hermosa project
Slide 16: PFS Product Recoveries
PFS PRODUCT RECOVERIES Taylor is expected to produce high-quality zinc and lead concentrates, with substantial silver by-product credits Average metal recoveries % Mid-grade zinc concentrate with relatively high silver content 91% 90% 81% High-grade lead concentrate Silver primarily reports to the l
Slide 17: PFS Production Profile
PFS PRODUCTION PROFILE Preferred PFS development scenario to target throughput of up to 4.3Mtpa(a) Payable ZnEq production and ZnEq head grade5 PFS production schedule has first ore ktpa, LHS; %, expected in FY27 and a single stage ramp up to nameplate in FY30 Up to 4.3Mtpa nameplate capacity, ~22 y
Slide 18: PFS Operating Unit Costs
PFS OPERATING UNIT COSTS Operating unit costs are expected to benefit from underground productivity, production scale and favourable location Operating unit costs7 US$/t ore milled (average) Operating unit costs • Mining costs include all activities related to underground Negative Operating unit cos
Slide 19: PFS Operating Unit Costs
PFS OPERATING UNIT COSTS Taylor’s unit costs are expected to be in the first quartile of the industry’s cost curve(a) Zinc total cash and sustaining costs curve CY29(a) USc/lb, real 1 January 2021, net of credits Potential opportunities to further reduce operating costs during feasibility include: 2
Slide 20: PFS Capital Expenditure
PFS CAPITAL EXPENDITURE Upfront investment required to Four year construction period support additional orebody dewatering following final investment decision • Direct growth capital includes estimates for all mining, processing and Pre-production capital expenditure other surface infrastructure, in
Slide 21: PFS Timeline and Approvals
PFS TIMELINE AND APPROVALS Taylor feasibility study and a final investment decision expected in mid CY23 Preferred development path assumed in the PFS(a) PFS completed Dewatering Feasibility study Shaft development First production construction completed and final commences targeted commences invest
Slide 22: Clark Scoping Study
CLARK SCOPING STUDY Scoping study has confirmed the potential to produce battery-grade manganese via Clark’s separate development Taylor and Clark Deposits (looking south-west) • Clark Deposit • 55Mt Mineral Resource averaging 2.31% zinc, 9.08% manganese and 78g/t silver(a) • Mineralised from surfac
Slide 23: Hermosa Regional Exploration
HERMOSA REGIONAL EXPLORATION Hermosa hosts a highly prospective regional land package with the potential for future discoveries • We have increased our tenure by 66% since acquisition, consolidating the most prospective areas for 0 5km polymetallic and copper mineralisation • Prospective corridor id
Slide 24: Looking Ahead
LOOKING AHEAD PFS results show Taylor’s Taylor feasibility study and Critical path works including potential to underpin Hermosa’s final investment decision dewatering infrastructure first stage of development expected in mid CY23 expected to commence in H2 FY22 Evaluating opportunities to reduce We
Slide 25: Summary
SUMMARY Hermosa is a regional scale Taylor PFS has defined the Potential to add to our broader opportunity pursuing critical potential for an initial mine portfolio’s substantial production green metals, with the potential development in the first quartile growth in metals critical for multiple stag
Slide 26: Supplementary Information
SUPPLEMENTARY INFORMATION
Slide 27: Zinc Market
ZINC MARKET Supply expected to fall 3.5% pa to 2030, Strong demand in transport, consumer and Rapid deployment of wind and solar requiring investment in new mine supply industrial sectors, with rising intensity of use infrastructure to create new demand and inducement pricing Zinc primary demand (kt
Slide 28: Lead Market
LEAD MARKET EV penetration rates and resultant Growth in the ICE(a) fleet will support Renewable energy storage will scrap supply will ultimately demand in the short to medium term remain a key component of demand determine the market balance Total lead demand by end-user sectors Demand 2020 2040 •
Slide 29: Silver Market
SILVER MARKET Lack of new high-content silver 14x increase in solar capacity Silver used extensively in solar panels polymetallic mines expected to anticipated in a 1.5C world culminate in a material market deficit Primary silver demand: 2020 to 2040 (Moz) Demand • Silver is the preferred metal used
Slide 30: Footnotes
FOOTNOTES 1. Group FY21 operating revenue excluding South Africa Energy Coal. Refer to market release “Financial Results and Outlook – year ended 30 June 2021” dated 19 August 2021. 2. 45% interest in the Sierra Gorda copper mine. Refer to market release “South32 to acquire a 45% interest in the Sie
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