Hudbay Minerals (TSX:HBM,NYSE:HBM) and Mitsubishi (TSE:8058,OTCPL:MSBHF) have approved construction of Copper World in Arizona, clearing the way for what Hudbay calls the "next major US copper mine" to start production in the second half of 2029.
The final investment decision was released on Wednesday (October 21) along with the results of a definitive feasibility study for the project, which sits about 50 kilometers (31 miles) southeast of Tucson.
Hudbay owns 70 percent of Copper World, and Mitsubishi holds the remaining 30 percent under a joint venture agreement signed in January.
The study outlines average production of 102,000 metric tons of copper a year over the first 10 years, 11 percent more than the 92,000 metric tons in the 2023 prefeasibility study, at average cash costs of US$1.65 per pound.
Hudbay expects its consolidated copper production to reach about 250,000 metric tons a year, double current levels, as Copper World comes online alongside other brownfield growth projects.
"We successfully executed a disciplined capital allocation strategy and ideal funding plan that only requires Hudbay to fund one-quarter of the project capital cost and defers Hudbay's first capital contribution to 2028, resulting in superior IRRs," said Eugene Lei, Hudbay's president and chief financial officer, who also chairs the Copper World joint venture board.
An extension case stretches the mine life to 37 years using only measured and indicated resources and expands mining onto federal land in year 10, subject to federal permits.
"This project adds more than 100,000 tons of annual copper production over the first 10 years, and the DFS demonstrates the full potential of the project in the Extension Case, delivering higher annual copper production for more than 30 years," Hudbay CEO Peter Kukielski said.
"Copper World is important to our growth strategy and the US copper landscape," said Taro Abe, chief operating officer of the Critical Minerals Division in Mitsubishi's Mineral Resources Group.
Additionally, Hudbay holds permits for a concentrate leach facility that would produce copper cathode, and said that facility could add about US$377 million to the project's after-tax NPV.
Kukielski described the next phase as building "a leading copper district in Arizona." In March, Hudbay agreed to acquire Arizona Sonoran Copper Company (TSX:ASCU) in an all-share deal that would give it full ownership of the Cactus project in southern Arizona.
Hudbay said at the time that the transaction, together with Copper World, would create North America's third-largest copper district.
On Wednesday morning, shares of Hudbay were trading at C$33.22 as of 10:06 a.m. EST.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.