Hudbay Minerals approves US$2.07B Copper World construction
Hudbay expects to contribute about US$500 million from 2028, with first production at the Arizona mine targeted for the second half of 2029.
Mara Quinlan
Hudbay Minerals Inc. TSEHBM NYSEHBM said on Wednesday it and its partner approved construction of Copper World in Arizona, with reported initial growth capital of US$2.07 billion. Hudbay expects to contribute about US$500 million, compared with its earlier estimate of US$200 million.
Hudbay shares TSEHBM fell 1.42 per cent to C$33.27 at Tuesday's 4:00 p.m. EDT close in Toronto, before Wednesday's announcement.
Hudbay owns 70 per cent of Copper World, while Mitsubishi Corporation TYO8058 holds 30 per cent. First production is targeted for the second half of 2029, following the partners' construction approval.
The Oct. 21 funding plan includes Mitsubishi's US$600 million initial equity investment and a US$230 million precious metals stream deposit. It also anticipates roughly US$650 million in project debt, with Hudbay's first capital contribution deferred until 2028.
The earlier Hudbay contribution estimate, disclosed on Aug. 13, 2025, relied on pre-feasibility estimates. The new figure accompanies the definitive feasibility study and the updated financing plan.
The Oct. 21 capital estimate includes about US$200 million for scope changes since the 2023 study. The plan starts the concentrator at 60,000 U.S. short tons a day, with an expansion to 90,000 in year five.
Mitsubishi said on Wednesday it expects an additional US$423 million equity contribution, with the amount adjustable depending on external financing secured. That commitment comes on top of its initial investment.
"Hudbay is well-positioned to fund capital contributions from its existing cash balance and liquidity, as well as projected strong free cash flow from its diversified operations during Copper World's project development," Hudbay said in the release.
The Oct. 21 study forecasts average annual copper production of 102,000 tonnes over the first decade, compared with 92,000 tonnes in the 2023 pre-feasibility study. Average cash costs over that period are estimated at US$1.65 a pound.
The expansion lifts forecast average annual copper output to 120,000 tonnes in years six to 10, from 84,000 tonnes in the first five years.
The base case has a 15-year mine life and requires only state and local permits. A separate extension case envisages 37 years, with mining on federal land subject to federal permits.
At an assumed copper price of US$5.00 a pound, the Oct. 21 study estimates a base-case after-tax net present value of US$1.2 billion. The valuation uses an 8 per cent discount rate, and the project internal rate of return is 17 per cent.
Read more: Magna Mining reports C$251M Crean Hill NPV and approves 2027 construction
Hudbay expects to close its enlarged US$700 million revolving credit facilities in the fourth quarter of 2026, extending their maturity to November 2030.
