rosemont
Operator: Hudbay
Location: USA
Term of Stream: Life of Mine
Stream Parameters: 100% of silver production and 100% of gold production
Upfront Consideration: US$230M
Primary Metal: Copper

Project Overview

The Rosemont Copper Project is a copper-molybdenum-silver porphyry deposit located in Pima County, Arizona. Hudbay acquired the project in July 2014 through the acquisition of Augusta Resources Corporation.

The Rosemont Deposit consists of skarn-hosted copper-molybdenum-silver mineralization related to quartz-monzonite porphyry intrusions. Genetically, it is a style of porphyry copper deposit, although intrusive rocks are volumetrically minor within the resource area. Mineralization is mostly in the form of primary (hypogene) copper-molybdenum-silver sulfides, found in stockwork veinlets and disseminated in the altered host rock. Some oxidized copper mineralization is also present in the upper portion of the deposit.

In 2015, Hudbay completed a two-year confirmatory drill program consisting of 89 holes and advanced the engineering in a number of areas, including through a metallurgical test program. Furthermore, Hudbay completed a definitive feasibility study for Rosemont in March 2017 demonstrating robust project economics. On March 8, 2019, Hudbay announced that the U.S. Army Corps of Engineers had issued a Section 404 Water Permit for the Rosemont Project and on March 21, 2019, Hudbay announced its receipt of the approved Mine Plan of Operations ("MPO") for the Rosemont project from the U.S. Forest Service. Hudbay has indicated that the issuance of the MPO is the final administrative step in the permitting process.

Precious Metal Purchase Agreement

On February 10, 2010, Wheaton agreed to pay upfront cash payments totaling US$230 million to acquire an amount equal to 100% of the life of mine payable silver and gold production from Rosemont, for the lesser of US$3.90 per ounce of silver and US$450 per ounce of gold (both subject to an inflationary adjustment) or the prevailing market price per ounce of silver and gold delivered. 

Effective February 8, 2019, Wheaton amended the Rosemont PMPA. In connection with the amended Rosemont PMPA, the Company is committed to pay Hudbay total upfront cash payments of $230 million in two installments, with the first $50 million being advanced upon Hudbay’s receipt of permitting for the Rosemont project and other customary conditions and the balance of $180 million being advanced once project costs incurred on the Rosemont project exceed $98 million. Under the amendment, the Company is now permitted to elect to pay the deposit in cash or the delivery of common shares and Hudbay has provided a corporate guarantee. Additionally, the Company will be entitled to certain delay payments, including where construction ceases in any material respect, or if completion is not achieved within agreed upon timelines.

More Information

For more information about Rosemont, please visit Hudbay’s website at www.hudbay.com.

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