Hudbay Minerals Inc. has received the approved Mine Plan of Operations (MPO) for the Rosemont project, located in Arizona, from the U.S. Forest Service. The issuance of the MPO is the final administrative step in the permitting process.

“Receiving the MPO is an important milestone that completes the permitting process at Rosemont,” said Alan Hair, Hudbay president and chief executive officer. “With the receipt of the Section 404 Water Permit, an agreement to consolidate 100% ownership and receipt of the approved MPO, Hudbay continues to move the project forward.”

Rosemont is now a fully permitted, shovel-ready copper project, according to Hair.

Rosemont is an undeveloped copper projects delivering a 15.5% after-tax unlevered internal rate of return at a copper price of $3 per pound based on the 2017 Feasibility Study published by Hudbay. Rosemont is expected to produce approximately 127,000 metric tons (mt) of copper over the first 10 years of operations.

Wheaton’s wholly owned subsidiary, Wheaton Precious Metals International Ltd., has a precious metals purchase agreement with Hudbay on the Rosemont project, in exchange for an upfront payment of $230 million paid in two installments.

In related news, Hudbay Minerals Inc. has reached an agreement with United Copper & Moly LLC (UCM) to purchase UCM’s 7.95% interest in the Rosemont project, and to terminate all of UCM’s remaining earn-in and off-take rights, for upfront cash consideration of US$45 million, plus three annual installments of US$10 million per year, commencing July 1, 2022. In connection with the transaction, Hudbay has agreed to release UCM from any and all obligations in relation to the Rosemont project. UCM is jointly owned by Korea Resources Corp. and LG International Corp.

“This transaction simplifies the ownership structure and improves our financial flexibility for the development of Rosemont,” Hair said.

Hair added that they will soon start looking for a development joint venture partner for Rosemont.

In addition to simplifying the ownership structure, the transaction also removes the current governance structure with UCM, which was inherited from the previous owner of Rosemont.

The UCM transaction is expected to close not later than April 25, subject to the approval of the parties’ respective boards of directors and the execution of a definitive agreement.