South32 produces development and exploration update
South32 in its quarterly report March 2021 reports strong operating performance across the portfolio during the quarter combined with improving prices for most of its commodities saw the net cash position increase to US$517 million.
South32 directed US$11M in the nine months ended March 2021 to regional exploration programs at Hermosa as drilling activity that had been impacted by COVID-19 restrictions resumed. South32 continue to progress its pre-feasibility study for the Taylor Deposit with work expected to be completed in the June 2021 quarter, ahead of a market update being provided.
A separate scoping study for the Clark Deposit focussed on metallurgy and the manganese battery chemicals market is also underway, with completion expected in H1 FY22.
The Ambler Metals Joint Venture entered into an agreement with the Alaska Industrial Development and Export Authority (AIDEA) for shared pre-development costs for a 340km road to access the Ambler region. Federal permits for construction of the road have been received by AIDEA, with pre-development costs of US$17.5M (South32 share) expected to be incurred over four years to deliver feasibility and permitting activities, ahead of reaching a decision on construction of the project by the end of CY24.
Of this total commitment to be funded from the Joint Venture, South32 expects to spend US$3.3M (South32 share) in the CY21 field season, with AIDEA having also entered into a land access agreement with Alaska Native regional corporation Doyon, Limited (Doyon) covering areas owned and managed by Doyon along the proposed route for the road.
Consistent with South32 strategy, that includes partnering with companies to fund early stage greenfield exploration opportunities, South32 invested US$12M in the nine months ended March 2021.
Although the risks associated with COVID-19 persist across a majority of its exploration jurisdictions, South32’s partners in the United States and Peru were able to progress drilling, while fieldwork also resumed in Australia, Ireland and elsewhere in South America during the March 2021 quarter.
South32 directed US$28M towards exploration programs at its existing operations and development options in the nine months ended March 2021 (US$22M capitalised), including US$2M for its EAI (US$1M capitalised), and US$11M at Hermosa as noted above (all capitalised).
