South32 Mining

Of all the mining projects currently proposed for the Patagonia Mountains, South 32’s Hermosa Project, Taylor Deposit, is the most likely to become an operational industrialized mine within a few years. There are several reasons for this:

• The exploration portion of the project has been underway the longest,
• The proposed underground mine is on private land with full surface and mineral rights and therefore not subject to a Forest Service review,
• South 32 received permits from the State of Arizona to proceed with plans to dewater a three mile radius around the mine site, and
• The Santa Cruz County Board of Supervisors granted South 32 a road easement enabling South 32 to finalize the design and development of the "Cross Creek Road".

 In 2018 South 32, an Australian mining company (a 2015 spin-off of BHP Billiton, the world’s largest mining company), purchased the Hermosa Project for $1.3 Billion. The previous owner was Augusta Group, a Canadian mining exploration company, known locally as Wildcat Silver, Arizona Minerals and Arizona Mining.   

 South 32’s holdings currently include: 

• 31 patented mining claims (they own both surface and mineral rights) on approximately 568 acres, 
• 1957 unpatented mining claims on approximately 34,000 acres of Forest Service land. 
• Their total unpatented mining claims cover more than 53 square miles or an area 40 times the size of the Town of Patagonia, AZ.
• South 32 refers to its 1957 unpatented mining claims as their “broader land package”. The “broader land package” is an integral part of South 32 mining operation because:
  • Based on South 32’s projections, within 5 to 8 years they will no longer have space on their private property for tailings generated by the underground Taylor Deposit mine, 
  • The volume of mine tailings will increase if South 32 proceeds with plans to mine the Clark Deposit, a zinc-manganese-silver deposit, adjacent to the Taylor Deposit.

As part of their pre-feasibility study, South 32 has done exploratory work on the unpatented Forest Service land. The work did not require Forest Service approval as it did not disturb the land surface.  Although neither South 32’s Taylor nor Clark Deposits are located within the San Rafael Valley Watershed, a large portion of their unpatented claims are located in the San Rafael Valley Watershed.  

In August 2020, Unisource Energy announced plans for a new Rio Rico-Harshaw Transmission line to serve the South 32 mine and customers east and south of the South 32 property.

Prior to South 32’s purchase, the Hermosa Project was referred to locally as Wildcat Silver, Arizona Mining and Arizona Minerals.  This is a brief description of the “Hermosa Project” prior to being purchased by South 32. In early 2006 the US Bankruptcy Court approved the ASARCO, LLC sale of the Hardshell Group mining claims to Arizona Minerals Inc.   The mining claims are patented mining claims on private property located near the ghost town of Harshaw, Arizona in the Patagonia Mountains. Arizona Minerals, Inc., a Nevada Corporation was a subsidiary of Wildcat Silver Corporation, a publicly traded company with headquarters in Vancouver, Canada and a company within the Augusta Group. Wildcat Silver later began trading on the Toronto Stock Exchange as Arizona Mining, Inc. This property is the site of the Central Deposit. 

Over the next 12 years, Arizona Mining Inc. (AMI) expanded its operation in the Patagonia Mountains.   

• Exploratory work in the form of extensive geological mapping, geochemical sampling, geophysical surveys and several drilling campaigns were completed on the initial Hardshell claims which became known as the Central Deposit,
• AMI staked more than a 1000 unpatented mining claims on Forest Service land,
• Preliminary plans for the Central Deposit called for an open pit mine that would include both the patent claims on the private land and unpatented claims on Forest Service land,
• In 2010 AMI purchased additional patented mining claims previously owned by ASARCO and began exploration of what has become known as the Taylor Deposit, 
• By August 2014 AMI shifted their attention from the Central deposit to the Taylor Deposit,  
• By 2016 AMI began to release reports on the Taylor Deposit, and 
• Ultimately the Taylor deposit was declared a “world class” ore deposit.

As an exploratory company, AMI had accomplished its goal of finding a major ore deposit. While continuing with exploratory work and developing plans for the Taylor Deposit underground mine, AMI was also looking for someone to buy the project. 

In 2017 South 32 purchased 15% share of AMI stock and became a major single shareholder in AMI. They began participating in the AMI Operations Committee and had a nominee appointed to AMI’s Board.  In June 2018 South 32 announced plans to acquire Arizona Minerals, Inc. for $1.3 Billion. The sale was finalized in 2018.