South32 (LSE:S32) said its Taylor zinc‑lead‑silver development at the Hermosa project will require about US$3,300M of growth capital, up ~US$1,100M from final investment approval, and that contractor underperformance has delayed shaft commissioning, moving full nameplate capacity from FY30 to FY31.
The capex increase reflects a change in scope to add decline access (~US$100M), higher shaft construction costs (~US$450M), materially higher inflation and industry input costs, and US tariff impacts (~US$500M).
"Our updated assessment of project execution has reaffirmed Taylor's potential to deliver our shareholders attractive returns from its long‑life, low‑cost production of zinc, silver and lead," Chief Executive Officer Graham Kerr said.
Infill drilling lifted the Taylor Ore Reserve by 52% to 99Mt and increased the Taylor Mineral Resource by 10% to 169Mt, while the adjacent Peake resource rose 32% to 33Mt.
Taylor's initial operating life has been extended by five years to about 33 years and life‑of‑mine payable production is now estimated at 10.4Mt ZnEq (3.7Mt zinc, 4.6Mt lead, 247Moz silver).
Steady‑state production is estimated at ~346kt ZnEq annually (123kt zinc, 155kt lead, 8.2Moz silver) with operating unit costs revised to ~US$100/t.
Completion of the Clark decline allows earlier access and is expected to enable first ore via Clark in mid‑FY28 and first production in H2 FY28, with first shaft production now expected in H1 FY29 and a more gradual ramp to nameplate.
Taylor's steady‑state EBITDA is estimated at ~US$650M per annum and a post‑tax NPV of ~US$3,100M on South32's base assumptions, rising to ~US$800M EBITDA and ~US$4,500M NPV at spot prices.
About US$2,100M of the growth capital is expected to be spent between Q4 FY26 and H2 FY28 and sustaining capital is now forecast at about US$50M per annum.
Hermosa remains in the US FAST‑41 process and federal permitting is on track for a Final Record of Decision and notice to proceed in H1 FY27.
