S32CD South 32 Limited

By Rhiannon Hoyle

South32 on Monday said it expects a noncash impairment expense of roughly $1.3 billion in relation to the Taylor deposit at its Hermosa project in the Patagonia Mountains of southern Arizona.

The company said recent studies have shown it can develop the Taylor zinc-lead-silver and Clark battery-grade manganese deposits independently and that it is now required to assess those deposits and the regional exploration land package individually.

South32 said the Taylor deposit has been negatively impacted by a number of factors since the Hermosa project was acquired in 2018, including delays related to the pandemic.

"We are disappointed by the delays resulting from the impact of Covid, the significant dewatering requirements and current inflationary market conditions," said Chief Executive Graham Kerr.

"We continue to see substantial opportunity to unlock additional value across Taylor, Clark and our highly prospective regional exploration package and that optionality is not included in today's impairment assessment," he said.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

July 23, 2023 18:55 ET (22:55 GMT)

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