Ivanhoe Electric’s Preliminary Feasibility Study for the Santa Cruz Copper Project in Arizona Defines a High-Quality Underground Mining Operation with Strong Economics Advanced United States Copper Project on Private Land with
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June 23, 2025
Ivanhoe Electric’s Preliminary Feasibility Study for the Santa
Cruz Copper Project in Arizona Defines a High-Quality
Underground Mining Operation with Strong Economics
Advanced United States Copper Project on Private Land with
an After-Tax Net Present Value8% of $1.9 Billion and a 24.0%
Internal Rate of Return at Current COMEX Copper Price
Updated Reserves and Mine Plan Support 100% Heap Leach
Process Producing 1.4 Million Tonnes of Copper Cathode Over
23 Year Mine Life
Low Initial Capital of $1.24 Billion and First Quartile Unit Cash
Costs of $1.32 Per Pound of Copper
Highly Engineered Study Will Be Used to Secure Project
Financing
Initial Construction Targeted for First Half 2026, with First
Copper Cathode Production Projected in 2028
Significant Copper Resources Support Future Expansion
Potential on Existing Land Package
PHOENIX, ARIZONA – Ivanhoe Electric Inc. (“Ivanhoe Electric”) (NYSE American:
IE; TSX: IE) Executive Chairman Robert Friedland and President and Chief
Executive Officer Taylor Melvin are pleased to announce the completion of the
Preliminary Feasibility Study (the “Study”) for the Company’s Santa Cruz Copper
Project in Arizona. Located in the heart of Arizona, a state known for its prolific
mining history and its booming technology industry, the Santa Cruz Copper
Project is poised to become one of the nation’s next major domestic producers of
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refined copper. The highly engineered Study confirms the strong economics of a
high-quality, high-grade underground copper mining operation and heap leach
processing facility supported by modern technologies. The NI 43-101 Technical
Report co-filed in Canada will include the Study as a Feasibility Study as defined
by the Canadian Institute of Mining, Metallurgy and Petroleum.
The Preliminary Feasibility Study, as prepared under United States regulatory
requirements, provides the requisite engineering studies needed to pursue long-
term project financing. Project financing efforts are already underway. Ivanhoe
Electric is pursuing multiple avenues of funding, including support from United
States government agencies, commercial lending institutions, and potential
strategic partners at the asset level. On April 15, 2025, Ivanhoe Electric received a
Letter of Interest from the Export-Import Bank of the United States outlining the
potential to provide up to $825 million in debt financing with a 15-year repayment
tenor under the Make More in America initiative (refer to Ivanhoe Electric’s April
15, 2025 news release).
Mr. Friedland commented: “Given global conflicts that concern us all, the United
States is now awake to the urgent national security imperative to restore
domestic American mineral production to the scale of the American economy.
Our government, industry, and defense establishment clearly recognize the
paramount importance of having a secure, domestic supply of all critical minerals
in the 21st century, including copper. The skillsets and government support
required to mine copper, the king of metals, are the same skillsets required to
mine any and all elements on the periodic table. Our Santa Cruz Copper Project is
at the leading edge of this resurgence – as one of the first new copper mines that
will be opened in the United States in a generation…right in the heart of Arizona –
“the Copper State”, with its burgeoning automotive, defense, and technology
industries…including the likes of Lucid Motors and Taiwan Semiconductor
Manufacturing Company. A simple Google search will show anyone there are
over 1,250 aerospace and defense-related companies in the state of Arizona
alone.
Santa Cruz will mine the largest high-grade copper oxide orebody in
America…which will be processed onsite by a new generation of skilled and
highly paid American workers. Santa Cruz will produce an LME Grade A 99.99%
pure copper cathode product that will be ready for immediate sale to American
industry from our mine gate. Our project will not process concentrate in
antiquated, expensive and polluting smelters or ship copper concentrate back
and forth across international borders for downstream processing. We will
produce pure American copper mined and processed in America, and directly
shipped from Arizona for use in American homes, factories and our national
defense industry. Santa Cruz is the right project, in the right place, at the right
time. Our progress to date could not have been achieved without the support of
our long-term supportive investors, such as Saudi Arabia’s Maaden and BHP, the
world’s largest mining company, and several of the world’s top institutional
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investors who understand the urgent need for domestic copper production. This
is what the American mineral industry and resurgence must look like – clean,
secure, strategic, and ready to support American national security.”
Mr. Melvin commented: “I am proud of the extraordinary work by our Santa Cruz
Project team to complete our Preliminary Feasibility Study on time and on
budget. We have assembled a dedicated team of talented mine engineers and
underground specialists who have been critical in getting us to this point.
Working together with our expert industry consultants, our team’s tireless efforts
have resulted in a highly engineered underground mine plan and a simplified
heap-leach process design with low initial capital, low unit operating costs, and
high copper recoveries. Our advanced Santa Cruz Project will provide high-
paying jobs in Arizona and be a significant long-term U.S. producer of copper
cathode to help meet domestic demand. We are fortunate to have such a high-
quality copper asset on private land with excellent infrastructure in Arizona, a
state with a rich mining history and a bright mining future.”
Highlights of the Preliminary Feasibility Study
High-grade Mineral Reserves
• Probable Mineral Reserves of 136 million tonnes at a grade of 1.08% copper
totaling 1.5 million tonnes of contained copper supports a 23-year mine life
Large, Modern Underground Mining Operation with Simple Process Flowsheet
• 20,000 tonnes per day mining operation utilizing modern mining
technology
• Conventional on/off heap leaching lowers operating costs and initial
surface capital while yielding high copper recoveries of 92.2% over the life
of mine and allowing spent ore to be utilized underground as paste backfill
• Average annual production of 72,000 tonnes of copper cathode during the
first 15 years of mining
Low Project Capital Intensity and Unit Operating Costs Underpin Strong
Economic Results
• Initial project capital of $1.24 billion and a capital intensity of approximately
$17,000 per tonne of copper1
• Global first quartile2 C1 cash costs of $1.32 per pound of copper over the
life of mine, and lowest cost in America
1 Initial capital expenditures divided by average annual copper production for the first 15 years of mining
2 S&P Global Market Intelligence co-product C1 copper cash cost curve (Q4 2024 dataset dated June 2025),
compared to Santa Cruz Copper Project Preliminary Feasibility Study life of mine C1 cash cost and annual average
copper production for the first 15 years of mining
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• At the current COMEX copper price of $4.83 per pound, the after-tax net
present value at an 8% discount rate is $1.9 billion with an internal rate of
return of 24%
• At a base case of $4.25 per pound of copper, the after-tax net present value
at an 8% discount rate is $1.4 billion with an internal rate of return of 20%
Clear Path to Development
• This is the final technical study to support ongoing project financing
discussions
• Private land and mineral rights enable streamlined permitting process
• Indicative development plan targets initial construction in first half of 2026
and first copper cathode production in 2028
High copper grades, high copper recoveries, low initial capital, and low operating
costs give the Santa Cruz Copper Project attractive economics at prices well
below today’s COMEX copper price (Table 1).
Table 1. Life of mine copper price sensitivity
Copper
Price
($/pound)
Pre-tax After-tax
Life of
Mine Free
Cashflow
($ billon)
Net
Present
Value8%
($ billion)
Internal
Rate of
Return
(%)
Life of
Mine Free
Cashflow
($ billion)
Net
Present
Value8%
($ billion)
Internal
Rate of
Return
(%)
3.75 4.73 1.29 17.8% 3.85 0.91 16.3%
4.00 5.44 1.59 20.0% 4.41 1.14 18.2%
4.25 (Base) 6.15 1.88 22.0% 4.96 1.38 20.0%
4.50 6.86 2.17 24.0% 5.52 1.61 21.8%
4.75 7.56 2.47 26.0% 6.07 1.84 23.5%
4.83
(COMEX
Spot*)
7.79 2.56 26.6% 6.25 1.91 24.0%
5.00 8.27 2.76 27.9% 6.63 2.07 25.2%
*COMEX spot price of $4.83 per pound of copper as of June 20, 2025.
Details of the Preliminary Feasibility Study
The Preliminary Feasibility Study is a Highly Engineered Study Supported
by Extensive Drilling, Metallurgical and Hydrogeological Testwork, and
Trade-off Studies Involving Global Leaders in Mine Engineering
Since the 2023 Initial Assessment Study, Ivanhoe Electric has invested more than
$100 million in new drilling, advanced testwork, and extensive engineering
studies to produce the Preliminary Feasibility Study. The Study incorporates data
gathered from an additional 149 drill holes totaling nearly 120,000 meters, more
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than 250 trade-off studies, and hundreds of hydrogeological and metallurgical
tests. Since commencement of exploration at the Santa Cruz Copper Project in
2021, Ivanhoe Electric has completed 329 drill holes totaling 279,000 meters.
Fluor Canada Ltd. served as Project Lead for the Study and was also responsible
for surface infrastructure and heap leach pads, working in close collaboration
with Ivanhoe Electric’s Project team of more than 40 engineers, geologists, and
technicians. Other industry-leading consultants involved in major workstreams of
the Study include BBA USA Inc. for resources, reserves, underground mine
planning and economic analysis, KCB Consultants Ltd. for heap leaching,
Paterson & Cooke USA, Ltd. for paste backfill, Met Engineering, LLC for
metallurgical testing, and INTERA Incorporated for hydrogeology.
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The Study summary results are presented below in Table 2. The Santa Cruz
Copper Project compares favorably on a global scale in terms of C1 cash cost,
and in terms of capital intensity when compared to North and South American
greenfield copper projects (Figure 1 and Figure 2, respectively).
Table 2. Summary results
Description Units Life of Mine First 15 Years
Production Data
Mine Life Year 23 15
Reserve Tonnes Million tonnes 136 106
Copper Grade % 1.08 1.10
Daily Throughput Tonnes per day 15,000 20,000
Annual Copper Production Tonnes per year 56,685 72,186
Total Copper Cathode Produced Thousand tonnes 1,360 1,083
Recovery % 92.2 92.4
Capital Costs
Initial Capital $ million 1,236 -
Sustaining Capital $ million 1,281 1,176
Unit Costs
Mining Cost $ per tonne processed 19.07 19.55
Processing Cost $ per tonne processed 7.31 7.02
General and Administrative Cost1 $ per tonne processed 3.04 3.03
Royalties $ per tonne processed 5.26 5.56
Total Operating Cost $ per tonne processed 34.68 35.16
Operating + Sustaining Cost $ per tonne processed 43.98 46.23
C1 Cash Cost $ per pound of copper 1.32 1.29
All-in-sustaining Cost $ per pound of copper 2.01 1.99
Financial Analysis
Copper Price $ per pound 4.25 4.25
Domestic Cathode Premium $ per pound 0.14 0.14
Pre-tax Free Cashflow $ million 6,148 4,501
Pre-tax Net Present Value8% $ million 1,880 -
Pre-tax Internal Rate of Return % 22.0 -
After-tax Free Cashflow $ million 4,961 3,637
After-tax Net Present Value8% $ million 1,376 -
After-tax Internal Rate of Return % 20.0 -
After-tax Payback Period2 Year 4.4 -
1. General and Administrative Cost inclusive of property tax. 2. After-tax payback period from the start of operations in 2029.
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Figure 1. Cash cost curve of global copper mines, highlighting United States
operating mines
Figure 2. Initial capital intensity compared to North and South American
greenfield copper projects
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The Santa Cruz Copper Project is Located on 100%-owned Private Land in
the Heart of America’s Copper State
The Santa Cruz Copper Project is located approximately 40 miles southeast of
Phoenix, Arizona in Casa Grande on nearly 6,000 acres of 100%-owned private
land, including surface, mineral, and associated water rights necessary for the
mining operation (Figure 3). Casa Grande is at the heart of a rapidly growing
industrial corridor with readily available power and transportation infrastructure
and a skilled local industrial workforce.
Figure 3. Santa Cruz Copper Project location