Ma’aden and Ivanhoe Electric to Establish a 50/50 Joint Venture to Explore for Copper, Gold, Silver and Electric Metals in the Kingdom of Saudi Arabia Saudi Exploration Joint Venture to Deploy the Disruptive Power of Typhoon™ on a Wide Scale Covering Approximately 48,500 km2 of
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January 11, 2023
Ma’aden and Ivanhoe Electric to Establish a 50/50 Joint Venture to
Explore for Copper, Gold, Silver and Electric Metals in the
Kingdom of Saudi Arabia
Saudi Exploration Joint Venture to Deploy the Disruptive Power of
Typhoon™ on a Wide Scale Covering Approximately 48,500 km2 of
the Underexplored Arabian Shield
Ma’aden to make a US$126.4 Million Strategic Investment into
Ivanhoe Electric to Fund the Joint Venture and the Company’s
US Projects
PHOENIX, ARIZONA & RIYADH, SAUDI ARABIA – Ivanhoe Electric (NYSE American: IE;
TSX: IE) Executive Chairman Robert Friedland , and President and Chief Executive
Officer Taylor Melvin, are pleased to announce that the Company has today executed a
binding Heads of Terms (the “Agreement”) with Saudi Arabian Mining Company
Ma’aden (“Ma’aden”) (Saudi Stock Exchange Tadawul: 1211). Ma’aden is among the
fastest growing mining companies in the world and the largest multi-commodity mining
and metals company in the Middle East , with a vision of being a sustainable mining
champion with a global presence. Ma’aden explores for, and mines, m inerals within
Saudi Arabia including gold, silver, copper, zinc, phosphate and other industrial
minerals and has a market capitalization of approximately US$48 billion.
The Agreement sets out the binding framework for a strategic investment of US$126.4
million by Ma’aden into the common stock of Ivanhoe Electric and the concurrent
establishment of a 50/50 exploration joint venture in Saudi Arabia (the “Joint Venture”).
This Agreement was signed today at the Future Minerals Forum taking place in Riyadh,
Saudi Arabia, and is expected to be completed by the end of Q1 2023.
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Key Terms of the Strategic Investment
• Ivanhoe Electric will issue approximately 10.2 million new common shares to
Ma’aden at a price of US$12.38 per share for gross proceeds of US$126.4 million,
resulting in Ma’aden becoming a 9.9% shareholder. Ma’aden will have anti-dilution
rights to allow it to maintain its 9.9% ownership.
• US$60 million of the gross proceeds are to be retained by Ivanhoe Electric for use
in advancing its US mineral projects, and for working capital and general corporate
purposes.
• Ma’aden to obtain the right to appoint one independent director to the Ivanhoe
Electric Board of Directors, bringing the Company’s board size to nine members.
Key Terms of the Joint Venture
• Ivanhoe Electric and Ma’aden will establish a new Saudi Arabian exploration Joint
Venture which will be owned 50/50 and established for an initial term of 5 years. It
may be extended up to 10 years upon mutual agreement.
• Ma’aden will make available approximately 48,500 km2 of land under exploration
license or license application within Saudi Arabia for exploration by the Joint
Venture.
• Ivanhoe Electric will contribute approximately US$66 million to the Joint Venture,
of which up to US$13 million will be used to fund the purchase of three new
generation TyphoonTM machines which will be owned by the Joint Venture. Prior to
the delivery of the new Typhoon™ units, Ivanhoe Electric will make available an
existing Typhoon™ unit to commence surveying in Saudi Arabia.
• Ivanhoe Electric will provide the Joint Venture with a royalty-free license to use
Typhoon™ within Saudi Arabia for the purpose of mineral exploration. The license
will remain exclusive to the Joint Venture in Saudi Arabia and effective while the
Joint Venture is continuing.
• The Joint Venture will operate through an equally constituted board of directors
and Technical Committee.
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Mr. Friedland commented from the Future Mineral s Forum, currently taking place in
Riyadh, Saudi Arabia : “Today’s agreement is our first major transaction since
successfully completing our IPO in mid-2022. The deal combines a conventional
corporate-level investment with a groundbreaking exploration Joint Venture centered
around the application of Ivanhoe Electric’s disruptive Typhoon ™ technology in the
Kingdom of Saudi Arabia . Ma’aden’s announced investment is a clear vote of
confidence by a major mining company in our US projects and in our vision to re-invent
mining for the electrification of everything , by agreeing to become one of our largest
shareholders.”
Mr. Friedland continued, “This Joint Venture in Saudi Arabia will set us down a new path
with Typhoon™. This will be the first wide-scale use and deployment of our disruptive
geophysical surveying tool to a third party for the mutual benefit of both companies and
their stakeholders. When Ma’aden proposed the idea of using the world’s best
geophysical surveying tool on on e of the world’s most prospective but underexplored
land areas in the Kingdom, our entire team jumped at the opportunity to be a part of this
new venture with its potential impact on Vision 2030.”
Ma’aden Chief Executive Officer Mr. Robert Wilt commented: “Ma’aden’s strategic
investment in Ivanhoe Electric is a critically important moment in our journey to
becoming a leading supplier of strategic minerals, which will fuel global economic
growth over the coming decade. Though our partnership with Ivanhoe Electric we are
advancing our capability to unlock the potential of our exploration portfolio to secure
supply of strategic minerals and strengthening our international presence. We are
continually looking at opportunities like this one to develop Saudi Arabia’s tremendous
mineral wealth and Ivanhoe Electric is an ideal partner.”
The Disruptive Power of Typhoon™ and Highly Advanced Computational
Geoscience Inc. Software to Seek Hidden Mineral Deposits in the Saudi Desert
Typhoon™ is the brand name for Ivanhoe Electric’s proprietary electrical geophysical
surveying transmitter, which can detect the presence of sulfide minerals containing
copper, nickel, gold and silver (as well as water and oil). The technology was developed
by our former parent I-Pulse to unlock exploration in areas where potential deposits are
hidden by cover, where target depths exceed the range of conventional geophysical
surveying systems, or where the scale and topography of an exploration target area
prevents efficient and cost-effective conventional surveying.
Typhoon™ achieves this through its unique specification s, which includes a current
output of up to 200 amps and a voltage output of up to 10,000 volts. The transmitter
uses switches and capacit ance systems which generate a very pure and stable
transmitted signal, resulting in an extremely high signal -to-noise ratio. Typhoon™ is
also capable of transmitting both induced polarization and electromagnetic signals,
meaning that the same transmitter can be used to search for a wide variet y of mineral
deposit types.
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Typhoon™ was specifically developed to effectively conduct large surveys and identify
deep geophysical anomalies in environments that have highly resistive surface
conditions, such as those seen in the Arabian Shield. Typhoon™ is the ideal tool for
surveying many parts of Saudi Arabia where the bedrock is hidden by sand and gravel
cover that can exceed 1 kilometer in depth – as similarly experienced at Ivanhoe
Electric’s Santa Cruz project in Arizona, USA.
Ivanhoe Electric currently has three Typhoon™ units and three more will be produced
for the Joint Venture in the first half of 2024. Three additional Typhoon™ units on order
with I-Pulse will be delivered subsequently to Ivanhoe Electric. When the construction
and delivery of these six new generation units is completed, the global fleet of
Typhoon™ units will have tripled from three to nine.
Mr. Melvin commented: “Typhoon™ is a transformational technology and a unique
asset for Ivanhoe Electric. The machines and supporting CGI data analytics can
potentially unlock remarkable new business opportunities for us. We intend to increase
the number of Typhoon™ units to meet the future exploration needs of Ivanhoe Electric
in the US and to support new opportunities. The Joint Venture with Ma’aden is just our
first foray into how we can best capture the value of Typhoon™ outside of exploring our
own projects.”
Typhoon™ Sees What Other Technologies Cannot
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Ivanhoe Electric Proprietary Typhoon™ Technology
Click on the video link below
Ivanhoe Electric also controls a data inversion business, Computational Geosciences
Inc. (“CGI”). CGI was founded in 2010 to commercialize innovative technology
developed at the University of British Columbia, Canada to improve and enhance
mineral exploration. The CGI technology consists of sophisticated codes to process
geophysical data and build 3D subsurface images that could indicate the presence of
various metals and minerals. The data processing and artificial intelligence software
developed by CGI complements our Typhoon ™ technology and represents the only
software product that can process the full spectrum of geophysical data produced by
Typhoon™ efficiently.
CGI will process the tremendous amounts of data that will be produced by the Saudi
exploration Joint Venture.
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Typhoon™ in action at Ivanhoe Electric’s Tintic Copper-Gold Project in
Utah, USA
Completion Expected by the End of Q1 2023
The Agreement signed today in Riyadh is a framework agreement that sets out the
binding parameters of the transactions disclosed today. It will be replaced by a more
detailed definitive agreement which the parties have agreed will include the key terms
from today’s Agreement, and which may only be changed if required to satisfy legal or
regulatory requirements, for the establishment of the Saudi Arabian Joint Venture
entity, or if required to meet the technical specifications and needs for the use of
Typhoon™ in the Kingdom. The Agreement will terminate three months from signing if
the more detailed definitive agreements are not executed by such time.
Other Terms of the Agreement
• Ivanhoe Electric will obtain a five-year standstill preventing Ma’aden from
increasing its shareholding beyond 19.9% without approval from Ivanhoe Electric’s
Board of Directors.
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• Ma’aden will agree for five years to vote in favor of certain matters as a shareholder
for so long as it has its director appointment right, including to vote in favor of the
election of all director nominees and to vote in favor of all matters that have been
approved by a majority of the independent directors of Ivanhoe Electric.
• Ma’aden will also agree for five years not to dispose of any shares, except under
certain conditions.
• A Technical Committee will supervise the exploration activities of the Joint Venture
including an initial “land identification stage” where the land Ma’aden is making
available will be reviewed and reduced to the most prospective areas for
TyphoonTM deployment. This will be followed by generative exploration and drilling
stages aimed at identifying mineral resources.
• Ivanhoe Electric will be the operator during the exploration phase. Ma’aden will
assume operatorship if an economically viable deposit is found and is designated
by the Joint Venture for further development.
• Ivanhoe Electric will provide training and development to an agreed number of
employees of the Joint Venture, on mineral exploration, geology, and the operation
of the Typhoon™ units.
• The parties have agreed to discuss the potential for a local Saudi stock exchange
listing for the Joint Venture entity, and to discuss the potential for Ivanhoe Electric
to convert its equity interest in future discoveries into royalties.
The transactions also remain subject to certain conditions being satisfied, including:
• Negotiation and execution of the definitive agreements.
• Approval of a supplemental listing application from the New York Stock Exchange.
• Toronto Stock Exchange approval.
• Other customary regulatory approvals.
The disclosure of the transactions in this press release is necessarily of a summary
nature and is qualified by text of the Heads of Terms itself which will be filed with the
US Securities Exchange Commission.
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About Ma’aden
Ma’aden is the largest multi-commodity mining and metals company in the Middle East
and among the fastest -growing mining companies in the world, with revenues of SAR
26.7 billion (US$7.12 billion) in 2021. Ma’aden is developing the mining industry into the
third pillar of the Saudi economy in line with Vision 2030, and aims to be a role model
in responsible and sustainable operations. Ma’aden operates 17 mines and sites, has
6,000+ direct employees and exports products to over 30 countries. Ma’aden is
embarking on massive growth over the next 18 years across phosphate, aluminum,
gold, copper and new minerals.
Website https://www.maaden.com.sa/
About Ivanhoe Electric
Ivanhoe Electric is an American technology and mineral exploration company that is re-
inventing mining for the electrification of everything by combining advanced mineral
exploration technologies, renewable energy storage solutions and electric metals
projects predominantly located in the United States. Ivanhoe Electric uses its
Typhoon™ transmitter, an accurate and powerful geophysical survey system, together
with advanced data analytics provided by its subsidiary, Computational Geosciences,
to accelerate and de -risk the mineral exploration process as well as to potentially
discover deposits of critical metals that may otherwise be undetectable by traditional
exploration technologies. Through its controlling interest in VRB Energy, Ivanhoe
Electric also develops and manufactures advanced grid -scale vanadium redox battery
storage systems. Finally, through advancing its portfolio of electric metals projects
located primarily in the United States, headlined by the Santa Cruz Copper Project in
Arizona and the Tintic Copper-Gold Project in Utah, as well as projects in Montana,
Oregon and North Carolina, Ivanhoe Electric is also well positioned to support American
supply chain independence by delivering the critical metals necessary for electrification
of the economy.
Contact Information
Valerie Kimball, Director of Investor Relations
+1.720.933.1150
Website www.ivanhoeelectric.com
Forward-Looking Statements
Certain statements in this news release constitute “forward -looking statements” or “forward -
looking information” within the meaning of applicable US and Canadian securities laws. Such
statements and information involve known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements of the company, its projects,
or industry results, to be material ly different from any future results, performance or
achievements expressed or implied by such forward -looking statements or information. Such