Ivanhoe Electric plans US$50 million offering
Ivanhoe Electric Inc. [IE-TSX, NYSE American] said it intends to sell US$50 million of units in an underwritten public offering with proceeds earmarked for a preliminary feasibility study at the Santa Cruz project copper project in Arizona, mineral rights payments, drilling and other exploration activities.
Under the terms of the offering, each unit will consist of one common share of Ivanhoe, and one accompanying warrant. Each whole warrant exercisable to purchase one whole common share. In addition, Ivanhoe said it intends to grant the underwriters a 30-day option to purchase up to an additional US$7.5 million worth of units.
The shares rose 2.9% or 25 cents to $8.73 and trade in a 52-week range of $17.51 and $8.32.
Ivanhoe Electric is headed by billionaire mining magnate Robert Friedland. His previous endeavors include nickel discoveries in the Voisey’s Bay area of Newfoundland and Labrador and more recently copper mining operations in Mongolia and the Democratic Republic of Congo (DRC). The DRC assets are held by Ivanhoe Mines Ltd. [IVN-TSX, IVPAF-OTC].
Friedland is Executive Chairman of Ivanhoe Electric, which is led by President and CEO Taylor Melvin.
Ivanhoe is a U.S. company that combines advanced mineral exploration technologies (Typhoon and Computational Geosciences Inc.) with electric metals exploration projects predominantly located in the U.S. It’s mineral exploration efforts focus on copper as well as other metals, including nickel, vanadium, cobalt, platinum group elements, gold and silver. The company also operates a 50/50 joint venture with the Saudi Arabian mining company Ma’aden to explore for minerals on approximately 48,500 square kilometres of underexplored Arabian Shield in the Kingdom of Saudi Arabia.
Ivanhoe has already completed an initial assessment (IA) for the Santa Cruz project in Arizona.
“Our goal is to develop a modern copper mine that produces copper with among the lowest levels of carbon dioxide output in the industry, a product we think has the potential to attract a premium price in the future,’’ the company has said.
The IA is a preliminary technical and economic study focusing on the potential for a high grade 15,000 tonne-per-day underground oxide copper mining operation (to be largely powered by renewable energy).
The IA envisions an underground operation producing 50,000 tonnes per year of cathode copper over a 20-year initial mine life based on a life-of-mine average grade of 1.58% copper and a cash cost of US$1.36 a pound
The initial capital expenditure is estimated at US$1.15 billion followed by a life of mine sustaining capital expenditure of 988 million.
The company was recently in the news when it announced a definitive exploration alliance agreement with a subsidiary of BHP Billiton Ltd. [BHP-NYSE, BHPLF-OTCPK]. The aim is to explore areas of interest in the U.S. to identify projects that may become 50/50%-owned joint ventures.