Ivanhoe Electric JV kicks off Saudi exploration campaign

Ivanhoe Electric (TSX: IE; NYSE-AM) has kicked off one of the biggest mineral exploration programs ever in oil-rich Saudi Arabia with its 50/50 joint venture partner, state-owned mining company Ma’aden.

The joint venture has exclusive access to 48,500 sq. km of land on the Arabian Shield. Ivanhoe is the operator during exploration, but if an economically viable deposit is found Ma’aden will take over.

The early exploration program will see Ivanhoe deploy its proprietary Typhoon geophysical surveying technology, which can detect sulphide minerals potentially containing copper, nickel, gold and silver.

Through its Vision 2030 project announced in 2019, Saudi Arabia hopes to establish mining as a pillar of its economy in an effort to diversify away from oil.

“It has been a little over a year since we initiated discussions with Ma’aden, resulting in Ma’aden’s significant investment in Ivanhoe Electric and the establishment of our Saudi Arabian exploration joint venture in July,” executive chairman Robert Friedland said in a release. “Only a few months later, our joint venture commenced the most ambitious metallic minerals exploration program the Kingdom of Saudi Arabia has ever seen.” 

The joint venture was established this summer with $66 million in work capital provided by Ma’aden. It invested a total of $127.1 million into Ivanhoe Electric for a 9.9% stake in the company. The rest of the cash was to be used by Ivanhoe for its projects in the United States, including the Santa Cruz copper project in Arizona.

Exploration will focus on three areas: the Al Amar belt (initially around Ma’aden’s operating Al Amar gold-copper mine), and the Wadi Bidah and Bir Umq belts. Together, these belts cover over sq. 4,000 km comprising 57 exploration licences.

The partners will start exploration at Umm Ash Shalahib, which largely surrounds the Al Amar mine. Al Amar is considered prospective for volcanic massive sulphide (VMS) and epithermal deposit types, with historical drilling intersecting mineralization close to Al Amar. The mine is not part of the JV.

The target area covers 65 sq. km, the same size as Ivanhoe’s Tintic project in Utah, with a number of precious and base metal occurrences reported by Ma’aden. Historical drilling returned an intercept of 10 metres at 1.13% copper and 12.9% zinc.

Wadi Bidah is located between 220 and 270 km southeast of Jeddah and about 50 km north of Ma’aden’s Al Hijar gold mine. This area has relatively limited data with its more challenging topography and local communities impacting both airborne and groundwork. The Bir Umq belt is also largely unmapped and unexplored. These two belts will see more exploration activity in mid-2024.

The initial Typhoon survey is to be conducted by the JV will be over Umm Ash Shalahib area and the Al Amar mining licence. The partners hope to produce first data inversions by the end of 2023.