Ivanhoe Electric raises $60M for Arizona copper project

Ivanhoe Electric (NYSE-A: IE; TSX: IE) plans to raise $60 million (C$85.8 million) for its Santa Cruz copper project in Arizona.

The company said this week it’s selling 10.25 million units in a public offering at $5.85 per unit. Each one holds a common share and a warrant with an exercise price of $7 per share. The offering, which was initially set at $50 million but later upsized, is expected to close on Friday.

The stock closed 3.5% stronger on Wednesday in Toronto at $7.78 apiece for a market capitalization of $749 million.

Ivanhoe said it will use the funds to complete the ongoing prefeasibility work for the Santa Cruz project in Casa Grande. The study is due to be completed in this year’s second quarter. It’s to include a mine plan supported by a new resource estimate after infill drilling and testwork since an assessment in September 2023. 

That study outlined a small surface footprint, underground copper mine at Santa Cruz with 5.9 million tonnes of annual production over a 20-year mine life. It would focus on the high-grade Santa Cruz and East Ridge deposits.

Santa Cruz

The project encompasses 24.2 sq. km of private land, including associated water rights. Last June, the company obtained approval to zone over half of the property for industrial use, a major permitting milestone for the proposed copper mine.

Ivanhoe acquired its land title in May 2023 for $116 million, and a year later, it gained full ownership of the mineral rights comprising the project after taking up its purchase option.

Since late 2022, the company has conducted 120,000 metres of drilling on the project. It has a resource estimate of 2.8 million tonnes of copper in the indicated category (226.7 million tonnes grading 1.24% total copper) and 1.8 million tonnes of copper in the inferred category (149 million tonnes grading 1.24% total copper).

BMO Capital Markets is acting as sole book-running manager for the capital raising.