U.S. preps $1.1B loan for Ivanhoe’s Santa Cruz copper project

Ivanhoe Electric (NYSE-A, TSX: IE) has inched towards receiving $1.1 billion in debt financing from the U.S. Export-Import Bank (EXIM) to develop its Santa Cruz copper project in Arizona. 

The bank increased its potential loan for Santa Cruz by a third compared with a letter of interest from April last year, Ivanhoe reported Monday. The new letter represents the completion of U.S. EXIM’s preliminary due diligence on the project, about 65 km southeast of Phoenix.     

“Our country has entered an extraordinary era of demand growth for copper, which is central to all forms of electricity generation, transmission and consumption as well as advanced manufacturing, artificial intelligence, and our national security,” Ivanhoe Electric Executive Chairman Robert Frieldland said in a release.

“At Santa Cruz, we are building a modern American copper mine capable of producing 99.9% pure copper metal, without a smelting process, to support American industry and supply chain security. We appreciate U.S. EXIM's strong support and will continue to work together as we develop our Santa Cruz Project into America's next major copper producer."

Follows Trump support

The EXIM letter comes just weeks after U.S. President Donald Trump publicly voiced support for financing Santa Cruz at an Aug. 7 mining roundtable at the State Department. The project could become one of the first major new U.S. copper mines in almost 20 years and comes with an estimated initial cost of $1.24 billion according to last year’s preliminary feasibility study (PFS).

Company shares gained 1% to $16.03 apiece on Monday morning in Toronto, for a market capitalization of $1.8 billion. The stock has traded in a 12-month range of $11.04 to $28.81.

Ivanhoe Electric CEO Taylor Melvin called the EXIM letter a “major milestone” for the project financing process.

“We look forward to working together with the outstanding team at US EXIM towards completion of our debt financing facility."

September feasibility update

Ivanhoe expects to complete an updated preliminary feasibility study for Santa Cruz next month. The update is to incorporate the plans for underground mine access using a tunnel boring machine and other engineering and development work.

Santa Cruz could produce 72,000 tonnes of copper annually during the first 15 years of a 23-year life, according to the PFS. At $4.25-per-lb. copper, it estimated an after-tax net present value of $1.4 billion, a 20% internal rate of return and cash operating costs of $1.32 per pound. 

Site prep

Crews have started clearing roads, building fences and preparing the portal excavation at the site, Melvin told The Northern Miner earlier this month. Box-cut construction is expected to start soon, ahead of the arrival and assembly of the tunnel-boring machine in the first half of next year. 

The company plans to start driving the decline in mid-2027 and reach the copper reserve about a year later. Ivanhoe hopes to place the first ore on its leach pads in the second half of 2028 and produce its first cathode in the first half of 2029, Melvin said. Surface work on the crushing, leaching and cathode plants would proceed in tandem with underground development.

Ivanhoe has secured its mine-land reclamation, air-quality, dust-control, aquifer-protection and land-use permits for the initial work. It is applying for the remaining approvals required for surface construction and production.