Ivanhoe Electric raises $60M to fund Arizona copper project

Ivanhoe Electric (NYSE American: IE) (TSX: IE) plans to raise $60 million through a public offering of units priced at $5.85 per unit. The proceeds will go toward its Santa Cruz copper project in Arizona.

In total, approximately 10.25 million units will be issued, each comprising one common share plus one warrant with an exercise price of $7.00 per share. The stock traded at $6.09 in New York by midday Wednesday, for an intraday gain of 3% and a market capitalization of $733.6 million.

The offering, which was initially set at $50 million but later upsized, is expected to close on Friday. BMO Capital Markets is acting as sole book-running manager.

Santa Cruz PFS

Ivanhoe said it will use the funds to complete the ongoing prefeasibility work for the Santa Cruz project located in Casa Grande, Arizona.

The Santa Cruz project encompasses 5,975 acres of private land, including associated water rights. In June 2024, the company obtained approval to have over half of this land (3,000 acres) for industrial use, representing 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, leading to a current 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).

An initial assessment in September 2023 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, focusing on the high-grade Santa Cruz and East Ridge deposits.

According to Ivanhoe, its prefeasibility study is on track for completion in the second quarter this year, and will include a mine plan supported by a new mineral resource estimate resulting from infill drilling and testwork since the assessment.