Published: September 8, 2023 |

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Ivanhoe Electric released results from the initial assessment (IA) for its Santa Cruz Copper Project, located west of Casa Grande, Arizona. The IA is a preliminary technical and economic study for the Santa Cruz Copper Project and associated high-grade mineral resources included in the Santa Cruz and East Ridge deposits. The study analyzes the potential for a high-grade underground copper mining operation supported by modern technologies to reduce environmental impact and powered predominantly by renewable energy.

“Completing the initial assessment for our Santa Cruz Copper Project is an important achievement for Ivanhoe Electric as we work to advance a new source of responsibly produced green copper in the United States. 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,” said Executive Chairman, Robert Friedland.

“Using primarily onsite renewable electricity generation, and with the potential to increase that to meet the project’s entire future needs, the initial assessment shows us that we are on the right track to achieving our goal at Santa Cruz and our larger goal of enhancing U.S. supply chain independence for critical metals. We are excited about the future for our Santa Cruz Project in Arizona,” added Friedland.

“The initial assessment for the Santa Cruz Copper Project is the result of a tremendous effort by our team and an important milestone for the project. The study provides a first look at our plans for a technologically advanced, underground copper mine in Arizona with attractive economics at today’s copper prices. We are designing the project to minimize environmental impact through the use of modern technologies and renewable power,” said President and Chief Executive Officer, Taylor Melvin.

“We believe the Santa Cruz Copper Project will become an industry-leading example of responsibly produced copper in the United States, and a source of high-quality jobs in Arizona during development and throughout its anticipated long mine life,” added Melvin.

HIGHLIGHTS OF THE INITIAL ASSESSMENT

The Santa Cruz IA outlines a potential 5.9 million tonnes per year underground mining operation, supported by 105.2 million tonnes of modeled mill feed with an average grade of 1.58 percent copper from the Santa Cruz and East Ridge Deposits, resulting in an estimated 20-year mine life.

The IA focuses exclusively on the high-grade exotic, oxide and enriched domains of the Santa Cruz and East Ridge Deposits. The oxide and enriched domains of the Texaco Deposit are not included in the current study.

Copper recoveries of 95.4 percent are expected to be achieved through a combination of solvent extraction and electrowinning (SX/EW) and conventional froth flotation.

The IA contemplates initial project capital expenditures of $1.15 billion, and LOM sustaining capital expenditures totaling $0.98 billion. A three-year construction period is envisioned to develop the underground workings and build the surface processing facilities.

The IA is designed to minimize environmental impact and minimize surface land disruption. As a result of the small surface footprint required for underground copper mining activities included in the IA, the total land area expected to be required for the mine, plant, tailings storage facilities and potential on-site generation of renewable solar power covers approximately one-third of the total land package.

The IA base case assumes 70 percent of the total electric power requirements for the project will be generated by onsite renewable infrastructure, enabling copper production with very low carbon dioxide equivalent (CO2e) emissions. The subsequent preliminary reasibility study (PFS) for the project will evaluate the potential use of combined solar power, battery storage, and a geothermal-driven microgrid as renewable power sources to provide up to 100 percent of the electricity requirements for the project.

An all-electric underground heavy mining fleet is assumed in the IA, in combination with railveyor technology for material movement, which would significantly reduce carbon dioxide emissions and improve energy efficiency. The use of an all-electric underground heavy equipment fleet alone represents an estimated 70-80 percent reduction in scope 1 emissions when compared to a traditional high-efficiency diesel-powered heavy equipment fleet.

The IA also contemplates placing 50 percent of the mine tailings back underground as cemented paste fill. The remaining 50 percent will be stored on the surface as thickened tailings at 65 percent solid content. Surface tailings will be contained within a ring dyke dam with a capacity to store 56.7 million tonnes. Water management associated with tailings storage is minimized as a result of thickened tailings and high evaporation rates in the Sonoran Desert.

Ivanhoe Electric controls the private surface land and patented mineral rights encompassing the entire Santa Cruz Project. The entirety of the facilities referenced in the IA, including mining, processing, tailings storage, and onsite renewable power generation facilities, can be developed on private land under private mineral title. Ivanhoe Electric also controls water rights associated with its Santa Cruz land package.

PHASED APPROACH TO UNDERGROUND MINING OPTIMIZES INITIAL CAPITAL EXPENDITURES

In the IA, twin declines would be developed to access the upper parts of the Santa Cruz and East Ridge deposits. One decline is required for air intake and access, while the other will be required for air exhaust and material movement. To develop the declines, the IA assumes that construction of the portal box cut would begin in 2026, decline development in 2027 and continues through 2028 to access the top portion of the mine. Under these assumptions, stoping activities would begin in 2029 with a one-year ramp up to the full 15,000 tonnes per day capacity.

Mining of the upper portion would proceed for the first eight years before additional capital expenditures are required to extend the declines by 1.9 kilometers. Additional surface infrastructure would be required once mining of the lower portion commences. This would include the second phase construction of a refrigeration plant, ventilation, water handling, and material handling.

Mine sequencing would employ typical transverse longhole stopes for the Santa Cruz deposit on a primary-secondary sequence with paste backfill for support. Mining of the Santa Cruz exotic mineralization has been evaluated using a drift and fill technique with access from the Santa Cruz longhole stoping levels. The East Ridge deposit will apply a drift and fill mining technique with access directly from the twin declines.

SIGNIFICANT TECHNICAL WORK COMPLETED INCREASED KNOWLEDGE OF REGIONAL AQUIFER AND GROUNDWATER FLOWS

Ivanhoe Electric conducted a detailed analysis of historical hydrogeological information and completed additional drill holes focused on obtaining additional hydrogeological information. Using this information, a hydrogeological conceptual site model was developed to determine which rock types have influence on the storage or movement of groundwater. A groundwater flow model was then developed to evaluate mine dewatering requirements and inform mine planning. The underground mine access and mine plan were analyzed against the groundwater flow model and showed that most of the mineralization is located within rock relatively low in water inflow.

Ivanhoe Electric has been proactive in its approach to geotechnical data collection. Upon acquisition of the project, early collection of geotechnical information began to facilitate the completion of a comprehensive geotechnical model in the early stage of design work, which also informed the groundwater flow model.

COMMITTED TO UTILIZING INDUSTRY-LEADING MINING TECHNOLOGIES AND RENEWABLE POWER SOURCES

The IA applies modern mining technologies, including the use of railveyor technology for the efficient movement of mined mineralization from underground to surface. Railveyor is a safe and autonomously operated alternative to traditional belt conveyors or diesel haul trucks. It is also able to recover energy through regenerative braking during the return phase.

PERMITTING, PLANNING, ENVIRONMENTAL MONITORING, WATER MANAGEMENT, AND STAKEHOLDER ENGAGEMENT

Data collection for permitting purposes is ongoing using a phased approach — Phase A involves acquiring the information required for the twin decline development permits, and Phase B focuses on obtaining mine development permits. The data included in the IA will form the basis for the permitting process.

To support the permitting process, there are several baseline environmental monitoring programs already in place. These programs include quarterly surface water sampling in major drainages, as well as the installation of piezometers in selected drill holes to collect sub-surface hydrologic data. Water elevation from existing agricultural wells is measured and a baseline groundwater sampling and monitoring program is being developed. To further assess the impact on local waterways, Ivanhoe Electric has assessed and classified all waterways within the Project area through the completion of an ordinary high water mark analysis.

Updated biological, archaeological, and cultural studies have been completed, which assist Ivanhoe Electric in taking the precautionary steps to preserve the ecosystem and cultural heritage. Ivanhoe Electric has, for example, implemented beneficial practices and procedures aimed at protecting migratory bird species.

Additionally, meteorological data is monitored to gather site-specific climate and evaporation information. This data, along with the development of an emissions inventory, will help determine the air permitting pathway.

Ivanhoe Electric has commenced engagement with key stakeholders, including surrounding communities, government agencies and municipalities, and local water groups.

Ivanhoe Electric is a U.S. company that combines advanced mineral exploration technologies with electric metals exploration projects predominantly located in the United States. They use its accurate and powerful Typhoon™ geophysical surveying system, together with advanced data analytics provided by their subsidiary, Computational Geosciences Inc., to accelerate and de-risk the mineral exploration process as they seek to discover new deposits of critical metals that may otherwise be undetectable by traditional exploration technologies. They believe the United States is significantly underexplored and has the potential to yield major new discoveries of critical metals. Their mineral exploration efforts focus on copper as well as other metals, including nickel, vanadium, cobalt, platinum group elements, gold, and silver. Through the advancement of its portfolio of electric metals exploration projects, headlined by the Santa Cruz Copper Project in Arizona and the Tintic Copper-Gold Project in Utah, as well as other exploration projects in the United States, they intend to support United States supply chain independence by finding and delivering the critical metals necessary for the electrification of the economy.

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