Ivanhoe Electric (TSX:IE) has unveiled a Prefeasibility Study (PFS) for its Santa Cruz Copper Project, outlining higher capital costs and increased production from the proposed underground mine in Arizona, US.
The PFS estimates initial capital costs of US$1.43 billion ($2.03 billion), up from US$1.24 billion in the project’s previous technical report last year.
The after-tax net present value, using an 8% discount rate, is around US$1.5 billion. This is up slightly from the previous US$1.4 billion, despite the updated study using a higher base-case copper price. Its internal rate of return remains largely unchanged.
Ivanhoe says the updated economics reflect current market input costs and a redesigned mine plan following its acquisition of a Robbins Crossover tunnel-boring machine in May 2026.
Production profile improves
According to the company, the new machine offers several improvements to the mine plan, including a faster production ramp-up.
Santa Cruz is now expected to produce nearly 75,000 tonnes of copper cathode annually on average over the first 15 years, compared with around 72,000 tonnes previously.
The project’s expected mine life has also increased from 23 years to 24 years, resulting in average annual production of 58,385 tonnes of copper.
Ivanhoe Electric Founder and Executive Chairman Robert Friedland describes Santa Cruz as the “highest grade, most advanced pure copper cathode project” in the US.
Located in Casa Grande, around 77km south of Phoenix, Santa Cruz is Ivanhoe Electric’s most advanced project. It covers approximately 24km² of private land, with the company saying all necessary permits are in place to advance surface construction.
Early site preparation and development activities have begun, with first copper cathode production targeted for 2029.
“We are building the most modern of copper mines in the heart of Arizona, with passionate, talented people and the most advanced technologies available to our industry,” Friedland says.
US Government interest
Friedland also highlights US Government interest in the project, describing Santa Cruz as important to the country’s mineral security.
“This kind of mine is in our national security interests,” he said during an investor call.
The company recently received a preliminary project letter from the US Export-Import Bank indicating potential debt financing of up to US$1.1 billion.
Friedland also points to the project’s relatively low reliance on sulphuric acid amid tight supplies, as well as the potential to expand its resource base through further exploration.
Ivanhoe Electric estimates there are a further 1.44 million tonnes (Mt) of contained copper in indicated resources outside the reserve base, while inferred resources across the three key deposits within the Santa Cruz land package contain another 3.3Mt.
Santa Cruz currently contains around 1.52Mt of copper in probable reserves.
Write to Jackson Chen at Mining.com.au
Main image: Ivanhoe Electric
