Ivanhoe Electric secures $200M bridge loan for Arizona copper mine

[Ben Graham]

Ivanhoe Electric (NYSE-A, TSX: IE) says it has secured a $200 million bridge loan from a syndicate of banks in support of its efforts to build the next major US copper mine in Arizona.

In a press release Thursday, Ivanhoe said the loan — backed by National Bank Capital Markets, Societe Generale and BMO Capital Markets — serves as “an important component” of the overall financing strategy for its Santa Cruz project as it aims to begin construction in the first half of 2026.

Executive chairman Robert Friedland said the credit approvals from this group of “top-tier mining financiers” are a clear vote of confidence in the Santa Cruz project, which he envisions as one of the first new US copper mines in almost two decades. “Santa Cruz is the first step in our vision to grow a new American-based and American-focused critical metals company,” Friedland stated in the release.

“The bank group conducted extensive technical due diligence as part of their credit approval process, and we are grateful for their support for our company and the Santa Cruz copper project,” Taylor Melvin, Ivanhoe’s CEO, added.

Melvin also noted that upon closing of the bridge loan, expected in December, the company will have added over $360 million in liquidity this quarter, placing it in an “exceptionally strong financial position” as it enters a critical development year for its flagship copper project.

Shares of Ivanhoe Electric fell despite the announcement, amid broader weakness in the equities market. By 10:30 a.m. ET, it traded at $12.81 apiece in New York, down 3.9% on the day, for a market capitalization of $1.88 billion.

Long-term copper producer

Located in Casa Grande, about 77 km south of Phoenix, Santa Cruz hosts a large underground deposit that is being earmarked as a long-term US producer of copper cathodes. Ivanhoe has been working on the project since 2022 and has so far delineated 3 million tonnes of indicated copper resources, about half of which are mineable reserves.

Anchored by this resource, Ivanhoe produced earlier this year a new preliminary feasibility study (PFS) for Santa Cruz, outlining a potential 23-year mine capable of producing 72,000 tonnes of 99.99% pure copper cathodes annually in the first 15 years.

Using a base case copper price of $4.25 per lb., the PFS gave the project an after-tax net present value (NPV) of $1.4 billion and an internal rate of return (IRR) of 20%. The initial project capital was pegged at $1.24 billion, for an estimated capital intensity of $17,000/t of copper. Its cash costs of $1.32/lb. over the life of mine would be in the first quartile globally and the lowest cost in America.

Financing talks

As part of its project financing strategy, Ivanhoe said it is in talks with interested parties both project-level minority investment and long-term debt. These include the US Export Import Bank, which indicated in April its interest in providing an $825 million loan that could cover the project’s construction costs.

In Thursday’s release, Ivanhoe said it remains well-positioned to deliver on its indicative Santa Cruz Copper project timeline, which is to begin copper cathode production in late 2028.