Ivanhoe Electric lifts Santa Cruz capex to US$1.43B in 2026 study

Ivanhoe Electric Inc. TSEIE NYSEAMERICANIE said on Wednesday that its updated Santa Cruz copper study estimates US$1.43 billion in initial capital and US$1.5 billion in after-tax net present value at an eight per cent discount rate, using US$4.75 a pound copper. Compared with its 2025 study, the Arizona project now requires US$190 million more initial capital and targets first cathode in 2029 instead of 2028.

Ivanhoe's NYSEAMERICANIE shares fell 4.2 per cent to US$10.29 at 9:50 a.m. EDT on Wednesday in New York.

The Sept. 23 study gives Santa Cruz a 24-year mine life based on 140 million tonnes of probable reserves grading 1.08 per cent copper. It projects about 75,000 tonnes of copper cathode a year during the first 15 years.

Ivanhoe said early site preparation has begun and it holds the city, county and state permits needed for surface construction and the planned mine decline. Box-cut work comes next, ahead of tunnel boring in summer 2027 and first cathode in 2029.

At the study's base-case copper price, the after-tax internal rate of return is 19 per cent and payback is 4.8 years from the start of production. The valuation also assumes a US$0.14-per-pound domestic cathode premium.

Initial capital rose from US$1.236 billion in the 2025 study to US$1.426 billion in the new cost table. Ivanhoe attributes US$88 million of the increase to construction cost inflation and US$18 million to mine development changes. The remaining US$84 million reflects changes in surface construction, indirect costs and contingency.

Projected life-of-mine C1 cash costs also rose, to US$1.47 a pound from US$1.32 in the 2025 study. All-in sustaining costs increased to US$2.28 a pound from US$2.02. The new design incorporates a tunnel boring machine and conveyor system for a roughly four-kilometre decline to the Santa Cruz deposit.

"We are currently transitioning into early construction," chief executive Taylor Melvin said in the release.

The reserve estimate, effective Sept. 23, uses net smelter return cutoffs of US$43.95 per tonne for longhole stoping and US$60 per tonne for longitudinal retreat stopes and drift-and-fill. The study also identifies 3.33 million tonnes of copper in inferred resources outside its mine plan; those tonnes have not been converted into reserves.

Ivanhoe received a preliminary US$1.1 billion project letter from the Export-Import Bank of the United States on Aug. 24. The letter is no financing commitment and remains subject to the bank's review and approval. Ivanhoe said it expects the bank's board to consider a final commitment in spring 2027, leaving funding for the US$1.43 billion initial build unsettled.

Ivanhoe expects to begin the Santa Cruz box cut in October 2026.