Ivanhoe Electric and SQM Partner to Hunt for Hidden Copper in Chile’s Atacama Desert
Ivanhoe Electric Teams Up With SQM to Explore for Copper Using Advanced Geophysics in Northern Chile
Ivanhoe Electric (NYSE-A, TSX: IE) has entered into a strategic partnership with Chilean lithium producer Sociedad Química y Minera de Chile (SQM) to explore for copper across parts of the Atacama Desert in northern Chile, one of the world’s most prolific mineral regions.
Under the agreement, the companies will deploy Ivanhoe Electric’s proprietary Typhoon geophysical surveying system, supported by data inversion software from Computational Geosciences Inc. (CGI).
The technology will be used to search for copper deposits across selected SQM mining concessions covering approximately 2,000 square kilometres.
Much of the Atacama Desert is covered by caliche, a hardened surface layer of salt-cemented sediments commonly found in arid regions. Caliche is highly electrically resistive, making it difficult for conventional, low-power geophysical systems to detect sulfide mineralization beneath it.
Ivanhoe Electric said its Typhoon system can generate a powerful, clean electrical signal capable of penetrating the resistive caliche layer, enabling the detection of potential copper deposits at depth that have remained largely unexplored.
SQM’s concessions currently used to produce potassium nitrate and iodine are located along major porphyry copper and polymetallic manto belts and lie close to some of the world’s largest copper mines.
The companies believe these geological conditions offer strong potential for significant new discoveries.
“Chile has supplied the world with copper for generations, and as demand accelerates, we believe the next wave of world-class copper discoveries will be found hidden beneath large areas of caliche,” Ivanhoe Electric Executive Chairman Robert Friedland said in a statement.
He added that the combination of the Typhoon platform and CGI’s technology is “uniquely capable of seeing through that cover to illuminate what other technologies cannot.”
Pathway to a Joint Venture
As part of the agreement, SQM will provide access to its concessions and commit $9 million in exploration funding over three years. The companies will establish a joint technical committee to oversee exploration programs and budgets.
During the exploration phase, Ivanhoe Electric will operate the Typhoon surveys, with CGI handling data processing and inversion. SQM will be responsible for follow-up drilling within agreed target areas.
If exploration results identify a copper or copper-equivalent deposit with potential exceeding one million tonnes, Ivanhoe Electric will have the option to form a 50/50 joint venture with SQM over the designated area.
To exercise this option, Ivanhoe must reimburse SQM at twice the exploration expenditure funded to date. Any resulting joint venture would be funded on a pro-rata basis, with SQM retaining the option to operate the project provided it holds at least 50% equity.
Shares in Ivanhoe Electric rose 3% following the announcement, lifting its market capitalization to nearly $3 billion in New York. SQM shares also edged 1% higher, valuing the company at approximately $23.8 billion.
