Ivanhoe Electric Completes Earn-In for 60% Stake in Samapleu-Grata Nickel-Copper Project in Ivory Coast
Ivanhoe Electric Announces Completion of Earn-In to Acquire a 60% Interest in the Samapleu-Grata Nickel-Copper Project in the Ivory Coast
Joint Venture Partner Sama Resources Announced a New Preliminary Economic Assessment for the Project Delivering a Pre-tax NPV8 of US$463M and a Pre-tax IRR of 28.2%, with an Estimated Initial Capital Cost of US$338M
The Project has the Potential for a 16-Year Mine Life Producing a Conventional 26% Copper Concentrate and a 13% Nickel Concentrate, with Associated Platinum, Palladium and Cobalt By-Products
PHOENIX, ARIZONA – Ivanhoe Electric Inc. (“Ivanhoe Electric”) (NYSE American: IE; TSX: IE) Executive Chairman, Robert Friedland and President and Chief Executive Officer, Taylor Melvin are pleased to announce today that Ivanhoe Electric has completed its earn-in to acquire a 60% interest in the Samapleu-Grata Nickel-Copper Project in the Ivory Coast (“Project”). On March 21, 2024, Ivanhoe Electric’s joint venture partner at the Project, Sama Resources Inc. (“Sama”) (TSXV: SME), disclosed a new 2024 preliminary economic assessment for the Project (“2024 PEA”) in accordance with National Instrument 43-101.
The Samapleu-Grata Nickel-Copper Project is now a 60/40 joint venture between Ivanhoe Electric and Sama. In addition to a 60% interest at the Project level, Ivanhoe Electric also owns 22.7% of the common shares of Sama.
Mr. Taylor Melvin, President and CEO of Ivanhoe Electric commented: “We are pleased to have completed our earn-in to 60% of the Samapleu-Grata Nickel-Copper Project.
We are particularly encouraged by the significant improvement in both the quality and quantity of potential future copper concentrate production at the Project compared to earlier studies.
The results announced by our joint venture partner, Sama, are a product of the hard work by our dedicated joint team. We look forward to working together with Sama on the next steps for our high-quality nickel-copper Project.”
The Samapleu-Grata Nickel-Copper Project is located in western Ivory Coast approximately 600 km from the capital Abidjan. The total area of the Project is approximately 835 km2.
Ivanhoe Electric entered into a binding term sheet for an earn-in and joint venture agreement with Sama which was subsequently formalized in March 2021. Ivanhoe Electric satisfied the terms of its 60% earn-in by spending C$25 million by March 2024.
Figure 1: Samapleu-Grata Nickel-Copper Project Location in Côte d’Ivoire
Highlights of the 2024 Preliminary Economic Assessment Announced by Sama Resources
The 2024 PEA outlines the potential for a conventional open pit mining operation supporting 86.5 million tonnes of modelled mill feed together with 1.62 million tonnes of direct shipped laterite material entirely from the Grata, Main and Extension deposits and the Sipilou Sud Laterite deposit.
Over the life of mine, the Samapleu-Grata Nickel-Copper Project would produce an annual average of 38,627 tonnes of a 26% copper concentrate and 55,119 tonnes of a 13% nickel concentrate through a process plant with a capacity of 5.475 million tonnes per year.
This would be achieved through a conventional process that focusses entirely on flotation, for the production of separate copper and nickel concentrates together with cobalt, platinum, palladium and gold as by-products.
Highlights from the 2024 PEA announced by Sama Resources include:
.Average annual production of approximately 38,627 tonnes of 26% copper concentrate and 55,119 tonnes of 13% nickel concentrate
.Average annual nickel metal in concentrate of approximately 7,165 tonnes per year and copper metal in concentrate of approximately 10,043 tonnes per year
.16 year-life of mine
.Pre-tax Net Present Value (“NPV”) at an 8% discount rate of US$463M and internal rate of return (“IRR”) of 28.2%
.Post-tax NPV8 of US$257M and post-tax IRR of 22.3%
.Initial capital costs of US$338M including a contingency of US$61M
.Post-tax payback period of 3.8 years
The 2024 PEA is based on a long-term nickel price of US$8.83/lb and a long-term copper price of US$3.99/lb.
The 2024 PEA is preliminary in nature and includes inferred mineral resources, considered too speculative in nature to be categorized as mineral reserves.
Mineral resources that are not mineral reserves have not demonstrated economic viability. Additional trenching and/or drilling will be required to convert inferred mineral resources to indicated or measured mineral resources. There is no certainty that the results of the 2024 PEA will be realized.
The 2024 PEA includes only the Grata, Main and Extension deposits and the Sipilou Sud Laterite Deposit, which together with the proposed mine infrastructure, covers only approximately 3% of the 835 km2 Project area.
This provides ample opportunities for exploration upside and expansion opportunities, including at known mineralized zones at Yepleu and Draba, as shown in Figure 2.
Figure 2: Samapleu-Grata Nickel-Copper Project Highlighting Areas Included in the 2024 PEA and Known Prospective Sectors for Further Exploration
The Samapleu-Grata Nickel-Copper Project is a potentially commercially profitable operating open-pit operation consisting of magmatic polymetallic sulfide mineralization with by-product metals, including copper, gold, cobalt, platinum, and palladium. The Project has a comparatively small capital cost and favorable internal rate of return while producing competitive nickel and copper concentrates.
Figure 3 compares the Project’s total estimated capital and pre-tax IRR against other pre-production nickel assets, including primary magmatic sulfide deposits like Tamarack, as well as the bulk-tonnage low-sulfur, ultramafic-hosted deposits like Dumont and Crawford.
Based on the 2024 PEA, the Samapleu-Grata Nickel-Copper Project has one of the lowest total capital costs while producing a pre-tax IRR that is second only to the Tamarack deposit in the United States providing the opportunity to construct a relatively small, but comparably profitable polymetallic mining operation.
Figure 3. Total Capital and Pre-Tax IRR for Selected Pre-Production Nickel Deposits
Source: S&P Capital IQ database; company reports and presentations.
Finally, the polymetallic nature of the Samapleu-Grata Nickel Copper Project means that it has the potential to produce not only a nickel concentrate, but a high quality 26% copper concentrate that is on par with the copper concentrate produced from primary copper mines.
