Ivanhoe Electric (TSX: IE) has released an updated preliminary feasibility study for its wholly owned Santa Cruz copper project. The study outlines an underground operation producing about 75,000 tonnes of copper cathode a year over its first 15 years.
At a base-case copper price of US$4.75 per pound, the study returns an after-tax net present value (8% discount) of US$1.5 billion, an after-tax internal rate of return of 18.7% and a payback period of 4.8 years. At the COMEX spot price of US$6.79 per pound as of September 21, the after-tax NPV rises to US$3.5 billion, with a 30% IRR and a 3-year payback.
Initial capital is estimated at US$1.43 billion, up from US$1.24 billion in the 2025 prefeasibility study. The company attributed the increase to roughly 8% cost inflation, additional mine development engineering and a change in scope for the solvent extraction and electrowinning facility. Sustaining capital adds another US$1.55 billion over the life of mine.
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Operating costs also rose. Life-of-mine C1 cash costs are now US$1.47 per pound, and all-in sustaining costs are US$2.28 per pound, compared with US$1.32 and US$2.02 in the prior study. At spot, that still leaves a margin of more than US$4.50 per pound.
The mine plan draws on probable reserves of 140.1 million tonnes grading 1.08% copper, containing 1.52 million tonnes of copper, which supports a 24 year mine life. Ore would be extracted by longhole stoping with paste backfill at about 20,000 tonnes per day through the first 15 years. It would then be heap leached to produce 99.99% pure copper cathode on site, with no smelter required. Life-of-mine recovery is estimated at 92.3%, for total output of 1.4 million tonnes of cathode.
A Robbins crossover tunnel boring machine, which the company agreed to acquire in May, will cut a single 4-kilometre access decline. The decline will house a permanent conveyor that carries development rock first and ore later.
“The 2026 Study includes advanced engineering for mine access, mine design, surface processing design, and updated input costs based on current market conditions to provide a real-time estimate of projected capital and operating costs,” said President and CEO Taylor Melvin. “We are currently transitioning into early construction.”
Box cut development is slated to begin in October. The tunnel boring machine is expected to start the decline in the summer of 2027, and first cathode is targeted for 2029.
The company is also in advanced talks on project financing, including potential debt of up to US$1.1 billion from the Export-Import Bank of the United States, which issued a preliminary project letter in August.
Ivanhoe Electric last traded at $15.09 on the TSX.
