Good day everyone. At this time, I would like to welcome you to the Ivanhoe Electric Santa Cruz Copper Project Update Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. If you'd like to ask a question during this time and you have joined via the webinar, please use the raise hand icon which can be found at the bottom of your webinar application. At this time, I would like to turn the call over to Ivanhoe Electric's Founder and Executive Chairman, Robert Friedland, for opening remarks.
Good morning to everybody on this call. I find myself in California this morning en route to Arizona. We're gonna be getting our team together for a board meeting. This is a good news call and an important turning point. As I'm speaking today, copper's trading at an all-time high, and the trading patterns we're seeing are extremely bullish for the metal. This is a good news story because we're building the best copper mine in the United States of America, and the only one that is going to really move forward at scale during the currency of the current administration. We have a spectacular American technology and an American commitment to use the best tunnel boring technology made by our country to develop the Santa Cruz ore body at an extremely high grade, easily accessible ore body.
The permanent infrastructure we will install using this technology will be of great long-term benefit to explore and develop the deep porphyry copper-molybdenum systems that exist underneath this phase I project, that can take this project in the future to being much bigger than the phase I project we're going to talk about today. I'm going to be joined today by Taylor, who joined us from Freeport, our President and CEO. Jordan Neeser, our Chief Financial Officer. Glen Kuntz, who is running all the mine development with a world of experience, and a senior representative from The Robbins Company based in Ohio, who build the world's best tunnel boring machines. With that incredible good news story, best of luck to all of our shareholders and people down there in Arizona. They're going to benefit from this project. I'll turn this over to Taylor. Taylor, go ahead.
Thank you, Robert. Appreciate your opening comments for what really is a great news story for our company and for our Santa Cruz Copper Project here in Arizona. Robert already touched on some of the main points of why we are so pleased to be announcing the purchase of a proven technology to lead our mine access development. We first learned about this Robbins crossover machine in late 2025. While continuing to advance the detailed engineering of our Santa Cruz Project, our engineering team, led by Glen Kuntz, started to investigate the opportunity to acquire this machine. We worked through the end of 2025 and into 2026 evaluating the machine's potential, and we worked in close consultation with the team at Robbins.
We secured a purchase option in March to give us time to complete our detailed due diligence, which included two site visits to the Grosvenor mine site. Based on our team's extensive work, again led by Glen and his close consultation with the team at Robbins, we are now confident that this machine is ideally suited for decline development at Santa Cruz, and importantly becomes a great asset for potential future development of growth opportunities at Santa Cruz and our nearby Texaco Deposit. Utilizing the tunnel boring machine technology improves our degree of confidence in decline development and reduces the potential variances associated with different ground conditions we expect to encounter during mine access at Santa Cruz. This tunnel boring machine is an American-made, best in class technological solution to a better engineered outcome for mine access at our Santa Cruz Project.
Importantly, this machine becomes a long-term asset for our company. This first Santa Cruz mine that we're advancing today is the high-grade oxide cap of what we believe is a much larger sulfide resource below the current mine plan. This long-term steel reinforced sealed tunnel that we're gonna create with this machine gives us a long-term life of mine and beyond the current life of mine projection access point for large scale copper development at Santa Cruz. We informed Robbins on Friday, May 8th, so just last week, of our intent to exercise our purchase option to acquire this machine. We're very fortunate to have on the call with us today Doug Harding.
Doug's a Senior Vice President from Robbins, and he's going to cover information on the next couple slides about this specific machine, and then Glen's gonna pick it up with what we're gonna do with this machine at Santa Cruz. Doug, I'll turn it to you, please.
Thanks, Taylor. Thanks for having me on this call. I'll just give you a brief introduction to Robbins. Robbins is a U.S.-based company, a privately held company. The company was started in 1952 by Richard Robbins, who designed and basically invented the hard rock tunnel boring machine, mechanically excavated machine that you see on the right. Robbins currently holds about 90% of all TBM production records for rock geology. This being best day, best week, best month, and monthly average of production. The typical tunnel boring machine technology has been around for a long time. It's used in a lot of civil projects, sewer projects, highway, transportation tunnels, and a lot in mining. Robbins started in mining in the late 1970s in copper mines in White Pine Copper in Michigan.
We have copper TBM technology in Magma Copper, Platinum Technology TBM platinum mines in Stillwater and also in coal mines. These would all be in the U.S., this technology is accepted not only in the States, but worldwide. Some significant projects that Robbins has worked on would be the Grosvenor. These projects, I'm basically introducing to you to show the capacity of a tunnel boring machine for varying geological conditions, which de-risks this project Santa Cruz. It not only de-risks the project from the standpoint of excavation through the geology, but it also puts a permanently lined precast tunnel, segmental tunnel that you have similar to when you see in a metro system. When you take a metro in New York or anywhere in the world, you see a precast line tunnel.
That's what we're gonna build behind this TBM. The Grosvenor TBM mine project was a Anglo American project, coal mine decline project. Very similar to the Santa Cruz project as far as the geology where we're going through, meaning it goes from soft ground to rock technology. That's where this crossover-type technology was developed, where significantly, you have two significantly different geologies, the machine has the ability to excavate through that. The Chicago TARP project was a large flood control project out of the city of Chicago. There's about 100 mi of tunnels under Chicago for flood control, all constructed using Robbins TBMs. Niagara Tunnel project was an interesting project. It's the largest rock tunnel boring machine ever built, 14.4 m, which is about 45 ft-46 ft in diameter.
Went right underneath Niagara Falls for hydroelectric power generation for the Sir Adam Beck Power Project. That was a decline as well. We started out at the surface, declined underneath the falls and came up at the power plant. One notable project is the Channel Tunnel project. It connects the U.K. to France. Robbins supplied four machines on that project, all Crossover machines. Two for the running tunnels, or three for the running tunnels and one for the rescue tunnel that goes in between. These machines for the day were very high capacity-type machines. Very difficult geology because we were afraid we were going to potentially have the channel come into the tunnel, these machines had to take that pressure of over 10 bar water pressure at the face. Next slide, please.
As we move into this TBM technology for the Ivanhoe Project, Santa Cruz, it is a proven technology. Robbins has been successful well over 1,000 projects using TBM technology. We worked extensively with Ivanhoe to select the machine to de-risk the project. The good news being that this technology solves the problems we have and de-risks the project at Santa Cruz on the decline. We are going through this aquifer section, which is difficult geology, but this is the type of machine used for that geology, so we don't see any problems with excavation through that geology. We've also added special features to the machine to grout off, meaning we can consolidate the ground to make the machine advance without any problems through this varying geology.
The transition between the rock. We start off in the alluvial, which is just the soft ground section and as we decline down in a one in six decline, we eventually hit the rock. From the rock all the way down to pit bottom or to the drift bottom where the ore is going to be excavated, we're going to install a conveyor system that allows us to do the excavation with the TBM and then also convert that to a permanent mine-to-life conveyor system. We are taking the material out on conveyors. As I said before, we're installing behind this tunnel boring machine a precast segmented lined tunnel, and then we're also going to put the roadbed in, a flat bottom roadbed so you can rubber tire trucks can come in and out of the tunnel.
The machine we're using is a machine that we developed for Anglo American. The machine is currently in Australia. When Robbins designs a TBM, we normally design it for about 15,000 hours of operating life before you have to replace major components. The machine was manufactured brand new for the project in Australia and has about 1,000 hours on it, so there's plenty of life left into this machine. It was specifically designed for a decline project, so it's very similar to the requirements for the Santa Cruz Project. We feel very comfortable with this machine, and we're very comfortable that we can manufacture a long-term solution safely with the TBM technology. Glen Kuntz, you wanna pick up?
Yep. Yeah. In our work with Robbins, we estimated it'll take approximately 12 months to complete 4 km of decline. The process, as Doug touched on, installing the continuous steel reinforced sealed concrete as the TBM advances will really significantly mitigate water handling, dewatering and preserve geotechnical integrity. As part of the decline development, the TBM installs a permanent conveyor system that will allow us to both move both ore and waste material for the life of mine for the Santa Cruz Copper Project. No, sorry. One back. Sorry, sorry. The on the right there, the image is basically showing you, it's a plan view that's basically showing you the PFS development, which is in gray, versus the TBM boxcut and decline is in red.
Overall, the TBM decline is 4 km long. The decline is roughly a 9.3 diameter in size. You'll notice that it's the boxcut is substantially smaller than when it was in the PFS. The average rate of advance on the TBM decline is approximately 10 m a day, which is approximately double the roadheader rates for the twin declines. You'll notice the because the concrete is in a sealed concrete lining and is completed along the TBM decline, it really preserves the geotechnical integrity, both from a safety perspective as well as actually of the long life.
You know, on this image, the primary sulfide resource sits right to the, basically to the left of the current workings, and as such we'll have access to the primary sulfide resource there, as well as the Texaco resource, which is approximately 2 km to the, on the northeast of, on this image.
Thanks, Glen. Clearly the acquisition of this Robbins crossover tunnel boring machine is a significant advancement in development of our mine access at Santa Cruz. This advanced United States-made technology will replace the need for roadheaders, for silica gel grouting, and the Rail-Veyor system because of the simultaneous construction of the conveyor system that both Doug and Glen have talked about. The overall impact on our decline development capital is negligible. After extensive studies, which includes updates to our ventilation shaft quotes, is less than $20 million.
It's really not comparable to the capital that we had in our previous study because, as Robert's mentioned, we're acquiring a long-term asset, and a long-term asset that's gonna help us not only develop Santa Cruz, but it's gonna give us tremendous flexibility and optionality as we seek to advance the development of nearby deposits like Texaco. We no longer need to obtain the Underground Injection Control permit associated with silica gel grouting, and we have all the necessary permits for initial construction activities, including the commencement of boxcut construction later this summer. It's important to note that this boxcut is significantly smaller than the boxcut that we would have needed for the twin decline roadheader approach that we had in the PFS. It's gonna have a smaller surface footprint in terms of the mine access for the boxcut.
Also want to point out and emphasize that this TBM technology and system does not change any aspect of the rest of the project. It's the same mining method, same mining rates, and the same surface processing to produce 99.99% pure copper cathode on-site as described in our 2025 preliminary feasibility study. We're gonna capture all this updated engineering and detail in an updated technical report that we expect to have completed in the third quarter of this year. Glen's gonna go over the updated development timeline for our project and highlight the permitting and the construction development.
Thank you, Taylor. Slide 11 here provides an updated development timetable for the Santa Cruz Project. Starting with the green bar on top for permitting, you'll see that we received our site development plan approval by the City of Casa Grande in March 2026, clearing the way for us to commence initial construction activities. You'll also note the removal of the requirement for an Underground Injection Control permit for silica gel. We have applied for our site-wide phase II Aquifer Protection Permit and are working with state regulatory authorities on their process timeline to receive the permit by mid-2027. With the arrival of the TBM expected in Q1 2027, we plan to start our boxcut in August of this year. As already mentioned, it is a much smaller boxcut.
Based on the decline development timeline, we now expect to start stacking first ore on the leach pads in mid to late 2028, with first cathode production during Q2, 2029. Our teams are working hard on optimization scenarios that may accelerate this timeline.
Thanks, Glen. To wrap up, today's announcement is a great advancement in de-risking of our Santa Cruz Project, which is America's next large-scale copper producer. Santa Cruz remains a high-grade advanced copper project on private land in the heart of the copper state in Arizona. This will be a modern underground mining operation that utilizes the best available technologies and, importantly, Made in America technologies to make Made in America copper to produce 99.99% pure copper cathode using a heap leach process. The project still has a short development timeline and is being led by our experienced internal project team and supported by world-class partners. We're excited to add The Robbins Company to our group of world-class partners.
Santa Cruz is on a fast track to provide copper metal that America needs to support domestic industry, supply chain security, and national security. In addition, we've got great growth opportunities, and we've already referenced this, our Texaco Deposit, which sits about 2 km to the northeast of the Santa Cruz project. As you might remember from previous releases, the highest grade intercept at Texaco was over 320 m of intercept at an average copper grade north of 0.8% copper. It also includes a significant molybdenum byproduct, another critical metal for U.S. In addition to the project that we're developing at Santa Cruz, we've got tremendous growth opportunities, and the acquisition of this tunnel boring system is gonna be a tremendous long-term asset for our company and the Santa Cruz district.
At this point, I'd like to turn the call back to the operator. We're happy to take any questions.
We will now move on to our question and answer session. If you have joined the webinar, please use the Raise Hand icon, which can be found at the bottom of your webinar application. When you are called upon, please unmute your line and ask your question. We will now pause a moment to assemble the queue. This concludes the call. Thank you for joining.