Good morning, and welcome to Ivanhoe Electric's webcast call on the 2026 Santa Cruz Copper Project Preliminary Feasibility Study. Today's call is taking place on Wednesday, September 23rd, 2026. The presentation portion of this call will be in a listen-only mode. Following the remarks, analysts will be invited to ask questions using the raise hand function. I will now turn the call over to Taylor Melvin, President and Chief Executive Officer for Ivanhoe Electric.
Thank you, and good morning, everyone. Thank you for joining the call today to discuss the 2026 preliminary feasibility study for our Santa Cruz Copper Project. Before we get started, please note that today's presentation contains forward-looking statements which could cause actual results to differ. Please refer to the news release and our SEC filings for full details. With us on the call today, we have our founder and Executive Chairman, Robert Friedland. Are we getting this echo on the call, anybody?
You sound good.
Okay. With us on the call today, we have Founder and Executive Chairman Robert Friedland, Michelle Lammers, our Chief Operating Officer, Glen Kuntz, Senior Vice President of Mine Development, and Jordan Neeser, our Chief Financial Officer. At this point, I would like to turn the call over to our Founder and Executive Chairman, Robert Friedland.
Well, good morning to everybody all over wherever you may be. I am in Colorado, reminiscing that we started thinking about a rebirth of mining in the United States. about 10 years ago. I got together with Eric Finlayson, who ran exploration for Rio Tinto, and we started looking at the Western United States And of course, Arizona was always the copper state, having produced about 10% of all the copper that humanity has mined in human history. And we have been working in Nevada and in Utah and in Montana and in New Mexico, and a lot of other places in the United States. And we have come to this turning point about stage 1, the mining the oxide, which is metallurgically very virtuous at Santa Cruz, west of Casa Grande, Arizona. This is a super high-tech copper mine, very clean and going directly to 99.99% copper cathode.
As I have said several times, I doubt it will leave the state of Arizona. There are 1,400 defense companies in Arizona screaming for this metal, several hundred billion dollars of capital investment going into semiconductors, automobiles, and other industries. And we are only located 5 mi west of an electric car company. I think it is very important to understand that with the Strait of Hormuz closed and supply chains stressed, and the incredible amount of copper required to upgrade the American grid and data centers, this kind of mine is in our national security interest, and that is why it has sort of attracted the attention of the U.S. administration.
Robert, we lost your audio.
It did.
You're back.
Can you just carry on with. You can't hear me.
You're back.
Am I back? There are a couple of very important factors here. The Strait of Hormuz has driven the price of sulfuric acid to the moon, and we will soon find out whether there's further escalation there or whether there's some kind of a peaceful settlement. But this mine uses very little sulfuric acid, and it doesn't need a smelter. This metal is critically important in phase I. There's a much larger phase II to go ahead and develop Texaco and a deeper hypogene sulfide resource here that could make this one of the largest mines in the world. Beyond that, we're extremely confident in the strength of our exploration team. We run a 50/50 joint venture with BHP, which is the Western world's largest mining company.
We also run our own 100% owned exploration efforts, and we are extremely confident that we'll have good news for our shareholders. That's why, starting this week, we're going to be talking about this company. First at the Colorado School of Mines this afternoon, and then at the Denver Gold Show because we're seeing a lot of gold in our projects, both domestically and in Saudi Arabia. Then in Washington, D.C., at an upcoming event, and soon on Wall Street. I believe these shares are significantly undervalued, deserving of much more attention. It's been a long summer, and the tangible reality that we're going to tell you about here today is only the opening note in a symphony that's taken us eight or nine years of hard work to get this far.
But America needs mining companies like this because the management team and the technology we address in the United States is quite different than what we would do in Mongolia or in the Democratic Republic of the Congo. It's been a long summer. In the United States, we can use the tangible
Can you still hear me? Can you hear me?
I think you've. Have you lost me?
You're good, Robert.
With just a few more words, this tunnel boring machine is something you can only do in the United States, and it's the kind of thing that will differentiate this mine. It's a little bit more capital intensive. It's much safer, highly mechanized, state-of-the-art technology. It generates very low global warming gas at the bottom of the world cost curve, and people are going to come from miles around as this gets developed in the great state of Arizona, and we've had tremendous local political support. I want to thank this incredible, young and dedicated team, some of whom you're going to meet today, that Taylor Melvin has put together. Those of you who want to reach me, I'm robert@ivanhoe.net. You're going to be hearing a lot about this project very soon, in the coming months, in many, many different ways.
You can follow us on X and a lot of other platforms. Without further ado, let's launch into it, guys. Thank you very much.
Great. Thank you, Robert Friedland. Appreciate you being with us this morning. As we get into the presentation, I will just point out that Santa Cruz continues to be the most advanced large-scale copper project in the United States, designed to produce pure copper cathode on-site without smelting. It is a high-grade, modern copper project entirely on private land in the middle of Arizona's booming industrial corridor, with excellent access to existing infrastructure. We are on an accelerated path to become America's next large producer of pure copper metal to support our country's economy and supply chain security. We generated this 2026 study to incorporate the industry-leading technology of the Robbins Crossover tunnel boring machine into our project design for mine access.
Since our 2025 study, our team of engineers and consultants have been busy updating their detailed engineering for all aspects of the project, significantly de-risking the project design and construction.
The 2026 study confirms Santa Cruz is a high-grade, low-cost, modern copper operation that will produce 99.99% pure copper cathode. Updated initial capital is $1.43 billion, for a capital intensity of less than $20,000 per ton of copper produced. Life of mine cash operating costs are estimated at $1.47 per pound, and that is the life of mine average. For the first 15 years, it is about $0.05 less than that. With this study complete, we remain on track for first copper cathode production in 2029. As a result of its high-grade reserves, modern design, and low capital and operating costs, the project delivers exceptional value at today's copper prices and is economic at much lower prices. At current COMEX prices of almost $6.80 per pound, the after-tax net present value of this project using an 8% discount rate is approximately $3.5 billion, with an after-tax IRR of 30%.
Slide seven shows some of the key metrics from our study. The mining method, the mine plan, and surface processing flow sheet remain largely unchanged from our 2025 study. Santa Cruz is designed to mine 20,000 tons per day of high-grade ore through an on-off heap leach process, achieving high copper recoveries of over 92% average during the life of mine. The projected annual copper production has increased to 75,000 tons of pure copper cathode per year from a solvent extraction electrowinning process. At our base case of $4.75 per pound of copper, the project has attractive after-tax NPV of $1.5 billion and an IRR of almost 20%. Importantly, the high leverage to copper prices result in $240 million of incremental value with each $0.25 change in the copper price.
As I mentioned before, at $1.43 billion of initial capital, our capital intensity is a low $19,100 per ton, which compares very favorably to industry averages for recent projects. The payback period at $4.75 copper is less than five years, and at today's prices, that payback number is less than three years. The 2026 study includes up-to-date input costs to reflect inflation on construction materials, energy costs, and labor. The 2026 study replaces the twin decline design and road headers from 2025 with the advanced and powerful technology of the Robbins tunnel boring machine for mine access and material handling. We have advanced our engineering for underground development, mine access, ventilation, and surface processing. Advanced test work resulted in an increase in the quantity of binder material for paste backfill, which has impacted sustaining capital.
Here you can see the impact of those updates on initial capital of $1.43 billion, our unit cash cost of $1.47 per pound, and our new all-in sustaining unit cost of $2.28 per pound. To put that in perspective, this is a chart of primary copper producers in the Americas. With all of the updates in our study, Santa Cruz continues to benefit from low unit costs. This chart from S&P Global shows Santa Cruz in the first quartile of primary copper mines in the Americas on a co-product basis. The high-grade nature of our reserves and our modern, efficient design, utilizing the best available technologies in our industry, allow us to achieve low unit costs. I am now going to turn the call over to Glen Kuntz to talk in more detail about The Robbins Company tunnel boring machine.
Thank you, Taylor. Good morning, everyone. The TBM will drive a single 4-km decline with a 9.3 m diameter through various ground conditions. TBM is designed to operate through the hard rock, wet, and mixed face ground conditions expected during decline development at Santa Cruz. Its earth pressure balance capability controls face stability, helps mitigate groundwater inflow, while the bi-directional cutter head and high torque, high speed drive are designed to manage changing geological conditions in a single drive. As it advances, it will simultaneously install a precast steel concrete liner to support long-term stability and safety. The TBM approach requires a smaller box cut, reducing excavated material by approximately 75% within the box cut. It is also designed to advance at approximately 10 m per day, about twice the stated rate for road headers development. The TBM is capable of advancing greater than 10 m within certain rock types.
Importantly, the conveyor installed as part of the tunneling system is intended to support both initial development and life of mine production. The TBM therefore contributes not only to access development, but also to the permanent material handling strategy. On the next slide here, optimized mine plan access design. The 3-D view shows how the TBM decline integrates within the broader underground mine development system. Since the 2025 PFS, additional geotechnical drilling has supported detailed engineering for mine access, ventilation, material movement, and production sequencing. The Santa Cruz deposit lies 310 m- 940 m below surface. The TBM will develop the mine decline while road headers will create access to the main mining levels. Centerline access will enable multiple mining phases, blend ore for surface transport and processing, and provide rapid, efficient backfilling.
Traditional drill and blast methods will be used for stoping and mine development. As one of the newest mines in America, the operation can adapt any advanced technologies, including tele-remote and autonomous equipment, telemetry, and grade control systems. The updated design reduces the heap leach pad footprint. Together with the refined mine plan, this enables a faster ramp-up, averaging approximately 75,000 tons of copper cathode annually over the first 15 years. The updated surface layout is designed to simplify and reduce handling and movement of material from the underground mine through processing, stacking and ultimately to spent ore handling, paste backfill, and copper cathode production. The design reduces surface crushing and replaces that with truck haulage for ore handling with surface conveyors.
The layout incorporates a staged construction approach, an on-off heap leach pad, and multiple solution ponds to provide greater operating flexibility and support the recycling of process solutions. The planned infrastructure occupies approximately 1,600 acres or about 30% of the total land package. This leaves significant land available for future development expansion of the East Ridge and Texaco deposits. I will now hand it over to Michelle.
Thank you, Glen. Good morning, everyone. I am very excited to be here today for my first investor call with Ivanhoe Electric, and to have the opportunity to talk about the Santa Cruz project. Santa Cruz was a significant part of what attracted me to Ivanhoe Electric, and the more I have learned about the project and the team behind it, the more excited I am about the opportunity ahead of us. This slide illustrates the Santa Cruz process flow sheet. My background includes significant run-of-mine heap leach and solvent extraction, electrowinning experience. So the fundamentals on this flow sheet are very familiar to me. Acid consumption, permeability, solution management, copper recovery, and ultimately producing 99.99% pure copper cathode through the solvent extraction and electrowinning process.
What is different about the Santa Cruz flow sheet when compared with traditional leaching, is the level of control and efficiency built into the process. We crush and agglomerate the ore with acid and salt and leach it in an on-off pad. The ore is achieving greater than 92% recovery in one leach cycle, contrasted with conventional oxide and secondary sulfide heap leach operations, where total copper recovery can occur over multiple leach cycles and several years. We are also seeing relatively low sulfuric acid consumption compared with many Arizona heap leach operations as a result of the chloride-assisted leaching. One of the key attributes that sets Santa Cruz apart is the atacamite-rich mineralization. Santa Cruz hosts the largest known atacamite deposit outside of Chile's Atacama Desert, which enables these higher copper recoveries, shorter leach cycles, and lower sulfuric acid consumption.
After the leaching is complete, half of the spent ore is then prepared for paste backfill and returned underground, and the remaining spent ore is stockpiled. The flow sheet takes well-established leaching and solvent extraction, electrowinning principles and applies them in a highly controlled and efficient flow sheet to produce copper metal to support the U.S. copper demand. This slide shows our expected cathode production over the life of mine. There are two things I would like to highlight here. First is the rapid ramp-up from initial production in 2029 to full design capacity by 2031, followed by a long period of relatively consistent cathode production and copper grades. Second, while the current mine plan shows a reduction in production beginning in 2045, we see potential to access additional resources in later years supported by areas adjacent to the existing resource that remain open for further exploration.
This slide shows our overall permitting and development timeline. We are permitted to begin initial construction activities. In parallel, we are advancing the remaining permits required for operations and life of mine production. We anticipate the box cut development to start next month. The TBM will be on site, and assembly will start early next year. Decline development will start mid-next year and run into 2028, and the development of the ventilation shafts will be executed in sequence to support underground development. These activities, along with underground development and surface construction, support our target of producing first copper cathode in 2029. I will hand it back over to Glen.
Thank you, Michelle. What you are looking at is the true definition of multi-decade upside. We are unlocking a very large, interconnected copper district with decades of organic growth ahead of us. Look at the sheer footprint of the system. The Santa Cruz, East Ridge, and Texaco deposits form part of a large, continuous, highly productive mineralized district stretching across more than 3 km. Our current mine plan is supported by a robust, high-grade, continuous mineral reserve base containing 1.5 million tons of copper at a grade of 1.8%. But that represents only a relatively small portion of our combined mineral resource base. Each of our deposits is open in most directions, and when you factor in indicated inferred mineral resources that are exclusive of our mineral reserve, we have the scale, high grade, and structural continuity to significantly expand our current mineral reserve base.
I will now hand it over to Jordan.
Thank you, Glen. Good morning, everyone. As we finalized the 2026 study, we have conserved liquidity, and we are in a very strong financial position to advance initial project activities with over $250 million of cash on hand as at June 30th, plus an undrawn $200 million credit facility in place and available until the end of next year. We are advancing project financing discussions with various parties. In August, we received a preliminary project letter from the U.S. Exim Bank for $1.1 billion in project financing support. This signifies the completion of their phase I due diligence and allows us to move forward to phase II and towards a final commitment. We are also in discussions with various commercial banks from which there is strong interest for project financing support.
With this 2026 study now published, we are targeting having our financing commitments advanced and in place by the end of this year. As you can see here on this slide in this picture, the current administration has been extremely supportive of domestic mining and critical minerals to support U.S. industry and supply chain independence. You can see here that our Executive Chairman is sitting alongside Secretary Lutnick and Rubio, as well as the President at this historic mining roundtable held in Washington just last month. We were honored to be specifically mentioned by the President relating to our project financing process with U.S. Exim. Thank you. Back to you, Taylor.
Thanks, Jordan. Our 2026 study confirms Santa Cruz is the highest grade, largest scale copper project in the United States, capable of producing pure copper metal to supply American industry and support the nation's supply chain security. We are on a short development timeline to start delivering that copper in 2029. We have got a great team in Arizona building America's newest large-scale copper cathode producer. At this point, we have concluded our prepared remarks for the presentation, and operator, we turn it back over to you to take any questions. Thanks.
Thank you. We will now move to our question and answer session. If you have joined via the webinar, please use the raise hand icon, which can be found at the bottom of your webinar application. When you are called on, please unmute your line and ask your question. We will now pause a moment to assemble the queue. Your first question will come from the line of Andrew Mikitchook with BMO Capital Markets. Please unmute your line and ask your question.
Good morning. Congratulations to Taylor and your talented team who have delivered this. Can we just go back to the permitting? You guys have started surface work and are permitted for that. What is the timeline for the remaining permits, I guess the relatively short list of remaining permits, considering you are on private ground, to be considered fully permitted, please?
Morning, Andrew. Thanks for joining the call. I am going to turn this over to Michelle to answer your question specifically. As you know, being on private land, our permitting authorities are the State of Arizona, Pinal County, and the City of Casa Grande. Michelle has mentioned that we have all the permits in hand that we need to begin construction activities up to and including the initial decline development with the tunnel boring machine. I will let Michelle and Glen answer a few specifics about the remaining permits.
Thank you, Taylor. All permits and permit applications are on track so that permits are in hand mid-next year. That is our target. However, as Taylor said, we can still start the initial construction activities as well as the decline development with the permits that we currently have in hand.
The specific permits, Andrew, that we are pursuing through the application process are the Section 45-513 dewatering permit that we will need as we get into the advanced part of decline development when we are interfacing with the aquifer, and then also our phase II Aquifer Protection Permit that relates to the lining of the leach pads that we will need for actual production. So those are the two main permits that we will be working on between now and the middle of next year. Anything you want to add to that, Glen?
Nope. You did it very well.
Maybe if I could squeeze in a second question. I am not sure if it is for Glen or somebody else, but can we come back to this tunnel boring machine? Has it been, I guess, repatriated, I guess, for refurbishment? What is the timeline and actual activity around it?
Yeah. Good morning, Andrew. This is Glen. The TBM itself, it was in Australia at a mine called the Grosvenor Mine. It has been disassembled now and being moved to a port. The key pieces that we need over on this side of the pond will then be transported by ship through to the shop in Texas, and then they will get refurbished and then come to site. Some of the components, like the cutter head and so forth, are already in Ohio, and therefore, they will be shipped directly because the cutter head that was in Australia was a smaller cutter head than the one that we are going to use. Parts will start arriving on site here at the end of this year, and then assembly will start in early 2027.
Andrew, as part of the box cut development, we will also begin the laydown area and preparation yard for the tunnel boring machine. As Glen mentioned, parts will begin to arrive towards the end of this year. By the time the machine is fully assembled on our site, early next summer, mid next summer, it will be roughly 50% brand-new components, most of which come from Robbins, Ohio-based facility. This will all come together in the first half of next year.
Perfect. Thank you. I'll step back and let others ask questions.
Your next question will come from the line of Andrew Dusome with National Bank of Canada. Please unmute your line and ask your question.
Morning, Andrew.
Congrats to Taylor on getting this big de-risking step out. I was just wondering maybe if you can go into some more detail around what drove the increase in the ramp up versus the prior PFS and the slight increase in total tonnage as well. Is that just a factor of the design changes due to the TBM decline?
Andrew, having a little hard time hearing you. I think you asked about what are the key drivers behind the accelerated ramp up, is that correct?
Yeah, the accelerated ramp up as well as the slight increase in overall tonnage over the life of mine.
Yeah. Glen, you want to handle that?
Sure. Yep. So for the first part, the TBM, when it is actually excavating, when it gets down to the main access level, we designed it so it actually excavates right through and it integrates right with our ventilation shafts. So now our ventilation shafts and the TBM decline are kind of connected as one. That allows us to have, obviously, more equipment underground and creates an opportunity where we can now mine an upper block of the mine quicker and faster than we did previously with the dual declines being driven by the road headers. So that change opened up this area, allows us for a faster ramp up of tonnage that sits right next to the material handling of the mine.
So kind of where you see on slide seven, that ramp up right there, the real big change between 2029 and 2030 is just access to tons that are available in this upper block that are right next to the material handling system.
Then maybe just on the increase in total tonnage over the life of mine, is that driven by the same factors?
Yeah. The overall reserve went up by about 4 million tons. And what that was is that tonnage that was now available to us in the upper block of the mine, so the top part of the mine that was previously not really available to us, was kind of in sill pillars and so forth, just the way the infrastructure was structured. So that difference there of about 4 million tons allowed us to get access to it sooner, and therefore the overall higher tonnage rate was achieved. There is really a lot around just scheduling and optimization around the fact that the ventilation shafts and the TBM tunnel get connected together. It just allows us a lot more flexibility.
Great. Thanks, Glen. I will jump back in the queue.
Yeah. No worries.
There are no more questions at this time. I would now like to turn the call over to Taylor Melvin for closing remarks.
Well, thank you everybody for joining this call today. This is an exciting day for our company and a great and important step in the evolution of our Santa Cruz Copper project. We appreciate your support and thanks for joining the call. That concludes today's call.