Ivanhoe Electric earns into 60% of nickel-copper project in Côte d’Ivoire

Ivanhoe Electric (TSX: IE; NYSE American: IE) has completed its earn-in to acquire a 60% interest in the Samapleu-Grata nickel-copper project in Côte d’Ivoire after satisfying the expenditure requirements outlined in an agreement from three years ago.

The completion of earn-in, which required Ivanhoe to spend $25 million on exploration by March 2024, now makes the Samapleu-Grata project a 60:40 joint venture between Ivanhoe Electric and Sama Resources (TSXV: SME), with Ivanhoe also owning 22.7% of the common shares of Sama.  

That development follows Sama’s release last week of an updated preliminary economic assessment (PEA), which demonstrated the potential for a 16-year open-pit mine producing copper concentrates of 38,627 tonnes and nickel concentrates of 55,119 tonnes a year, with associated byproducts (i.e. platinum and palladium).

Its average annual nickel metal in concentrate will amount to around 7,165 tonnes and copper metal in concentrate of about 10,043 tonnes.

Using a long-term nickel price of US$8.83 per lb. and copper price of US$3.99 per lb., the study calculated a post-tax net present value (at an 8% discount) of US$257 million and an internal rate of return of 22.3%. The initial capital cost is US$338 million.

The 2024 PEA improved on the one published in 2020 since it effectively doubled the mill feed and changed the flow sheet to produce conventional nickel and copper concentrates, Sama said. It increased the overall nickel concentrate production by 19%, and importantly, increased the life-of-mine copper concentrate production by more than 100% over its projected mine life.

“We are particularly encouraged to see the polymetallic nature of the project and the inclusion of all key payable metals – nickel, copper, gold, cobalt, platinum and palladium – and the significant improvement in both the quality and quantity of potential future copper concentrate production,” Ivanhoe Electric CEO Taylor Melvin said in a news release on Thursday.

These project economics only included the Grata, Main and Extension deposits and the Sipilou Sud laterite deposit, which together cover just 3% of the 835-sq.-km project area at Samapleu-Grata.

This, according to Ivanhoe, provides ample opportunities for exploration upside and expansion opportunities, including at known mineralized zones at Yepleu and Draba.

Ivanhoe shares were up 2.8% to $12.34 apiece on Monday morning, valuing the company at $1.4 billion. Its shares traded in a 52-week range of $9.89 and $22.30.