Ivanhoe Electric (NYSE American: IE) (TSX: 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 the earn-in, which required Ivanhoe to spend C$25 million on exploration by March 2024, follows the release of an updated preliminary economic assessment (PEA) by Sama Resources (TSXV: SME), its joint venture partner on the polymetallic project, last week.
The PEA 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 such as platinum and palladium.
Its average annual nickel metal in concentrate will amount to approximately 7,165 tonnes and copper metal in concentrate of approximately 10,043 tonnes.
Using a long-term nickel price of $8.83/lb. and copper price of $3.99/lb., the study calculated a post-tax net present value (at an 8% discount) of $257 million and an internal rate of return of 22.3%. The initial capital cost is $338 million.
The 2024 PEA, said Sama, was an improvement on the study published in 2020 since it effectively doubled the mill feed and changed the flowsheet to produce conventional nickel and copper concentrates. In doing so, it increased the overall nickel concentrate production by 19%, and increased the life-of-mine copper concentrate production by more than 100% over its projected mine life.
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 km2 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.
“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 the March 21 news release.
Following the latest updates, the Samapleu-Grata project is now a 60/40 joint venture between Ivanhoe Electric and Sama. In addition to earning its 60% interest, Ivanhoe also owns 22.7% of the common shares of Sama.
Ivanhoe Electric’s shares rose by 2.8% to C$12.34 by 11:15 a.m. in Toronto. The Vancouver-headquartered copper explorer has a market capitalization of C$1.49 billion ($1.1bn).
