Ivanhoe Electric to jointly develop Alacran mine in Colombia with China’s JCHX

Ivanhoe Electric Executive Chairman Robert Friedland and President and Chief Executive Officer Taylor Melvin have announce that Ivanhoe Electric’s subsidiary, Cordoba Minerals Corp and Chinese mine developer and mining contractor JCHX Mining Management Co Ltd have agreed to a strategic arrangement for the joint development of Cordoba’s flagship Alacran Project in Colombia. Ivanhoe Electric owns a 63.27% interest in Cordoba.

Alacran is a copper-gold-silver project 390 km northwest of Bogota and 160 km north of Medellin and is part of the wider San Matias project which is 100%-owned by Cordoba. It includes 100% of Alacran as well as satellite deposits at Montiel East, Montiel West and Costa Azul. Ivanhoe Mines, of which Friedland is Founder and Executive Co-Chairman has already worked closely with JCHX at the Kamoa-Kakula copper mine for a number of years in DRC via JCHX subsidiary JMMC which is the mining contractor there. Ivanhoe Mines jointly owns Kamoa-Kakula with Chinese mining giant Zijin Mining, which also works closely with JCHX in its own right – JCHX for example being the mining contractor at Zijin’s Cukaru Peki copper and gold mine in Serbia.

The San Matias copper-gold-silver project was the subject of an independent Preliminary Feasibility Study prepared by Nordmin Engineering Ltd and published in January 2022 which was focused on Alacran and does not include the satellite deposits Montiel East, Montiel West and Costa Azul. Probable Mineral Reserves total 102.1 Mt grading 0.41% copper, 0.26 g/t gold, and 2.30 g/t silver diluted. The mine would be a 22,000 t/d open pit, with average annual production of 68.8 Mlbs copper, 55,000 oz gold, and 386,000 oz silver, over a 13-year Life of Mine with a low overall strip ratio of 1.1. During the first six years of production, copper, gold and silver grades within the fresh and transition rock are expected to average 0.61%, 0.29 g/t and 3.50 g/t respectively.

JCHX, through a wholly owned subsidiary, will purchase a 50% ownership interest in CMH Colombia SAS, a company existing under the laws of Colombia, for aggregate consideration of US$100 million. CMH will own 100% of the Alacran Project and will be the joint venture vehicle for Cordoba and JCHX in this strategic project level partnership.

A Joint Venture Shareholders’ Agreement (JV SHA) will govern the strategic relationship between Cordoba and JCHX, and will set forth the general responsibility and authority of the CMH board of directors (CMH board), in addition to the entitlements of each shareholder.

The CMH board will comprise of four individuals, of which two directors will be nominated by Cordoba and the other two directors will be nominated by JCHX; and for so long as the shareholdings in CMH remain 50%-50%, a Cordoba representative will serve as the Chairperson of the Board of Directors, and will possess a casting vote on all matters subject to a list of reserved matters.

Cordoba will be appointed as the operator and manager of the Alacran Project pursuant to a management services agreement and will be responsible for setting the annual programs and budgets for the CMH board’s approval.

JCHX (or its affiliate) has right of first offer to bid on the Engineering, Procurement and Construction (EPC) and Detailed Design Agreement contracts, provided that Cordoba has the right to open the process out to competitive tender; with JCHX having the right to match any competitive bid. JCHX (or its affiliate) will also be entitled to up to 100% of the offtake from the production under the current Feasibility Study of the Alacran Project, provided that they are paying fair market value and they are the most competitive offer (including a matching right for other third-party proposals).

Ivanhoe Electric is an American technology and mineral exploration company that it says “is re-inventing mining for the electrification of everything by combining advanced mineral exploration technologies, renewable energy storage solutions and electric metals projects predominantly located in the United States.” These include the Santa Cruz Copper Project in Arizona and the Tintic Copper-Gold Project in Utah, as well as projects in Montana, Oregon and North Carolina.

Ivanhoe Electric also uses its Typhoon™ transmitter, an accurate and powerful geophysical survey system, together with advanced data analytics provided by its subsidiary, Computational Geosciences, to accelerate and de-risk the mineral exploration process as well as to potentially discover deposits of critical metals that may otherwise be undetectable by traditional exploration technologies. Through its controlling interest in VRB Energy, Ivanhoe Electric also develops and manufactures advanced grid-scale vanadium redox battery storage systems.