Ivanhoe Electric Executive Chairman Robert Friedland, and President and Chief Executive Officer Taylor Melvin, have announced that the company has executed a binding Heads of Terms with Saudi Arabian Mining Company Ma’aden. The agreement sets out the binding framework for a strategic investment of $126.4 million by Ma’aden into the common stock of Ivanhoe Electric, giving it a 9.9% shareholding; and the concurrent establishment of a 50/50 exploration joint venture in Saudi Arabia.
This agreement was signed at the Future Minerals Forum taking place in Riyadh, Saudi Arabia, and is expected to be completed by the end of Q1 2023. Ma’aden is among the fastest growing mining companies in the world and the largest multi-commodity mining and metals company in the Middle East, with a vision of being a sustainable mining champion with a global presence. Ma’aden explores for, and mines, minerals within Saudi Arabia including gold, silver, copper, zinc, phosphate and other industrial minerals and has a market capitalisation of approximately $48 billion.
Some $60 million of the gross proceeds are to be retained by Ivanhoe Electric for use in advancing its US mineral projects, and for working capital and general corporate purposes. Ma’aden obtains the right to appoint one independent director to the Ivanhoe Electric Board of Directors, bringing the company’s board size to nine members.
Ivanhoe Electric and Ma’aden will establish a new Saudi Arabian exploration Joint Venture which will be owned 50/50 and established for an initial term of 5 years. It may be extended up to 10 years upon mutual agreement. Ma’aden will make available approximately 48,500 km2 of land under exploration license or license application within Saudi Arabia for exploration by the JV.
Ivanhoe Electric will contribute approximately $66 million to the JV, of which up to $13 million will be used to fund the purchase of three new generation Typhoon™ machines which will be owned by the Joint Venture. Prior to the delivery of the new Typhoon units, Ivanhoe Electric will make available an existing Typhoon unit to commence surveying in Saudi Arabia.
Ivanhoe Electric will also provide the JV with a royalty-free license to use Typhoon within Saudi Arabia for the purpose of mineral exploration. The license will remain exclusive to the JV in Saudi Arabia and effective while the JV is continuing. The JV will operate through an equally constituted board of directors and Technical Committee.
Friedland commented from the Future Minerals Forum, currently taking place in Riyadh, Saudi Arabia: “Today’s agreement is our first major transaction since successfully completing our IPO in mid-2022. The deal combines a conventional corporate-level investment with a groundbreaking exploration Joint Venture centered around the application of Ivanhoe Electric’s disruptive Typhoon technology in the Kingdom of Saudi Arabia. Ma’aden’s announced investment is a clear vote of confidence by a major mining company in our US projects and in our vision to re-invent mining for the electrification of everything, by agreeing to become one of our largest shareholders.”
Friedland continued, “This Joint Venture in Saudi Arabia will set us down a new path with Typhoon. This will be the first wide-scale use and deployment of our disruptive geophysical surveying tool to a third party for the mutual benefit of both companies and their stakeholders. When Ma’aden proposed the idea of using the world’s best geophysical surveying tool on one of the world’s most prospective but underexplored land areas in the Kingdom, our entire team jumped at the opportunity to be a part of this new venture with its potential impact on Vision 2030.”
Ma’aden Chief Executive Officer Robert Wilt commented: “Ma’aden’s strategic investment in Ivanhoe Electric is a critically important moment in our journey to becoming a leading supplier of strategic minerals, which will fuel global economic growth over the coming decade. Though our partnership with Ivanhoe Electric we are advancing our capability to unlock the potential of our exploration portfolio to secure supply of strategic minerals and strengthening our international presence. We are continually looking at opportunities like this one to develop Saudi Arabia’s tremendous mineral wealth and Ivanhoe Electric is an ideal partner.”
Typhoon is the brand name for Ivanhoe Electric’s proprietary electrical geophysical surveying transmitter, which can detect the presence of sulphide minerals containing copper, nickel, gold and silver (as well as water and oil). The technology was developed by its former parent I-Pulse to unlock exploration in areas where potential deposits are hidden by cover, where target depths exceed the range of conventional geophysical surveying systems, or where the scale and topography of an exploration target area prevents efficient and cost-effective conventional surveying.
Typhoon achieves this through its unique specifications, which includes a current output of up to 200 amps and a voltage output of up to 10,000 volts. The transmitter uses switches and capacitance systems which generate a very pure and stable transmitted signal, resulting in an extremely high signal-to-noise ratio. Typhoon™ is also capable of transmitting both induced polarisation and electromagnetic signals, meaning that the same transmitter can be used to search for a wide variety of mineral deposit types.
The statement said: “Typhoon was specifically developed to effectively conduct large surveys and identify deep geophysical anomalies in environments that have highly resistive surface conditions, such as those seen in the Arabian Shield. Typhoon is the ideal tool for surveying many parts of Saudi Arabia where the bedrock is hidden by sand and gravel cover that can exceed 1 kilometre in depth – as similarly experienced at Ivanhoe Electric’s Santa Cruz project in Arizona, USA.”
Ivanhoe Electric currently has three Typhoon units and three more will be produced for the Joint Venture in the first half of 2024. Three additional Typhoon units on order with I-Pulse will be delivered subsequently to Ivanhoe Electric. When the construction and delivery of these six new generation units is completed, the global fleet of Typhoon units will have tripled from three to nine.
Melvin commented: “Typhoon is a transformational technology and a unique asset for Ivanhoe Electric. The machines and supporting CGI data analytics can potentially unlock remarkable new business opportunities for us. We intend to increase the number of Typhoon units to meet the future exploration needs of Ivanhoe Electric in the US and to support new opportunities. The Joint Venture with Ma’aden is just our first foray into how we can best capture the value of Typhoon™ outside of exploring our own projects.”
Ivanhoe Electric also controls a data inversion business, Computational Geosciences Inc (CGI). CGI was founded in 2010 to commercialise innovative technology developed at the University of British Columbia, Canada to improve and enhance mineral exploration. The CGI technology consists of sophisticated codes to process geophysical data and build 3D subsurface images that could indicate the presence of various metals and minerals. The data processing and artificial intelligence software developed by CGI complements our Typhoon technology and Ivanhoe Electric says represents the only software product that can process the full spectrum of geophysical data produced by Typhoon efficiently. CGI will process the tremendous amounts of data that will be produced by the Saudi exploration Joint Venture.