B2Gold Corp. press release

CORRECTING AND REPLACING: Ivanhoe Electric Announces Completion of the Initial Assessment for the Santa Cruz Copper Project in Arizona

2023-09-06

TSX - Toronto Stock Exchange · Gold · Canada · Technical Studies

The Initial Assessment Focuses on a Small Surface Footprint, 5.9 Million Tonnes per Year High Grade Underground Copper Mining Operation Supported Solely by the High-Grade Exotic, Oxide and Enriched Domains of the Santa Cruz and East Ridge Deposits Additional Resources at the Texaco Deposit and the Large, Primary Sulfide Resources at Santa Cruz Provide Potential for Future Growth Life of Mine ("LOM") Copper Production Estimated to be 1.6 Million Tonnes over a 20-Year Mine Life, with an Average Grade of 1.58% Total Copper and C1 Cash Costs[1] of $1.36 per Pound Estimated LOM Copper Production Includes 1.0 Million Tonnes of 99.99% Pure Copper Cathode and 0.6 Million Tonnes of Copper Contained in a Concentrate that is 48% Copper by Weight Initial Capital Estimate of $1.15 Billion, After-tax NPV8%of $1.32 Billion and IRR of 23.0% Assuming LOM $3.80/lb Copper Price Base Case Utilizes 70% Renewable Energy, Resulting in Low Scope 1 and 2 Carbon Dioxide Equivalent ("CO2e") Emissions of 0.49 Tonnes of CO2e per Tonne of Copper Produced, Compared to the Industry Average of 3.9 Tonnes of CO2e per Tonne of Copper[2] Ivanhoe Electric Controls the Private Surface Land and Patented Mineral Rights Encompassing the Entire Santa Cruz Copper Project Ivanhoe Electric to Host Conference Call to Review the Initial Assessment at 11:00 am ET on Wednesday, September 6, 2023

PHOENIX, AZ / ACCESSWIRE / September 6, 2023 / Ivanhoe Electric (NYSE American:IE)(TSX:IE) Executive Chairman, Robert Friedland and President and Chief Executive Officer, Taylor Melvin are pleased to provide the results from the Initial Assessment[3] ("IA") for its Santa Cruz Copper Project, located west of Casa Grande, Arizona. The IA is a preliminary technical and economic study for the Santa Cruz Copper Project and associated high-grade mineral resources included in the Santa Cruz and East Ridge deposits. The study analyzes the potential for a high-grade underground copper mining operation supported by modern technologies to reduce environmental impact and powered predominantly by renewable energy.

Mr. Friedland commented: "Completing the Initial Assessment for our Santa Cruz Copper Project is an important achievement for Ivanhoe Electric as we work to advance a new source of responsibly produced "green" copper in the United States. Our goal is to develop a modern copper mine that produces copper with among the lowest levels of carbon dioxide output in the industry; a product we think has the potential to attract a premium price in the future. Using primarily onsite renewable electricity generation, and with the potential to increase that to meet the Project's entire future needs, the Initial Assessment shows us that we are on the right track to achieving our goal at Santa Cruz and our larger goal of enhancing U.S. supply chain independence for critical metals. We are excited about the future for our Santa Cruz Project in Arizona."

Mr. Melvin commented: "The Initial Assessment for the Santa Cruz Copper Project is the result of a tremendous effort by our team and an important milestone for the Project. The study provides a first look at our plans for a technologically advanced, underground copper mine in Arizona with attractive economics at today's copper prices. We are designing the Project to minimize environmental impact through the use of modern technologies and renewable power. We believe the Santa Cruz Copper Project will become an industry-leading example of responsibly produced copper in the United States, and a source of high-quality jobs in Arizona during development and throughout its anticipated long mine life."

Highlights of the Initial Assessment The Santa Cruz IA outlines a potential 5.9 million tonnes per year underground mining operation, supported by 105.2 million tonnes of modeled mill feed with an average grade of 1.58% copper from the Santa Cruz and East Ridge Deposits, resulting in an estimated 20-year mine life.

The IA focuses exclusively on the high-grade exotic, oxide and enriched domains of the Santa Cruz and East Ridge Deposits. The oxide and enriched domains of the Texaco Deposit are not included in the current study (2.7 million tonnes indicated grading 1.42% total copper and 27.3 million tonnes inferred grading 1.39% total copper, using a 0.80% cut-off grade). Future studies could evaluate the potential addition of the large primary sulfide domains at Santa Cruz (76.2 million tonnes indicated grading 0.88% total copper and 8.0 million tonnes inferred grading 0.92% total copper, using a 0.70% cut-off grade) and at the Texaco Deposit (0.9 million tonnes indicated grading 1.05% total copper and 35.0 million tonnes inferred grading 1.06% total copper, using a 0.80% cut-off grade), subject to market conditions.

Copper recoveries of 95.4% are expected to be achieved through a combination of solvent extraction and electrowinning ("SX/EW") and conventional froth flotation.

The IA includes LOM production for the Project of 1.0 million tonnes of copper in the form of 99.99% pure copper cathode and 0.6 million tonnes of copper contained in a 48% copper concentrate with very low deleterious elements, such as arsenic or lead.

LOM average C1 cash costs are expected to be $1.36 per payable pound of copper, with C3 total costs[4] expected to average $2.84 per payable pound of copper.

The IA contemplates initial project capital expenditures of $1.15 billion, and LOM sustaining capital expenditures totaling $0.98 billion. A three-year construction period is envisioned to develop the underground workings and build the surface processing facilities.

The IA estimates that the Project has a pre-tax net present value ("NPV") of $1.6 billion at an 8% discount rate and a pre-tax internal rate of return ("IRR") of 25.1%, using a flat LOM copper price assumption of $3.80 per pound. After-tax NPV is estimated at $1.3 billion with an after-tax IRR of 23.0%, using the same discount rate and copper price assumptions.

The IA is designed to minimize environmental impact and minimize surface land disruption. As a result of the small surface footprint required for underground copper mining activities included in the IA, the total land area expected to be required for the mine, plant, tailings storage facilities and potential on-site generation of renewable solar power covers approximately one-third of the total land package.

The IA base case assumes 70% of the total electric power requirements for the Project will be generated by onsite renewable infrastructure, enabling copper production with very low carbon dioxide equivalent ("CO2e") emissions of 0.49 tonnes of CO2e per tonne of copper for Scope 1 and 2 emissions. In comparison, the global mining industry average is approximately 3.9 tonnes of CO2e per tonne of copper equivalent[5]. The subsequent Preliminary Feasibility Study ("PFS") for the Project will evaluate the potential use of combined solar power, battery storage and a geothermal-driven microgrid as renewable power sources to provide up to 100% of the electricity requirements for the Project.

An all-electric underground heavy mining fleet is assumed in the IA, in combination with railveyor technology for material movement, which would significantly reduce carbon dioxide emissions and improve energy efficiency. The use of an all-electric underground heavy equipment fleet alone represents an estimated 70-80% reduction in Scope 1 emissions when compared to a traditional high-efficiency diesel-powered heavy equipment fleet.

The IA also contemplates placing 50% of the mine tailings back underground as cemented paste fill. The remaining 50% will be stored on the surface as thickened tailings at 65% solid content. Surface tailings will be contained within a ring dyke dam with a capacity to store 56.7 million tonnes. Water management associated with tailings storage is minimized as a result of thickened tailings and high evaporation rates in the Sonoran Desert.

Ivanhoe Electric controls the private surface land and patented mineral rights encompassing the entire Santa Cruz Project. The entirety of the facilities referenced in the IA, including mining, processing, tailings storage and onsite renewable power generation facilities, can be developed on private land under private mineral title. Ivanhoe Electric also controls water rights associated with its Santa Cruz land package.

Video of the Santa Cruz IA operation. Click on the image below for the high-resolution video.

[](https://pr.report/u6eTXzYa)

Ivanhoe Electric to Host a Conference Call on the Santa Cruz Initial Assessment

On Wednesday, September 6, 2023, Ivanhoe Electric will host a conference call to discuss the results of the Santa Cruz IA.

The call will include remarks from Ivanhoe Electric's Executive Chairman Robert Friedland, President and Chief Executive Officer Taylor Melvin and other members of the Company's management team. It will also feature a question-and-answer session.

DATE: Wednesday, September 6, 2023.

TIME: 11:00 am Eastern / 8:00 am Pacific / 8:00 am Arizona.

DIAL IN: 1-888-664-6383 or 416-764-8650

LINK: https://app.webinar.net/oE8nX7LrV06

A replay of the call, together with supporting presentation slides, will be made available on Ivanhoe Electric's website at www.ivanhoeelectric.com.

Table 1. Summary of the Initial Assessment Estimated Operating and Economic Results

| Production Results | ## | | Mine Life | 20 years | | Total LOM Mill Feed | 105.2 Mt | | Nameplate Mill Throughput | 15,000 tpd | | Average Feed Grade (total copper) | 1.58% | | Average Feed Grade (soluble copper) | 1.01% | | Average Total Copper Recovery | 95.4% | | Total LOM Copper Production (in cathode and concentrate) | 1.59 Mt | | Average Copper Production in Cathode (first 10 years) | 57 ktpa | | Average Copper Production in Concentrate (first 10 years) | 29 ktpa | | Operating Costs | ## | | Onsite Operating Costs (mining, processing, G&A) | $43.48/t | | Average C1 Cash Costs | $1.36/lb | | Average C3 Total Costs | $2.84/lb | | Capital Costs | ## | | Initial Capital Expenditures | $1.15B | | Sustaining Capital Expenditures | $0.98B | | Total LOM Capital Expenditures | $2.12B | | Economic Analysis | ## | | Copper Price | $3.80/lb | | Pre-Tax Undiscounted Free Cash Flow | $5.22B | | Pre-Tax NPV 8% | $1.64B | | Pre-Tax IRR | 25.1% | | After-Tax Undiscounted Free Cash Flow | $4.23B | | After-Tax NPV 8% | $1.32B | | After-Tax IRR | 23.0% |

Robust IA Economics for the USA's "Next Generation" Copper Mine The IA outlines LOM copper production totaling 1.6 million over a 20-year mine life - underpinned by 105.2 million tonnes of modeled mill feed grading 1.58% total copper. Copper C1 cash costs are expected to average $1.36 per pound.

Figure 1. Santa Cruz IA copper sales and cost profile.

Total operating costs (mining, processing, G&A and other) are expected to average $43.48 per tonne processed, including mining costs of $27.33 per tonne, processing costs of $12.84 per tonne and G&A and other costs of $3.31 per tonne.

The initial capital expenditures total $1.15 billion, which includes pre-production development of the twin declines and underground infrastructure, purchase of mining equipment, construction of the processing plant and infrastructure facilities and construction of the tailings storage facility.

LOM sustaining capital expenditures total $0.98 billion, which includes the capital required to extend the twin declines to the lower portion of the Santa Cruz Deposit, as well as the maintenance of all equipment and supporting infrastructure. It also includes expansion and closure costs of the tailing facility.

The IA estimates LOM revenue of $12.9 billion using a flat copper price assumption of $3.80 per pound. Pre-tax undiscounted free cash flow totals $5.22 billion and pre-tax NPV8%totals $1.64 billion with an IRR of 25.1%.

On an after-tax basis, the IA Project is estimated to generate $4.23 billion of undiscounted free cash flow, an NPV8%of $1.32 billion with an IRR of 23.0%.

Figure 2. IA economics are sensitive to the input copper price and capital and operating cost assumptions.

Note: Copper price points calculated by Ivanhoe Electric and inserted into IA sensitivity model.

The IA is preliminary in nature and includes an economic analysis that is based, in part, on inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable the inferred mineral resources to be categorized as mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability. Accordingly, there is no certainty that the results of the IA will be realized.

The IA contains economic analyses which include and exclude inferred mineral resources. This press release focuses on the economic analysis, including inferred mineral resources. For more information regarding the economic analysis without inferred mineral resources, see the Initial Assessment, which is included as an exhibit to the Form 8-K filed with the SEC in connection with this announcement.

The IA is based on Ivanhoe Electric's December 31, 2022 Mineral Resource Estimate, which includes the Santa Cruz, East Ridge and Texaco Deposits, using a 0.70% copper cut-off at Santa Cruz, 0.90% at East Ridge and 0.80% at Texaco (the "2022 Mineral Resource Estimate", see February 14th, 2023 news release). The economic analysis described in this release and in the IA does not include any mineral resources from the Texaco Deposit.

Phased Approach to Underground Mining Optimizes Initial Capital Expenditures and Maximizes Return on Investment In the IA, twin declines, each measuring 4.3 kilometers, would be developed to access the upper parts of the Santa Cruz and East Ridge deposits. One decline is required for air intake and access, while the other will be required for air exhaust and material movement. To develop the declines, the IA assumes that construction of the portal box cut would begin in 2026, decline development in 2027 and continues through 2028 to access the top portion of the mine. Under these assumptions, stoping activities would begin in 2029 with a 1-year ramp up to the full 15,000 tonnes per day capacity.

Mining of the upper portion would proceed for the first eight years before additional capital expenditures are required to extend the declines by 1.9 kilometers. Additional surface infrastructure would be required once mining of the lower portion commences. This would include the second phase construction of a refrigeration plant, ventilation, water handling, and material handling.

Mine sequencing would employ typical transverse longhole stopes for the Santa Cruz deposit on a primary-secondary sequence with paste backfill for support. Mining of the Santa Cruz exotic mineralization has been evaluated using a drift and fill technique with access from the Santa Cruz longhole stoping levels. The East Ridge deposit will apply a drift and fill mining technique with access directly from the twin declines.

Over the total LOM, 105.2 million tonnes of mineralized material is expected to be mined. This includes 88.6 million tonnes from the Santa Cruz deposit, 1.9 million tonnes from the Santa Cruz exotic mineralization, 9.8 million tonnes from the East Ridge deposit and 4.9 million tonnes of low-grade material required to access the Deposits.

Figure 3. Santa Cruz IA site layout, requiring approximately one-third of the total land package for the mine, plant, process, tailings storage facilities and on-site generation of solar power.

Figure 4. Completed IA mine design plan identifying the Santa Cruz deposit, Santa Cruz zone of exotic mineralization and East Ridge deposit. Key mining infrastructure is also depicted, such as the portal box cut, twin declines, lateral developments and ventilation raises.

Significant Technical Work Completed to Date Increased Knowledge of the Regional Aquifer and Groundwater Flows Ivanhoe Electric has conducted a detailed analysis of historical hydrogeological information and completed additional drill holes focused on obtaining additional hydrogeological information. Using this information, a hydrogeological conceptual site model was developed to determine which rock types have influence on the storage or movement of groundwater. A groundwater flow model was then developed to evaluate mine dewatering requirements and inform mine planning. The underground mine access and mine plan were analyzed against the groundwater flow model and showed that most of the mineralization is located within rock relatively low in water inflow.

Ivanhoe Electric has been proactive in its approach to geotechnical data collection. Upon acquisition of the Project, early collection of geotechnical information began to facilitate the completion of a comprehensive geotechnical model in the early stage of design work, which also informed the groundwater flow model. As of August 2023, Ivanhoe Electric has completed 71,620 meters of geotechnical drilling.

Copper Recoveries Averaging 95.4% Expected to be Achieved by Using SX/EW for Copper Cathode Production and Froth Flotation Copper Concentrate Production The IA envisions the production of copper through a process that utilizes a conventional design for treating high-grade mixed copper oxide and copper sulfide mineralization. In the IA, total copper recovery averages 95.4% over the LOM.

The IA includes potential LOM production of 1,587,000 tonnes of copper contained in 99.99% pure cathode and 48% copper concentrate with very low deleterious elements, such as arsenic or lead. LOM copper recovered to cathode totals 1,032,000 tonnes and LOM copper recovered to concentrate totals 555,000 tonnes (65% copper in cathode, 35% copper in concentrate).

Figure 5. Santa Cruz IA summary processing flowsheet showing the production of both copper cathode from copper oxide mineralization and copper concentrate from copper sulfide mineralization.

Ivanhoe Electric is Committed to Utilizing Industry-Leading Mining Technologies and Renewable Power Sources The IA applies modern mining technologies, including the use of railveyor technology for the efficient movement of mined mineralization from underground to surface. Railveyor is a safe and autonomously operated alternative to traditional belt conveyors or diesel haul trucks. It is also able to recover energy through regenerative braking during the return phase.

Figure 6. Sandvik roadheader used for decline development shown on the left (Source: Sandvik) and railveyor unloading turn shown on the right (Source: Railveyor)

Additionally, the IA base case envisions that 70% of the Project's power requirements will be generated from onsite renewable power sources. The subsequent PFS will investigate the potential of onsite generation of power from combined solar panels, battery storage and a geothermal-driven microgrid to provide 100% of the electricity needs for the Project. Even at 70%, the application in the IA of onsite renewable power for the direct production of copper would lead to one of the lowest CO2e emissions intensities per pound of copper produced in the industry[6].

Average carbon intensities in the global mining industry stand at approximately 3.9 tonnes of CO2e per tonne of copper equivalent, encompassing both scope 1 and 2 emissions[7]. The IA base case anticipates that the average CO2e intensity for Santa Cruz copper (development and mining stages) is 0.49 tonnes of CO2e per tonne of copper for scope 1 and 2 emissions.

CO2e intensity is affected by a variety of factors, including the type and efficiency of the mining equipment used, the grade of the ore, the depth of the mine, and the method of generating electricity.

Figure 7. At the IA base case, Santa Cruz is projected to be one of the lowest CO2e emissions operations per tonne of copper on the global emissions "cost" curve.

Source: Wood Mackenzie, 2023 (single year 2022 data shown, the Santa Cruz 2023 IA has not been reviewed by Wood Mackenzie).

Figure 8. Santa Cruz is projected to produce less CO2e per Tonne of Copper than other USA copper mines currently in production.