American mining company Ivanhoe Electric announced the signing of a Definitive Agreement with Saudi Arabian Mining Company Ma’aden finalizing the terms of the transactions announced on January 11, 2023. At closing, Ma’aden and Ivanhoe Electric will form a 50/50 exploration joint venture in Saudi Arabia to explore copper, nickel, gold, silver and other electric metals. Ivanhoe Electric is the operator of the Joint Venture during the exploration phase, and Ma’aden will become the operator for the development of any economically viable deposits found and specifically designated by the Joint Venture.
The Joint Venture will deploy the Typhoon™ geophysical surveying system, which is the brand name for Ivanhoe Electric’s proprietary electrical geophysical surveying transmitter, which can detect the presence of sulfide minerals containing copper, nickel, gold and silver (as well as water and oil). Ivanhoe Electric’s proprietary Typhoon geophysical surveying system in operation at the Santa Cruz Copper Project, located near Casa Grande, Arizona, USA (July 2022). yphoon-powered machines claim to detect minerals buried up to 1.5 kilometres below ground.
At closing, Ivanhoe Electric expects to issue approximately 10.2 million common shares to Ma’aden, representing 9.9% of common shares outstanding, at a purchase price of $12.38 per share for gross proceeds of US$126.5 million. US$66 million of proceeds will go to the Joint Venture to fund exploration activities, including the purchase of three new-generation Typhoon™ machines to be used by the Joint Venture. The remaining US$60 million will be retained by Ivanhoe Electric to advance its portfolio of US mineral projects, and for working capital and general corporate purposes.
As part of the equity private placement, Ivanhoe Electric will grant Ma’aden a top-up right allowing Ma’aden to maintain its 9.9% ownership, and Ma’aden will agree to a five-year standstill limiting its shareholding to a maximum of 19.9%, subject to certain exceptions. Ma’aden will have the right to appoint a nominee to the Ivanhoe Electric board of directors. The transactions are expected to close by the end of Q2 2023 subject to the approval of a supplemental listing application by the New York Stock Exchange and the corporate and regulatory formalities required in Saudi Arabia to incorporate the joint venture entity.
To read more about the EV Landscape in Saudi Arabia, click here.
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