Ma’aden and Ivanhoe Electric to Establish joint venture to explore in Saudi Arabia
Ivanhoe Electric announced that is has formed a joint venture with Ma’aden, the Saudi Arabian mining company, to explore for copper, gold, silver and battery and electric metals in Saudi Arabia.
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 capitalization of approximately US$48 billion.
Ivanhoe Electric said in a press release that the agreement sets out the binding framework for a strategic investment of US$126.4 million by Ma’aden into the common stock of Ivanhoe Electric and the concurrent establishment of a 50/50 exploration joint venture in Saudi Arabia. The agreement was signed at the Future Minerals Forum taking place in Riyadh, Saudi Arabia, and is expected to be completed by the end of the first quarter of 2023.
Ivanhoe Electric will issue approximately 10.2 million new common shares to Ma’aden at a price of US$12.38 per share for gross proceeds of US$126.4 million, resulting in Ma’aden becoming a 9.9 percent shareholder. Ma’aden will have anti-dilution rights to allow it to maintain its 9.9 percent ownership.
US$60 million of the gross proceeds are to be retained by Ivanhoe Electric for use in advancing its U.S. mineral projects, and for working capital and general corporate purposes.
Ma’aden will obtain the right to appoint one independent director to the Ivanhoe Electric Board of Directors, bringing the company’s board size to nine members.
The joint venture which will be owned 50/50 and established for an initial term of five 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 joint venture.
Ivanhoe Electric will contribute approximately US$66 million to the Joint Venture, of which up to $13 million will be used to fund the purchase of three new generation Typhoon machines. Ivanhoe Electric will provide the Joint Venture with a royalty-free license to use Typhoon within Saudi Arabia for the purpose of mineral exploration. The license will remain exclusive to the joint venture in Saudi Arabia and effective while the joint venture is continuing.
Typhoon 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).
“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,” said Ivanhone Electric CEO Robert Friedland. “Ma’aden’s announced investment is a clear vote of confidence by a major mining company in our U.S. projects and in our vision to re-invent mining for the electrification of everything, by agreeing to become one of our largest shareholders.
“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.”