Santa Cruz Copper Project: A Strategic Investment in U.S. Critical Mineral Dominance

The Ivanhoe Electric Santa Cruz Copper Project has emerged as a cornerstone of America's push to secure its critical mineral supply chain. With rising demand for copper in electric vehicles, renewable energy infrastructure, and defense systems, this Arizona-based project offers a rare combination of low costs, strong economics, and alignment with national security priorities. Here's why investors should take notice now.

The Economics: A First-Quartile Performer

The Santa Cruz Project's financial metrics stand out in a world of rising production costs and geopolitical risks. At current copper prices of $4.83/lb, the project boasts an after-tax net present value (NPV) of $1.9 billion and an internal rate of return (IRR) of 24%—metrics that outperform most global copper projects. Even at a conservative base-case price of $4.25/lb (well below historical averages), the NPV remains robust at $1.4 billion, with an IRR of 20%.

What drives these numbers? World-class economics anchored by first-quartile operating costs of just $1.32/lb, among the lowest in the industry. This is achieved through a modern heap leach/solvent-extraction-electrowinning (SX/EW) process, which minimizes energy and water intensity, while the project's underground mining design ensures high copper recovery rates (92.2% over the mine life).

The project's capital efficiency is equally compelling: a total capital cost of $1.24 billion for a 23-year mine life, yielding an industry-leading capital intensity of $17,000 per tonne of copper. By contrast, many new greenfield projects struggle to break even above $20,000/tonne.

A Timing Sweet Spot for Green Energy and National Security

Santa Cruz's timing could not be better. The Energy Information Administration forecasts global copper demand to grow 30% by 2030, driven by EVs, solar panels, and wind turbines—all of which rely heavily on the metal. Meanwhile, the U.S. has only two major copper mines under construction, leaving the country vulnerable to supply shocks from politically unstable regions like Chile and Peru.

Santa Cruz directly addresses this gap. Its 72,000-tonne/year output over the first 15 years will supply a critical domestic source of copper, supporting President Biden's Inflation Reduction Act clean energy goals and the Pentagon's push to reduce reliance on foreign minerals. The project's location on 100%-owned private land—a rarity in the U.S.—ensures minimal permitting delays, with construction set to begin in early 2026 and first production in 2028.

Financing and Expansion Potential

The project's financial health is bolstered by the Export-Import Bank of the United States, which has signaled interest in providing up to $825 million in debt financing under the Make More in America initiative. This government support reduces project risk and underscores its strategic importance.

Beyond its initial 1.5 million tonnes of probable reserves, Santa Cruz holds 4.8 million tonnes of indicated and inferred resources, offering clear upside for expansion. The sulfide-rich Primary domain (0.5 million tonnes) could even be developed with additional processing infrastructure, further extending the mine's lifespan.

Why Invest Now?

The Santa Cruz Project is a rare trifecta of low-cost production, strong demand tailwinds, and government backing. Investors who act before construction begins in 2026 and first production in 2028 stand to capture significant upside as the project moves toward full operation.

Key catalysts to watch:
- June 23, 2025 Conference Call: Management will address investor questions about financing, timelines, and copper's macroeconomic outlook.
- Permitting Milestones: Progress on local approvals could accelerate in Q3 2025.
- Copper Price Dynamics: A rebound toward $5/lb would further boost NPV.

The Bottom Line

Santa Cruz is not just another mining project—it's a strategic asset in America's energy transition and national security. With its cost leadership, secure land position, and alignment with policy priorities, this project is poised to deliver outsized returns as global copper demand surges. Investors seeking exposure to the critical minerals boom should consider Ivanhoe Electric before its first production milestone in 2028. The time to act is now.