The deal between the Saudi Arabian Mining Company (Ma'aden) and Ivanhoe Electric Inc. (IE) to buy 9.9% of the company's shares and create a 50/50 joint venture to carry out one of the largest exploratory programs ever done has been finished, according to the announcement. The agreement will provide Ma'aden access to IE's ground-breaking TyphoonTM geophysical survey technology through the joint venture, accelerating the exploration of Saudi Arabia's territories, which are thought to contain US$1.3 trillion worth of unmined minerals.
The ambitious Vision 2030 of the Kingdom, which places mining as a third pillar of the Saudi economy, is what inspired Ma'aden to embark on its extraordinary exploration program. Ma'aden's new business strategy calls for ten-fold expansion by 2040 as well as a shift into strategic minerals to support the development of downstream sectors in the Kingdom.
A minimum of 48,500 km2 of land, or more than Denmark, will be explored as part of the joint venture (JV) with Ivanhoe Electric. Highly prospective licensing areas in this area have the potential to result in significant new discoveries of copper, nickel, gold, silver, and other important minerals. In order to improve Ma'aden's exploration capabilities and expand its resource base and production pipeline, the JV will use IE's exclusive TyphoonTM technology and CGI software.
In accordance with the agreement, Ma'aden will pay US$126.5 million for roughly 10.2 million common shares of IE, or 9.9% of Ivanhoe Electric Inc., with a top-up option to maintain its 9.9% ownership. The JV will use US$66 million of the total US$126.5 million to finance exploratory efforts and the procurement of three TyphoonTMs of the newest generation. Ma'aden now has the authority to choose a candidate for the IE board of directors.
Only after a number of requirements have been met will the establishment of the JV and the purchase of 9.9% of IE's shares become effective.
According to Ma'aden CEO Robert Wilt, "we are partnering with Ivanhoe Electric to start one of the largest exploration programs in the world. It's fantastic to see businesses like IE grasp the size of this possibility. We have just begun to scratch the surface of the potential in the Kingdom, and in order to achieve our long-term growth goals, we must explore more quickly, more intelligently, and across greater distances. With the help of IE's Typhoon technology, we will be able to multiply our exploration efforts by six and de-risk and hasten the creation of a sizable exploration hub in the Kingdom. This will enable us to more quickly exploit the Kingdom's mineral resources and put us on track to reach our 10-fold growth ambitions.
Robert Friedland, the executive chairman of Ivanhoe, said, "We are eager to complete our transaction terms with Ma'aden and start the crucial job of mineral exploration in the Kingdom of Saudi Arabia. Using our extremely potent and revolutionary TyphoonTM geophysical surveying system, our joint venture will launch the largest exploratory program ever carried out. We have all the resources required to carry out a revolutionary exploration program for electric and precious metals in the Kingdom of Saudi Arabia thanks to our TyphoonTM technology, our Computational Geosciences' machine-based learning software, and the combined skills of our highly skilled team of women and men. There is incredible potential for new discoveries.
