Ivanhoe Electric (NYSE-A, TSX: IE) has moved closer to securing $1.1 billion in debt financing from the U.S. Export-Import Bank (EXIM) to develop its Santa Cruz copper project in Arizona.

The bank raised its potential loan for Santa Cruz by a third compared with a letter of interest issued in April last year, Ivanhoe reported Monday. The new letter marks the completion of U.S. EXIM's preliminary due diligence on the project, located about 65 km southeast of Phoenix. A letter of interest is a non-binding step in the process at EXIM, the U.S. government's export credit agency: a final loan would still require further due diligence and board approval.

"Our country has entered an extraordinary era of demand growth for copper, which is central to all forms of electricity generation, transmission and consumption as well as advanced manufacturing, artificial intelligence, and our national security," Ivanhoe Electric Executive Chairman Robert Friedland — the veteran mining financier whose earlier company, Ivanhoe Mines, developed the Oyu Tolgoi copper-gold mine in Mongolia before a Rio Tinto takeover — said in a release.

"At Santa Cruz, we are building a modern American copper mine capable of producing 99.9% pure copper metal, without a smelting process, to support American industry and supply chain security," Friedland said. "We appreciate U.S. EXIM's strong support and will continue to work together as we develop our Santa Cruz Project into America's next major copper producer." Producing finished cathode on site from leached ore would let the project bypass smelting, a part of the copper supply chain where U.S. capacity is limited.

Follows Trump backing

The EXIM letter arrives just weeks after U.S. President Donald Trump publicly voiced support for financing Santa Cruz at an Aug. 7 mining roundtable held at the State Department. The project could become one of the first major new U.S. copper mines in almost 20 years and carries an estimated initial cost of $1.24 billion, according to last year's preliminary feasibility study (PFS). The backdrop is a broader policy drive to rebuild domestic copper supply: the United States is a net importer of refined copper, according to U.S. Geological Survey data, and Washington this year has imposed tariffs on some imported copper products following a Section 232 national security review.

Ivanhoe Electric shares gained 1% to $16.03 apiece Monday morning in Toronto, giving the company a market capitalization of $1.8 billion. The stock has traded in a 12-month range of $11.04 to $28.81.

CEO Taylor Melvin called the EXIM letter a "major milestone" in the project financing process. "We look forward to working together with the outstanding team at US EXIM towards completion of our debt financing facility," he said.

September feasibility update

Ivanhoe expects to complete an updated preliminary feasibility study for Santa Cruz next month. The revision is to incorporate plans for underground mine access using a tunnel boring machine, along with other engineering and development work.

According to the PFS, Santa Cruz could produce 72,000 tonnes of copper annually during the first 15 years of a 23-year mine life. At $4.25-per-lb. copper, the study estimated an after-tax net present value of $1.4 billion, a 20% internal rate of return and cash operating costs of $1.32 per pound.

Site preparation underway

Crews have started clearing roads, building fences and preparing the portal excavation at the site, Melvin told The Northern Miner earlier this month. Box-cut construction is expected to begin soon, ahead of the arrival and assembly of the tunnel-boring machine in the first half of next year.

The company plans to start driving the decline in mid-2027 and reach the copper reserve about a year later. Ivanhoe aims to place the first ore on its leach pads in the second half of 2028 and produce its first cathode in the first half of 2029, Melvin said. Surface work on the crushing, leaching and cathode plants would proceed in tandem with underground development.

Ivanhoe has secured its mine-land reclamation, air-quality, dust-control, aquifer-protection and land-use permits for the initial work, and is now applying for the remaining approvals required for surface construction and production.