Cordoba lands bridge financing for Alacran project from Ivanhoe Electric

Half of the amount ($4 million) will be provided by majority shareholder Ivanhoe Electric via a short-term convertible debenture that bears an annual interest rate of 12%.

The remaining half is to be advanced by China’s JCHX Mining, Cordoba’s 50/50 joint venture partner on the Alacran project. JCHX is also a shareholder of Cordoba with a 19.99% interest.

Proceeds of the debt financings will be used by Cordoba to advance Alacran towards the feasibility stage and complete technical work required for its environmental impact assessment.

Under a deal struck late last year, JCHX agreed to pay $100 million for half of Alacran in three installments. The first $40 million was paid when the deal closed in May. The second $40 million payment is due when a feasibility is completed and an environmental impact assessment is submitted to regulators, or within two years of the deal’s closing.

The Ivanhoe debenture is due at the end of the year, or sooner if the second payment from JCHX is made before then. Ivanhoe can convert the outstanding principal to equity at a price of C$0.32 per share.

The Alacran deposit is part of Cordoba’s larger San Matias property located in the department of Córdoba. It could become the largest copper mine in the nation and has been declared a “Project of National Interest” by the Colombian government.

A prefeasibility study published in early 2022 gave the Alacran project an after-tax net present value (at 8% discount) of $415.1 million and an internal rate of return of 25.4%, with a 2.9-year payback period. Initial capital costs are estimated at $434.9 million.

Financial analysis shows that 60% of the initial capital cost can be financed by debt. This would improve the after-tax IRR to 27.2%, but marginally reduce the NPV to $394.5 million.

Over an estimated 13-year mine life, Alacran would have average annual production of 68.8 million lb. copper, 55,000 oz. gold, and 386,000 oz. silver, processing 22,000 tonnes of ore per day.

In addition to Alacran, Cordoba also holds a 51% interest in the Perseverance copper project in Arizona, which it is exploring through a JV and earn-in agreement.