Copper Explorer Prismo Metals Also Has Big Plans

Ivanhoe Electric (NYSE American IE / WKN A3DNSS) is raising $60 million to further develop the Santa Cruz copper project in Arizona. The company plans to issue approximately 10.25 million units at $5.85 per share, consisting of one share and one warrant exercisable at $7.00 per share.

Ivanhoe Electric’s stock traded on the NYSE American at $6.21 USD, representing a price increase of about 5%. This gives the company a market capitalization of nearly $750 million USD. Initially, they planned to raise ‘only’ $50 million USD, but later increased the amount.

According to Ivanhoe, the funds are intended to complete the ongoing work on a pre-feasibility study for the Santa Cruz copper project in Casa Grande, Arizona. The project site covers approximately 2,418 hectares of private land with associated water rights. In mid-last year, Ivanhoe Electric received approval to use more than half of the land for industrial purposes, which was a significant milestone in the permitting process for the planned copper mine.

Since late 2022, Ivanhoe Electric has already conducted drilling totaling 120,000 meters at Santa Cruz, delineating an indicated resource of 226.7 million tonnes at 1.24% copper, or 2.8 million tonnes of contained copper. Additionally, there are 149 million tonnes at 1.24% copper in the inferred category, accounting for 1.8 million tonnes of contained copper.

A preliminary economic assessment from September 2023 envisioned an underground mine at Santa Cruz with a production of 5.9 million tonnes of copper over a 20-year operating life, with the company focusing on high-grade deposits.

According to Ivanhoe, the pre-feasibility study is scheduled to be completed in the second quarter of 2025 and will include a mining plan based on an updated resource estimate.

Prismo Metals Also Bets on Copper in Arizona

Canadian explorer Prismo Metals (WKN A2QEGD / CSE PRIZ) is also betting – among other things – on copper in Arizona! However, with the promising Hot Breccia copper project, they are still at a very early stage of exploration. On the other hand, the company’s market capitalization is just 5.4 million CAD.

Prismo also wants to benefit from the excellent infrastructure in Arizona, where numerous mines already produce hundreds of millions of pounds of copper annually. Hot Breccia is located just 4 kilometers from the former producing Christmas Mine and not very far from one of the world’s largest, higher-grade (over 1.6 billion t at 1.5% Cu) copper deposits called Resolution, owned by Rio Tinto/BHP and showing similarities to the Christmas deposit.

The Christmas Mine, in the past, produced about 25 million tons of ore containing 363 million pounds of copper, 2.1 million ounces of silver, and 55,026 ounces of gold. According to Prismo, Resolution serves as a model for the mineralization at Hot Breccia, with Hot Breccia exhibiting the same previously productive geological units – just covered by volcanic rock.

In the past – mainly between 1972 and 1981 – several drillings were conducted at Hot Breccia, yielding results including 23.45 meters at 0.54% copper at a depth of 640 meters, 18.29 meters at 1.4% copper and 4.65% zinc at 883.92 meters depth, as well as 7.62 meters at 1.73% copper and 0.11% zinc at 702.56 meters depth, and 4.57 meters at 1.4% copper and 0.88% zinc at 716.28 meters depth (Kennecott). Additionally, there were 387.10 meters of variably mineralized skarn with several sections of over 1% copper and a peak value of 3.16% copper.

Additionally, a mineralized fragment brought up from depth through brecciation within the intrusion showed grades of 5.7% copper, 32.8 g/t silver, and 0.24 g/t gold. According to Prismo management, this represents a clear indication of a strong mineralized event at depth. This is also supported by a geophysical survey (ZTEM) conducted by the company last year, which found a large conductive anomaly at depth beneath a dike swarm and the namesake breccia, as well as copper mineralization at the surface.

Prismo has now also received the results of a study conducted by Exploration Technologies using Artificial Intelligence on the project in southern Arizona. These results confirm that the most likely location for a large sulphide ore body is in the same area as historical drilling, a vein swarm with xenoliths of copper-bearing skarn, and the conductive anomaly from the 2023 ZTEM survey. According to the AI investigation, the suspected sulphide mineralization covers an area of 1,000 by 1,150 meters.

For Prismo, the immediate focus is on raising the necessary capital for their first drilling campaign to test these assumptions. If successful, and if the initial drill holes indeed prove the existence of a large sulphide ore body, this could, in our view, lead to another significant copper discovery in Arizona. Of course, Prismo Metals is a much riskier speculation than Ivanhoe Electric, but correspondingly, the potential for price increases in the event of a significant discovery is considerably greater. Investors should always be aware of both sides.