ie-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-41436

Ivanhoe Electric Inc.

(Exact Name of Registrant as Specified in its Charter)


Delaware			32-0633823
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
450 E Rio Salado Parkway, Suite 130 Tempe, Arizona			85281
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (480) 656-5821

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	o

Non-accelerated filer	o	Smaller reporting company	o

Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of May 8, 2024, the registrant had 120,307,414 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

IVANHOE ELECTRIC INC. Form 10-Q

For the Quarter Ended March 31, 2024


		Page
PART I. FINANCIAL INFORMATION		3
Item 1.	Condensed Interim Consolidated Financial Statements	3
	Condensed Interim Consolidated Balance Sheets	3
	Condensed Interim Consolidated Statements of Loss and Comprehensive Loss	4
	Condensed Interim Consolidated Statements of Changes in Equity	5
	Condensed Interim Consolidated Statements of Cash Flows	6
	Notes to Condensed Interim Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II. OTHER INFORMATION		24
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities	24
Item 6.	Exhibits	26
Signatures		27

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

IVANHOE ELECTRIC INC.

Condensed Interim Consolidated Balance Sheets (Unaudited)

(Expressed in thousands of U.S. dollars)


	March 31, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	179,361	$	205,043
Accounts receivable	4,319		3,326
Inventory	5,313		5,013
Prepaid expenses and deposits	2,853		3,104
	191,846		216,486
Non-current assets:
Investments subject to significant influence	36,730		39,130
Other investments	2,235		2,989
Exploration mineral interests	216,824		216,290
Property, plant and equipment	7,823		6,645
Other non-current assets	5,698		5,686
Total assets	$	461,156	$	487,226

Liabilities and Equity
Current liabilities:
Accounts payable and accrued liabilities	$	22,294	$	19,948
Note payable, current	13,817		12,672
Due to related party	—		4,000
Lease liabilities, current	623		699
Contract liability	2,480		2,404
	39,214		39,723
Non-current liabilities:
Note payable	36,244		36,244
Convertible debt	28,984		28,372
Deferred income taxes	4,821		4,845
Lease liabilities, net of current portion	1,581		1,199
Other non-current liabilities	580		562
Total liabilities	111,424		110,945

Commitments and contingencies (Note 15)

Equity:
Common stock, par value $0.0001; 700,000,000 shares authorized;120.3 million shares issued and outstanding as of March 31, 2024 (December 31, 2023 - 700,000,000 authorized; 120.0 million issued and outstanding)	12		12
Additional paid-in capital	790,824		777,816
Accumulated deficit	(457,015)		(401,504)
Accumulated other comprehensive income	(2,323)		(2,073)
Equity attributable to common stockholders	331,498		374,251
Non-controlling interests	18,234		2,030
Total equity	349,732		376,281
Total liabilities and equity	$	461,156	$	487,226

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IVANHOE ELECTRIC INC.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Unaudited)

(Expressed in thousands of U.S. dollars, except for share and per share amounts)


	Three Months Ended March 31,
	2024		2023
Revenue	$	360	$	679
Cost of sales	(100)		(184)
Gross profit	260		495

Operating expenses:
Exploration expenses	43,643		26,559
General and administrative expenses	12,601		10,633
Research and development expenses	810		1,843
Selling and marketing expenses	87		49

Loss from operations	56,881		38,589

Other expenses (income):
Interest income, net	(35)		(32)
Foreign exchange gain	(5)		(161)
Loss on revaluation of investments	271		375
Share of loss of equity method investees	3,012		622
Other income, net	(3)		(741)

Loss before income taxes	60,121		38,652

Income tax recovery	(26)		(72)

Net loss	60,095		38,580
Less loss attributable to non-controlling interests	(4,584)		(2,506)
Net loss attributable to common stockholders or parent	55,511		36,074

Net loss	60,095		38,580
Other comprehensive loss , net of tax:
Foreign currency translation adjustments	392		68
Other comprehensive loss	392		68
Comprehensive loss	$	60,487	$	38,648

Comprehensive loss attributable to:
Common stockholders or parent	55,761		36,120
Non-controlling interests	4,726		$	2,528
	$	60,487	$	38,648

Net loss per share attributable to common stockholders
Basic and diluted	$	0.46	$	0.39
Weighted-average common shares outstanding
Basic and diluted	120,246,430		92,964,249

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IVANHOE ELECTRIC INC.

Condensed Interim Consolidated Statements of Changes in Equity (Unaudited)

(Expressed in thousands of U.S. dollars, except share amounts)

Three months ended March 31, 2024 and 2023


				Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive Income (loss)		Non-controlling interest		Total
	Common Stock
	Shares	Amount
Balance at January 1, 2023	92,960,584	$	9	$	409,683	$	(202,128)	$	(1,189)	$	(3,928)	$	202,447
Net loss	—	—		—		(36,074)		—		(2,506)		(38,580)
Other comprehensive income	—	—		—		—		(46)		(22)		(68)
Issuance of common stock; earn-in payment	10,281	—		150		—		—		—		150
Stock options exercised	1,000	—		3		—		—		—		3
Share-based compensation	—	—		5,067		—		—		65		5,132
Other changes in non-controlling interests	—	—		(6)		—		—		4		(2)
Balance at March 31, 2023	92,971,865	$	9	$	414,897	$	(238,202)	$	(1,235)	$	(6,387)	$	169,082














Balance at January 1, 2024	120,025,264	$	12	$	777,816	$	(401,504)	$	(2,073)	$	2,030	$	376,281
Net loss	—	—		—		(55,511)		—		(4,584)		(60,095)
Other comprehensive loss	—	—		—		—		(250)		(142)		(392)
Issuance of common stock; Kaizen arrangement	116,413	—		952		—		—		—		952
Issuance of common stock; earn-in payment	12,765	—		95		—		—		—		95
Settlement of restricted share units	150,000	—		—		—		—		—		—
Settlement of deferred share units	1,972	—		—		—		—		—		—
Share-based compensation	—	—		3,315		—		—		30		3,345
Non-controlling interests investment in subsidiary	—	—		9,372		—		—		20,628		30,000
Other changes in non-controlling interests	—	—		(726)		—		—		272		(454)
Balance at March 31, 2024	120,306,414	$	12	$	790,824	$	(457,015)	$	(2,323)	$	18,234	$	349,732

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IVANHOE ELECTRIC INC.

Condensed Interim Consolidated Statements of Cash Flows (Unaudited)

(Expressed in thousands of U.S. dollars)

Three months ended March 31, 2024 and 2023


	2024		2023
Operating activities
Net loss	$	(60,095)	$	(38,580)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization	622		1,040
Share-based compensation	3,345		5,132
Non-cash exploration expense	209		662
Non-cash research and development expense	282		645
Unrealized foreign exchange gain	(3)		(155)
Interest expense	1,816		804
Income taxes	—		(72)
Loss on revaluation of investments	271		375
Share of loss of equity method investees	3,012		622
Other	350		(141)

Changes in other operating assets and liabilities:
Trade accounts receivable	(896)		(710)
Inventory	(309)		(144)
Operating lease liabilities	(350)		(283)
Accounts payable and accrued liabilities	1,435		(1,108)
Other operating assets and liabilities	352		1,894
Net cash used in operating activities	(49,959)		(30,019)

Investing activities
Purchase of mineral interests	(300)		(1,763)
Purchase of property, plant and equipment and intangible assets	(672)		(348)
Purchase of investments subject to significant influence	(722)		(555)
Cash acquired on acquisition of subsidiary	227		—
Net cash used in investing activities	(1,467)		(2,666)

Financing activities
Non-controlling interests investment in subsidiary	26,000		—
Proceeds from exercise of stock options	—		3
Net cash provided by financing activities	26,000		3

Effect of foreign exchange rate changes on cash and cash equivalents	(256)		17
Decrease in cash and cash equivalents	(25,682)		(32,665)
Cash and cash equivalents, beginning of the year	205,043		139,660
Cash and cash equivalents, end of the period	$	179,361	$	106,995

Supplemental cash flow information
Cash paid for income taxes	$	—	$	1,069

Supplemental disclosure of non-cash investing and financing activities
Issuance of common stock; Kaizen arrangement	$	952	$	—
Issuance of common stock; earn-in payment	$	95	$	150
Non-controlling interests investment in subsidiary	$	4,000	$	—
Settlement of related party loan	$	(4,000)	$	—

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IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Tabular amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

1. Background and basis of preparation:

Ivanhoe Electric Inc. (“Ivanhoe Electric” or “the Company”) is a United States domiciled company that combines advanced mineral exploration technologies with electric metals exploration projects predominantly located in the United States. The Company’s mineral exploration efforts focus on copper as well as other metals including nickel, vanadium, cobalt, platinum group elements, gold and silver. The Company’s portfolio of electric metals exploration projects include the Santa Cruz Project in Arizona and the Tintic Project in Utah, as well as other exploration projects in the United States.

In addition to mineral projects in the United States, the Company also holds direct and indirect ownership interests, and in some cases controlling financial interests, in other non-U.S. mineral projects, and in proprietary mineral exploration and minerals-based technologies.

The Company holds a 50% interest in a joint venture with Saudi Arabian Mining Company Ma’aden (“Ma’aden”) to explore prospective land in Saudi Arabia.

The Company conducts the following business activities through certain subsidiaries:

•VRB Energy Inc. (“VRB”), develops, manufactures and installs vanadium flow batteries for grid-scale energy storage. Ivanhoe Electric had an ownership interest in VRB of 90.0% as at March 31, 2024 (December 31, 2023 — 90.0%).

•Computational Geosciences Inc. (“CGI”), provides data analytics, geophysical modeling, software licensing and artificial intelligence services for the mineral, oil & gas and water exploration industries. Ivanhoe Electric had an ownership interest in CGI of 94.3% as at March 31, 2024 (December 31, 2023 — 94.3%).

•Cordoba Minerals Corp. (“Cordoba”) holds the San Matias copper-gold-silver project in northern Colombia. Ivanhoe Electric had an ownership interest in Cordoba of 62.8% as at March 31, 2024 (December 31, 2023 — 62.8%).

•Kaizen Discovery Inc. (“Kaizen”) holds the Pinaya copper-gold exploration project in Peru. Ivanhoe Electric had an ownership interest in Kaizen of 100.0% as at March 31, 2024 (December 31, 2023 — 82.5%). On February 6, 2024, Ivanhoe Electric acquired all of the issued and outstanding common shares of Kaizen not already beneficially owned by Ivanhoe Electric in exchange for common stock in Ivanhoe Electric (Note 9).

•Sama Nickel Corporation ("SNC") holds the Samapleu-Grata Nickel-Copper Project in the Ivory Coast. On March 11, 2024, Ivanhoe Electric completed its earn-in and acquired a 60% interest in SNC (Note 5).

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all information and disclosures required by generally accepted accounting principles in the United States. Therefore, this information should be read in conjunction with the Company's consolidated financial statements and notes contained on its Form 10-K for the year ended December 31, 2023. The information furnished herein reflects all normal recurring entries, that are in the opinion of management, necessary for a fair statement of the results for the interim periods reported. Operating results for the three month period ended March 31, 2024, are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

The condensed interim consolidated financial statements have been prepared on a going concern basis, which presumes the realization of assets and satisfaction of liabilities in the normal course of business.

References to “$” refer to United States dollars and “Cdn$” to Canadian dollars.

2. Significant accounting policies:

The Company discloses in its consolidated financial statements for the year ended December 31, 2023, those accounting policies that it considers significant in determining its results of operations and financial position. There

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IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Tabular amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

have been no material changes to, or in the application of, the accounting policies previously identified and described in the Company’s consolidated financial statements for the year ended December 31, 2023.

Recent accounting pronouncements not yet adopted:

In August 2023, the FASB issued ASU 2023-05 Business Combinations—Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. The update was issued to address the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements. Upon formation, a joint venture will recognize and initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). This update is effective prospectively for all joint venture formations with a formation date on or after January 1, 2025.

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update was issued to enhance the transparency and decision usefulness of income tax disclosures primarily related to the rate reconciliation and income taxes paid information. The Company is required to adopt ASU 2023-09 on January 1, 2025 and is currently evaluating the expected impact on the consolidated financial statements.

3. Use of estimates:

The preparation of consolidated financial statements requires management of the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities, the related disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results may differ from these estimates.

The significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended December 31, 2023.

4. Cash and cash equivalents:

Of the total cash and cash equivalents at March 31, 2024 and December 31, 2023, $30.2 million and $15.0 million, respectively, was not available for the general corporate purposes of the Company as it was held by non-wholly-owned subsidiaries.

At March 31, 2024, the Company has $4.5 million in cash equivalents in the form of redeemable short-term investments (December 31, 2023 - $0).

5. Investments subject to significant influence:

The Company’s principal investment subject to significant influence is its investment in Ma'aden Ivanhoe Electric Exploration and Development Limited Company ("Ma'aden Joint Venture"). Others include its investments in Sama Resources Inc. (“Sama”) and Go2Lithium Inc. ("Go2Lithium").


	Equity Method								Carried at fair value
	Ma'aden Joint Venture		SNC (Note a)		Go2Lithium		Other		Sama		Total
Balance at December 31, 2023	$	31,606	$	896	$	2,469	$	—	$	4,159	$	39,130
Change in fair value	—		—		—		—		454		454
Investment	—		440		—		282		—		722
Share of loss	(2,121)		(827)		(64)		—		—		(3,012)
Acquisition	—		(489)		—		—		—		(489)
Foreign currency translation	—		(20)		(55)		—		—		(75)
Balance at March 31, 2024	$	29,485	$	—	$	2,350	$	282	$	4,613	$	36,730

(a) Acquisition of Sama Nickel Corporation:

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IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Tabular amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

On March 11, 2024, the Company completed its earn-in and acquired an additional 30% in SNC bringing its total ownership interest in SNC to 60% . SNC owns the Samapleu-Grata Nickel-Copper Project in the Ivory Coast. The Company determined that it acquired control of SNC and commenced consolidating the results of SNC from March 11, 2024 under the voting interest entity model. The acquisition was accounted for as an asset acquisition as SNC did not meet the definition of a business. The cost of the acquisition has been allocated to the assets and liabilities of SNC, including exploration property in the Ivory Coast.

6. Exploration properties:


	Santa Cruz		Tintic		San Matias		Other		Total
Balance at December 31, 2023	$	166,492	$	30,663	$	15,315	$	3,820	$	216,290
Acquisition costs	—		—		—		529		529
Foreign currency translation	—		—		—		5		5
Balance at March 31, 2024	$	166,492	$	30,663	$	15,315	$	4,354	$	216,824

7. Note payable:


	Note payable
Balance at December 31, 2023	$	48,916
Interest expense	1,145
Balance at March 31, 2024	$	50,061

Current portion	13,817
Non-current portion	36,244
Balance at March 31, 2024	$	50,061

In May 2023, the Company issued a secured promissory note in the amount of $82.6 million as part of a land acquisition at its Santa Cruz project. The promissory note includes an annual interest rate of prime plus 1% and is to be paid in installments, as follows:

•$34.3 million, plus accrued interest, paid in November 2023;

•four equal principal payments of $12.1 million on the first, second, third and fourth anniversaries of the November 2023 payment, plus applicable accrued interest.

8. Convertible debt:


	VRB Convertible Bond







Balance at December 31, 2023	$	28,372
Interest expense	612
Balance at March 31, 2024	$	28,984

On July 8, 2021, VRB issued a convertible bond for gross proceeds of $24.0 million. The bond has a five-year term and interest accrues at a rate of 8% per annum.

Prior to the maturity date, the convertible bond is automatically converted into equity of VRB upon an equity financing or sale event, at a price per share equal to the lower of:

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IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Tabular amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

•the transaction price of the equity financing or sale event; and

•the valuation cap price of $158.0 million divided by the total shares outstanding at the time of the event.

If no equity financing or sale event occurs, VRB must repay the outstanding principal and interest on maturity.

The Company has accounted for the convertible bond, including its embedded features, as a debt instrument accounted at amortized cost, as it was determined the embedded features are not required to be bifurcated.

9. Equity:

(a) Common stock transactions:

On February 6, 2024, Ivanhoe Electric acquired all of the issued and outstanding common shares of Kaizen not already beneficially owned by Ivanhoe Electric pursuant to a plan of arrangement under the Business Corporations Act (British Columbia) (the “Arrangement”).

Immediately prior to the closing of the Arrangement, Ivanhoe Electric beneficially owned 82.5% of the issued and outstanding common shares of Kaizen on a non-diluted basis. Following the closing of the Arrangement, Ivanhoe Electric beneficially owns 100% of the issued and outstanding common shares of Kaizen on a fully diluted basis.

Ivanhoe Electric acquired the common shares in consideration for the issuance of one share of common stock of Ivanhoe Electric for every 127 Common Shares issued and outstanding immediately prior to the closing of the Arrangement. A total of 116,413 shares of Ivanhoe Electric were issued.

(b) Stock-based compensation:

Stock-based payment compensation was allocated to operations as follows:


	Three Months Ended March 31,
	2024		2023
General and administrative expenses	$	2,690	$	4,199
Exploration expenses	655		928
Cost of sales	—		5
	$	3,345	$	5,132

(i) Stock options:

On March 11, 2024, the Company granted stock options to certain directors, officers and employees of the Company. The options have a seven-year term and comprise three equal tranches vesting in one-third annual increments beginning one year from the grant date.

Information related to stock options granted during the three months ended March 31, 2024 is presented below.

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IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Tabular amounts expressed in thousands of U.S. dollars, unless otherwise indicated)


		Grant date: March 11, 2024
Exercise price		$	13.50
Number of options granted		1,801,234
Weighted average assumptions used to value stock option awards:
	Expected volatility	61.6		%
	Expected life of options (in years)	4
	Expected dividend rate	0		%
	Risk-free interest rate	4.23		%
Weighted average grant-date fair value (per option)		$	3.46

10. Revenue:

The Company recognized revenue from the following sources:


	Three months ended March 31:
Revenue type	2024		2023
Software licensing	$	—	$	400
Data processing services	360		279
Renewable energy storage systems (Note a)	—		—
Total	$	360	$	679

(a)At March 31, 2024, the Company had a contract liability of $2.5 million (December 31, 2023 — $2.4 million) relating to the sale of renewable energy storage systems.

11. Exploration expense:


	Three months ended March 31:
Project	2024		2023
Santa Cruz, USA	$	27,837	$	14,682
Tintic, USA	3,520		1,121
San Matias, Colombia (Cordoba)	3,518		4,658
Hog Heaven, USA	3,307		638
Carolina, USA	895		238
Bitter Creek, USA	658		27
White Hill, USA	237		491
Lincoln, USA	130		295
Generative exploration and other	3,541		4,409
Total	$	43,643	$	26,559

12. Related party transactions:

Related parties include entities with common direct or indirect shareholders and/or directors. Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions.

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IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Tabular amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

The following table summarizes transactions between the Company and significant related parties.


	Balance outstanding as at		Transactions for the three months ended March 31,
	March 31, 2024	December 31, 2023	2024	2023
Total Expenses
Global Mining (Note a)	459	224	1,363	4,316
Ivanhoe Capital Aviation (Note b)	—	—	250	250
I-Pulse (Note c)	1,251	1,395	396	1,157
Total	1,710	1,619	2,009	5,723
Revenue
Ma'aden Joint Venture (Note d)	—	—	300	—
Advances
Global Mining (Note a)	1,051	1,169	—	—
Ma'aden Joint Venture (Note d)	2,643	1,254	—	—
Deposit
I-Pulse (Note c)	4,165	4,233	—	—
Loan
JCHX Mining Management Co., Ltd (Note e)	—	4,000	—	—


	Transactions for the three months ended March 31,
	2024	2023
Expense classification
Exploration expenses	419	3,042
General and administrative expenses	1,307	2,031
Research and development expenses	283	650
	2,009	5,723

(a)Global Mining Management Corp. (“Global Mining”) is a private company based in Vancouver, Canada, that provides administration, accounting, and other office services to the Company on a cost-recovery basis. The Company held 7.1% of Global Mining’s outstanding common shares at March 31, 2024 (December 31, 2023 — 7.1%).

(b)Ivanhoe Capital Aviation (“ICA”) is an entity beneficially owned by the Company’s Executive Chairman. ICA provides use of its aircraft to the Company.

(c)I-Pulse is a shareholder of the Company. On October 24, 2022, the Company entered into an agreement with I-Pulse, to purchase six Typhoon™ transmitters to be delivered in stages over approximately three years. The total purchase price for the six Typhoon™ transmitters is $12.4 million, which includes research and development costs of $2.8 million. The agreement also includes maintenance costs of $1.7 million. The Company is recognizing the research and development costs and annual maintenance costs on a straight line basis in the consolidated statement of loss over the applicable term. In October 2022, the Company made deposit payments totaling $7.1 million, representing 50% of each component of the agreement. The remaining

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IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Tabular amounts expressed in thousands of U.S. dollars, unless otherwise indicated)

payments will be made as each Typhoon™ transmitter system is delivered. In December 2023, the Company received the first Typhoon™ transmitter that was deliverable under the agreement.

(d)The Company's majority owned subsidiary, CGI, provides geophysical data processing services to the Ma'aden joint venture and recognized revenue totalling $0.3 million.

At March 31, 2024 the Ma’aden Joint Venture owes the Company $2.6 million for costs that the Company incurred on behalf of the Ma’aden Joint Venture related to exploration work in Saudi Arabia.

(e)JCHX Mining Management Co., Ltd (“JCHX") held 19.8% of Cordoba’s issued and outstanding common stock as at March 31, 2024 (December 31, 2023 - 19.8%).

In November 2023, $4 million was advanced to Cordoba by JCHX. In January 2024, Cordoba announced receipt of the second installment of $40 million relating to the strategic arrangement entered into with JCHX in May 2023. The $4 million loan was settled in full by applying it towards the second installment received as a payment in kind.

13. Fair value measurement:

The following table provides the valuation hierarchy classification of assets and liabilities that are recorded at fair value and measured on a recurring basis in the combined balance sheets:


	March 31, 2024						December 31, 2023
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Financial assets:
Investments subject to significant influence	4,613		—		—		4,159		—		—
Other investments	1,485		750		—		2,239		750		—
Total financial assets	$	6,098	$	750	$	—	$	6,398	$	750	$	—
Financial liabilities:
Total financial liabilities	$	—	$	—	$	—	$	—	$	—	$	—

There were no movements in level three instruments for the three months ended March 31, 2024.

14. Segment reporting:

The Company’s President & Chief Executive Officer is the Chief Operating Decision Maker (“CODM”) of the Company. The CODM evaluates how the Company allocates resources, assesses performance and makes strategic and operational decisions. Based upon such evaluation, the Company has determined that it has three reportable segments. The Company’s reportable segments are critical metals, data processing and energy storage.

Critical metals is focused on mineral project exploration and development with a focus on identifying and developing mineral projects, and ultimately mines, associated with the metals necessary for electrification.

The data processing segment provides data analytics, geophysical modeling and artificial intelligence services for the mineral, oil & gas and water exploration industries.

The energy storage segment develops, manufactures and installs vanadium flow batteries for grid-scale energy storage.

Segment information for the periods presented is as follows:

Table of Contents

IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Tabular amounts expressed in thousands of U.S. dollars, unless otherwise indicated)


	Three months ended March 31, 2024
	Critical Metals		Data Processing		Energy Storage		Total
Revenue	$	—	$	360	$	—	$	360
Intersegment revenues	—		119		—		119
Loss (income) from operations	55,065		(57)		1,873		56,881
Segment assets	442,731		4,941		13,484		461,156


	Three months ended March 31, 2023
	Critical Metals		Data Processing		Energy Storage		Total
Revenue	$	—	$	679	$	—

SEC Form 10-Q filed by Ivanhoe Electric Inc.