What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-08 compared with 2023-08-14 · 158 added, 146 removed, 213 unchanged (59% of the section changed)

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Those statements include, but are not limited to, statements with respect to:

estimated calculations of mineral reserves and resources at our properties including changes in those estimated calculations, anticipated results and timing of exploration activities, timing of studies for advancing or developing our properties, plans and objectives, industry trends, our requirements for additional capital, treatment under applicable government regimes for permitting or attaining approvals, government regulation, environmental risks, title disputes or claims, synergies of potential future acquisitions, and our anticipated uses of the net proceeds from our initial public offering or other offerings of our securities.

estimated calculations of mineral reserves and resources at our properties including changes in those estimated calculations, anticipated results and timing of exploration activities, timing of studies for advancing or developing our properties, plans and objectives, industry trends, our requirements for additional capital, treatment under applicable government regimes for permitting or attaining approvals, government regulation, environmental risks, title disputes or claims, synergies of potential future acquisitions, the projected, forecast or anticipated economic parameters of our mineral projects (including capital cost, operating cost, net present value, internal rate of return and other parameters), and our anticipated uses of the net proceeds from our initial public offering or other offerings of our securities.

In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “could,” “should,” “would,” “achieve,” “budget,” “scheduled,” “forecasts,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology.

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our mineral projects are all at the exploration stage and are subject to the significant risks and uncertainties associated with mineral exploration;

the initial assessment for our Santa Cruz Project is only an early stage study of its potential economic viability and future studies and actual economic outcomes may vary greatly from those set forth in the initial assessment;

we have no mineral reserves, other than at the San Matias project;

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we depend on our material projects for our future operations;

our mineral resource calculations at the Santa Cruz Project are only estimates;

actual capital costs, operating costs, production and economic returns at any future mine may differ significantly from those we have anticipated;

our mineral resource and reserve calculations and economic projections relating to our properties are only estimates;

actual capital costs, operating costs, production and economic returns at any future mine may differ significantly from those we have anticipated or projected;

the title to some of the mineral properties may be uncertain or defective;

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You should carefully consider these risks, as well as the additional risks described in other documents we file with the SEC.

We also operate in a very competitive and rapidly changing environment.

We also operate in a very competitive and rapidly changing industry.

New risks emerge from time to time and it is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in, or implied by, any forward-looking statements.

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Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under “Risk Factors” in the 2022 Form 10-K.

and uncertainties, as well as other risks of which we are not aware or which we currently do not believe to be material, may cause our actual future results to be materially different than those expressed in our forward-looking statements.

These risks and uncertainties, as well as other risks of which we are not aware or which we currently do not believe to be material, may cause our actual future results to be materially different than those expressed in our forward-looking statements.

We caution you not to place undue reliance on these forward-looking statements.

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Our mineral exploration efforts focus on copper as well as other metals including nickel, vanadium, cobalt, platinum group elements, gold and silver.

Through the advancement of our portfolio of electric metals exploration projects, headlined by the Santa Cruz Copper Project in Arizona and the Tintic Copper-Gold Project in Utah, as well as other exploration projects in the United States, we intend to support United States supply chain independence by finding and delivering the critical metals necessary for the electrification of the economy.

We also operate a 50/50 joint venture with Saudi Arabian Mining Company Ma’aden to explore for minerals on ~48,500 km2 of underexplored Arabian Shield in the Kingdom of Saudi Arabia.

Through the advancement of our portfolio of electric metals exploration projects, headlined by the Santa Cruz Project in Arizona and the Tintic Project in Utah, as well as other exploration projects in the United States, we intend to support the United States' supply chain independence by finding and delivering critical metals necessary for the electrification of the economy.

We also operate a 50/50 joint venture with Saudi Arabian Mining Company Ma’aden ("Ma'aden") to explore for minerals on ~48,500 km2 of underexplored Arabian Shield in the Kingdom of Saudi Arabia.

Finally, in addition to our mineral projects, we also own a controlling interest in VRB Energy Inc.

("VRB") which is primarily engaged in the design, manufacture, installation, and operation of vanadium redux flow energy storage systems.

At our Santa Cruz Copper Project in Arizona, we are evaluating the potential for a high-grade modern underground copper mining operation.

We are advancing economic studies for an underground copper mining operation with a focus on minimizing the surface footprint of the mine while at the same time incorporating leading technologies to improve efficiencies and costs.

At our Santa Cruz Project in Arizona, we are evaluating the potential for a high-grade modern underground copper mining operation.

We recently completed the Initial Assessment & Technical Report Summary for the Santa Cruz Project (the "IA"), which outlines a potential 5.9 million tonnes per year underground mining operation, supported by 105.2 million tonnes of modeled mill feed with an average grade of 1.58% copper from the Santa Cruz and East Ridge Deposits, resulting in an estimated 20-year mine life.

We are advancing further studies for an underground copper mining operation with a focus on minimizing the surface footprint of the mine while at the same time incorporating leading technologies to improve efficiencies and costs.

We are designing a technologically advanced mine that we expect to result in low carbon dioxide emissions per pound of copper produced and be a leading example of responsibly produced domestic copper.

Key considerations that will influence our decision making include, but are not limited to, using clean and renewable energy in our future mining operations, optimizing and minimizing our water utilization, minimizing our environmental footprint, ensuring workforce diversity and hiring from local communities, health, safety and environmental performance, support of local cultural heritage and biodiversity protection.

"Our” mineral projects refers to our interests in such projects which may be a direct ownership interest in mineral titles (including through subsidiary entities), a right to acquire mineral titles through an earn-in or option agreement, or, in the case of our investments in publicly listed companies in Canada, through our ownership of the equity of those companies that have an interest in such mineral project

Our shares are listed on the NYSE American and the TSX under the ticker symbol “IE”.

References to our mineral projects refers to our interests in such projects which may be a direct ownership interest in mineral titles (including through subsidiary entities), a right to acquire mineral titles through an earn-in or option agreement, or, in the case of our investments in publicly listed companies in Canada, through our ownership of the equity of those companies that have an interest in such mineral project.

Our shares of common stock are listed on the NYSE American and the TSX under the ticker symbol “IE”.

Reverse Stock Split

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Business Developments in the Quarter

On May 15, 2023, we signed a Common Stock Subscription Agreement ("the Subscription Agreement") with Saudi Arabian Mining Company Ma’aden (“Ma’aden”) pursuant to the Heads of Terms previously disclosed in the Company’s Form 8-K filed on January 11, 2023.

On July 6, 2023, the Company completed the closing of the transactions contemplated by the Subscription Agreement (the “Ma’aden Transactions”) and entered into an Investor Rights Agreement, a Shareholders’ Agreement and the other instruments contemplated thereby.

The Ma'aden Transactions include the establishment of a 50/50 exploration joint venture between Ma’aden and Ivanhoe Electric to explore for minerals on ~48,500 km2 of underexplored Arabian Shield in the Kingdom of Saudi Arabia, and a strategic investment by Ma'aden in Ivanhoe Electric common stock.

On July 6, 2023, we issued to Ma’aden an aggregate of 10,269,604 shares of common stock of the Company, constituting 9.9% of the total outstanding number of

shares of common stock immediately following closing of the Ma'aden Transactions, for gross proceeds of approximately $127.1 million, representing an aggregate purchase price of $12.38 per share.

On May 15, 2023, we signed a Common Stock Subscription Agreement ("the Subscription Agreement") with Saudi Arabian Mining Company Ma’aden (“Ma’aden”).

On July 6, 2023, we completed the closing of the transactions contemplated by the Subscription Agreement (the “Ma’aden Transactions”) and entered into an Investor Rights Agreement, a Shareholders’ Agreement and the other instruments contemplated thereby.

The Ma'aden Transactions included the establishment of a 50/50 exploration joint venture between Ma’aden and Ivanhoe Electric to explore for minerals on ~48,500 km2 of underexplored Arabian Shield in the Kingdom of Saudi Arabia, and a strategic investment by Ma'aden in Ivanhoe Electric common stock.

On July 6, 2023, we issued to Ma’aden an aggregate of 10,269,604 shares of common stock of our Company, constituting 9.9% of the total outstanding number of shares of common stock immediately following closing of the Ma'aden Transactions, for gross proceeds of approximately $127.1 million, representing an aggregate purchase price of $12.38 per share.

Of the $127.1 million total proceeds from the private placement, $66.0 million has been contributed to the joint venture to fund its exploration activities, including the purchase of three new-generation Typhoon TM machines from I-Pulse Inc.

The remaining $61.1 million has been retained by Ivanhoe Electric to advance our portfolio of US mineral projects, and for working capital and general corporate purposes.

On May 23, 2023, we completed the acquisition of 5,975 acres of surface title and associated water rights at the Santa Cruz Project for aggregate consideration of $116.86 million to be paid in installments over a 4.5-year period.

On May 23, 2023, we paid the vendor $34.3 million of the purchase price (inclusive of a previously paid $0.1 million exclusivity payment and a $5.0 million earnest money escrow deposit upon signing the Agreement) and issued a secured promissory note to the vendor in the principal amount of $82.6 million with an interest rate of prime plus 1%.

We also hold the option to acquire all the mineral titles contiguous with the acquired surface lands.

Those mineral rights will be formally acquired upon the completion of scheduled option payments in August 2024.

At that time, we will have a unified land and mineral package encompassing the entire Santa Cruz Project.

On May 8, 2023, our subsidiary, Cordoba Mineral Corp.

("Cordoba"), announced that it and JCHX Mining Management Co., Ltd.

("JCHX") had satisfied all necessary conditions to close the $100 million strategic arrangement for the joint-development of Cordoba's Alacran Project in Colombia.

As a result of the closing, JCHX has funded the initial installment of $40 million towards its 50% ownership interest in CMH, a company existing under the laws of Colombia, which owns 100% of the Alacran Project and is the joint venture vehicle for Cordoba and JCHX in this strategic project level partnership.

For its 50% interest, JCHX will pay the $100 million purchase price in three installments.

At the closing of the transaction, $40 million was paid as a first installment.

A second installment of $40 million is payable in cash upon the board of directors of Cordoba approving the feasibility study of the Alacran Project, and the filing of the Environmental Impact Assessment (“EIA”) to the relevant Colombian Government authority, but in no event shall such second installment be paid later than the second anniversary of the closing of the transaction.

A third and final installment of $20 million is payable in cash once the approval of the EIA is obtained, which must be within two years of the transaction’s closing date.

Should the EIA not be approved by the second anniversary of the closing date, JCHX will have the option to elect not to complete this final installment, which will result in JCHX being diluted to 40% and Cordoba increasing to a majority 60% shareholding in CMH.

On July 10, 2023, we filed an automatic shelf registration statement on Form S-3 to permits us to publicly offer and sell securities from time to time, including common stock, preferred stock, debt securities, warrants, subscription rights and units.

We may offer and sell securities under the Form S-3 from time to time.

On September 6, 2023, we completed and announced the IA.

The IA is a preliminary technical and economic study for the Santa Cruz Project and associated high-grade mineral resources included in the Santa Cruz and East Ridge deposits.

The study analyzes the potential for a high-grade underground copper mining operation supported by modern technologies to reduce environmental impact and powered predominantly by renewable energy.

On September 18, 2023, we closed an underwritten public offering consisting of 11,851,852 shares of our common stock at a public offering price of $13.50 per share.

The aggregate gross proceeds to the Company from the offering were approximately $160 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

In addition, we received notice from the underwriters on September 18, 2023, of the full exercise of their option to purchase an additional 1,777,777 shares of common stock from the Company.

The aggregate gross proceeds from the exercise of the underwriters’ option was approximately $24 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by the Company.

The sale of the underwriters’ option shares closed on September 21, 2023.

On October 23, 2023, we entered into a subscription agreement with Ma’aden whereby Ma’aden agreed to purchase 1,513,650 shares of our common stock at a purchase price of $13.50 per share in a private placement, for aggregate gross proceeds of approximately $20.4 million.

The subscription agreement is as a result of the "top-up right” granted to Ma'aden under the July 6, 2023 investor rights agreement which enables Ma'aden to purchase additional shares of our common stock to maintain its 9.9% stock ownership position in the event of any issuances.

The sale of the shares closed on October 31, 2023.

We account for our business in three business segments – (i) critical metals, (ii) data processing and software licensing services and (iii) energy storage systems.

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Exploration expenses also include payments under earn-in and option agreements where the option right is with respect to ownership interests in legal entities owning the underlying mineral project in the exploration project phase.

Through our earn-in and option agreements, we have the right (and in some cases, the obligation) to fund and conduct

exploration on the underlying mineral project prior to determining whether to acquire a minority or majority ownership interest through further funding the costs of such exploration and, in some cases, through direct payments to the owners of the project.

Through our earn-in and option agreements, we have the right (and in some cases, the obligation) to fund and conduct exploration on the underlying mineral project prior to determining whether to acquire a minority or majority ownership interest through further funding the costs of such exploration and, in some cases, through direct payments to the owners of the project.

In the event we cease making expenditures on an exploration mineral project or fail to incur the agreed level of exploration expenditures, we will not obtain an ownership right beyond any which may have been acquired as of the date of termination.

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In particular, we are incurring increased general and administrative expenses costs in 2023 compared to 2022 for salaries, non-cash stock-based compensation, compliance related costs and directors’ and officers’ insurance expense.

Research and Development Expenses

Expenditures on research and development activities are recognized as an expense in the period in which they are incurred.

We expect research and development expenses to increase as our technology-based businesses continue to grow.

Since 2018, the majority of our research and development expenses came from CGI’s data processing business, which includes amortization expenses related to its artificial intelligence intellectual property acquired in 2018.

VRB also conducts research and development activities to continue to advance its energy storage system technology.

We also have research and development expenses that we incur in relation to Typhoon TM .

In 2023, we have commenced design and development activities for our next generation of Typhoon TM equipment.

Three Months Ended June 30, 2023 Compared to the Three Months Ended June 30, 2022

For the three months ended June 30, 2023 we recorded a net loss attributable to common stockholders of $38.3 million ($0.41 per share), compared to $54.4 million ($0.85 per share) for the three months ended June 30, 2022, which was a decrease of $16.1 million.

A significant contributor to this decrease for the three months ended June 30, 2023 was that the three months ended June 30, 2022 included an amount of $16.1 million in relation to a non-cash loss on the revaluation of the convertible notes that were automatically converted into shares of our common stock upon the completion of the IPO on June 30, 2022 and there was no similar expense in 2023.

This decrease was offset by an increase of $8.7 million in exploration expenditures and an increase of $8.0 million in general and administrative expenses compared to the three months ended June 30, 2022.

Exploration expenses were $32.6 million for the three months ended June 30, 2023, an increase of $8.7 million from $23.9 million for the three months ended June 30, 2022.

Three Months Ended September 30, 2023 Compared to the Three Months Ended September 30, 2022

For the three months ended September 30, 2023 we recorded a net loss attributable to common stockholders of $77.9 million ($0.74 per share), compared to $40.4 million ($0.43 per share) for the three months ended September 30, 2022, which was an increase of $37.5 million.

A significant contributor to this increase for the three months ended September 30, 2023 was that the three months ended September 30, 2023 included an increase of $32.7 million in share of losses of equity method investees due to our recognition of a $33.0 million share of loss from the Ma'aden joint venture due to the expensing of the land access rights in accordance with our accounting policy for exploration and evaluation costs.

In addition, there was also an increase of $4.6 million in general and administrative expenses compared to the three months ended September 30, 2022.

Exploration expenses were $34.2 million for the three months ended September 30, 2023, an increase of $0.2 million from $34.0 million for the three months ended September 30, 2022.

Exploration expenses consisted of the following:

Three Months Ended

September 30,

(In thousands) 2023 2022

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Tintic, USA 6,030 613

Carolina, USA 790 514

Hog Heaven, USA 3,512 262

White Hill, USA 259 —

Lincoln, USA 1,641 210

White Hill, USA 618 —

Pinaya, Peru 178 297

Carolina, USA 158 501

Generative exploration and other 3,700 4,277

Total $ 34,208 $ 33,971

During the three months ended June 30, 2023, exploration expenditures largely focused on activities at:

• the Santa Cruz Project where $15.0 million of exploration expenditure was incurred in the three months ended June 30, 2023 compared to $14.8 million incurred in the three months ended June 30, 2022.

Activities during the three months ended June 30, 2023 at Santa Cruz were focused on a program of exploration and infill resource, geotechnical, hydrological and metallurgical drilling, advancing technical studies, and continued work on the Initial Assessment Study for the Santa Cruz Copper Project which we plan to complete by the end of the third quarter of 2023.

• Cordoba's San Matias Project where $10.1 million of exploration expenditure was incurred by Cordoba for the three months ended June 30, 2023 focused on continuing work on the feasibility study on the Alacran deposit.

Activities during the three months ended June 30, 2023 included ongoing infill geotechnical, metallurgical, hydrological and infill drilling to advance the feasibility study.

During the three months ended June 30, 2023, a total of 12,739.3 meters of infill diamond drilling was completed.

The final program total was 44,889.75 meters in 233 diamond drill holes completed;

• the Tintic Project where $2.0 million of exploration expenditure was incurred in the three months ended June 30, 2023 compared to $0.4 million incurred in the three months ended June 30, 2022.

Activities during the three months ended June 30, 2023 at Tintic included commencing a two drill rig exploration program that is testing new areas of the historic Main Tintic Mining District.

General and administrative expenses were $12.7 million for the three months ended June 30, 2023, an increase of $8.0 million from $4.7 million in three months ended June 30, 2022.

Several items contributed to the increase, including:

• a $4.2 million increase in stock-based compensation expense from $0.2 million for the three months ended June 30, 2022 compared to $4.4 million for the three months ended June 30, 2023.

This increase was due to the impact of the additional non-cash stock-based compensation expense in relation to the Ivanhoe Electric stock option and RSU grants that occurred in November 2022, January 2023 and February 2023;

• a $1.3 million increase in directors and officers insurance expenses from $0.2 million for the three months ended June 30, 2022 to $1.5 million for the three months ended June 30, 2023.

This increase was due to the three months ended June 30, 2023 including an entire quarter of director and officers insurance expense compared to the three months ended June 30, 2022 as we entered into the insurance policy in late June 2022 immediately before our IPO;

• a $0.8 million increase in salary and wages compared to the three months ended June 30, 2022 due to adding more people to our management and administrative teams following our IPO.

Revenue for the three months ended June 30, 2023 was $1.3 million, an increase of $0.2 million from the three months ended June 30, 2022.

During the three months ended September 30, 2023, exploration expenditures largely focused on activities at:

• the Santa Cruz Project where $11.1 million of exploration expenditure was incurred in the three months ended September 30, 2023 compared to $21.8 million incurred in the three months ended September 30, 2022.

Activities during the three months ended September 30, 2023 at Santa Cruz were focused on a program of infill resource drilling, geotechnical, hydrological and metallurgical drilling, advancing technical studies, and finalization of the IA

and the National Instrument 43-101 Preliminary Assessment and Technical Report ("PEA") which were released on September 6, and September 11, 2023.

• Cordoba's San Matias Project where $7.3 million of exploration expenditure was incurred by Cordoba for the three months ended September 30, 2023 compared to $6.0 million incurred in the three months ended September 30, 2022.

Activities during the three months ended September 30, 2023 focused on continuing work on the feasibility study on the Alacran deposit including feasibility metallurgical test work, infrastructure, mine, mill and tailings facility design work, investigation of power supply options, environmental studies and market investigations.

• the Tintic Project where $6.0 million of exploration expenditure was incurred in the three months ended September 30, 2023 compared to $0.6 million incurred in the three months ended September 30, 2022.

Activities during the three months ended September 30, 2023 at Tintic included continuing the two drill rig exploration program that is testing new areas of the historic Main Tintic Mining District.

Drilling has focused on deep targets guided by geophysical data;

• the Hog Heaven Project in Montana where $3.5 million of exploration expenditure was incurred in the three months ended September 30, 2023 compared to $0.3 million incurred in the three months ended September 30, 2022.

Activities during the three months ended September 30, 2023 at Hog Heaven included continuing the two drill rig exploration program that commenced in June 2023.

The program was focused on delineating new epithermal mineralization and testing porphyry copper concepts.

The Hog Heaven site was evacuated from July 28 to August 8, 2023 due to nearby wildfire activity, and drilling was again halted August 24 to September 2, 2023 to upgrade roads and install water lines as a safety precaution in advance of colder weather conditions.

General and administrative expenses were $11.4 million for the three months ended September 30, 2023, an increase of $4.6 million from $6.9 million in three months ended September 30, 2022.

The main items contributed to the increase, including:

• a $4.3 million increase in stock-based compensation expense from $0.4 million for the three months ended September 30, 2022 compared to $4.7 million for the three months ended September 30, 2023.

This increase was due to the impact of the non-cash stock-based compensation expense incurred in relation to additional Ivanhoe Electric stock option and RSU grants that have occurred since October 2022;

• a $0.6 million increase in salary and wages compared to the three months ended September 30, 2022 due to adding more people to our management and administrative teams following our IPO.

Revenue for the three months ended September 30, 2023 was $0.2 million, a decrease of $1.2 million from the three months ended September 30, 2022.

Three Months Ended

September 30,

(In thousands)

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Cost of sales (161) (598)

Gross profit $ 37 —

Gross (loss) profit $ (151) 29

Revenue $ 239 1,181

Cost of sales (275) (875)

Gross profit $ 58 115

VRB's revenue represented 96.8% of our revenue for the three months ended June 30, 2023 ($1.3 million) and 0.0% for the three months ended June 30, 2022 ($0.0 million).

During the second quarter of 2023, VRB delivered, installed and commissioned a 1MW/2MWh energy storage system to a customer in China, which resulted in $1.3 million of revenue being recognized.

CGI’s software licensing and data processing services to the mining and oil and gas industries represented 3.2% of our revenue for the three months ended June 30, 2023 ($0.0 million) and 100.0% for the three months ended June 30, 2022 ($0.2 million).

Revenue decreased at CGI as a result of less data processing projects occurring during the second quarter of 2023.

Gross (loss) profit $ (36) 306

CGI’s software licensing and data processing services to the mining and oil and gas industries represented 95.8% of our revenue for the three months ended September 30, 2023 ($0.2 million) and 46.9% for the three months ended

September 30, 2022 ($0.6 million).

Revenue decreased at CGI as a result of less data processing projects occurring during the third quarter of 2023.

CGI continues to focus on generating new business.

Research and development expenses for the three months ended June 30, 2023 were $2.1 million, an increase of $0.9 million from the same period in 2022 primarily attributable to incurring $0.8 million of expenditure in the second quarter of 2023 on research and development activities for our next generation of Typhoon TM equipment.

Six Months Ended June 30, 2023 Compared to the Six Months Ended June 30, 2022

For the six months ended June 30, 2023 we recorded a net loss attributable to common stockholders of $74.3 million ($0.80 per share), compared to $69.8 million ($1.09 per share) for the six months ended June 30, 2022, which was an increase of $4.5 million.

Significant contributors to this increase for the six months ended June 30, 2023 included an increase of $17.9 million in exploration expenditures and an increase of $13.4 million compared to the six months ended June 30, 2022.

These increases for the six months ended June 30, 2023 were offset by a decrease of $19.0 million due to the six months ended June 30, 2022 including an amount of $19.0 million in relation to a non-cash loss on the revaluation of the convertible notes that were automatically converted into shares of our common stock upon the completion of the IPO on June 30, 2022 and there was no similar expense in 2023.

Exploration expenses were $59.1 million for the six months ended June 30, 2023, an increase of $17.9 million from $41.2 million for the six months ended June 30, 2022.

VRB's revenue represented 4.2% of our revenue for the three months ended September 30, 2023 ($0.0 million) and 53.1% for the three months ended September 30, 2022 ($0.6 million).

During the third quarter of 2023, VRB recognized $0.01 million in revenue in relation to a maintenance service project for a customer in China.

Nine Months Ended September 30, 2023 Compared to the Nine Months Ended September 30, 2022

For the nine months ended September 30, 2023 we recorded a net loss attributable to common stockholders of $152.2 million ($1.57 per share), compared to $110.2 million ($1.50 per share) for the nine months ended September 30, 2022, which was an increase of $42.0 million.

Significant contributors to this increase for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 included an increase of $18.2 million in exploration expenditures, an increase of $18.0 million in general and administrative expenses and an increase of $32.4 million in share of losses of equity method investees due to our recognition of a $33.0 million share of loss from the Ma'aden joint venture.

These increases for the nine months ended September 30, 2023 were offset by a decrease of $19.0 million due to the nine months ended September 30, 2022 including an amount of $19.0 million in relation to a non-cash loss on the revaluation of the convertible notes that were automatically converted into shares of our common stock upon the completion of the IPO on June 30, 2022 and there was no similar expense in 2023.

Exploration expenses were $93.3 million for the nine months ended September 30, 2023, an increase of $18.2 million from $75.2 million for the nine months ended September 30, 2022.

Exploration expenses consisted of the following:

Six Months Ended June 30,

Nine Months Ended September 30,

(In thousands) 2023 2022

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Hog Heaven, USA 4,566 1,130

Carolina, USA 1,028 514

Lincoln, USA 2,118 549

White Hill, USA 1,368 —

Carolina, USA 1,186 1,015

Pinaya, Peru 828 2,448

Lincoln, USA 477 339

Generative exploration and other 11,284 10,561

Total $ 93,318 $ 75,157

During the six months ended June 30, 2023, exploration expenditures largely focused on activities at:

• the Santa Cruz Project where $29.7 million of exploration expenditure was incurred in the six months ended June 30, 2023 compared to $24.6 million incurred in the six months ended June 30, 2022.

Activities during the six months ended June 30, 2023 at Santa Cruz were focused on a program of exploration and infill resource, geotechnical, hydrological and metallurgical drilling, advancing technical studies, completing the updated mineral resource estimate released in February 2023 and working on the Initial Assessment Study for the Santa Cruz Copper Project which we plan to complete by the end of third quarter of 2023.

• Cordoba's San Matias Project where $14.8 million of exploration expenditure was incurred by Cordoba for the six months ended June 30, 2023 focused on continuing work on the feasibility study on the Alacran deposit.

Activities during the six months ended June 30, 2023 included ongoing infill geotechnical, metallurgical, hydrological and infill resource drilling to advance the feasibility study.

During the six months ended June 30, 2023 a total of 16,685

meters of infill diamond drilling was completed.

The final program total was 44,889.75 meters in 233 diamond drill holes completed;

• the Tintic Project where $3.1 million of exploration expenditure was incurred in the six months ended June 30, 2023 compared to $0.7 million incurred in the six months ended June 30, 2022.

Activities during the six months ended June 30, 2023 at Tintic were focused on completing an initial diamond drill hole and commencing a two drill rig exploration program that is testing new areas of the historic Main Tintic Mining District.

General and administrative expenses were $23.3 million for the six months ended June 30, 2023, an increase of $13.4 million from $9.9 million in six months ended June 30, 2022.

During the nine months ended September 30, 2023, exploration expenditures largely focused on activities at:

• the Santa Cruz Project where $40.8 million of exploration expenditure was incurred in the nine months ended September 30, 2023 compared to $46.4 million incurred in the nine months ended September 30, 2022.

Activities during the nine months ended September 30, 2023 at Santa Cruz were focused on a program of exploration and infill resource, geotechnical, hydrological and metallurgical drilling, advancing technical studies, completing the updated mineral resource estimate released in February 2023 and the finalization of the IA and the National Instrument 43-101 Preliminary Assessment and Technical Report ("PEA") which were released on September 6, and September 11, 2023.

• Cordoba's San Matias Project where $22.1 million of exploration expenditure was incurred by Cordoba for the nine months ended September 30, 2023 compared to $11.8 million incurred in the nine months ended September 30, 2022.

Activities during the nine months ended September 30, 2023 focused on continuing work on the feasibility study on the Alacran deposit.

including infill geotechnical, metallurgical, hydrological and infill resource drilling, feasibility metallurgical test work, infrastructure, mine, mill and tailings facility design work, investigation of power supply options, environmental studies and market investigations;

• the Tintic Project where $9.1 million of exploration expenditure was incurred in the nine months ended September 30, 2023 compared to $1.3 million incurred in the nine months ended September 30, 2022.

Activities during the nine

months ended September 30, 2023 at Tintic were focused on completing an initial diamond drill hole and commencing a two drill rig exploration program that is testing new areas of the historic Main Tintic Mining District.

Drilling has focused on deep targets guided by geophysical data;

• the Hog Heaven Project in Montana where $4.6 million of exploration expenditure was incurred in the three months ended September 30, 2023 compared to $1.1 million incurred in the three months ended September 30, 2022.

Activities during the three months ended September 30, 2023 at Hog Heaven included a two drill rig exploration program that commenced in June 2023.

The program was focused on delineating new epithermal mineralization and testing porphyry copper concepts.

General and administrative expenses were $34.7 million for the nine months ended September 30, 2023, an increase of $18.0 million from $16.7 million in nine months ended September 30, 2022.

Several items contributed to the increase, including:

• a $8.0 million increase in stock-based compensation expense from $0.5 million for the six months ended June 30, 2022 compared to $8.5 million for the six months ended June 30, 2023.

This increase was due to additional non-cash stock-based compensation expense in relation to Ivanhoe Electric stock option and RSU grants that occurred in November 2022, January 2023 and February 2023;

• a $2.9 million increase in directors and officers insurance expenses from $0.2 million for the six months ended June 30, 2022 compared to $3.1 million for the six months ended June 30, 2023.

This increase was due to the six months ended June 30, 2023 including six months of director and officers insurance expense compared to six months ended June 30, 2022 as we entered into the insurance policy in late June 2022 immediately before our IPO;

• a $1.2 million increase in salary and wages compared to the six months ended June 30, 2022 due to adding more people to our management and administrative teams following our IPO.

Revenue for the six months ended June 30, 2023 was $2.0 million, a decrease of $5.0 million from $7.0 million for the six months ended June 30, 2022.

Six Months Ended

• a $12.3 million increase in stock-based compensation expense from $1.4 million for the nine months ended September 30, 2022 compared to $13.7 million for the nine months ended September 30, 2023.

This increase was due to additional non-cash stock-based compensation expense in relation to Ivanhoe Electric stock option and RSU grants that have occurred since October 2022;

• a $2.4 million increase in directors and officers insurance expenses from $1.8 million for the nine months ended September 30, 2022 compared to $4.2 million for the nine months ended September 30, 2023.

This increase was due to the nine months ended September 30, 2023 including nine months of director and officers insurance expense compared to the nine months ended September 30, 2022 including only four months expense as we entered into the insurance policy in June 2022 immediately before our IPO;

• a $1.9 million increase in salary and wages compared to the nine months ended September 30, 2022 due to adding more people to our management and administrative teams following our IPO.

Revenue for the nine months ended September 30, 2023 was $2.2 million, a decrease of $5.9 million from $8.2 million for the nine months ended September 30, 2022.

Nine Months Ended

September 30,

(In thousands)

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Cost of sales (1,396) (598)

Gross profit $ 37 —

Gross (loss) profit $ (114) 29

Revenue $ 2,232 8,172

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Gross profit $ 517 7,130

VRB's revenue presented 63.8% of our revenue for the six months ended June 30, 2023 ($1.3 million) and 0.0% for the six months ended June 30, 2022 ($0.0 million).

During the second quarter of 2023, VRB delivered, installed and commissioned a 1MW/2MWh energy storage system to a customer in China, which resulted in $1.3 million of revenue being recognized.

CGI’s software licensing and data processing services to the mining and oil and gas industries represented 36.2% of our revenue for the six months ended June 30, 2023 ($0.7 million) and 100.0% for the six months ended June 30, 2022 ($7.0 million).

CGI’s revenue for the six months ended June 30, 2023 was $0.7 million a decrease of $6.3 million from $7.0 million for the six months ended June 30, 2022.

The decrease in CGI’s revenue was a result of revenue for the six months ended June 30, 2022 including a one-time amount of $6.5 million relating to a new contract that CGI entered into with one of its customers upon the expiration of a previous three-year contract.

VRB's revenue represented 57.4% of our revenue for the nine months ended September 30, 2023 ($1.3 million) and 7.7% for the nine months ended September 30, 2022 ($0.6 million).

During the nine months ended September 30, 2023, VRB delivered, installed and commissioned a 1MW/2MWh energy storage system to a customer in China, which resulted in $1.3 million of revenue being recognized.

CGI’s software licensing and data processing services to the mining and oil and gas industries represented 42.6% of our revenue for the nine months ended September 30, 2023 ($1.0 million) and 92.3% for the nine months ended September 30, 2022 ($7.5 million).

CGI’s revenue for the nine months ended September 30, 2023 was $1.0 million, a decrease of $6.6

million from $7.5 million for the nine months ended September 30, 2022.

The decrease in CGI’s revenue was a result of revenue for the nine months ended September 30, 2022 including a one-time amount of $6.5 million relating to a new contract that CGI entered into with one of its customers upon the expiration of a previous three-year contract.

Under that agreement with this customer, CGI agreed to license certain software for a one-time fee of $6.5 million, which was received and recognized in the first quarter of 2022.

CGI’s revenue for the six months ended June 30, 2023 consisted of $0.4 million of software licensing revenue and $0.3 million in revenue from processing data.

CGI’s gross profit for the six months ended June 30, 2023 was $0.5 million, a decrease of $6.3 million from $6.8 million for the six months ended June 30, 2022.

The licensing of certain software for a one-time fee of $6.5 million had a direct impact on gross profit for the six months ended June 30, 2022 as the licenses had no underlying carrying value and therefore resulted in a $6.5 million gross profit being recognized.

Research and development expenses for the six months ended June 30, 2023 were $4.0 million, an increase of $1.4 million from the same period in 2022 primarily attributable to incurring $1.5 million of expenditure in the first half of 2023 on commencing research and development activities for our next generation of Typhoon TM equipment.

CGI’s revenue for the nine months ended September 30, 2023 consisted of $0.4 million of software licensing revenue and $0.6 million in revenue from processing data.

CGI’s gross profit for the nine months ended September 30, 2023 was $0.6 million, a decrease of $6.5 million from $7.1 million for the nine months ended September 30, 2022.

The licensing of certain software for a one-time fee of $6.5 million had a direct impact on gross profit for the nine months ended September 30, 2022 as the licenses had no underlying carrying value and therefore resulted in a $6.5 million gross profit being recognized.

Stock-Based Compensation

During the six months ended June 30, 2023, we granted stock options to certain new employees of the Company.

In February 2023, we granted 500,000 stock options at an exercise price of $13.23 per share and in March 2023, we granted 100,000 stock options at an exercise price of $15.46.

The fair value of the option grants was determined using the Black-Scholes option-pricing model as $7.22 and $8.53 per share, respectively.

During the nine months ended September 30, 2023, we granted stock options to certain employees of the Company.

The fair value of the option grants was determined using the Black-Scholes option-pricing model as follows:

February 1, 2023 Grant Date March 1, 2023 Grant Date July 1, 2023 Grant Date August 9, 2023 Grant Date

Number of options granted 500,000 100,000 100,000 200,000

Exercise price $13.23 $15.46 $13.04 $16.03

Black-Scholes option-pricing model fair value $7.22 $8.53 $6.95 $8.46

In addition, in January 2023, we granted 750,000 RSUs to a new senior officer of the Company which had a fair value on the grant date of $12.15 per share.

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We have not generated any revenue from our mining projects and do not expect to generate any revenue from our mining projects for the foreseeable future.

We have funded our operations primarily through the sale of our equity and convertible securities.

At June 30, 2023 and December 31, 2022, we had cash and cash equivalents of $63.8 million and $139.7 million, respectively, and a working capital of $14.0 million and $133.6 million, respectively.

Of the total cash and cash equivalents at June 30, 2023 and December 31, 2022, $13.1 million and $20.7 million, respectively, was not available for the general corporate purposes of the Company as these amounts were held by non-wholly-owned subsidiaries.

In addition, on July 6, 2023, we completed the closing of the Ma'aden transactions where we issued to Ma’aden an aggregate of 10,269,604 shares of common stock of the Company for gross proceeds of approximately $127.1 million.

Of these proceeds approximately $61.1 million is available to be used to advance our portfolio of US mineral projects, and for working capital and general corporate purposes.

As at August 14, 2023, we believe that we will have sufficient cash resources to carry out our business plans for at least the next 12 months.

We have funded our operations through the sale of our equity and convertible securities.

At September 30, 2023 and December 31, 2022, we had cash and cash equivalents of $249.0 million and $139.7 million, respectively, and a working capital of $198.3 million and $133.6 million, respectively.

Of the total cash and cash equivalents at September 30, 2023 and December 31, 2022, $13.3 million and $20.7 million, respectively, was not available for the general corporate purposes of the Company as these amounts were held by non-wholly-owned subsidiaries.

As at November 7, 2023, we believe that we will have sufficient cash resources to carry out our business plans for at least the next 12 months.

We have based these estimates on our current assumptions which may require future adjustments based on our ongoing business decisions as well as, in particular, exploration success at our mineral projects.

Accordingly, we may require additional cash resources earlier than we currently expect or we may need to curtail currently planned activities.

Cash Balances as of June 30, 2023

The table below discloses the amounts of cash disaggregated by currency denomination as of June 30, 2023 in each jurisdiction that our affiliated entities are domiciled.

Cash Balances as of September 30, 2023

The table below discloses the amounts of cash disaggregated by currency denomination as of September 30, 2023 in each jurisdiction that our affiliated entities are domiciled.

Currency by Denomination (in USD Equivalents)

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USA $ 234,680 $ 260 $ — $ — $ — $ 234,940

Colombia — — — 6,091 — 6,091

Singapore 8,500 — — — — 8,500

Canada 2,365 504 — — — 2,869

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Since their incorporation, these PRC subsidiaries have had accumulated losses and have not declared or paid any dividends or made any distribution of earnings.

There were no cash transfers to or from our PRC subsidiaries in the form of intercompany loans during the three months ended June 30, 2023.

There were no cash transfers to or from our PRC subsidiaries in the form of intercompany loans during the three months ended September 30, 2023.

Refer to Note 18 of our consolidated and combined carve-out financial statements in our 2022 Form 10-K which outlines other restrictions on transfers of net assets from our consolidated subsidiaries to the Company.

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Bridge Loan — Cordoba

In December 2022, JCHX advanced a bridge loan of $10 million to Cordoba Minerals in connection with the strategic arrangement for the joint development of Cordoba Mineral’s Alacran Project.

In December 2022, JCHX Mining Management Co., Ltd (“JCHX”) advanced a bridge loan of $10 million to Cordoba Minerals in connection with the strategic arrangement for the joint development of Cordoba Mineral’s Alacran Project.

The bridge loan is for an 18-month term and bears interest at 12% per annum during the first 12 months of the term and 14% per annum during the remaining six months, calculated on the basis of a 365-day year.

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The following table presents our sources and uses of cash for the periods indicated:

Six Months Ended June 30,

Nine Months Ended September 30,

Net cash (used in) provided by:

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We do not generate adequate cash from operations to cover our operating expenses and therefore rely on our financing activities to provide the cash resources to fund our operating and investing activities.

Net cash used in operating activities for the six months ended June 30, 2023 was $65.8 million, an increase of $21.6 million from the $44.2 million of net cash used for the six months ended June 30, 2022.

Net cash used in operating activities for the nine months ended September 30, 2023 was $107.0 million, an increase of $28.2 million from the $78.8 million of net cash used for the nine months ended September 30, 2022.

Investing activities.

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To date, due to our mining projects being in the exploration stage we have not incurred material capital expenditures.

Net cash used in investing activities for the six months ended June 30, 2023 of $40.9 million was mainly attributable to $39.2 million related to payments for mineral interests and $1.2 million for the purchase of investments that are subject to significant influence.

The $39.2 million payments for mineral interests included $35.4 million paid to acquire land at the Santa Cruz Project and $3.5 million of option payments at our Tintic Project.

The $1.2 million for the purchase of investments that are subject to significant influence relates to the funding of our 30% interest in the Sama Nickel Corporation Inc.

joint venture in the Ivory Coast.

Net cash used in investing activities for the nine months ended September 30, 2023 of $114.6 million was mainly attributable to the $67.9 million related to purchase of investments subject to significant influence and $45.6 million related to payments for mineral interests.

The $67.9 million related to purchase of investments subject to significant influence primarily relates to our $66.0 million investment in the Ma'aden Joint Venture.

The $45.6 million of payments for mineral interests included $41.7 million paid to acquire land at the Santa Cruz Project and $3.5 million of option payments at our Tintic Project.

Financing activities.

During the six months ended June 30, 2023, there were no significant corporate Ivanhoe Electric financing activities as we continued to fund our operations with proceeds from our IPO.

We did receive $1.2 million of proceeds from the exercise of employee stock options during the six months ended June 30, 2023.

Our subsidiary, Cordoba, raised $29.5 million during six months ended June 30, 2023 in relation to financing its Alacran project through its strategic arrangement with JCHX.

Net cash used in investing activities for the nine months ended September 30, 2023 was $331.0 million which was primarily from the $299.9 million in net proceeds we raised through issuances our common stock.

We raised net proceeds of $123.7 million as a result of the July 2023 private placement with Ma'aden and raised net proceeds of $175.5 million from our September 2023 public offering.

In addition, we received $1.6 million of proceeds from the exercise of employee stock options during the nine months ended September 30, 2023.

Our subsidiary, Cordoba, raised $29.5 million during nine months ended September 30, 2023 in relation to financing its Alacran project through its strategic arrangement with JCHX.

Contractual Obligations

As of June 30, 2023, there were no material changes in our contractual obligations since December 31, 2022 other than those discussed above under "Note Payable".

As of September 30, 2023, there were no material changes in our contractual obligations since December 31, 2022 other than those discussed above under "Note Payable".

Off Balance Sheet Arrangements

As of June 30, 2023, we were not involved in any off-balance sheet arrangements that have or are reasonably likely to have a material effect on our financial condition, results of operations, or liquidity.

As of September 30, 2023, we were not involved in any off-balance sheet arrangements that have or are reasonably likely to have a material effect on our financial condition, results of operations, or liquidity.

Related Party Transactions

See Note 12 of our Condensed Interim Consolidated Financial Statements for the three and six months ended June 30, 2023.

See Note 12 of our Condensed Interim Consolidated Financial Statements for the three and nine months ended September 30, 2023.

Critical Accounting Estimates

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The use of the Black-Scholes option pricing model requires input estimation of the expected life of the option and volatility, which can have a significant impact on the valuation model and resulting expense recorded.

In February 2023, we granted 500,000 stock options at an exercise price of $13.23 per share and in March 2023, we granted 100,000 stock options at an exercise price of $15.46.

The fair value of the option grants was determined using the Black-Scholes option-pricing model as $7.22 and $8.53 per share, respectively.

The following assumptions were used to compute the fair value of the options granted:

February 1, 2023 Grant Date March 1, 2023 Grant Date

We granted 900,000 stock options during the nine months ended September 30, 2023.

The table below details the options granted and the Black-Scholes option pricing model assumptions used to compute the fair value of the options:

February 1, 2023 Grant Date March 1, 2023 Grant Date July 1, 2023 Grant Date August 9, 2023 Grant Date

Number of options granted 500,000 100,000 100,000 200,000

Exercise price $13.23 $15.46 $13.04 $16.03

Black-Scholes option-pricing model fair value $7.22 $8.53 $6.95 $8.46

Black-Scholes option-pricing model assumptions:

Risk-free interest rate 3.7% 4.5% 4.4% 4.4%

Dividend yield nil nil

Dividend yield nil nil nil nil

Estimated volatility 69.8% 69.5% 66.2% 65.4%

Expected option life 4 years 4 years

Expected option life 4 years 4 years 4 years 4 years

The risk-free interest rate assumption was based on the U.S.

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The amount that is ultimately incurred for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount recognized.

We had no uncertain tax positions as of June 30, 2023.

Emerging Growth Company Status

We had no uncertain tax positions as of September 30, 2023.

Transition from Emerging Growth Company Status and Smaller Reporting Company Status

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

The JOBS Act exempts emerging growth companies from being required to comply with new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

We have elected not to opt out of this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

As a result, our consolidated and combined carve-out financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

The accounting policies applied in our consolidated and combined carve-out financial statements included elsewhere in this Quarterly Report reflect the early adoption of certain accounting standards as the JOBS Act does not preclude an emerging growth company from early adopting a new or revised accounting standard to the extent early adoption is allowed by the accounting standard.

We expect to lose our emerging growth company status at the end of the fiscal year ended December 31, 2023, when we expect to qualify as a large accelerated filer based on the worldwide market value of our common equity held by non-affiliates as at June 30, 2023.

An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies.

These provisions include:

• We are not required to engage an auditor to report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002.

• We are not required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis).

• We are not required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay,” “say-on-frequency” and “say-on-golden parachutes”.

• We are not required to disclose certain executive compensation items such as the correlation between executive compensation and performance, and comparisons of the chief executive officer’s compensation to median employee compensation.

In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards.

This provision allows an emerging growth company to delay the adoption of accounting standards that have different effective dates for public and private companies until those standards would otherwise apply to private companies.

We have elected to avail ourselves of this exemption and, therefore, we will not be subject to the same requirements to adopt new or revised accounting standards as other public companies that are not “emerging growth companies.”

We are also a “smaller reporting company” as defined under the Exchange Act.

As a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and have reduced disclosure obligations regarding executive compensation.

Due to the market value of our equity securities that was held by non-affiliates on June 30, 2023 exceeding $700 million, we anticipate that on December 31, 2023, we will become a “large accelerated filer” as defined under the Exchange Act, and will cease to be an “emerging growth company”.

Accordingly, we anticipate that for purposes of our Form 10-K annual report for the year ended December 31, 2023, we will no longer qualify for the accommodations granted to an emerging growth company and will be required to comply with the requirements applicable to a large accelerated filer.

Due to the market value of our equity securities held by non-affiliates on June 30, 2023 exceeding $700 million, we will also cease to be a “smaller reporting company”.

Due to a transitional period approved by the SEC for former smaller reporting companies, we anticipate that our Form 10-K annual report for the year ended December 31, 2023 and our proxy statement for our 2024 annual meeting of stockholders may continue to take advantage of the reduced disclosure obligations relating to a smaller reporting company.

Quantitative and Qualitative Disclosures about Market Risk.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis