Ivanhoe Electric Inc. 10-Q

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 3 Table of Contents 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 4 Table of Contents 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 5 Table of Contents 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 ) $ — 6 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) 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 7 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) 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: 8 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) 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: 9 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) • 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. 10 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) 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. 11 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) 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 12 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) 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: 13 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 $ — $ 679 Intersegment revenues — 48 — 48 Loss (income) from operations 36,159 399 2,031 38,589 Segment assets 208,441 3,633 15,293 227,367 15. Commitments and contingencies: The Company has entered into a contractual arrangement to purchase six Typhoon™ transmitters from I-Pulse (Note 12). In the ordinary course of business, the Company may be involved in various legal proceedings and subject to claims that arise. Although the results of litigation and claims are inherently unpredictable and uncertain, the Company is not currently a party to any legal proceedings the outcome of which, if determined adversely to it, are believed to, either individually or taken together, have a material adverse effect on the Company’s business, financial condition or results of operations. 16. Subsequent event: On May 7, 2024, the Company entered into an Exploration Alliance Agreement with BHP Mineral Resources Inc. (“BHP”), which sets out the framework for BHP and the Company to explore mutually agreed “Areas of Interest” in the United States to identify copper and other critical metal exploration opportunities within those Areas of Interest that may become 50/50 owned joint ventures following a discovery. The Agreement is for a term of three years , which may be extended upon mutual agreement. BHP will provide the initial funding of $ 15 million and thereafter the Company and BHP would provide funding on a 50/50 basis. The Company will provide the alliance access to one Typhoon™ system. 14