What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-08 · 124 added, 82 removed, 347 unchanged (37% of the section changed)

35 unchanged sentences

700,000,000 shares authorized;

120.3 million shares issued and outstanding as of March 31, 2024 (December 31, 2023 - 700,000,000 authorized;

120.4 million shares issued and outstanding as of June 30, 2024 (December 31, 2023 - 700,000,000 authorized;

120.0 million issued and outstanding)

11 unchanged sentences

Three Months Ended

June 30, Six months ended

2024 2023 2024 2023

Revenue $ 538 $ 1,314 $ 898 $ 1,993

8 unchanged sentences

Other expenses (income):

Interest income, net ( 35 ) ( 32 )

Foreign exchange gain ( 5 ) ( 161 )

Loss on revaluation of investments 271 375

Interest expense, net 387 713 352 681

Foreign exchange loss (gain) 692 ( 1,312 ) 687 ( 1,473 )

Loss (gain) on revaluation of investments 431 ( 1,321 ) 702 ( 946 )

Share of loss of equity method investees 1,453 606 4,465 1,228

Other income, net ( 3 ) ( 741 )

Other expense (income), net 12 ( 1,096 ) 9 ( 1,837 )

Loss before income taxes 51,521 44,975 111,642 83,627

20 unchanged sentences

dollars, except share amounts)

Three months ended March 31, 2024 and 2023

capital Accumulated

1 unchanged sentence

comprehensive

Income (loss) Non-controlling

loss Non-controlling

interest Total

Shares Amount

Balance at January 1, 2023 92,960,584 $ 9 $ 409,683 $ ( 202,128 ) $ ( 1,189 ) $ ( 3,928 ) $ 202,447

Three months ended June 30, 2024 Shares Amount

Balance at April 1, 2024 120,306,414 $ 12 $ 790,824 $ ( 457,015 ) $ ( 2,323 ) $ 18,234 $ 349,732

Net loss — — — ( 46,783 ) — ( 4,738 ) ( 51,521 )

Other comprehensive income — — — — ( 46 ) ( 22 ) ( 68 )

Issuance of common stock;

earn-in payment 10,281 — 150 — — — 150

Other comprehensive loss — — — — ( 238 ) ( 91 ) ( 329 )

Stock options exercised 82,187 — 694 — — — 694

Share-based compensation — — 5,067 — — 65 5,132

Stock-based compensation — — 3,969 — — 100 4,069

Non-controlling interests investment in subsidiary — — 15 — — 364 379

Other changes in non-controlling interests — — — — — 100 100

Balance at March 31, 2023 92,971,865 $ 9 $ 414,897 $ ( 238,202 ) $ ( 1,235 ) $ ( 6,387 ) $ 169,082

Balance at June 30, 2024 120,388,601 $ 12 $ 795,502 $ ( 503,798 ) $ ( 2,561 ) $ 13,969 $ 303,124

Six months ended June 30, 2024

Balance at January 1, 2024 120,025,264 $ 12 $ 777,816 $ ( 401,504 ) $ ( 2,073 ) $ 2,030 $ 376,281

7 unchanged sentences

Settlement of deferred share units 1,972 — — — — — —

Share-based compensation — — 3,315 — — 30 3,345

Stock options exercised 82,187 — 694 — — — 694

Stock-based compensation — — 7,284 — — 130 7,414

Non-controlling interests investment in subsidiary — — 9,387 — — 20,992 30,379

Other changes in non-controlling interests — — ( 726 ) — — 372 ( 354 )

Balance at March 31, 2024 120,306,414 $ 12 $ 790,824 $ ( 457,015 ) $ ( 2,323 ) $ 18,234 $ 349,732

Balance at June 30, 2024 120,388,601 $ 12 $ 795,502 $ ( 503,798 ) $ ( 2,561 ) $ 13,969 $ 303,124

IVANHOE ELECTRIC INC.

Condensed Interim Consolidated Statements of Changes in Equity (Unaudited)

(Expressed in thousands of U.S.

dollars, except share amounts)

capital Accumulated

deficit Accumulated

comprehensive

loss Non-controlling

interest Total

Three months ended June 30, 2023 Shares Amount

Balance at April 1, 2023 92,971,865 $ 9 $ 414,897 $ ( 238,202 ) $ ( 1,235 ) $ ( 6,387 ) $ 169,082

Net loss — — — ( 38,263 ) — ( 6,584 ) ( 44,847 )

Other comprehensive loss — — — — ( 823 ) ( 448 ) ( 1,271 )

Stock options exercised 479,909 — 1,194 — — — 1,194

Stock-based compensation — — 5,365 — — 66 5,431

Settlement of deferred share units 11,990 — — — — — —

Non-controlling interests investment in subsidiary — — 17,979 — — 19,174 37,153

Other changes in non-controlling interests — — 7 — — ( 1 ) 6

Balance at June 30, 2023 93,463,764 $ 9 $ 439,442 $ ( 276,465 ) $ ( 2,058 ) $ 5,820 $ 166,748

Six months ended June 30, 2023

Balance at January 1, 2023 92,960,584 $ 9 $ 409,683 $ ( 202,128 ) $ ( 1,189 ) $ ( 3,928 ) $ 202,447

Net loss — — — ( 74,337 ) — ( 9,090 ) ( 83,427 )

Other comprehensive loss — — — — ( 869 ) ( 470 ) ( 1,339 )

Issuance of common stock;

earn-in payment 10,281 — 150 — — — 150

Stock options exercised 480,909 — 1,197 — — — 1,197

Stock-based compensation — — 10,432 — — 131 10,563

Settlement of deferred share units 11,990 — — — — — —

Non-controlling interests investment in subsidiary — — 17,979 — — 19,174 37,153

Other changes in non-controlling interests — — 1 — — 3 4

Balance at June 30, 2023 93,463,764 $ 9 $ 439,442 $ ( 276,465 ) $ ( 2,058 ) $ 5,820 $ 166,748

IVANHOE ELECTRIC INC.

Condensed Interim Consolidated Statements of Cash Flows (Unaudited)

(Expressed in thousands of U.S.

Three months ended March 31, 2024 and 2023

Six months ended June 30, 2024 and 2023

Operating activities

2 unchanged sentences

Depreciation and amortization 1,335 1,714

Share-based compensation 3,345 5,132

Stock-based compensation 7,414 10,563

Non-cash exploration expense 95 1,003

Non-cash research and development expense 565 1,290

Unrealized foreign exchange gain ( 3 ) ( 155 )

Unrealized foreign exchange loss (gain) 689 ( 1,494 )

Interest expense 3,631 2,374

Income taxes — ( 200 )

Loss on revaluation of investments 271 375

Loss (gain) on revaluation of investments 702 ( 946 )

Share of loss of equity method investees 4,465 1,228

24 unchanged sentences

Supplemental disclosure of non-cash investing and financing activities

Note payable issued as consideration for land purchase $ — $ 82,590

Issuance of common stock;

3 unchanged sentences

Non-controlling interests investment in subsidiary 4,000 10,546

Settlement of loan upon issuance of shares of subsidiary — ( 10,546 )

Settlement of related party loan $ ( 4,000 ) $ —

14 unchanged sentences

(“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 %).

Ivanhoe Electric had an ownership interest in VRB of 90.0 % as at June 30, 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 %).

Ivanhoe Electric had an ownership interest in CGI of 94.3 % as at June 30, 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).

Ivanhoe Electric had an ownership interest in Cordoba of 62.8 % as at June 30, 2024 (December 31, 2023 — 62.8 %).

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.

1 unchanged sentence

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.

Operating results for the six months ended June 30, 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.

2 unchanged sentences

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.

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.

There 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:

4 unchanged sentences

This update is effective prospectively for all joint venture formations with a formation date on or after January 1, 2025.

IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Tabular amounts expressed in thousands of U.S.

dollars, unless otherwise indicated)

In November 2023, the FASB issued ASU 2023-07 Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

The update was issued to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The Company is required to adopt ASU 2023-07 on January 1, 2025 and is currently evaluating the expected impact on the consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740):

7 unchanged sentences

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 ) .

Of the total cash and cash equivalents at June 30, 2024 and December 31, 2023, $ 20.8 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 June 30, 2024, the Company has $ 1.7 million in cash equivalents in the form of redeemable short-term investments (December 31, 2023 - $ 0.0 million ) .

Investments subject to significant influence:

12 unchanged sentences

Foreign currency translation — ( 20 ) ( 75 ) — — ( 95 )

Balance at March 31, 2024 $ 29,485 $ — $ 2,350 $ 282 $ 4,613 $ 36,730

Balance at June 30, 2024 $ 28,418 $ — $ 1,975 $ 657 $ 4,201 $ 35,251

(a) Acquisition of Sama Nickel Corporation:

On March 11, 2024, the Company completed its earn-in and acquired an additional 30 % in Sama Nickel Corporation ("SNC") bringing its total ownership interest in SNC to 60 % .

SNC owns the Samapleu-Grata Nickel-Copper Project ("Samapleu 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 its exploration property in the Ivory Coast.

IVANHOE ELECTRIC INC.

2 unchanged sentences

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.

Exploration properties:

3 unchanged sentences

Foreign currency translation — — — 7 7

Balance at March 31, 2024 $ 166,492 $ 30,663 $ 15,315 $ 4,354 $ 216,824

Balance at June 30, 2024 $ 166,792 $ 30,703 $ 15,315 $ 4,356 $ 217,166

Note payable:

1 unchanged sentence

Interest expense 2,290

Balance at March 31, 2024 $ 50,061

Balance at June 30, 2024 $ 51,206

Current portion 14,962

Non-current portion 36,244

Balance at March 31, 2024 $ 50,061

Balance at June 30, 2024 $ 51,206

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.

5 unchanged sentences

Interest expense 1,224

Balance at March 31, 2024 $ 28,984

Balance at June 30, 2024 $ 29,596

On July 8, 2021, VRB issued a convertible bond for gross proceeds of $ 24.0 million.

1 unchanged sentence

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:

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;

2 unchanged sentences

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.

IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Tabular amounts expressed in thousands of U.S.

dollars, unless otherwise indicated)

(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”).

On February 6, 2024, Ivanhoe Electric acquired all of the issued and outstanding common shares of Kaizen Discovery Inc.

(“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.

4 unchanged sentences

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

Three Months Ended March 31,

Three Months Ended June 30, Six months ended June 30,

2024 2023 2024 2023

General and administrative expenses $ 2,987 $ 4,759 $ 5,677 $ 8,958

Exploration expenses 1,082 667 1,737 1,595

Research and development expenses — 5 — 5

Cost of sales — — — 5

1 unchanged sentence

(i) Stock options:

On March 11, 2024, the Company granted stock options to certain directors, officers and employees of the Company.

During the six months ended June 30, 2024 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.

IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated Financial Statements

(Unaudited - Tabular amounts expressed in thousands of U.S.

dollars, unless otherwise indicated)

March 11, 2024

Information related to stock options granted during the six months ended June 30, 2024 is presented below.

March 11, 2024 April 8, 2024

Exercise price $ 13.50 $ 13.50

6 unchanged sentences

Weighted average grant-date fair value (per option) $ 3.46 $ 4.72

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 Company recognized revenue from the following sources:

Three months ended

Three Months Ended June 30, Six months ended June 30,

Revenue type 2024 2023 2024 2023

3 unchanged sentences

Total $ 538 $ 1,314 $ 898 $ 1,993

(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.

(a) At June 30, 2024, the Company had a contract liability of $ 2.7 million (December 31, 2023 — $ 2.4 million) relating to the sale of renewable energy storage systems.

Exploration expense:

Three months ended

Three Months Ended June 30, Six months ended June 30,

Project 2024 2023 2024 2023

3 unchanged sentences

Hog Heaven, USA 2,530 416 5,837 1,054

Unity, USA 1,552 — 1,650 21

Samapleu Project, Ivory Coast (Note 5(a)) 1,414 — 1,414 —

Carolina, USA 300 790 1,195 1,028

14 unchanged sentences

three months ended

June 30, Transactions for the

six months ended

2024 December 31,

2023 2024 2023 2024 2023

Total Expenses

Total expenses and accounts payable

Global Mining (Note a) 239 224 1,018 4,897 2,381 9,213

2 unchanged sentences

Total 1,285 1,619 1,698 6,305 3,707 12,028

Revenue and accounts receivable

Ma'aden Joint Venture (Note d) 100 — 363 — 663 —

5 unchanged sentences

three months ended

June 30, Transactions for the six

2024 2023 2024 2023

Expense classification

2 unchanged sentences

Research and development expenses 307 658 590 1,308

1,698 6,305 3,707 12,028

(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 %).

The Company held 6.7 % of Global Mining’s outstanding common stock at June 30, 2024 (December 31, 2023 — 7.1 %).

The advance provided to Global Mining is included in other non-current assets.

(b) Ivanhoe Capital Aviation (“ICA”) is an entity beneficially owned by the Company’s Executive Chairman.

5 unchanged sentences

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

In October 2022, the Company made deposit payments totaling $ 7.1 million, representing 50 % of each component of the agreement and recorded in other non-current assets.

The remaining payments will be made as each Typhoon™ transmitter system is

IVANHOE ELECTRIC INC.

2 unchanged sentences

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 %).

(d) The Company's majority owned subsidiary, CGI, provides geophysical data processing services to the Ma'aden joint venture and recognized revenue totaling $ 0.7 million.

At June 30, 2024 the Company has $ 0.9 million in accounts receivable owed by the Ma'aden joint venture 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 June 30, 2024 (December 31, 2023 - 19.8 %).

In November 2023, $ 4.0 million was advanced to Cordoba by JCHX.

3 unchanged sentences

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

June 30, 2024 December 31, 2023

Level 1 Level 2 Level 3 Level 1 Level 2 Level 3

5 unchanged sentences

Total financial liabilities $ — $ — $ — $ — $ — $ —

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

There were no movements in level three instruments for the three months ended June 30, 2024.

Segment reporting:

6 unchanged sentences

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:

IVANHOE ELECTRIC INC.

2 unchanged sentences

dollars, unless otherwise indicated)

Three months ended March 31, 2024

Segment information for the periods presented is as follows:

Three Months Ended June 30, 2024 Six months ended June 30, 2024

Processing Energy

Storage Total Critical

Processing Energy

Storage Total

3 unchanged sentences

Segment assets 398,774 4,777 12,722 416,273 398,774 4,777 12,722 416,273

Three months ended March 31, 2023

Three Months Ended June 30, 2023 Six months ended June 30, 2023

Processing Energy

Storage Total Critical

Processing Energy

Storage Total

7 unchanged sentences

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.

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.

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 1. Financial Statements