Ivanhoe Electric Inc. 10-Q

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with the condensed interim consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q (this “Quarterly Report”) and with our audited consolidated financial statements and the related notes for the fiscal year ended December 31, 2024 included in Part II of our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (the “SEC”) on February 27, 2025 (the “2024 Form 10-K”). S pecial Note Regarding Forward-Looking Statements This Quarterly Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended, (the "Exchange Act"), that involve risks and uncertainties, including statements based on our current expectations, assumptions, estimates and projections about future events, our business, our financial condition, results of operations and prospects, our industry and the regulatory environment in which we operate. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. 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, 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 offerings of our securities or other fundraising activities. 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. These forward-looking statements may include projections of our future financial performance, the development of our mineral properties, our anticipated growth strategies and anticipated trends in our industry. All forward-looking statements speak only as of the date on which they are made. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions concerning future events that are difficult to predict. Therefore, actual future events or results may differ materially from these statements. We believe that the factors that could cause our actual results to differ materially from those expressed or implied by forward-looking statements include the following: we will require substantial additional capital in the future; most of our mineral projects are all at the exploration or development stage and are subject to the significant risks and uncertainties associated with mineral exploration and development; our Santa Cruz Copper Project is subject to significant risks associated with mine construction and commissioning, including possible delays, cost overruns, and unanticipated technical problems in addition to the need to obtain all required permits and necessary funding; the Preliminary Feasibility Study (the "PFS") for our Santa Cruz Copper Project includes estimates and assumptions to project potential economic viability and actual economic outcomes may vary greatly from those set forth in the PFS; other than at the Santa Cruz Copper Project and at the Alacrán Copper Project, we have no mineral reserves, and only have mineral resources that may never be upgraded to a higher category of resource or to a mineral reserve; we have a limited operating history on which to base an evaluation of our business and prospects; we depend on our material projects for our future operations; 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; the title to some of the mineral properties may be uncertain or defective; our business is subject to changes in the prices of copper, gold, silver, nickel, cobalt, vanadium and platinum group metals; we have claims and legal proceedings against one of our subsidiaries; our business is subject to significant risk and hazards associated with exploration activities, mine development, construction and future mining operations; we may fail to identify attractive acquisition candidates or joint ventures with strategic partners or be unable to successfully integrate acquired mineral properties or successfully manage joint ventures; our success is dependent in part on our joint venture partners and their compliance with our agreements with them; our business is extensively regulated by the United States and foreign governments as well as local governments; we may be adversely affected by tariff and trade actions; VRB may not receive the anticipated payments from Red Sun in connection with the VRB China transaction in full or in a timely manner; our subsidiary Cordoba’s sale of its interest in the Alacrán Copper Project may not be completed; we may not be able to successfully establish a United States vanadium redox battery business because of permitting, financial or operational matters which would adversely affect our vanadium redox battery business; the requirements that we obtain, maintain and renew environmental, construction and mining permits are often a costly and time-consuming process; our non-U.S. operations are subject to additional political, economic and other uncertainties not generally associated with domestic 18 operations; our current and future exploration and mining activities may be adversely affected by increased and excessive heating owing to climate change, including increased risk and occurrence of forest fire which may adversely affect the timing and scope of our exploration operations; and our current and future operations may be adversely impacted by public health emergencies, pandemics, epidemics or similar events. 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 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. These factors should not be construed as exhaustive and should be read in conjunction with the risks described under the heading “Risk Factors” in our 2024 Form 10-K. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under “Risk Factors” in the 2024 Form 10-K. 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. We do not undertake any obligation to make any revisions to these forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events, except as required by law. Business Overview We are a United States domiciled minerals exploration company with a focus on developing mines from mineral deposits principally located in the United States. We seek to support American supply chain independence by finding and delivering copper and other critical metals vital to advanced manufacturing, infrastructure development, technology, and national security. We use our powerful Typhoon™ geophysical surveying system, together with advanced data analytics provided by our 94.3% owned subsidiary, Computational Geosciences Inc. (“CGI”), to accelerate and de-risk the mineral exploration process as we seek to discover new deposits of critical metals that may otherwise be undetectable by traditional exploration technologies. We believe the United States is significantly underexplored and has the potential to yield major new discoveries of critical metals. Our mineral exploration efforts focus on copper as well as other metals including nickel, cobalt, platinum group elements, gold and silver. Through the advancement of our portfolio of critical metals exploration and development projects, headlined by the Santa Cruz Copper Project in Arizona, we intend to contribute to domestic supply by developing resources that support industrial and strategic sectors. We also operate a 50/50 joint venture with Saudi Arabian Mining Company ("Maaden") to explore for minerals on ~48,500 km 2 of underexplored Arabian Shield in Saudi Arabia. Finally, in 2024, we established an exploration alliance with BHP Mineral Resources Inc. (“BHP”), a subsidiary of BHP Group Limited, to search for critical minerals in the United States. In addition to our mineral projects, we also own a 90.0% controlling interest in VRB Energy Inc. (“VRB”) which itself owns 100% of VRB Energy USA Inc. ("VRB USA"), an Arizona-based developer of advanced grid-scale energy storage systems utilizing vanadium redox flow batteries for integration with renewable power sources. VRB also has a 49% interest in VRB China which is a joint venture with a subsidiary of privately held Shanxi Red Sun Co., Ltd. VRB China manufactures, develops and sells vanadium redox flow batteries for Asian, African and Middle Eastern markets. Our other mineral projects in the United States include the Tintic Project, located in Utah, the Hog Heaven Copper-Silver-Gold Project, located in Montana and the Gleeson Project, located in Arizona. We also hold a portfolio of exploration projects in the western United States, including projects in Arizona, Nevada, New Mexico and Montana. 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 projects. Our shares of common stock are listed on the NYSE American and the TSX under the ticker symbol “IE”. Business Developments in the Quarter Santa Cruz Copper Project On June 23, 2025, we announced the completion of the Preliminary Feasibility Study (the "PFS") for the Santa Cruz Copper Project in Arizona. The PFS confirmed the economic viability of an underground copper mining operation combined with a heap leach processing facility utilizing modern technologies and designed to produce copper cathode for 19 delivery to U.S. customers. Following completion of the PFS, we are conducting optimization studies and detailed engineering as we work towards the beginning of initial construction activities in the first quarter of 2026. Situated entirely on private land in Arizona, the Santa Cruz Copper Project integrates underground mining with chloride-assisted heap leaching to produce copper cathode on site, eliminating the need for smelting, tailings storage, and transportation and refining of concentrates. This integrated approach significantly reduces the project's overall carbon intensity. The project has been designed as a phased approach to responsibly meet the growing demand for copper in the United States. The Santa Cruz Copper Project features a compact site layout, advanced water management tailored for arid conditions, and plans to use paste backfill made from spent ore to minimize waste and enhance ground stability. The findings of the PFS include that the Santa Cruz Copper Project is projected to produce 1.4 million tonnes of copper cathode over a 23-year mine life. With a base case copper price of $4.25/lb, the Santa Cruz Copper Project has an after-tax Net Present Value of $1.4 billion at an 8% discount rate and an Internal Rate of Return (IRR) of 20%. The initial project capital is estimated at $1.24 billion. Cordoba Minerals Corp. ("Cordoba") On May 8, 2025, our subsidiary, Cordoba entered into an agreement to sell Cordoba's remaining 50% interest in the Alacrán Copper Project to a consortium of investors including JCHX Mining Management Co., Ltd. ("JCHX") a 19.2% shareholder of Cordoba, for $88 million in cash on closing, $12 million in a deferred payment, and up to $28 million in a contingent payment. JCHX acquired its first 50% of the Alacrán Copper Project in May 2023. On September 15, 2025, the Cordoba shareholders, at a special meeting, approved the proposed sale of the Cordoba's remaining 50% interest in the Alacrán Copper Project. After retaining a $5 million working capital reserve, the payment of taxes, fees, and other costs associated with negotiating and closing the transaction, and after settling all outstanding liabilities and obligations, it is estimated that approximately $65 million to $70 million in cash will be available for distribution to Cordoba shareholders, of which our share would be at least $40 million. The transaction must be completed by December 31, 2025. Remaining conditions for closing include the approval of the Environmental Impact Assessment for the Alacrán Copper Project by the environmental regulator in Colombia (the “EIA Approval”). Following the closing of the transaction, Cordoba will continue to be a publicly listed company on the TSX Venture Exchange and will undertake a search for new business development opportunities. Saudi Arabia Exploration Activities On September 2, 2025, we announced that Maaden had made available an additional 1,345 square kilometers of exploration licenses to the Maaden Ivanhoe Electric Exploration and Development Limited Company ("Maaden Joint Venture") that we established with them in 2023. To October 20, 2025, the Maaden Joint Venture has completed approximately 732 square kilometers of geophysical surveys using our advanced Typhoon™ system and drilled 16 holes totaling approximately 10,461 meters across the Al Amar Belt. Drilling at Al Amar hit narrow intervals of low- to high-grade base and precious metals mineralization associated with Typhoon™-identified anomalies at depths of up to one kilometer. Segments We account for our business in four business segments – (i) Santa Cruz Copper Project (ii) critical metals, (iii) data processing services and (iv) energy storage. Significant Components of Results of Operations Revenue, Cost of Sales and Gross Profit We have not generated any revenue from our mineral projects because they are in the exploration or development stage. We generate some revenue from our technology business, CGI, which is included in the data processing business segment. CGI generates revenue from the sale of data processing services to the mining and oil and gas industries. In prior years, CGI has also generated revenue from software licensing. 20 Exploration Expenses Direct costs for the acquisition of mineral exploration rights, including option payments, are capitalized and recorded initially at cost as exploration properties. Exploration and evaluation costs are expensed in the period incurred until such time as it has been determined that a mineral property is commercially feasible, in which case subsequent exploration and evaluation costs incurred to develop a mineral property are capitalized. Commercial feasibility is generally established when a mineral property has proven and probable reserves, permits or rights to extract the resources and reserves have been obtained and financing to develop the property has been approved. Exploration expenses include topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities in relation to identifying a Mineral Resource and then evaluating the technical feasibility and commercial viability of extracting the Mineral Resource, as well as value-added taxes in relation to these direct exploration and evaluation costs incurred in foreign jurisdictions where recoverability of those taxes is uncertain. Exploration expenses also include salaries, benefits and non-cash stock-based compensation expenses of the employees performing these activities. 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. 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 that may have been acquired as of the date of termination. Included in exploration expenses are early stage projects and exploration costs that we incur in relation to generating new projects that may or may not proceed to earn-in agreements depending on our evaluation. These are categorized as “Project generation and other”. General and Administrative Expenses Our general and administrative expenses consist of salaries and benefits, stock-based compensation, professional and consultant fees, insurance and other general administration costs. Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024 For the three months ended September 30, 2025 we recorded a net loss attributable to common stockholders of $17.5 million ($0.13 per share), compared to $43.2 million ($0.36 per share) for the three months ended September 30, 2024, which was a decrease of $25.7 million. Significant contributors to this decrease for the three months ended September 30, 2025 included a decrease of $15.8 million in exploration expenditures, a decrease of $1.7 million in general and administrative expenses and a decrease of $8.6 million in share of loss of equity accounted investees compared to the three months ended September 30, 2024. Exploration expenses were $14.7 million for the three months ended September 30, 2025, a decrease of $15.8 million from $30.5 million for the three months ended September 30, 2024. Exploration expenses consisted of the following: Three months ended September 30, (In thousands) 2025 2024 Exploration Expenses: Santa Cruz, USA $ 4,439 $ 15,141 Alacrán Project (Cordoba) 5,564 4,063 Hog Heaven, USA 441 2,645 Tintic, USA 634 2,343 Project generation and other 3,610 6,267 Total $ 14,688 $ 30,459 During the three months ended September 30, 2025, exploration expenditures largely focused on activities at: • the Santa Cruz Copper Project where $4.4 million of expenditure was incurred in the three months ended September 30, 2025 compared to $15.1 million incurred in the three months ended September 30, 2024. Activities 21 during the three months ended September 30, 2025 at the Santa Cruz Copper Project were focused on conducting optimization studies and detailed engineering. The exploration expenditures incurred in the three months ended September 30, 2024 were significantly higher due to the activities being focused on infill resource drilling, geotechnical, hydrological, and metallurgical drilling to obtain data for the technical studies; and • the Alacrán Copper Project where $5.6 million of expenditure was incurred by Cordoba for the three months ended September 30, 2025 focused on consultation associated with the EIA Approval process. General and administrative expenses were $9.1 million for the three months ended September 30, 2025, a decrease of $1.7 million from $10.9 million for the three months ended September 30, 2024. Contributing to the decrease was a $0.9 million decrease in administration expenditures at VRB for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 as a result of 2024 including general and administration costs related to VRB China which was deconsolidated in October 2024 and therefore there is no similar amount for three months ended September 30, 2025. We also had a $0.8 million decrease in non-cash stock based compensation expenses from $3.3 million for the three months ended September 30, 2024 compared to $2.5 million for the three months ended September 30, 2025 due to $0.4 million in forfeitures being recorded as result of an executive resigning in the third quarter of 2025 and a change in the mix of long-term incentive compensation issued for our 2025 annual grants. Also contributing to this decrease was that a $0.5 million decrease at Cordoba for salaries and travel expense for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 due to less corporate activity while Cordoba waits for EIA Approval. Share of income of equity method investees was $4.4 million for the three months ended September 30, 2025, a change of $8.6 million from the share of loss of equity method investees of $4.3 million for the three months ended September 30, 2024. The change was largely due to our $7.3 million share of the income from VRB China for the three months ended September 30, 2025. There was no comparative amount for the three months ended September 30, 2024 due to joint venture being formed in October 2024 . CGI’s software licensing and data processing services to the mining and oil and gas industries represented 100% of our revenue for the three month periods ended September 30, 2025 and 2024. VRB did not generate revenue during these periods. Three months ended September 30, Percentage Change 2025 2024 (In thousands) Software licensing and data processing services: Revenue $ 545 $ 671 (19) % Cost of sales (266) (256) 4 % Gross profit $ 279 $ 415 (33) % CGI’s revenue for the three months ended September 30, 2025 was $0.5 million, a decrease of $0.1 million from $0.7 million for the three months ended September 30, 2024. The decrease in CGI’s revenue was a result of less data processing services being performed. CGI’s gross profit for the three months ended September 30, 2025 was $0.3 million, a decrease of $0.1 million from $0.4 million for the three months ended September 30, 2024. The decrease in CGI's gross profit was consistent with the decrease in revenue. Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024 For the nine months ended September 30, 2025 we recorded a net loss attributable to common stockholders of $71.9 million ($0.55 per share), compared to $145.5 million ($1.21 per share) for the nine months ended September 30, 2024, which was a decrease of $73.6 million. Significant contributors to this decrease for the nine months ended September 30, 2025 included a decrease of $66.8 million in exploration expenditures, a decrease of $3.7 million in general and administrative expenses, and a decrease of $5.9 million in share of loss of equity accounted investees, offset by an increase of $2.4 million in interest expense and increase in impairment expense of a non-core exploration property of $2.5 million compared to the nine months ended September 30, 2024. 22 Exploration expenses were $44.6 million for the nine months ended September 30, 2025, a decrease of $66.8 million from $111.4 million for the nine months ended September 30, 2024. Exploration expenses consisted of the following: Nine months ended September 30, (In thousands) 2025 2024 Exploration Expenses: Santa Cruz, USA $ 16,368 $ 63,456 Alacrán Project (Cordoba) 13,255 10,817 Hog Heaven, USA 1,709 8,482 Tintic, USA 1,819 9,544 Project generation and other 11,400 19,057 Total $ 44,551 $ 111,356 During the nine months ended September 30, 2025, exploration expenditures largely focused on activities at: • the Santa Cruz Copper Project where $16.4 million of expenditure was incurred in the nine months ended September 30, 2025 compared to $63.5 million incurred in the nine months ended September 30, 2024. Activities during the nine months ended September 30, 2025 at the Santa Cruz Copper Project were focused on the technical engineering studies required to support the PFS that was released on June 23, 2025 and conducting optimization studies and detailed engineering. The exploration expenditures incurred in the nine months ended September 30, 2024 were significantly higher due to the activities being focused on infill resource drilling, geotechnical, hydrological, and metallurgical drilling to obtain data for the technical studies; and • the Alacrán Copper Project where $13.3 million of expenditure was incurred by Cordoba for the nine months ended September 30, 2025 focused on detailed engineering design of the Alacran mine and consultation associated with the EIA Approval process. General and administrative expenses were $30.4 million for the nine months ended September 30, 2025, a decrease of $3.7 million from $34.2 million for the nine months ended September 30, 2024. Contributing to the decrease was a $1.8 million decrease in administration expenditures at VRB for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 as a result of 2024 including general and administration costs related to VRB China which was deconsolidated in October 2024 and therefore there is no similar amount for nine months ended September 30, 2025. We also had a $1.3 million decrease in non-cash stock based compensation expenses in 2025 due to a change in the mix of long-term incentive compensation issued for our 2025 annual grants. Also contributing to this decrease was a $0.4 million decrease at Cordoba for salaries and travel expense for nine months ended September 30, 2025 compared to nine months ended September 30, 2024 due to less corporate activity while Cordoba waits for EIA Approval. Also contributing to this decrease was that the nine months ended September 30, 2024 included $0.6 million related to corporate administration costs for Kaizen Discovery that was acquired by us in 2024 and there were no similar expenditures in 2025. Share of loss of equity method investees was $2.9 million for the nine months ended September 30, 2025, a decrease of $5.9 million from the share of loss of equity method investees of $8.7 million for the nine months ended September 30, 2024. The change was largely due to our $6.6 million share of the income from VRB China which was formed in October 2024. There was no comparative amount for nine months ended September 30, 2024. Net interest expense was $3.8 million for the nine months ended September 30, 2025, an increase of $2.4 million from $1.3 million for the nine months ended September 30, 2024. The increase in net interest expense was largely due to $2.9 million less interest income received as the average cash balances in the nine months ended September 30, 2025 were lower than the same period in 2024. CGI’s software licensing and data processing services to the mining and oil and gas industries represented 100% of our revenue for the nine month periods ended September 30, 2025 and 2024. VRB did not generate revenue during these periods. 23 Nine months ended September 30, Percentage Change 2025 2024 (In thousands) Software licensing and data processing services: Revenue $ 2,348 $ 1,569 50 % Cost of sales (853) (548) 56 % Gross profit $ 1,495 $ 1,021 46 % CGI’s revenue for the nine months ended September 30, 2025 was $2.3 million, an increase of $0.8 million from $1.6 million for the nine months ended September 30, 2024. The increase in CGI’s revenue was a result of more data processing services being performed. CGI’s gross profit for the nine months ended September 30, 2025 was $1.5 million, an increase of $0.5 million from $1.0 million for the nine months ended September 30, 2024. The percentage increase in CGI's gross profit was consistent with the increase in revenue. Stock-Based Compensation On March 6, 2025, as part of our long-term incentive plan the following equity incentives were granted to certain of our officers and employees: • 776,557 stock-settled restricted stock units ("RSU's") that vest in three equal tranches beginning one year from the grant date. The fair value of the stock-settled RSU’s is amortized over the vesting period. The total fair value of the March 6, 2025 RSU grant was $4.5 million. • Performance share units ("PSU's") that vest on December 31, 2027, with the number of units to vest determined by our share price performance against constituents from a Base Metals Index. The number of units to vest ranges between zero times to two times the target number of PSU's. The total target number of PSU's is 714,822. The total fair value of the March 6, 2025 PSU grant was $5.1 million. Liquidity, Capital Resources and Capital Requirements Cash Resources We have recurring net losses and negative operating cash flows and we expect that we will continue to operate at a loss until we are able to generate revenue from our mining projects and such revenue exceeds our expenses. We cannot assure you that any of our mining projects will advance to commercial production or be profitable once in commercial production. To date, we have funded our operations primarily through the sale of our equity securities. At September 30, 2025 and December 31, 2024, we had cash and cash equivalents of $69.5 million and $41.0 million, respectively, and a working capital of $25.7 million and $35.9 million, respectively. Of the total cash and cash equivalents at September 30, 2025 and December 31, 2024, $16.5 million and $11.2 million, respectively, was not available for the general corporate purposes of the Company as these amounts were held by non-wholly-owned subsidiaries. At September 30, 2025, we had outstanding 11,644,872 Warrants that were issued in our February 2025 public offering, each exercisable until February 17, 2026 to purchase one share of our common stock at a price of $7.00 per share. Our cash resources may be improved, and our need for additional financing may be delayed or reduced, if Warrants are exercised. In October 2025, we completed a public offering where we issued 11,500,000 shares of our common stock at $15.00 per share for gross proceeds of approximately $172.5 million, after giving effect to the underwriter’s exercise in full of its option to purchase additional shares of common stock. We intend to use the net proceeds from this offering to complete the remaining payments owed from the purchase of land at our Santa Cruz Copper Project in Arizona, to fund early development activities at the Santa Cruz Copper Project, to fund exploration activities at our current projects and joint ventures, and for other working capital and general corporate purposes. As at November 5, 2025, we believe that we have sufficient cash resources to carry out our business plans for at least the next 12 months, after which we expect to need additional financing to further advance our projects and conduct our business; provided, however, that if we make a development decision at the Santa Cruz Copper Project within the next 12 months, our need for additional financing will be accelerated. We have based these estimates on our current assumptions, 24 which may require future adjustments based on our ongoing business and development decisions. Accordingly, we may require additional cash resources earlier than we currently expect or we may need to curtail currently planned activities. On April 15, 2025, we received a Letter of Interest from the Export-Import Bank of the United States (“EXIM Bank”) outlining the potential to provide up to $825 million in debt financing with a 15-year repayment tenor for the development of the Santa Cruz Copper Project in Arizona through EXIM Bank’s Make More in America initiative. EXIM Bank is the official export credit agency of the United States. It is a government agency that offers financial support to companies through means such as direct loans and loan guarantees, working capital guarantees, and export credit insurance. EXIM Bank’s Make More in America initiative and its China and Transformational Exports Program are designed to boost the United States’ competitiveness, strengthen supply chains, and reduce strategic vulnerabilities. Following the receipt of the Letter of Interest from EXIM Bank, we are currently advancing through the formal application process. EXIM Bank will need to conduct all requisite due diligence necessary to determine if a final lending commitment would be made. Any final lending commitment will be dependent on meeting EXIM Bank’s underwriting criteria, authorization process, and finalization and satisfaction of terms and conditions. All final lending commitments must be in compliance with EXIM Bank policies as well as program, legal and eligibility requirements. We are assessing EXIM Bank’s interest together with other financing alternatives available to it for the development of the Santa Cruz Copper Project. The construction of the Santa Cruz Copper Project following a development decision will require additional capital beyond the amount that EXIM Bank may make available. We may seek additional financing at any time through debt, equity, project specific debt, and/or other means, including asset sales. Our continued operations are dependent on our ability to obtain additional financing or to generate future cash flows. However, there can be no assurance that we will be successful in our efforts to raise additional capital on terms favorable to us, or at all. Consolidated Cash Balances as of September 30, 2025 The table below discloses the amounts of cash disaggregated by currency denomination as of September 30, 2025 in each jurisdiction that our affiliated entities are domiciled. Currency by Denomination (in USD Equivalents) US dollars Canadian Dollars Colombian Pesos Other Total (In thousands) Jurisdiction of Entity: USA $ 56,218 $ 700 $ — $ — $ 56,918 Colombia 8,126 — 409 — 8,535 Canada 1,524 909 — — 2,433 Other 1,388 119 — 86 1,593 Total $ 67,257 $ 1,727 $ 409 $ 86 $ 69,479 Refer to Note 19 of our consolidated financial statements in our 2024 Form 10-K which outlines other restrictions on transfers of net assets from our consolidated subsidiaries to the Company. Note Payable In May 2023, as part of the consideration for the acquisition of 5,975 acres of surface title and associated water rights at the Santa Cruz Copper Project we issued to the vendor a secured promissory note in the principal amount of $82.6 million. The promissory note included an annual interest rate of prime plus 1% and is to be paid in installments. In November 2023, we repaid $34.3 million, plus accrued interest of the promissory note and in November 2024, we repaid $12.1 million, plus accrued interest of the promissory note. Three principal payments of $12.1 million remain to be paid on the second, third and fourth anniversaries of the November 2023 payment, plus applicable accrued interest. Convertible Bond — VRB. In 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 will be automatically converted into equity of VRB upon an equity financing or sale event, at a price per share equal to the lower of (A) the transaction 25 price of the equity financing or sale event, and (B) 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 in July 2026. At September 30, 2025, the balance of principal and interest on the bond was $33.0 million and it is classified as a current liability on the balance sheet. Bridge Loan — Cordoba. In December 2024, Cordoba obtained a $10.0 million bridge loan from JCHX, of which $5.0 million was received in December 2024 and $5.0 million in January 2025. The loan bears simple interest at 10% per annum for the first six months of the agreement, and 12% per annum thereafter. The loan was repaid in June 2025. Cash Flows The following table presents our sources and uses of cash for the periods indicated: Nine months ended September 30, 2025 2024 Net cash (used in) provided by: Operating activities 1 $ (63,497) $ (131,391) Investing activities 1 7,799 (12,775) Financing activities 83,041 27,209 Effect of foreign exchange on cash 804 (1,015) Total change in cash $ 28,147 $ (117,972) 1. During the period, management identified an immaterial reclassification to the Condensed Interim Consolidated Statements of Cash Flows for the three-month and six-month periods ended March 31, 2025 and June 30, 2025. The misclassification related to proceeds of $9.7 million received from the disposal of a subsidiary which were incorrectly classified as a cash receipt from operating activities in those periods. The cash receipt has been appropriately reflected as an investing activity in the Condensed Interim Consolidated Statement of Cash Flows for the nine months ended September 30, 2025. See Note 1 of the Condensed Interim Consolidated Financial Statements for more details. Operating activities. Net cash used in operating activities for all periods presented largely was spent on our exploration expenses and our general and administrative costs. 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. The net cash used in operating activities during the nine months ended September 30, 2025 of $63.5 million primarily was the result of $43.2 million of cash exploration expenditures and $22.7 million of cash general and administrative costs offset by a $2.1 million change in operating assets and liabilities. Investing activities. Our investing activities generally relate to acquisitions of mineral property interests, purchases of public company shares in companies that we may partner with and capital expenditures at our projects. To date, due to our mining projects being in the exploration stage we have not incurred material capital expenditures. Net cash received from investing activities for the nine months ended September 30, 2025 of $7.8 million was mainly attributable to $9.7 million of proceeds received from the sale of a subsidiary, which is a result of VRB receiving in February 2025 the first tranche of the $20.0 million receivable that it recorded upon selling 51% of VRB China in October 2024. This receipt was offset by $1.2 million related to the purchases of property, plant and equipment and $0.7 million of payments for mineral interests. Financing activities. The net cash provided by financing activities during the nine months ended September 30, 2025 of $83.0 million was primarily a result of the public offering we completed in February 2025 where we issued 11,794,872 units (the “Units”) at a price of $5.85 per Unit for net proceeds of approximately $65.8 million. Each Unit consisted of (i) one share of our common stock and (ii) one accompanying warrant. 26 Also during the nine months ended September 30, 2025, our subsidiary, Cordoba received a $5.0 million bridge loan from JCHX which was in addition to $5.0 million which was previously received in December 2024. On June 25, 2025, JCHX paid Cordoba $20.0 million which was the third installment under the strategic arrangement signed in 2023 whereby JCHX acquired its 50% ownership of the Alacrán Copper Project. On June 26, 2025, Cordoba repaid the $10.0 million bridge loan using the proceeds from the third installment. We also received $2.2 million from the exercise of stock options and warrants during the nine months ended September 30, 2025. Contractual Obligations As of September 30, 2025, there have been no material changes, outside the ordinary course of business, in our contractual obligations since December 31, 2024. Refer to Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2024 Form 10-K for information regarding our contractual obligations. Off Balance Sheet Arrangements As of September 30, 2025, 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 13 of our consolidated financial statements for the three and nine months ended September 30, 2025. Critical Accounting Estimates Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements that have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent assets and liabilities as of the date of our financial statements. Below are the accounting matters that we believe are critical to our financial statements due to the degree of uncertainty regarding the estimates or assumptions involved and the magnitude of the asset, liability, revenue, expense, gain or loss being reported. Actual results may vary from our estimates in amounts that may be material to the financial statements. An accounting estimate is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used or changes in the accounting estimates that are reasonably likely to occur periodically, could materially impact our financial statements. We base our assumptions and estimates on historical experience and various other sources that we believe to be reasonable under the circumstances. Actual results may differ from the estimates we calculate due to changes in circumstances, global economics and politics and general business conditions. A summary of our significant accounting policies are detailed in Note 2 to our consolidated financial statements included in our 2024 Form 10-K. We have outlined below those policies identified as being critical to the understanding of our business and results of operations and that require the application of significant management judgment in developing estimates. Recoverable value of exploration mineral interests We review and evaluate exploration mineral interests for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The recoverability of our exploration mineral interests and intangible assets did not involve significant estimation in the periods presented as circumstances did not indicate the carrying amount of our assets may not be recoverable. However, the recoverability of our recorded mineral interests is subject to market factors that could significantly affect the recoverability of our assets, such as commodity prices, results of exploration activities that may affect our intentions to continue under option or earn-in agreements and geopolitical circumstances, particularly in Colombia. By nature, significant changes in these factors are reasonably possible to occur periodically, which could materially impact our financial statements. 27 Stock-based compensation Compensation expense for PSU's granted to certain of our officers and employees is determined based on estimated fair values of the PSU's at the time of grant using a Monte Carlo valuation model, which requires the input of the following subjective assumptions: Grant date: March 6, 2025 Expected volatility 63.4 % Expected life of PSU's (in years) 2.75 USA risk-free interest rate 4.0 % Canada risk-free interest rate 2.6 % Expected dividend rate 0 % Weighted average grant-date fair value (per unit) $ 7.07 The expected volatility is based on the historical volatility of our stock on the NYSE American over a term commensurate with the expected life of the PSU's. The USA risk-free interest rate was based on the yield observed on the US Dollar treasury curve as at the grant date, while the Canadian risk-free interest rate was based on the yield observed on the Canadian dollar government bond curve as at the grant date. Income taxes We make estimates and judgments in determining the provision for income tax expense, deferred tax assets and liabilities and liabilities for unrecognized tax benefits, including interest and penalties. We are subject to income tax laws in many jurisdictions, including the United States, Colombia, Canada, Australia, the Ivory Coast and Peru. We report income tax in accordance with U.S. GAAP, which requires the establishment of deferred tax accounts for all temporary differences between the financial reporting and tax bases of assets and liabilities, using currently enacted tax rates. In addition, deferred tax accounts must be adjusted to reflect new rates if enacted into law. Realization of deferred tax assets is contingent on the generation of future taxable income. As a result, we consider whether it is more likely than not that all or a portion of such assets will be realized during periods when they are available, and if not, we provide a valuation allowance for amounts not likely to be recognized. In determining our valuation allowance, we have not assumed future taxable income from sources other than the reversal of existing temporary differences. The extent to which a valuation allowance is warranted may vary as a result of changes in our estimates of future taxable income. In addition to the potential generation of future taxable income through the establishment of economic feasibility, development and operation of mines on our exploration assets, estimates of future taxable income could change in the event of disposal of assets, the identification of tax-planning strategies or changes in tax laws that would allow the benefits of future deductible temporary differences in certain entities or jurisdictions to be offset against future taxable temporary differences in other entities or jurisdictions. We recognize the effect of uncertain income tax positions if those positions are more likely than not of being sustained. The amount recognized is subject to estimates and our judgment with respect to the likely outcome of each uncertain tax position. 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 September 30, 2025.