UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended ~~June 30, 2022~~

March 31, 2023


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

For the transition period from to

Commission File Number: 001-41436

Ivanhoe Electric Inc.

(Exact Name of Registrant as Specified in its Charter)

~~Delaware~~	~~32-0633823~~


Delaware			32-0633823
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
606 – 999 Canada Place Vancouver,, BCCanada			V6C 3E1
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (~~604~~) (604) 689-8765

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.0001 per share

NYSE American ~~Toronto Stock Exchange~~

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

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

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


Large accelerated filer	☐o	Accelerated filer	☐o

Non-accelerated filer	☒x	Smaller reporting company	☒x

Emerging growth company	☒x

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

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

As of ~~August 12, 2022,~~May 15, 2023, the registrant had ~~92,887,918~~92,979,197 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

Table of Contents

IVANHOE ELECTRIC INC. Form 10-Q

For the Quarter Ended ~~June 30, 2022~~

March 31, 2023

	~~Page~~
			Page
PART I. FINANCIAL INFORMATION			3
Item 1.		Condensed Interim Consolidated Financial Statements	3
		Condensed Interim Consolidated Balance Sheets	3
		Condensed Interim Consolidated ~~and Combined Carve-out~~ Statements of Loss and Comprehensive Loss	4
		Condensed Interim Consolidated ~~and Combined Carve-out~~ Statements of Changes in Equity	5
		Condensed Interim Consolidated ~~and Combined Carve-out~~ Statements of Cash Flows	6
		Notes to Condensed Interim Consolidated ~~and Combined Carve-out~~ Financial Statements	7
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	16 15
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	25 23
Item 4.		Controls and Procedures	25 23
PART II. OTHER INFORMATION			27 25
Item 1.		Legal Proceedings	27 25
Item 1A.		Risk Factors	27 25
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities	25
Item 6.		Exhibits	27
Signatures			28

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

IVANHOE ELECTRIC INC.

Condensed Interim Consolidated Balance Sheets (Unaudited)

(InExpressed in thousands of U.S. dollars)

June 30,

December 31,

2022

2021
Assets

Current assets:




Cash and cash equivalents

$
223,833

$
49,850
Accounts receivable

1,139

1,385
Inventory

6,344

5,878
Prepaid expenses, deposits and other

8,079

1,152

239,395

58,265
Non-current assets:


Investments subject to significant influence

6,837

7,701
Other investments

1,605

1,802
Exploration mineral interests

82,269

73,039
Property, plant and equipment

3,443

2,523
Intangible assets

2,788

4,340
Other non-current assets

4,657

5,861
Total assets

$
340,994

$
153,531

Liabilities and Equity




Current liabilities:




Accounts payable and accrued liabilities

$
20,503

$
10,195
Deferred consideration payable

—

26,562
Lease liabilities, current

405

342
Contract liability

3,275

3,484

24,183

40,583
Non-current liabilities:


Deferred income taxes

4,952

5,382
Convertible debt

24,879

78,832
Lease liabilities, net of current portion

751

55
Other non-current liabilities

371

865
Total liabilities

55,136

125,717

Commitments and contingencies (Note 15)





Equity:




Preferred stock, par value $0.0001; 50,000,000 shares authorized; NaN issued and outstanding

—

—
Common stock, par value $0.0001; 700,000,000 shares authorized; 92.9 million shares issued and outstanding as of June 30, 2022 (December 31, 2021 - 63.9 million)

9

6
Additional paid-in capital

406,851

75,743
Accumulated deficit

(122,132)

(52,314)
Accumulated other comprehensive income

(1,567)

(1,502)
Equity attributable to common stockholders

283,161

21,933
Non-controlling interests

2,697

5,881
Total equity

285,858

27,814
Total liabilities and equity

$
340,994

$
153,531

March 31,
2023 December 31,
2022
Assets
Current assets:
Cash and cash equivalents $ 106,995 $ 139,660
Accounts receivable 2,207 1,497
Inventory 5,869 5,648
Prepaid expenses and deposits 3,085 4,226
118,156 151,031
Non-current assets:
Investments subject to significant influence 6,118 5,998
Other investments 1,656 2,220
Exploration mineral interests 88,520 86,758
Property, plant and equipment 4,214 3,934
Intangible assets 546 1,249
Other non-current assets 8,157 9,296
Total assets $ 227,367 $ 260,486
Liabilities and Equity
Current liabilities:
Accounts payable and accrued liabilities $ 12,934 $ 13,943
Lease liabilities, current 831 706
Contract liability 3,572 2,783
17,337 17,432
Non-current liabilities:
Deferred income taxes 3,878 3,888
Convertible debt 26,427 25,918
Due to related party 10,305 10,010
Lease liabilities, net of current portion 294 403
Other non-current liabilities 44 388
Total liabilities 58,285 58,039
Commitments and contingencies (Note 14)
Equity:
Common stock, par value $0.0001; 700.0 million shares authorized; 93.0 million shares issued and outstanding as of March 31, 2023 (December 31, 2022 - 700.0 million shares authorized; 93.0 million issued and outstanding) 9 9
Additional paid-in capital 414,897 409,683
Accumulated deficit (238,202) (202,128)
Accumulated other comprehensive income (1,235) (1,189)
Equity attributable to common stockholders 175,469 206,375
Non-controlling interests (6,387) (3,928)
Total equity 169,082 202,447
Total liabilities and equity $ 227,367 $ 260,486

Table of Contents

IVANHOE ELECTRIC INC.

Condensed Interim Consolidated ~~and Combined Carve-out~~ Statements of Loss and Comprehensive Loss (Unaudited)

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

Three Months Ended June 30,

Six Months Ended June 30,


2022

2021

2022

2021
Revenue

$
229

$
1,495

$
6,991

$
3,054
Cost of sales

(115)

(324)

(167)

(641)
Gross profit

114

1,171

6,824

2,413

Operating expenses:

Exploration expenses

23,863

8,348

41,186

14,609
General and administrative expenses

4,659

3,425

9,885

6,220
Research and development expenses

1,257

756

2,588

1,712
Selling and marketing expenses

21

22

57

45

Loss from operations

29,686

11,380

46,892

20,173

Other expenses (income):

Interest expense, net

523

26

1,035

115
Foreign exchange loss (gain)

242

22

431

(354)
Loss on revaluation of investments

6,102

1,475

1,443

258
Loss on revaluation of convertible debt

16,083

—

18,965

—
Share of loss of equity method investees

1,550

—

1,550

—
Other expenses, net

1,359

67

1,582

(422)

Loss before income taxes

55,545

12,970

71,898

19,770

Income taxes

(70)

52

1,251

(184)

Net loss

55,475

13,022

73,149

19,586
Less loss attributable to non-controlling interests

(1,109)

(2,286)

(3,331)

(4,197)
Net loss attributable to common stockholders or parent

54,366

10,736

69,818

15,389

Net loss

55,475

13,022

73,149

19,586
Other comprehensive income, net of tax:

Foreign currency translation adjustments

147

206

41

198
Other comprehensive income

147

206

41

198
Comprehensive loss

$
55,622

$
13,228

$
73,190

$
19,784

Comprehensive loss attributable to:

Common stockholders or parent

54,533

10,912

69,883

15,551
Non-controlling interests

1,089

$
2,316

3,307

$
4,233

$
55,622

$
13,228

$
73,190

$
19,784

Net loss per share attributable to common stockholders

Basic and diluted

$
0.85

$
0.18

$
1.09

$
0.26
Weighted-average common shares outstanding

Basic and diluted

64,243,603

59,909,344

64,085,348

59,909,344

Three Months Ended
March 31,
2023 2022
Revenue $ 679 $ 6,762
Cost of sales (184) (52)
Gross profit 495 6,710
Operating expenses:
Exploration expenses 26,559 17,323
General and administrative expenses 10,633 5,226
Research and development expenses 1,843 1,331
Selling and marketing expenses 49 36
Loss from operations 38,589 17,206
Other expenses (income):
Interest (income) expense, net (32) 762
Foreign exchange (gain) loss (161) 189
Loss (gain) on revaluation of investments 375 (4,659)
Loss on revaluation of convertible debt — 2,632
Share of loss of equity method investees 622 —
Other (income) expenses, net (741) 223
Loss before income taxes 38,652 16,353
Income taxes (72) 1,321
Net loss 38,580 17,674
Less loss attributable to non-controlling interests (2,506) (2,222)
Net loss attributable to common stockholders or parent 36,074 15,452
Net loss 38,580 17,674
Other comprehensive loss (income), net of tax:
Foreign currency translation adjustments 68 (106)
Other comprehensive loss (income) 68 (106)
Comprehensive loss $ 38,648 $ 17,568
Comprehensive loss attributable to:
Common stockholders or parent 36,120 15,350
Non-controlling interests 2,528 $ 2,218
$ 38,648 $ 17,568
Net loss per share attributable to common stockholders
Basic and diluted $ 0.39 $ 0.24
Weighted-average common shares outstanding
Basic and diluted 92,964,249 63,925,334

Table of Contents

IVANHOE ELECTRIC INC.

Condensed Interim Consolidated ~~and Combined Carve-out~~ Statements of Changes in Equity (Unaudited)

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

~~Six~~

Three months ended ~~June 30,~~March 31, 2023 and 2022 ~~and 2021~~

Accumulated




Additional

other

Common Stock

paid-in

Net parent

Accumulated

comprehensive

Non-controlling

Shares

Amount

capital

investment

deficit

income(loss)

interest

Total
Balance at January 1, 2021

—

$
—

$
—

$
43,520

$
—

$
(1,538)

$
6,710

$
48,692

Net loss

—

—

—

(4,653)

—

—

(1,911)

(6,564)
Other comprehensive income (loss)

—

—

—

—

—

13

(5)

8
Net transfer from parent

—

—

—

5,606

—

—

—

5,606
Other changes in non-controlling interests

—

—

—

—

—

—

398

398
Balance at March 31, 2021

—

—

—

44,473

—

(1,525)

5,192

48,140

Net loss

—

—

—

(2,353)

(8,383)

—

(2,286)

(13,022)
Other comprehensive loss

—

—

—

—

—

(175)

(31)

(206)
Net transfer from parent

—

—

—

23,534

—

—

—

23,534
Restructuring upon spin off (Note 1)

—

6

65,648

(65,654)

—

—

—

—
Share based compensation

—

—

236

—

—

—

80

316
Other changes in non-controlling interests

—

—

(28)

—

—

—

1,567

1,539
Balance at June 30, 2021

—

$
6

$
65,856

$
—

$
(8,383)

$
(1,700)

$
4,522

$
60,301

Balance at January 1, 2022

63,925,334

$
6

$
75,743

$
—

$
(52,314)

$
(1,502)

$
5,881

$
27,814

Net loss

—

—

—

—

(15,452)

—

(2,222)

(17,674)
Other comprehensive income

—

—

—

—

—

102

4

106
Share-based compensation

—

—

882

—

—

—

73

955
Balance at March 31, 2022

63,925,334

6

76,625

—

(67,766)

(1,400)

3,736

11,201

Net loss

—

—

—

—

(54,366)

—

(1,109)

(55,475)
Other comprehensive income (loss)

—

—

—

—

—

(167)

20

(147)
Issuance of common stock, net of issuance costs

14,388,000

2

158,200

—

—

—

—

158,202
Issuance of common stock upon conversion of debt

13,628,958

1

160,139

—

—

—

—

160,140
Issuance of common stock upon settlement of liability

945,626

—

11,111

—

—

—

—

11,111
Share-based compensation

—

—

784

—

—

—

54

838
Other changes in non-controlling interests

—

—

(8)

—

—

—

(4)

(12)
Balance at June 30, 2022

92,887,918

$
9

$
406,851

$
—

$
(122,132)

$
(1,567)

$
2,697

$
285,858

Additional
paid-in
capital Accumulated
deficit Accumulated
other
comprehensive
Income (loss) Non-controlling
interest Total
Common Stock
Shares Amount
Balance at January 1, 2022 63,925,334 $ 6 $ 75,743 $ (52,314) $ (1,502) $ 5,881 $ 27,814
Net loss — — — (15,452) — (2,222) (17,674)
Other comprehensive income — — — — 102 4 106
Share-based compensation — — 882 — — 73 955
Balance at March 31, 2022 63,925,334 $ 6 $ 76,625 $ (67,766) $ (1,400) $ 3,736 $ 11,201
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 loss — — — — (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

Table of Contents

IVANHOE ELECTRIC INC.

Condensed Interim Consolidated ~~and Combined Carve-out~~ Statements of Cash Flows (Unaudited)

(InExpressed in thousands of U.S. dollars)

Six months ended June 30,


2022

2021
Operating activities





Net loss

$
(73,149)

$
(19,586)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:

Depreciation of property, plant and equipment

410

218
Amortization of intangible assets

1,506

1,435
Amortization of operating lease right-of-use-assets

372

328
Share-based compensation

1,793

1,103
Unrealized foreign exchange (gain) loss

392

(225)
Interest expense

1,022

130
Income taxes

1,251

(184)
Loss on revaluation of convertible debt

18,965

—
Loss on revaluation of investments

1,443

258
Share of loss of equity method investees

1,550

—
Other

1,566

(1,215)

Changes in other operating assets and liabilities:




Trade accounts receivable

247

(373)
Inventory

(466)

(659)
Operating lease liabilities

(430)

(375)
Accounts payable and accrued liabilities

(102)

2,092
Other operating assets and liabilities

(567)

170
Net cash used in operating activities

(44,197)

(16,883)

Investing activities

Purchase of mineral interests

(25,727)

(3,050)
Purchase of property, plant and equipment and intangible assets

(615)

(1,707)
Purchase of investments subject to significant influence

(1,962)

—
Other

(110)

(515)
Net cash used in investing activities

(28,414)

(5,272)

Financing activities

Net proceeds from issuance of common stock

160,576

—
Proceeds from convertible notes

86,200

—
Net transfer from parent

—

23,152
Proceeds from subsidiary financings

—

1,382
Other

(12)

—
Net cash provided by financing activities

246,764

24,534

Effect of foreign exchange rate changes on cash and cash equivalents

(170)

124
Increase in cash and cash equivalents

174,153

2,379
Cash and cash equivalents, beginning of the year

49,850

9,341
Cash and cash equivalents, end of the period

$
223,833

$
11,844

Supplemental cash flow information

Cash paid for income taxes

$
438

$
348

Supplemental disclosure of non-cash investing and financing activities

Issuance of common stock upon conversion of debt

$
160,140

$
—
Issuance of common stock upon settlement of liability

11,111

—
Settlement of loan from parent

—

5,886
Issuance of common stock in exchange for assets (Note 1)

—

65,654

Three months ended March 31, 2023 and 2022


	2023		2022
Operating activities
Net loss	$	(38,580)	$	(17,674)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation and amortization	1,040		1,053
Share-based compensation	5,132		955
Non-cash exploration expense	662		—
Non-cash research and development expense	645		—
Unrealized foreign exchange (gain) loss	(155)		225
Interest expense	804		758
Income taxes	(72)		1,321
Loss on revaluation of convertible debt	—		2,632
Loss (Gain) on revaluation of investments	375		(4,659)
Share of loss of equity method investees	622		—
Other	(141)		344

Changes in other operating assets and liabilities:
Trade accounts receivable	(710)		253
Inventory	(144)		(449)
Operating lease liabilities	(283)		(267)
Accounts payable and accrued liabilities	(1,108)		1,134
Other operating assets and liabilities	1,894		(245)
Net cash used in operating activities	(30,019)		(14,619)

Investing activities
Purchase of mineral interests	(1,763)		(4,714)
Purchase of property, plant and equipment and intangible assets	(348)		(93)
Purchase of investments subject to significant influence	(555)		(793)
Net cash used in investing activities	(2,666)		(5,600)

Financing activities
Proceeds from exercise of stock options	3		—
Net cash provided by financing activities	3		—

Effect of foreign exchange rate changes on cash and cash equivalents	17		138
Decrease in cash and cash equivalents	(32,665)		(20,081)
Cash and cash equivalents, beginning of the year	139,660		49,850
Cash and cash equivalents, end of the period	$	106,995	$	29,769

Supplemental cash flow information
Cash paid for income taxes	1,069		$	208

Supplemental disclosure of non-cash investing and financing activities
Issuance of common stock; earn-in payment	$	150	$	—

Table of Contents

IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated ~~and Combined Carve-Out~~ 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”) was incorporated in the State of Delaware, USA, on July 14, 2020, as a wholly-owned subsidiary of High Power Exploration Inc. (“the Parent” or “HPX”). On April 30, 2021, HPX completed a restructuring whereby HPX contributed (i) all of the issued and outstanding shares of HPX’s subsidiaries, other than those holding direct or indirect interests in its Nimba Iron Ore Project (“Nimba Project”); (ii) certain property, plant and equipment; and (iii) certain financial assets (collectively the “Contributed Assets”) in exchange for common stock of Ivanhoe Electric. HPX then distributed 59,909,344 shares of common stock of Ivanhoe Electric to HPX stockholders by way of an in-kind dividend, with each HPX stockholder receiving 1 share of common stock of Ivanhoe Electric for each HPX share held by the stockholder.

On June 30, 2022, Ivanhoe Electric completed an initial public offering (“IPO”) of 14,388,000 shares of the Company’s common stock at a price of $11.75 per share, resulting in gross proceeds from the offering of $169.1 million. The Company’s shares were listed on the NYSE American and the Toronto Stock Exchange under the ticker symbol “IE”.

2020. Ivanhoe Electric is a mineral project exploration and development company with a focus on identifying and developing mineral projects, and ultimately mines, associated with the metals necessary for electrification, in particular, copper, ~~gold, silver,~~ nickel, cobalt, vanadium, gold, silver, and the platinum group metals.

~~While the~~

The Company’s current mineral projects are located predominantly in the United States. In addition to mineral projects in the United States, itthe Company also holds ~~significant~~direct and indirect ownership interests, and in some cases controlling financial interests, in other non-U.S. mineral projects, and in proprietary mineral exploration ~~technology~~ and in minerals-based ~~high technology.~~

technologies.

The Company conducts the following business activities through certain subsidiaries:

●

Kaizen Discovery Inc. (“Kaizen”) holds the Pinaya copper-gold exploration project in Peru. Ivanhoe Electric had an ownership interest in Kaizen of 82.7% as at June 30, 2022 (December 31, 2021 — 82.7%).

•

●

Cordoba Minerals Corp. (“Cordoba”) holds the San Matias copper-gold-silver project in northern Colombia. Ivanhoe Electric had an ownership interest in Cordoba of 63.3% as at June 30, 2022 (December 31, 2021 — 63.3%).

●

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 June 30, 2022 (December 31, 2021 — 90.0%).~~

●

Computational Geosciences Inc. (“CGI”), provides data analytics, geophysical modelling, 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 June 30, 2022 (December 31, 2021 — 94.3%).

~~As HPX continued to hold its~~ interest in VRB of 90.0% as at March 31, 2023 (December 31, 2022 — 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 ~~immediately following~~had an ownership interest in CGI of 94.3% as at March 31, 2023 (December 31, 2022 — 94.3%).

•Cordoba Minerals Corp. (“Cordoba”) holds the ~~transfer of the Contributed Assets, there was no resultant change of control~~San Matias copper-gold-silver project in ~~either~~northern Colombia. Ivanhoe Electric orhad an ownership interest in Cordoba of 63.3% as at March 31, 2023 (December 31, 2022 — 63.3%).

•Kaizen Discovery Inc. (“Kaizen”) holds the ~~Contributed Assets. As such, the acquisition by~~Pinaya copper-gold exploration project in Peru. Ivanhoe Electric had an ownership interest in Kaizen of 82.5% as at March 31, 2023 (December 31, 2022 — 82.7%).

The accompanying unaudited consolidated financial statements have been prepared in accordance with the ~~Contributed Assets has been accounted for at historical cost as a transaction between entities under common control.~~

~~Basis of preparation — Prior~~instructions to Form 10-Q and do not include all information and disclosures required by generally accepted accounting principles in the ~~restructuring:~~

~~These condensed interim~~United States. Therefore, this information should be read in conjunction with the Company's consolidated and combined carve-out financial statements ~~have been prepared under U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). These condensed interim consolidated~~ and ~~combined carve-out financial statements include results~~notes contained on its Form 10-K for the year ended December 31, 2022. The information furnished herein reflects all normal recurring entries, that are in the opinion of management, necessary for a fair statement of the ~~Company~~results for the interim periods ~~prior to~~reported. Operating results for the restructuring on April 30, 2021. Up to the date of restructuring, these financial statements have been prepared on a combined basis and the Parent’s net investment in the Company’s operations is shown in lieu of stockholders’ equity. All intercompany balances and transactions have been eliminated in the condensed interim consolidated and combined carve-out financial statements.

~~Table of Contents~~

~~IVANHOE ELECTRIC INC.~~

~~Notes to the Condensed Consolidated and Combined Carve-Out Financial Statements~~

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

Prior to the restructuring, the financing of operations was historically managed by the Parent. Net parent investment represents the Parent’s historical investment in the Company and includes accumulated net earnings or losses attributable to the Parent, intercompany balances that were capitalized at the timethree month period ended March 31, 2023, are not necessarily indicative of the restructuring and direct capital contributions and expense allocations from the Parent to the Company. Assets contributed to Ivanhoe Electric at the time of restructuring have been recorded by the Company during the periods the assets were under the control of the Parent, except for certain loan receivables and advancesresults that ~~have not been allocated to the Company prior to the restructuring completion date (Note 12). A description of the costs allocated to the Company is included in Note 12.~~

Management believes the assumptions underlying the condensed interim consolidated and combined carve-out financial statements, including the assumptions regarding allocation of expenses, are systematic, rational and reasonable. Nevertheless, the condensed interim consolidated and combined carve-out financial statements may not include all of the actual expenses that would have been incurred by the Company on a stand-alone basis, and may not accurately reflect the Company’s historical financial position, results of operations and cash flows that would have been reported if the Company had been a stand-alone entity during the periods prior to the restructuring. The amounts that would have been or will be incurred on a stand-alone basis could differ from the amounts allocated due to economies of scale, management judgment, cash management and financing obtained as a stand-alone company, or other factors.

~~Basis of preparation — Subsequent to the restructuring:~~

~~The Company’s financial statements~~expected for the ~~periods subsequent to April 30, 2021 are consolidated financial statements based on the reported results of Ivanhoe Electric as a stand-alone company.~~

year ending December 31, 2023.

Reverse stock split:

In June 2022, the Company’s stockholders approved an amendment to the Company’s certificate of incorporation to effect a reverse stock split of the Company’s outstanding common stock at a ratio of 3-for-1 (the “Reverse Stock Split”) effective as of June 16, 2022. The number of authorized shares and the par value of the common stock were not adjusted as a result of the Reverse Stock Split. For periods before June 16, 2022, all references to common stock, options to purchase common stock, per share data, and related information contained in the condensed interim consolidated ~~and combined carve-out~~ financial statements have been retrospectively adjusted to reflect the effect of the Reverse Stock Split.

The condensed interim consolidated ~~and combined carve-out~~ 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 ~~accompanying condensed interim~~Company discloses in its consolidated and combined carve-out financial statements are unaudited, but include all adjustments, consisting of normal recurring entries, which management believes to be necessary for a fair presentation for the dates and periods presented. Interim results are not necessarily indicative of results for a full year. The condensed interim consolidated and combined carve-out financial statements have been prepared in accordance with U.S. GAAP for interim financial information. Accordingly, they do not include all financial information and disclosures required by U.S. GAAP for complete financial statements and should be read in conjunction with the Company’s audited consolidated and combined carve-out financial statements for the year ended December 31, ~~2021.~~

~~The Company discloses in its consolidated and combined carve-out financial statements for the year ended December 31, 2021,~~2022, those accounting policies that it considers significant in determining its results of operations and financial position. There

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 and combined carve-out financial statements for the year ended December 31, ~~2021.~~

~~The Company adopted ASU 2019-12 effective January 1,~~ 2022. ~~The new guidance which simplifies the~~

Recent accounting ~~for income taxes, eliminates certain exceptions with ASC 740 and clarifies certain aspects of the current guidance to promote consistency~~

pronouncements not yet adopted:

~~Table of Contents~~

~~IVANHOE ELECTRIC INC.~~

~~Notes to the Condensed Consolidated and Combined Carve-Out Financial Statements~~

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

~~among reporting entities. The adoption of ASU 2019-12 did not have a material impact on the Company’s condensed interim consolidated and combined carve-out financial statements.~~

In August 2020, the FASB issued ASU 2020-06 Debt — Debt with Conversion and Other Options (Topic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Topic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The update is to address issues identified as a result of the complexity associated with applying generally accepted accounting principles for certain financial instruments with both liability and equity characteristics. ~~Non-public entities and emerging growth companies applying extended transition periods for new or revised accounting standards are~~The Company is required to adopt ~~the update effective~~ASU 2020-06 for fiscal years beginning after December 15, 2023 ~~including interim periods within those fiscal years with early adoption permitted. The Company~~and is currently evaluating the expected impact on the consolidated financial statements.

In June 2022, the FASB issued ASU 2022-03 Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. The update is to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security. The update clarifies that a contractual restriction on the sale of an equity security is not considered part of the unit of account of the equity security and, therefore, is not considered in measuring fair value. The Company intends to adopt ASU 2022-03 on January 1, 2024 and is currently evaluating the expected impact on the consolidated financial statements.

3.Use of estimates:

The preparation of consolidated financial statements ~~in conformity with U.S. GAAP~~ 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 and combined carve-out financial statements for the year ended December 31, ~~2021.~~

2022.

4.Cash and cash equivalents:

Of the total cash and cash equivalents at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021, $21.5~~2022, $10.2 million and ~~$28.5~~$20.7 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, 2023, the Company does not have any cash equivalents in the form of redeemable short-term investments (December 31, 2022 - $2.3 million).

5.Investments subject to significant influence:

The Company’s principal investment subject to significant influence is Sama Resources Inc. (“Sama”). Others include ~~the Company’s~~its investments in Fjordland Exploration Inc. (“Fjordland”) and Sama Nickel Corporation (“SNC”).

Carried at fair value

Equity method


Sama

Fjordland

SNC

Total
Balance at January 1, 2022

5,719

1,325

657

7,701
Change in fair value

(481)

(769)

—

(1,250)
Investment during the period

—

—

1,962

1,962
Share of loss

—

—

(1,551)

(1,551)
Foreign currency translation

—

(13)

(12)

(25)
Balance at June 30, 2022

$
5,238

$
543

$
1,056

$
6,837

6.~~Exploration mineral interests:~~

Santa Cruz

Tintic Project

San Matias

Pinaya Project

Mineral Royalty

Other

Total
Balance at December 31, 2021

$
35,075

$
19,588

$
13,607

$
2,511

$
1,708

$
550

$
73,039
Acquisition costs

4,952

4,025

—

—

—

250

9,227
Foreign currency translation

—

—

—

3

—

—

3
Balance at June 30, 2022

$
40,027

$
23,613

$
13,607

$
2,514

$
1,708

$
800

$
82,269


	Carried at fair value				Equity method
	Sama		Fjordland		SNC		Total
Balance at December 31, 2022	4,799		309		890		5,998
Change in fair value	189		—		—		189
Investment	—		—		555		555
Share of loss	—		—		(622)		(622)
Foreign currency translation	—		—		(2)		(2)
Balance at March 31, 2023	$	4,988	$	309	$	821	$	6,118

Table of Contents

IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated ~~and Combined Carve-Out~~ Financial Statements

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

6. Exploration mineral interests:

Santa
Cruz Tintic Pinaya San
Matias Other Total
Balance at December 31, 2022 $ 40,880 $ 27,138 $ 2,525 $ 15,315 $ 900 $ 86,758
Acquisition costs — 1,763 — — — 1,763
Foreign currency translation — — (1) — — (1)
Balance at March 31, 2023 $ 40,880 $ 28,901 $ 2,524 $ 15,315 $ 900 $ 88,520

7.~~Deferred consideration payable:~~

Upon completion of the Company’s IPO on June 30, 2022, the deferred consideration payable was settled with Central Arizona Resources Ltd. (“CAR”). The Company paid CAR $15.0 million in cash and issued 945,626 shares of common stock to CAR in accordance with the original terms of the agreement.

8.Convertible debt:

Series 1

Series 2

VRB


Convertible

Convertible

Convertible

Notes (Note a)

Notes (Note a)

bond (Note b)

Total

Balance at December 31, 2021

$
54,975

$
—

$
23,857

$
78,832
Issuance of Series 2 Convertible Notes

—

86,200

—

86,200
Interest expense

—

—

1,022

1,022
Fair value adjustments

8,709

10,256

—

18,965
Conversion to common stock

(63,684)

(96,456)

—

(160,140)
Balance at June 30, 2022

$
—

$
—

$
24,879

$
24,879

	~~(a)~~
		~~Ivanhoe Electric convertible notes~~VRB Convertible Bond







Balance at December 31, 2022		$	25,918
Interest expense		509
Balance at March 31, 2023		$	26,427

~~(i) Series 1 Convertible Notes:~~

Between August 3, 2021 and November 17, 2021, the Company completed a financing which included the issuance of $50.0 million aggregate principal amount of unsecured convertible promissory notes (“Series 1 Convertible Notes”). Upon completion of the Company’s IPO on June 30, 2022, the Series 1 Convertible Notes, including accrued interest of $0.9 million, were automatically converted into 5,419,923 shares of common stock of the Company at a conversion price of $9.39 per share (Note 9).

~~(ii) Series 2 Convertible Notes:~~

~~On April 5, 2022, the Company completed a financing in which it issued $86.2 million aggregate principal amount of unsecured convertible promissory notes (“Series 2 Convertible Notes”).~~

~~The Series 2 Convertible Notes were unsecured and bore interest at 3% per annum, in arrears and payable on the maturity date of July 31, 2023.~~

Upon completion of the Company’s IPO on June 30, 2022, the Series 2 Convertible Notes, including accrued interest of $0.6 million, were automatically converted into 8,209,035 shares of common stock of the Company at a conversion price of $10.58 per share being a 10% discount to the gross price per share at which common stock was sold in the IPO (Note 9).

The convertible notes along with their embedded features did not contain any equity components, and therefore were recognized as a liability on issuance. The Company elected to measure the convertible notes at fair value, with subsequent changes in fair value recorded in net loss.

~~(b)VRB Convertible bond:~~

On July 8, 2021, VRB issued a convertible bond for gross proceeds of $24.0 million. The bond has a ~~five year~~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:

•

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.~~

cost, as it was determined the embedded features are not required to be bifurcated.

Directly attributable transaction costs of $1.1 million were recorded against the carrying value of the debt and are amortized using the effective interest method at a rate of 9.1%.

8. Equity:

(a) Stock-based compensation:

(i) Stock options:

During the three months ended March 31, 2023, the Company granted stock options to certain new management 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. The stock options were granted at an exercise price equal to the closing stock price on the grant date.

The fair value of each stock option is estimated on the date of grant using the Black-Scholes option valuation model. Expected volatility was calculated based on the historical volatility of a group of peer companies’ common stock and a group of relevant stock market indices over the expected option life. Management exercised judgment in determining the expected life of the options and considered factors such as the contractual term of the options, the vesting schedule and expected volatility. The risk-free interest rate is based on Federal Reserve rates in effect for bonds with maturity dates equal to the expected term of the option.

Information related to stock options granted during the three months ended March 31, 2023 is presented below.

Table of Contents

IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated ~~and Combined Carve-Out~~ Financial Statements

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

~~The book value~~
Grant date: February 1, 2023 Grant date: March 1, 2023
Exercise price $ 13.23 $ 15.46
Number of options granted 500,000 100,000
Weighted average assumptions used to value stock option awards:
Expected volatility 69.8 % 69.5 %
Expected life of options (in years) 4 4
Expected dividend rate 0 % 0 %
Risk-free interest rate 3.73 % 4.52 %
Weighted average grant-date fair value (per option) $ 7.22 $ 8.53

(ii) Stock settled restricted stock units ("RSUs"):

On January 1, 2023, Ivanhoe Electric granted 750,000 stock-settled RSUs to a new executive of the ~~VRB convertible debt approximates fair value as VRB’s operations are early stage and there have been no significant changes to~~Company. The RSUs comprise five equal tranches vesting in one-fifth annual increments beginning one year from the ~~business since the issuance~~grant date. The fair value ~~determination is a level 3 assessment.~~

9.~~Equity:~~

~~Common stock transactions~~

~~(a)IPO:~~

On June 30, 2022, the Company completed an IPO of 14,388,000 shares of common stock which were issued at a price of $11.75 per share for gross proceeds of $169.1 million. Directly attributable issuance costs of $10.9 million incurred in conjunction with the IPO were recorded as a reduction in paid in capital.

~~(b)Debt conversions:~~

~~On June 30, 2022, $50.9 million of Series 1 Convertible Notes including accrued interest were automatically converted into 5,419,923 shares of common stock~~ of the ~~Company at a conversion price of $9.39 per share.~~

~~On June 30, 2022, $86.8 million of Series 2 Convertible Notes including accrued interest were automatically converted into 8,209,035 shares of common stock~~stock-settled RSUs is amortized over the vesting period. The total fair value of the ~~Company at a conversion price of $10.58 per share.~~

~~The stock issuance resulting from the Series~~January 1, ~~and Series 2 debt conversions~~2023 RSU grant was ~~recorded at fair value based on the IPO price of $11.75 per share.~~

~~(c)Stock issuance to CAR:~~

~~On June 30, 2022, the Company issued 945,626 shares of common stock to CAR (Note 7). The stock issuance was recorded at fair value based on the IPO price of $11.75 per share.~~

~~10.~~$9.1 million.

9. Revenue:

The Company recognized revenue from the following sources:


	Three months ended March 31:
Revenue type	2023		2022
Software licensing	$	400	$	6,702
Data processing services	279		60
Renewable energy storage systems (Note a)	—		—
Total	$	679	$	6,762

(a)

Three months ended

Six months ended

June 30:

June 30:
Revenue type

2022

2021

2022

2021
Software licensing (Note a)

$
9

$
0

$
6,711

$
0
Data processing services

220

1,464

280

2,950
Renewable energy storage systems (Note b)

—

31

—

104
Total

$
229

$
1,495

$
6,991

$
3,054
At March 31, 2023, the Company had a contract liability of $3.6 million (December 31, 2022 — $2.8 million) relating to the sale of renewable energy storage systems.

~~(a)~~

On October 15, 2021, the Company entered into a software license agreement whereby the Company provided software that can be used by the licensee in perpetuity for a one-time fee of $6.5 million, which was received in January 2022 and at which time its performance obligation with respect to the license was met. As such, in accordance with the Company’s accounting policy for the sale of software licenses, the license fee revenue was recognized in 2022. Software licensing revenue includes associated services included in the software license agreement. This revenue is included in the data processing segment.

~~(b)~~

~~At June 30, 2022, the Company had a contract liability of $3.3 million (December 31, 2021 — $3.5 million) relating to the sale of renewable energy storage systems.~~

Table of Contents

IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated ~~and Combined Carve-Out~~ Financial Statements

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

~~11.~~10. Exploration expense:


	Three months ended March 31:
Project	2023		2022
Santa Cruz, USA	$	14,682	$	9,798
San Matias, Colombia	4,658		2,376
Tintic, USA	1,121		289
Hog Heaven, USA	638		560
White Hill, USA (Note a)	491		—
Lincoln, USA	295		13
Carolina, USA	238		—
Pinaya, Peru	157		686
Generative exploration and other	4,279		3,601
Total	$	26,559	$	17,323

Three months ended

Six months ended

June 30:

June 30:
Project

2022

2021

2022

2021
Santa Cruz, USA

$
14,763

$
237

$
24,561

$
434
San Matias, Colombia

3,397

3,653

5,773

6,824
Pinaya, Peru

1,465

502

2,151

718
Perseverance, USA

166

44

1,659

98
Hog Heaven, USA

308

681

868

1,321
Tintic, USA

407

678

696

1,042
Yangayu, Papua New Guinea

333

—

651

—
Carolina, USA

316

—

514

—
Bitter Creek, USA

149

55

508

68
Lincoln, USA

326

—

339

—
Ivory Coast Project, Ivory Coast

5

1,443

26

1,930
Project generation and other

2,228

1,055

3,440

2,174
Total

$
23,863

$
8,348

$
41,186

$
14,609

(a)

White Hill project:

~~12.~~

On February 22, 2023, the Company entered into an agreement with Exiro Minerals USA Corp. (“Exiro”) which gives the Company the right to earn an 80% interest in the White Hill Project located in the Gillis Range, Mineral County, Nevada, by incurring $10.0 million of expenditures and making payments to Exiro totaling $5.0 million ($3.6 million in cash and $1.4 million in our common stock) within six years of signing the agreement.

11. 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.

~~The Parent~~

~~The nature of the Company’s related party relationship with the Parent is disclosed in Note 1.~~

~~Cost allocations~~

Prior to completing the restructuring described in Note 1, the Parent incurred corporate and technical costs attributable to the Company and the Nimba Project. Accordingly, the condensed interim consolidated and combined carve-out financial statements include costs allocations from the Parent, including executive oversight, occupancy, office overhead, accounting, tax, treasury, legal, information technology, human resources and mineral exploration. These allocations were made on the basis of direct usage. All such amounts were deemed incurred and settled by the Company in the period in which the costs were recorded and are included in net parent investment.

Allocated costs for the four months ended April 30, 2021 totaled $1.3 million and are solely from the period prior to the restructuring. The allocated costs are primarily included in general and administrative expenses and exploration expenses in the consolidated and combined statements of loss.

~~Table of Contents~~

~~IVANHOE ELECTRIC INC.~~

~~Notes to the Condensed Consolidated and Combined Carve-Out Financial Statements~~

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

~~Other related parties~~

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

Transactions for the

Transactions for the

three months ended

six months ended


Balance outstanding as at

June 30,

June 30,

June 30,

December 31,








2022

2021

2022

2021

2022

2021
Total Expenses












Global Mining (Note a)

1,208

993

3,345

1,803

6,082

3,250
Ivanhoe Capital Aviation (Note b)

—

—

250

—

500

—
HPX (Note c)

—

—

—

487

—

487
Total

1,208

993

3,595

2,290

6,582

3,737
Advances












Global Mining (Note a)

1,833

1,855

—

—

—

—

Transactions for the

Transactions for the six

three months ended

months ended

June 30,

June 30,


2022

2021

2022

2021
Expense classification








General and administrative expenses

1,580

1,153

3,052

1,935
Exploration expenses

2,015

1,137

3,530

1,802

3,595

2,290

6,582

3,737

~~(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 Parent and the Company on a cost-recovery basis. The Company held 7.1% of Global Mining’s outstanding common shares at June 30, 2022 (December 31, 2021 — 7.1%).

~~Transactions incurred with Global Mining include cost allocations from the Parent totaling $645,000 from the period January 1, 2021 to April 30, 2021.~~

~~(b)~~

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

~~(c)~~

~~HPX was the parent of the Company prior to the restructuring on April 30, 2021 (Note 1). After the restructuring there was reimbursement to HPX for certain costs paid by HPX on the Company’s behalf.~~


	Balance outstanding as at		Transactions for the three months ended March 31,
	March 31, 2023	December 31, 2022	2023	2022
Total Expenses
Global Mining (Note a)	1,538	1,383	4,316	2,737
Ivanhoe Capital Aviation (Note b)	—	83	250	250
I-Pulse (Note c)	—	—	1,157	—
Total	1,538	1,466	5,723	2,987
Advances
Global Mining (Note a)	1,988	1,987	—	—
Deposit
I-Pulse (Note c)	5,971	7,128	—	—
Loan
JCHX Mining Management Co., Ltd (Note d)	10,305	10,010	—	—

Table of Contents

IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated ~~and Combined Carve-Out~~ Financial Statements

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

Transactions for the
three months ended
March 31,
2023 2022
Expense classification
Exploration expenses 3,042 1,515
General and administrative expenses 2,031 1,472
Research and development expenses 650 —
5,723 2,987

~~13.~~(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, 2023 (December 31, 2022 — 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 Inc. (“I-Pulse”) is a significant 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 annual maintenance costs of $1.7 million per year. The Company is recognizing the research and development costs and annual maintenance costs on a straight line basis in the condensed interim consolidated statement of loss. In October 2022, the Company made deposit payments totaling $7.1 million, representing 50% of each component of the agreement. The remaining payments will be made as each Typhoon™ transmitter system is delivered.

(d)JCHX Mining Management Co., Ltd (“JCHX") held 19.9% of Cordoba’s issued and outstanding common stock as at March 31, 2023 (December 31, 2022 - 19.9%).

In December 2022, JCHX advanced a bridge loan of US$10 million to Cordoba. The bridge loan is for an 18-month term and bears interest at 12% per annum during the first 12 months of the term and 14% per annum during the remaining six months.

Upon closing the project financing transaction described in Note 15, all of the principal and interest outstanding on the bridge loan was applied towards that transaction’s first installment as a payment in kind.

In the event the bridge loan was not repaid, JCHX had the option to receive payment in kind equal to 20% of the total issued shares of CMH Colombia S.A.S. (“CMH”), a Colombian subsidiary of Cordoba.

12. 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, 2023						December 31, 2022
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Financial assets:
Investments subject to significant influence	5,297		—		—		5,108		—		—
Other investments	1,656		—		—		2,220		—		—
Total financial assets	$	6,953	$	—	$	—	$	7,328	$	—	$	—
Financial liabilities:
Total financial liabilities	$	—	$	—	$	—	$	—	$	—	$	—

Table of Contents

June 30, 2022

December 31, 2021

Level 1

Level 2

Level 3

Level 1

Level 2

Level 3
Financial assets:










Investments subject to significant influence

5,781

—

—

7,044

—

—
Other investments

1,605

—

—

1,802

—

—
Total financial assets

$
7,386

$
—

$
—

$
8,846

$
—

$
—
Financial liabilities:










Convertible notes

—

—

—

—

—

54,975
Deferred consideration payable

—

—

—

—

—

26,562
Total financial liabilities

$
—

$
—

$
—

$
—

$
—

$
81,537

~~The Ivanhoe Electric Series 1 and Series 2 Convertible~~

IVANHOE ELECTRIC INC.

Notes to the Condensed Interim Consolidated Financial Statements

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

There were ~~converted into common stock of~~no movements in level three instruments for the ~~Company on June 30, 2022 (Note 8(a)).~~

~~14.~~three months ended March 31, 2023.

13. Segment reporting:

The Company’s President & Chief Executive Officer and its Executive Chairman iscombine to form 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 3three 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, software licensing 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.

~~Table of Contents~~

~~IVANHOE ELECTRIC INC.~~

~~Notes to the Condensed Consolidated and Combined Carve-Out Financial Statements~~

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

Segment information for the periods presented is as follows:

Three months ended June 30, 2022

Six months ended June 30, 2022

Critical

Data

Energy


Critical

Data

Energy


Metals

Processing

Storage

Total

Metals

Processing

Storage

Total
Revenue

$
—

$
229

$
—

$
229

$
—

$
6,991

$
—

$
6,991
Intersegment revenues

—

96

—

96

—

139

—

139
Loss (income) from operations

27,103

953

1,630

29,686

47,883

(4,596)

3,605

46,892
Segment Assets

309,574

7,259

24,161

340,994

309,574

7,259

24,161

340,994

Three months ended June 30, 2021

Six months ended June 30, 2021

Critical

Data

Energy


Critical

Data

Energy


Metals

Processing

Storage

Total

Metals

Processing

Storage

Total
Revenue

$
—

$
1,464

$
31

$
1,495

$
—

$
2,950

$
104

$
3,054
Intersegment revenues

—

16

—

16

—

44

—

44
Loss (income) from operations

10,351

(101)

1,130

11,380

18,140

(282)

2,315

20,173
Segment Assets

59,522

9,245

9,256

78,023

59,522

9,245

9,256

78,023

~~15.~~


	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


	Three months ended March 31, 2022
	Critical Metals		Data Processing		Energy Storage		Total
Revenue	$	—	$	6,762	$	—	$	6,762
Intersegment revenues	—		43		—		43
Loss (income) from operations	20,780		(5,549)		1,975		17,206
Segment Assets	106,792		8,529		26,334		141,655

14. Commitments and contingencies:

The Company has entered into a contractual arrangement to purchase six Typhoon™ transmitters from I-Pulse (Note 11).

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.

15. Subsequent events:

(a) On May 8, 2023, Cordoba announced that Cordoba and JCHX had satisfied all necessary conditions to close the $100 million strategic arrangement for the joint development of the Alacran Project in Colombia. As a result of the closing, JCHX has funded the initial installment of $40 million towards its 50% ownership interest in CMH, which owns 100% of the Alacran Project and is the joint venture vehicle for Cordoba and JCHX in this strategic project level partnership.

For its 50% interest, JCHX will pay the $100 million purchase price in three installments. The first payment of $40 million wasmade by JCHX at closing. A second installment of $40 million is payable in cash upon the board of

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)

directors of Cordoba approving the Feasibility Study of the Alacran Project, and the filing of the Environmental Impact Assessment (“EIA”) to the relevant Colombian Government authority, but in no event shall such second installment be paid later than the second anniversary of the closing of the transaction. A third and final installment of $20 million is payable in cash once the approval of the EIA is obtained, which must be within two years of the transaction’s closing date. Should the EIA not be approved by the second anniversary of the closing date, JCHX will have the option to elect not to complete this final installment, which will result in JCHX being diluted to 40% and Cordoba increasing to a majority 60% shareholding in CMH.

In December 2022, JCHX advanced a bridge loan of $10 million to Cordoba. Upon closing of the transaction, the entire balance owing under the bridge loan and accrued interest was applied towards the first installment as a payment in kind.

(b) On May 10, 2023, Ivanhoe Electric signed a binding purchase and sale agreement (“PSA”) for the acquisition of surface land at its Santa Cruz Project in Arizona. The acquisition totals 6,205 acres of surface title and associated water rights.

Under the terms of the PSA, Ivanhoe Electric will acquire the land for a total purchase price of $120.5 million to be paid in installments, as follows:

•$5.0 million deposit, paid May 11, 2023, becomes non-refundable upon successful completion of due diligence;

•$34.3 million payable at the time of closing, expected in May 2023, inclusive of the $5.0 million deposit;

•$34.3 million, plus accrued interest, payable on or before six months following the date of closing;

•Four equal principal payments of $13.0 million on the first, second, third and fourth anniversaries of the Second Closing Payment, plus applicable accrued interest.

Interest on future payments will accrue at a rate of Prime plus 1%.

(c) On May 15, 2023, Ivanhoe Electric signed a definitive agreement with Saudi Arabian Mining Company Ma’aden (“Ma’aden”) which finalized the terms of the transactions previously announced on January 11, 2023. The transactions include the establishment of a 50/50 exploration joint venture between Ma’aden and Ivanhoe Electric to explore approximately 48,500 km2 of prospective land in Saudi Arabia and a $126.5 million strategic investment by Ma'aden in Ivanhoe Electric common stock.

The Company expects to issue approximately 10.2 million common shares to Ma’aden, representing 9.9% of common shares outstanding, at a purchase price of $12.38 per share. Of the $126.5 million total proceeds from the private placement, $66 million will go to the joint venture to fund exploration activities, including the purchase of three new TyphoonTM machines. The remaining $60 million will be retained by Ivanhoe Electric to advance our portfolio of US mineral projects, and for working capital and general corporate purposes.

At closing, Ivanhoe Electric will grant Ma’aden a top-up right allowing Ma’aden to maintain its 9.9% ownership, and Ma’aden will agree to a five-year standstill limiting its shareholding to a maximum of 19.9%, subject to certain exceptions. Ma’aden will have the right to appoint a nominee to the Ivanhoe Electric board of directors.

Item 2. ~~Management’s~~Management's Discussion and Analysis of Financial Condition and Results of ~~Operations.~~

Operations

You should read the following discussion and analysis of our financial condition and results of operations together with the condensed interim consolidated ~~and combined carve-out~~ 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 and combined carve-out financial statements and the related notes for the fiscal year ended December 31, ~~2021~~2022 included in Part II of our ~~final prospectus (the “Final Prospectus”)~~Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission (the “SEC”) on ~~June 29, 2022 pursuant to Rule 424(b)(4)~~March 14, 2023 (the “2022 Form 10-K”).

Special 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”~~"Securities Act").

~~Special Note Regarding Forward-Looking Statements~~

~~This Quarterly Report contains~~, 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, 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 of exploration activities, plans and objectives, industry trends, our requirements for additional capital, treatment under applicable government regimes for permitting or attaining approvals, government regulation, environmental risks, title disputes or claims, synergies of potential future acquisitions, and our anticipated uses of the net proceeds from our initial public offering. 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, 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: our mineral projects are all at the exploration stage; we have no mineral reserves, other than at the San Matias project; 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 calculations at the Santa Cruz Project are only estimates; the Santa Cruz 3D induced polarization and resistivity geophysical survey results are expected by September 2022; the first results of the IP survey at the Pinaya Project are expected in September 2022; actual capital costs, operating costs, production and economic returns 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 two of our subsidiaries; our business is subject to significant risk and hazards associated with future mining operations; ~~our failure~~we may fail to identify attractive acquisition candidates or joint ventures with strategic partners or ~~our inability~~be unable to successfully integrate acquired mineral properties or successfully manage joint ~~ventures impacts our business;~~ventures; our business is extensively regulated by the United States and foreign governments as well as local governments; 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 operations; and our operations may be impacted by the COVID-19 pandemic, including impacts to the availability of our workforce, government orders that may require temporary suspension of operations, and the global economy.

You should carefully consider these risks, as well as the additional risks described in other documents we file with the SEC. We also operate in a very competitive and rapidly changing environment. 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 ~~Final Prospectus.~~2022 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 ~~Final Prospectus.~~2022 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 and development company with a focus on developing mines from mineral deposits principally located in the United States in order to support ~~American~~domestic supply chain independence and to deliver the critical metals necessary for electrification of the economy. We believe the United States is significantly underexplored and will yield major new discoveries of these metals. Our mineral ~~projects~~exploration efforts focus on copper, ~~gold, silver,~~ nickel, ~~cobalt,~~ vanadium, ~~and the~~cobalt, platinum group ~~metals.~~

elements, gold and silver. All of our mineral properties are in the exploration stage.

“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

~~Table of Contents~~

in publicly listed companies in Canada, through our ownership of the equity of those companies, that have an interest in such mineral projects.

Our two ~~main~~material mineral projects are ~~located in the United States and are known as~~ the Santa Cruz Copper Project (“Santa Cruz” or the “Santa Cruz Project”) in Arizona and the Tintic Copper-Gold Project (“Tintic” or the “Tintic Project”) in Utah. We have the option to acquire 100% of the mineral rights constituting the Santa Cruz and Tintic ~~projects, although~~projects. On May 11, 2023, we ~~currently own an 84.3% ownership interest~~announced the signing of a binding purchase and sale agreement for the acquisition of 6,205 acres of surface title and associated water rights at the Santa Cruz Project for a total purchase price of $120.5 million to be paid in installments over a 4.5-year period. We also hold the option to acquire all the mineral ~~rights to the Tintic Project by acreage~~titles contiguous with the ~~right to acquire~~acquired surface lands. Those mineral rights will be formally acquired upon the ~~balance~~completion of scheduled option payments in August 2023 and 2024. At that time, we will have a unified land and mineral package encompassing the ~~mineral rights.~~

entire Santa Cruz Project.

Our other key mineral projects ~~are~~include the Hog Heaven Project, located in Montana (the “Hog Heaven Project”), and the Ivory Coast Project located in the Ivory Coast, West Africa, which is ~~owned directly by a subsidiary of~~held through our 22.8% equity interest in Sama Resources Inc. (“Sama”)~~, although we have a~~ and our 30% direct interest in ~~Sama’s subsidiary as well.~~

the Sama Nickel Corporation Inc. joint venture.

We also have investments in publicly traded companies in Canada, and through our ownership of equity in those companies, we have an indirect interest in mineral projects in the United States, Canada, Colombia ~~Ivory Coast~~ and Peru.

In addition to our mineral projects, we also own controlling interests in two technology companies: VRB ~~Energy Inc. (“VRB”)~~ and ~~Computational Geosciences Inc. (“CGI”).~~CGI. As of ~~June 30, 2022,~~March 31, 2023, we owned 90.0% of the outstanding shares of VRB. VRB and its subsidiary companies are primarily engaged in the design, manufacture, installation, and operation of energy storage systems. As of ~~June 30, 2022,~~March 31, 2023, we owned 94.3% of CGI’s outstanding shares. CGI has developed technology that consists of sophisticated codes to process geophysical data and build 3D subsurface images that could indicate the presence of various natural resources, including metallic minerals and water. CGI offers mineral prospectivity and drill target identification services, data analytic tools and optimization of operational processes. CGI provides fee-for-service and licensing agreements for one-off technology applications to customers in the area of critical minerals, energy and water exploration.

~~Initial Public Offering~~

On May 15, 2023, we signed a definitive agreement with Saudi Arabian Mining Company Ma’aden (“Ma’aden”) which finalized the terms of the transactions previously announced on January 11, 2023. The transactions include the establishment of a 50/50 exploration joint venture between Ma’aden and Ivanhoe Electric to explore approximately 48,500 km2 of prospective land in Saudi Arabia, and a $126.5 million strategic investment by Ma'aden in Ivanhoe Electric common stock. We expect to issue approximately 10.2 million common shares to Ma’aden, representing 9.9% of common shares outstanding, at a purchase price of $12.38 per share. Of the $126.5 million total proceeds from the private placement, $66 million will go to the joint venture to fund exploration activities, including the purchase of three new-generation TyphoonTM machines. The remaining $60 million will be retained by Ivanhoe Electric to advance our portfolio of US mineral projects, and for working capital and general corporate purposes. The transactions are expected to close by the end of June 2023 subject to the approval of a supplemental listing application by the New York Stock Exchange and the corporate and regulatory formalities required in Saudi Arabia to incorporate the joint venture entity.

On June 30, 2022, we completed an initial public offering ~~(“IPO”) of 14,388,000 shares of our common stock at a price of $11.75 per share, resulting in gross proceeds from~~and the ~~offering of $169.1 million. The~~ Company’s shares were listed on the NYSE American and the ~~Toronto Stock Exchange~~TSX under the ticker symbol “IE”.

Reverse Stock Split

On June 16, 2022, we effected a reverse stock split of our outstanding common stock at a ratio of 3-for-1 (the “Reverse Stock Split”). The number of authorized shares and the par value of the common stock were not adjusted as a result of the Reverse Stock Split. ~~In this Quarterly Report, all~~All references to common stock, options to purchase common stock, per share data and related information have been retrospectively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.

Impact of the COVID-19 Pandemic

The COVID-19 global pandemic has caused governments worldwide to implement measures to slow the spread of the outbreak through quarantines, travel restrictions, business shutdowns, and other measures. The COVID-19 pandemic has negatively affected the global economy, disrupted financial markets and international trade, resulted in increased unemployment levels and significantly affected global supply chains, all of which have and are expected to continue to affect our future exploration activities and business. To the extent the COVID-19 pandemic adversely affects our business prospects, financial condition, and results of operation, it may also have the effect of exacerbating many of the other risks described ~~under~~in the ~~heading “Risk Factors”~~Item 1A. Risk Factors section in our ~~Final Prospectus.~~

2022 Form 10-K.

Segments

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

~~Table of Contents~~

Significant Components of Results of Operations

Revenue, Cost of Sales and Gross Profit

We generate revenue from our technology businesses CGI and VRB, which are included in the data processing and software licensing business segment and the energy storage systems business ~~segments,~~segment, respectively.

We have not generated any revenue from our mining projects because they are in the exploration stage. We do not expect to generate any revenue from our mining projects for the foreseeable future.

Exploration Expenses

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

Included in exploration expenses are exploration costs that we incur in relation to generating new projects. These activities may or may not proceed to earn-in agreements depending on our evaluation. These are categorized as “Generative exploration and other”.

General and Administrative Expenses

Our general and administrative expenses consist of salaries and benefits, ~~stock~~stock-based compensation, professional and consultant fees, insurance and other general administration costs. Our general and administrative expenses ~~are expected to increase~~have increased significantly now that we ~~have commenced~~are operating as a public ~~company. We~~company and have added to our management team. In particular, we expect ~~higher~~to incur increased general and administrative expenses costs in 2023 compared to 2022 for salaries, non-cash stock-based compensation, compliance related ~~to salaries, benefits, stock compensation, legal fees, compliance~~costs and ~~corporate governance, accounting and audit expenses, stock exchange listing fees, transfer agent and other shareholder-related fees,~~ directors’ and officers’ ~~and other~~ insurance ~~costs and other administrative costs.~~

expense.

Research and Development Expenses

~~Each expenditure~~

Expenditures on research and development activities isare recognized as an expense in the period in which ~~it is~~they are incurred. We expect research and development expenses to increase as our technology-based businesses continue to grow.

Since 2018, the majority of our research and development expenses came from CGI’s data processing business, which includes amortization expenses related to its artificial intelligence intellectual property ~~which it~~ acquired in 2018. VRB also conducts research and development activities to continue to advance its energy storage system technology.

We ~~expect~~also have research and development expenses that we incur in relation to ~~increase as~~TyphoonTM. In 2023, we have commenced design and development activities for our ~~technology-based businesses continue to grow.~~

~~Results~~next generation of ~~Operations~~

TyphoonTM equipment.

Three Months Ended ~~June 30, 2022~~March 31, 2023 Compared to the Three Months Ended ~~June 30, 2021~~

March 31, 2022

For the three months ended ~~June 30, 2022,~~March 31, 2023 we recorded a net loss attributable to common stockholders of ~~$54.4~~$36.1 million ($~~0.85~~0.39 per share), compared to ~~$10.7~~$15.5 million ($~~0.18~~0.24 per share) for the three months ended ~~June 30, 2021,~~March 31, 2022, which was an increase of ~~$43.6~~$20.6 million. Significant contributors to this increase infor the three months ended ~~June 30, 2022 were a $15.5~~March 31, 2023 included an increase of $9.2 million ~~increase~~ in exploration expenditures, ~~a $16.1~~an increase of $5.4 million ~~increase~~ in ~~non-cash loss on revaluation of convertible debt~~general and administrative expenses, and a ~~$4.7~~decrease of $6.1 million ~~increase~~ in ~~non-cash loss on revaluation of investments~~revenue compared to the three months ended ~~June 30, 2021.~~

March 31, 2022.

Exploration expenses ~~of $23.9~~were $26.6 million for the three months ended ~~June 30, 2022 were~~March 31, 2023, an increase of ~~$15.5~~$9.2 million from ~~$8.3~~$17.3 million for the three months ended ~~June 30, 2021. This increase is largely attributed to exploration expenditures at~~March 31, 2022. Exploration expenses consisted of the ~~Santa Cruz Project which had not yet been acquired in the comparable period ending June 30, 2021.~~ following:


	Three months ended March 31,
(In thousands)	2023		2022
Exploration Expenses:
Santa Cruz, USA	$	14,682	$	9,798
San Matias, Colombia	4,658		2,376
Tintic, USA	1,121		289
Hog Heaven, USA	638		560
White Hill, USA	491		—
Lincoln, USA	295		13
Carolina, USA	238		—
Pinaya, Peru	157		686
Generative exploration and other	4,279		3,601
Total	$	26,559	$	17,323

During the three months ended ~~June 30, 2022,~~March 31, 2023, exploration expenditures largely focused on ~~exploration~~ activities at:

●

the Santa Cruz Project where $14.8 million of exploration expenditure was incurred in the quarter. Activities at Santa Cruz are focused on a 85,000-meter program of resource in-fill, geotechnical, hydrological and metallurgical drilling. As of June 30,

•the Santa Cruz Project where $14.7 million of exploration expenditure was incurred in the three months ended March 31, 2023 compared to $9.8 million incurred in the three months ended March 31, 2022. Activities during the three months ended March 31, 2023 at Santa Cruz were focused on a program of exploration and infill resource, geotechnical, hydrological and metallurgical drilling, advancing technical studies, completing an updated mineral resource estimate and beginning an Initial Assessment Study for the Santa Cruz Copper Project.

•the San Matias Project where $4.7 million of exploration expenditure was incurred by Cordoba Minerals for the three months ended March 31, 2023 focused on continuing work on the feasibility study on the Alacran deposit. Activities during the three months ended March 31, 2023 included ongoing infill geotechnical, metallurgical, hydrological and infill resource drilling to advance the feasibility study. During the three months ended March 31, 2023 a total of 3,946 meters of infill diamond drilling was completed. To date, a total of approximately 40,000 meters out of the planned 42,000 meter infill diamond drilling campaign have been completed; and

~~Table~~•the Tintic Project where $1.1 million of ~~Contents~~exploration expenditure was incurred in the three months ended March 31, 2023 compared to $0.3 million incurred in the three months ended March 31, 2022. Activities during the three months ended March 31, 2023 at Tintic were focused on completing an initial diamond drill hole which we commenced drilling in November 2022 and completed in February 2023 in challenging snowy conditions. We expect to execute a more extensive drilling campaign at Tintic during the spring of 2023 when operating conditions improve; and

2022, seven drills rigs were operating on site to in-fill and expand the Santa Cruz deposit, with 36,637 meters completed by the end of June 2022. In addition, we recently completed a 26.5-km2 (6,500-acre), 3D induced polarization (“IP”) and resistivity geophysical survey using our proprietary high-power Typhoon™ transmitter system. The data is currently being processed by CGI and we expect survey results by September 2022;

●

the San Matias Project where $3.4 million of expenditure was incurred in the quarter. Activities at San Matias included commencing a Feasibility Study at the Alacran deposit which will focus on updating the mine plan and mineral resource estimate at the Alacran deposit. A 25,000-meter initial phase drill program has commenced in support of the Feasibility Study; and

●

the Pinaya Project where $1.5 million of exploration expenditure was incurred in the quarter and which was focused on an IP resistivity survey at the project which commenced in March 2022 and was completed in June 2022. First results of the IP survey are expected in September 2022;

General and administrative expenses ~~of $4.7~~were $10.6 million for the three months ended ~~June 30, 2022 increased by $1.2~~March 31, 2023, an increase of $5.4 million from ~~$3.4~~$5.2 million in ~~the~~ three months ended ~~June 30, 2021.~~March 31, 2022. Several items contributed to the increase, including:

●

~~a $0.5 million increase in accounting~~

•a $3.8 million increase in stock-based compensation expense largely due to impact of the additional non-cash stock-based compensation expense of the additional Ivanhoe Electric stock option and RSU grants that occurred in November 2022 and ~~audit fees largely related to the preparation of financial statements and other requirements for the IPO;~~

●

~~a $0.4 million increase at VRB primarily due to an increase in professional fees in relation to certain technical studies that it was conducting; and~~

●

~~$0.3 million in expenditures related to entering into an agreement for aviation services with a related company~~ during ~~2022 (three months ended June 30, 2021: $nil).~~

~~During~~ the three months ended ~~June 30, 2022, we recorded~~ March 31, 2023; and

•a ~~non-cash $16.1~~$1.6 million ~~loss on revaluation of convertible debt which related to the conversion of our Series 1~~increase in directors and Series 2 Convertible Notes (the “Notes”) that were automatically converted into shares of common stock upon the completion of the IPO on June 30, 2022. An aggregate of $50.9 million of Series 1 Notes and $86.8 million of Series 2 Notes, including accrued interest, were automatically converted into 13,628,958 shares of common stock of the Company.

~~Revenue~~officers insurance expenses for the three months ended March 31, 2023 in relation to the new director and officers insurance policy we entered into when we became a public company in June ~~30, 2022~~2022. There was ~~$0.2 million, a decrease of $1.3 million from $1.5 million for~~no similar expense in the three months ended ~~June 30, 2021.~~

Three months

Three months ended

ended June 30,

Percentage change


June 30, 2022

2021

year-over-year

(In thousands)

CGI: Software licensing and data processing services:






Revenue

$
229

$
1,464

(84)
%
Cost of sales

(115)

(295)

(61)
%
Gross profit

$
114

$
1,169

(90)
%
VRB: Energy storage systems:







Revenue

$
—

$
31

(100)
%
Cost of sales

—

(29)

(100)
%
Gross profit

$
—

$
2

(100)
%
Total:







Revenue

$
229

$
1,495

(85)
%
Cost of sales

(115)

(324)

(65)
%
Gross profit

$
114

$
1,171

(90)
%

March 31, 2022.

CGI’s software licensing and data processing services to the mining and oil and gas industries represented ~~100%~~100.0% of our revenue for the three months ended ~~June 30, 2022~~March 31, 2023 ($~~0.2~~0.7 million) and ~~98%~~100.0% for the three months ended ~~June 30, 2021~~March 31, 2022 ($~~1.5~~6.8 million). VRB generated no revenue during these periods.


	Three Months Ended March 31, 2023		Three Months Ended March 31, 2022		Percentage Change
(In thousands)
Software licensing and data processing services:
Revenue	$	679	$	6,762	(90)	%
Cost of sales	(184)		(52)		254	%
Gross profit	$	495	$	6,710	(93)	%

CGI’s revenue for the three months ended March 31, 2023 was $0.7 million a decrease of $6.1 million from $6.8 million for the three months ended March 31, 2022. The ~~significant~~ decrease in CGI’s revenue was a ~~direct~~ result of revenue for the three months ended March 31, 2022 including a one-time amount of $6.5 million relating to a new contract that CGI entered into with one of its customers upon the expiration ~~in 2021~~ of a previous three-year contract. Under ~~the new~~that agreement with this customer, CGI agreed to license certain software for a one-time fee of $6.5 million, which was received and recognized in the first quarter of 2022. ~~As at June 30, 2022, there only remains a final~~

~~Table of Contents~~

~~payment of $250,000 under this agreement due in 2023. We cannot provide any assurance that we will enter into any additional contracts with this customer in the future.~~

Research and development expenses for the six months ended June 30, 2022 were $1.3 million, an increase of $0.5 million from the same period in 2021 largely attributable to a $0.3 million increase in research and development activity at CGI as we have been focused on developing its services to generate new business after completing the $6.5 million software licensing agreement.

~~Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021~~

For the six months ended June 30, 2022, we recorded a net loss attributable to common stockholders of $69.8 million ($1.09 per share), compared to $15.4 million ($0.26 per share) for the six months ended June 30, 2021, which was an increase of $54.4 million. Significant contributors to this increase in the six months ended June 30, 2022 were a $26.6 million increase in exploration expenditures, a $19.0 million increase in non-cash loss on revaluation of convertible debt and a $3.7 million increase in general and administrative expenses offset by an increase in revenue of $3.9 million compared to the six months ended June 30, 2021.

Exploration expenses of $41.2 million for the six months ended June 30, 2022 increased by $26.6 million from $14.6 million for the six months ended June 30, 2021. This increase is largely attributed to exploration expenditures at the Santa Cruz Project which had not yet been acquired in the comparable period ending June 30, 2021. During the six months ended June 30, 2022, expenditures largely focused on exploration activities at:

●

the Santa Cruz Project where $24.6 million of exploration expenditure was incurred in the six months ended June 30, 2022. Activities at Santa Cruz are focused on a 85,000-meter program of resource in-fill, geotechnical, hydrological and metallurgical drilling, in addition to a property-wide Typhoon™ 3D IP survey;

●

the San Matias Project where $5.8 million of exploration expenditure was incurred in the six months ended June 30, 2022, focused on an exploration drilling program than began in November 2021 and was completed in March 2022, as well as commencing a Feasibility Study on the Alacran deposit in May 2022; and

●

the Pinaya Project where $2.2 million of exploration expenditure was incurred in the six months ended June 30, 2022. Activities included a 3,046-meter drill program that began in November 2021 and that was completed in January 2022 as well as expenditures related to the IP survey which began in March 2022 and that was completed on June 30, 2022.

General and administrative expenses of $9.9 million for the six months ended June 30, 2022 increased by $3.7 million from $6.2 million in the six months ended June 30, 2021. Several items contributed to the increase, including:

●

~~a $1.3 million increase in accounting and audit fees largely related to the preparation of financial statements and other requirements for the IPO;~~

●

~~a $1.1 million increase at VRB primarily due to an increase in professional fees in relation to certain technical studies that it was conducting;~~

●

a $0.4 million increase at Kaizen primarily due to higher share based payments as a result of an option grant in February 2022 and higher professional fees related to the legal proceedings with AM Gold Inc.; and

●

~~$0.5 million in expenditures related to entering into an agreement for aviation services with a related company during 2022 (six months ended June 2021: $nil).~~

During the six months ended June 30, 2022, we recorded a non-cash $19.0 million loss on revaluation of convertible debt which related to the conversion of the Notes that were automatically converted into shares of common stock upon the completion of the IPO on June 30, 2022.

~~Table of Contents~~

~~Revenue for the six months ended June 30, 2022 was $7.0 million, an increase of $3.9 million from $3.1 million for the six months ended June 30, 2021.~~

Six months ended

Six months ended

Percentage change

June 30, 2022

June 30, 2021

year-over-year

(In thousands)







CGI: Software licensing and data processing services:







Revenue

$
6,991

$
2,950

137
%
Cost of sales

(167)

(560)

(70)
%
Gross profit

$
6,824

$
2,390

186
%
VRB: Energy storage systems:







Revenue

$
—

$
104

(100)
%
Cost of sales

—

(81)

(100)
%
Gross profit

$
—

$
23

(100)
%
Total:







Revenue

$
6,991

$
3,054

129
%
Cost of sales

(167)

(641)

(74)
%
Gross profit

$
6,824

$
2,413

183
%

CGI’s ~~software licensing and data processing services to the mining and oil and gas industries represented 100% of our~~ revenue for the ~~six~~three months ended ~~June 30, 2022 ($7.0 million)~~March 31, 2023 consisted of $0.4 million of software licensing revenue and ~~97% for the six months ended June 30, 2021 ($3.0 million). This significant increase~~$0.3 million in ~~CGI’s~~ revenue was a direct result of a new contract that CGI entered into with one of its customers upon the expiration in 2021 of a previous three-year contract. Under the new agreement with this customer, CGI agreed to license certain software for a one-time fee of $6.5 million, which was received and recognized in the first quarter of 2022. As at June 30, 2022, there only remains a final payment of $250,000 under this agreement due in 2023. We cannot provide any assurance that we will enter into any additional contracts with this customer in the future.

from processing data.

CGI’s gross profit for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 was ~~$6.8~~$0.5 million, a ~~$4.4~~decrease of $6.2 million ~~or a 186% increase~~ from ~~$2.4 million~~$6.7 for the ~~six~~three months ended ~~June 30, 2021.~~March 31, 2022. The licensing of certain software for a one-time fee of $6.5 million had a direct impact on gross profit for the three months ended March 31, 2022 as the licenses had no underlying carrying value and therefore resulted in a $6.5 million gross profit being ~~recognized in relation to the license.~~

recognized.

Research and development expenses for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 were ~~$2.6~~$1.8 million, an increase of ~~$0.9~~$0.5 million from the same period in ~~2021~~2022 primarily attributable to aincurring $0.6 million ~~increase~~of expenditure in the first quarter of 2023 on commencing research and development ~~activity~~activities for our next generation of TyphoonTM equipment.

Stock-Based Compensation

During the three months ended March 31, 2023, we granted stock options to certain new employees of the Company. In February 2023, we granted 500,000 stock options at ~~CGI~~an exercise price of $13.23 per share and in March 2023, we granted 100,000 stock options at an exercise price of $15.46. The fair value of the option grants was determined using the Black-Scholes option-pricing model as $7.22 and $8.53 per share, respectively. In addition, in January 2023, we granted 750,000 RSUs to a ~~$0.3 million increase at VRB. Research and development activities increased in 2022 at CGI as CGI has been focused~~new senior officer of the Company which had a fair value on ~~developing its services to generate new business after completing~~ the ~~$6.5 million software licensing agreement.~~

grant date of $12.15 per share.

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 for the foreseeable future.

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

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

~~On April 5, 2022, we raised funds by selling Series 2 Convertible Notes for gross proceeds of $86.2 million. These funds were raised to finance our activities through the completion of our IPO.~~

On June 30, 2022, we closed our IPO of 14,388,000 shares of our common stock at a price of $11.75 per share. The gross proceeds from the offering were approximately $169.1 million, before deducting underwriting discounts and commissions and estimated offering expenses payable by us.

~~Table of Contents~~

At ~~June 30, 2022,~~March 31, 2023 and December 31, ~~2021,~~2022, we had cash and cash equivalents of ~~$223.8~~$107.0 million and ~~$49.9~~$139.7 million, respectively, and a working capital ~~balance~~ of ~~$215.2~~$100.8 million and ~~$17.7~~$133.6 million, respectively. Of the total cash and cash

equivalents at ~~June 30, 2022~~March 31, 2023 and December 31, ~~2021, $21.5~~2022, $10.2 million and ~~$28.5~~$20.7 million, respectively, was not available for the general corporate purposes of the Company as these amounts were held by non-wholly-owned subsidiaries.

We believe that we will have sufficient cash resources to carry out our business plans ~~including our currently planned exploration activities at our mineral projects,~~ for at least the next 12 months. We have based these estimates on our current assumptions which may require future adjustments based on our ongoing business decisions as well as, in particular, exploration success at our mineral projects. Accordingly, we may require additional cash resources earlier than we currently ~~expect.~~

expect or we may need to curtail currently planned activities.

Our significant operational expenses include the payments that we anticipate making under the various earn-in and option agreements to which we are a party. These agreements are structured to provide us with flexibility whereby our ability to continue to explore on a mineral project is contingent on funding agreed specified levels over specified time intervals. ~~A summary of our mineral obligations and payments as at June 30, 2022 are as follows:~~

~~Mineral Project Obligation and Payments as at June 30, 2022 (in $ thousands)~~

Mineral Project

Commitment

2022

2023

2024

2025

2026-2032

Total
In $ thousands)

Santa Cruz (USA)

Discretionary

$
18,665

$
6,550

$
10,300

$
596

$
—

$
36,111
Santa Cruz (USA)

Non-discretionary

600

800

920

—

—

2,320
Total Santa Cruz (USA)

19,265

7,350

11,220

596

—

38,431
Tintic (USA)

Discretionary

1,762

5,288

—

—

—

7.050
Hog Heaven (Montana)

Discretionary

—

3,500

500

500

39,000

43,500
Ivory Coast (Ivory Coast)

Discretionary

—

—

—

—

7,762

7,762
South Voisey’s Bay (Canada)

Discretionary

—

—

4,416

—

—

4,416
Crystal Haven (Australia)

Discretionary

—

7,000

—

35,000

—

42,000
Unity (USA)

Discretionary

—

2,000

2,250

—

—

4,250
Cave & Lincoln (USA)

Discretionary

100

150

200

250

2,250

2,950
Carolina Mining (USA)

Discretionary

—

—

—

5,000

20,000

25,000
Total

21,127

25,288

18,586

41,346

69,012

175,359

Cash Balances as of ~~June 30, 2022~~

March 31, 2023

The table below discloses the amounts of cash disaggregated by currency denomination as of ~~June 30, 2022~~March 31, 2023 in each jurisdiction that our affiliated entities are domiciled.

Currency by Denomination (in USD Equivalents)

Canadian

Chinese


US dollars

dollars

Renminbi

Other

Total
(In $ thousands)











Jurisdiction of Entity:










USA

$
200,421

$
1,407

$
—

$
—

$
201,828
Cayman Islands

12,702

8

—

—

12,710
Canada

3,979

4,020

—

—

7,999
China

—

—

438

—

438
British Virgin Islands

387

1

—

—

388
Other

264

1

—

205

470
Total

217,753

5,437

438

205

223,833


	Currency by Denomination (in USD Equivalents)
	US dollars		Canadian dollars		Chinese Renminbi		Colombian Pesos		Other		Total
(In thousands)
Jurisdiction of Entity:
USA	$	95,456	$	776	$	—	$	—	$	—	$	96,232
Colombia	—		—		—		123		—		$	123
Cayman Islands	5,843		4		—		—		—		$	5,847
Canada	3,041		917		—		—		—		$	3,958
China	—		—		336		—		—		$	336
British Virgin Islands	422		1		—		—		—		$	423
Other	42		1		—		—		33		76
Total	$	104,804	$	1,699	$	336	$	123	$	33	$	106,995

Our subsidiary VRB, domiciled in the Cayman Islands, is subject to certain foreign exchange restrictions with respect to its ~~PRC~~People's Republic of China ("PRC") subsidiaries. There are foreign exchange policies in the PRC that limit the amount of capital that can be directly transmitted offshore from VRB’s PRC subsidiaries to VRB. Since their incorporation, these PRC subsidiaries have had accumulated losses and have not declared or paid any dividends or made any distribution of earnings.

There were no cash transfers to or from our PRC subsidiaries in the form of intercompany loans during the three ~~and six month periods~~months ended ~~June 30, 2022 and 2021.~~

March 31, 2023.

~~Table of Contents~~

Refer to Note 2218 of our ~~audited~~ consolidated and combined ~~carve out~~carve-out financial statements ~~for the year ended December 31, 2021 included~~ in ~~the Final Prospectus,~~our 2022 Form 10-K which outlines other restrictions on transfers of net assets from our consolidated subsidiaries to the Company.

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 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.

Bridge Loan — Cordoba Minerals.

In December 2022, JCHX advanced a bridge loan of $10 million to Cordoba Minerals in connection with the strategic arrangement for the joint development of Cordoba Mineral’s Alacran Project. The bridge loan is for an 18-month term and bears interest at 12% per annum during the first 12 months of the term and 14% per annum during the remaining six months, calculated on the basis of a 365-day year. Upon closing the strategic arrangement on May 8, 2023, all of the principal and interest outstanding on the bridge loan was applied towards the first installment as a payment in kind.

Cash Flows

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

Six months ended June 30,


2022

2021
(In thousands)




Net cash (used in) provided by:




Operating activities

$
(44,197)

$
(16,883)
Investing activities

(28,414)

(5,272)
Financing activities

246,764

24,534
Effect of foreign exchange on cash

(170)

124
Total change in cash

173,983

2,503

Three Months Ended
March 31,
2023 2022
Net cash (used in) provided by:
Operating activities (30,019) (14,619)
Investing activities (2,666) (5,600)
Financing activities 3 —
Effect of foreign exchange on cash 17 138
Total change in cash (32,665) (20,081)

Operating activities.

Net cash used in operating activities for the six months ended June 30, 2022 was $44.2 million, an increase of $27.3 million from the $16.9 million of net cash used for the six months ended June 30, 2021.

Net cash used in operating activities for all periods presented largely was ~~largely~~ 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.

Net cash used in operating activities for the three months ended March 31, 2023 was $30.0 million, an increase of $15.4 million from the $14.6 million of net cash used for the three months ended March 31, 2022.

Investing activities.

Our investing activities generally relate to acquisitions of mineral property interests, ~~and~~ purchases of public company shares in companies that we may partner ~~with.~~with and capital expenditures at our projects. To date, ~~because~~due to our mining projects ~~are~~being in the exploration stage we have not incurred material capital expenditures.

Net cash used in investing activities for the ~~six~~three months ended ~~June 30, 2022~~March 31, 2023 of ~~$28.4~~$2.7 million was mainly attributable to ~~$25.7~~$1.8 million ~~for~~related to payments for mineral interests ~~of which $21.4~~and $0.6 million ~~were~~ for the ~~Santa Cruz Project and $4.0~~purchase of investments that are subject significant influence. The $1.8 million ~~were~~of cash used for purchases of mineral interests related to option payments at our Tintic Project. The $0.6 million for the ~~Tintic Project.~~

purchase of investments that are subject to significant influence relates to the funding of our 30% interest in the Sama Nickel Corporation Inc. joint venture in the Ivory Coast.

Financing activities.

During the ~~six~~three months ended ~~June 30, 2022,~~March 31, 2023, there ~~was $246.8 million of net cash provided by~~were no significant financing activities ~~representing~~as we continued to fund our operations with proceeds from our IPO.

Contractual Obligations

As of March 31, 2023, there have been no material changes, outside the ~~$160.6 million~~ordinary course of ~~net cash raised upon the closing~~business, in our contractual obligations since December 31, 2022. Refer to Part II, Item 7 of our ~~IPO~~Annual Report on ~~June 30,~~Form 10-K for the year ended December 31, 2022, ~~and $86.2 million raised from~~filed with the ~~sale of the Series 2 Convertible Notes. Share issuance costs, which are netted against IPO proceeds, include $2.4 million of accrued costs~~SEC on March 14, 2023, for ~~which the cash outflow had not yet occurred at June 30, 2022.~~

~~Contractual Obligations and Commitments~~

information regarding our contractual obligations.

Off Balance Sheet Arrangements

As of ~~June 30, 2022, we had the following material contractual obligations in addition to our mineral project payments described above.~~

Payments due by period (in thousands)




Less than





More than


Total

1 year

1-3 years

4-5 years

5 years
Long-term debt obligations (a)

$
24,000

$
—

$
—

$
24,000

$
—
Leases

1,179

405

765

9

—
Other long-term contractual liabilities (b)

371

—

371

—

—
Total contractual obligations

$
25,550

$
405

$
1,136

$
24,009

$
—

~~(a)~~

~~Long-term obligations include the $24.0 million convertible bond issued by VRB that matures in 2026.~~

~~Table of Contents~~

~~(b)~~

~~Includes all other long-term financial liabilities reflected on our balance sheet that are contractually fixed as to timing and amount.~~

~~Off-Balance Sheet Arrangements~~

~~As of June 30, 2022,~~March 31, 2023, we were not involved in any off-balance sheet arrangements that have or are reasonably likely to have a material effect on our financial condition, results of operations, or liquidity.

Related Party Transactions

See Note 11 of our consolidated and combined carve-out financial statements for the three months ended March 31, 2023.

Critical Accounting Estimates

Our management’s discussion and analysis of our financial condition and results of operations is based on our consolidated and combined carve-out financial statements which 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 ~~is described~~are detailed in Note 3 to our ~~audited~~ consolidated and combined carve-out financial statements ~~for the year ended December 31, 2021~~ included in ~~the Final Prospectus.~~our 2022 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.

Stock-based compensation

Compensation expense for options granted to employees, directors and certain service providers is determined based on estimated fair values of the options at the time of grant using the Black-Scholes option pricing model, which takes into account, as of the grant date, the fair market value of the shares, expected volatility, expected life, expected dividend yield and the risk-free interest rate over the expected life of the option. The use of the Black-Scholes option pricing model requires input estimation of the expected life of the option and volatility, which can have a significant impact on the valuation model and resulting expense recorded.

In February 2023, we granted 500,000 stock options at an exercise price of $13.23 per share and in March 2023, we granted 100,000 stock options at an exercise price of $15.46. The fair value of the option grants was determined using the Black-Scholes option-pricing model as $7.22 and $8.53 per share, respectively. The following assumptions were used to compute the fair value of the options granted:

February 1, 2023 Grant Date March 1, 2023 Grant Date
Risk-free interest rate 3.7% 4.5%
Dividend yield nil nil
Estimated volatility 69.8% 69.5%
Expected option life 4 years 4 years

The risk-free interest rate assumption was based on the U.S. treasury constant maturity yield at the date of the grant over the expected life of the option. No dividends are expected to be paid. We calculated the estimated volatility based on the historical volatility of a group of peer companies’ common stock and a group of relevant stock market indices over the expected option life as we only commenced publicly trading in June 2022. The computation of expected option life was determined based on a reasonable expectation of the option life prior to the option being exercised or forfeited.

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, Canada, Colombia, Peru, Australia, the Ivory Coast and the PRC.

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 ~~the Company’s~~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

~~Table of Contents~~

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 ~~June 30, 2022.~~

~~Recently adopted accounting standards and recent accounting pronouncements~~

There were no significant updates to previously reported accounting standards. See Note 2 of the condensed interim consolidated and combined carve-out financial statements included in this Quarterly Report

March 31, 2023.

Emerging Growth Company Status

We are an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act of 2012 (the ~~“JOBS Act”~~(“JOBS Act"). The JOBS Act exempts emerging growth companies from being required to comply with new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our ~~condensed interim~~ consolidated and combined carve-out financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not Applicable.

Item 4. Controls and Procedures.

Management’s Evaluation of our Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the ~~Securities and~~ Exchange Act ~~of 1934, as amended (the “Exchange Act”)~~ is (1) recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and (2) accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure.

As of ~~June 30, 2022,~~March 31, 2023, our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily

applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our principal executive officer and principal financial officer have concluded based upon the evaluation described above that, as of ~~June 30, 2022,~~March 31, 2023, our disclosure controls and procedures were effective at the reasonable assurance level.

~~Table of Contents~~

Changes in Internal Control over Financial Reporting

During the quarter ended ~~June 30, 2022,~~March 31, 2023, there were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15(d)-15(f) promulgated under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~Table of Contents~~

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become subject to various legal proceedings that are incidental to the ordinary conduct of our business. Although we cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, we make a provision for potential liabilities when we deem them probable and reasonably estimable. These provisions are based on current information and legal advice and may be adjusted from time to time according to developments. We believe that none of the litigation in which we are currently involved, or have been involved in since the beginning of our most recently completed fiscal year, individually or in the aggregate, is material to our financial condition, cash flows or results of operations.

Two of our subsidiaries are involved in legal proceedings described below.

Our subsidiary Kaizen ~~is currently subject to~~was involved in litigation in British Columbia, Canada which commenced in 2017. The proceedings ~~relate~~related to a claim by AM Gold Inc. (“AMG”) against Kaizen in respect of its acquisition of the Pinaya Project. ~~The trial~~On September 2, 2022, the Supreme Court of ~~the action has been concluded and the trial judge agreed with Kaizen’s position that the plaintiff’s claims were without merit and~~Canada dismissed the ~~action in its entirety. The plaintiff commenced an~~application of AM Gold (“AMG”) seeking leave to appeal ~~from~~ the ~~trial judgment which was dismissed by~~January 21, 2022 decision of the British Columbia Court of Appeal, ~~on January 21, 2022.~~which upheld the March 23, 2021 decision of the trial judge dismissing all of AMG’s claims. The ~~plaintiff can only appeal with leave to appeal from~~British Columbia Court of Appeal concluded that no errors were made in the trial judge’s reasoning. The Supreme Court of ~~Canada. The plaintiff has applied for leave to appeal and a~~Canada’s dismissal means that the decision ~~is expected in September, 2022. Kaizen is entitled to recover costs~~ of ~~the trial and applied for an enhanced, substantial indemnity costs award which was granted against the plaintiff AM Gold Inc. and its principal. The defendants appealed this indemnity costs award to~~ the British Columbia Court of Appeal is final and conclusive. There is no further avenue of appeal or review available to AMG as a ~~hearing~~result of the Supreme Court of Canada’s dismissal of the claims. Kaizen was entitled to payment from AMG on account of the costs ~~order was held on May 31, 2022,~~of the litigation and has now reached a settlement agreement regarding that entitlement with ~~a decision expected within 90 days. Kaizen has incurred approximately~~AMG and recovered costs of Cdn$~~3.2 million~~500,000 in legal fees and expenses to date in this dispute, which has occupied significant management time. If the plaintiff obtains leave to appeal and/or Kaizen is unable to make a substantial recovery of its legal costs incurred, Kaizen may be unable to advance the Pinaya Project at the rate it wishes to and may incur additional costs, which could negatively impact its financial position as well as its ability to explore and potentially develop the Pinaya Project into an operating mine.

March 2023.

Our subsidiary Cordoba is currently involved in two legal proceedings. The first is a criminal lawsuit filed by Cordoba in late 2018 and in January 2019 with the Colombian prosecutors against nine members of former Colombian management alleging breach of fiduciary obligations, abuse of trust, theft and fraud. This proceeding is ongoing. In the second proceeding, Cordoba (along with the National Mining Agency, Ministry of Mines and Energy, the local environmental authority, the Municipality of Puerto Libertador and the State of Cordoba) were served with a class action claim by the Alacran Community. This class action seeks (i) an injunction against Cordoba´s operations in the Alacrán area and (ii) an injunction against the prior declaration by the authorities that the Alacran Community´s mining activities were illegal. The claim was initially filed with the Administrative Court of Medellín, which remanded the case to the Administrative Court of Montería, which contested it and submitted the case to the Council of State. The Council of State determined the Administrative Court of Montería as the competent tribunal, where the process is currently being conducted. The Administrative Court of Montería admitted the commencement of the class action on September 2021. The decision was challenged by Cordoba and other defendants and ~~accordingly,~~confirmed by the Court. Cordoba timely filed its: (i) response to the lawsuit and statement of defense; and (ii) opposition to the injunction requested by plaintiffs. The Court ~~is required to adopt~~now should: (i) issue a decision ~~which is still pending.~~on the injunction; and (ii) schedule date and time for the initial hearing. While the court matters proceed, Cordoba will incur additional costs that will negatively impact its financial position. As well, the litigation process is uncertain and it is possible that the second proceeding is resolved against Cordoba, which could have a material adverse effect on its business, results of operations, financial condition and prospects.

Item 1A. Risk Factors.

There have been no material changes to ~~the Risk Factors~~our risk factors previously disclosed in ~~the Final Prospectus. The risks described in the Final Prospectus are not the only risks facing~~Part I, Item 1A. “Risk Factors” of our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and operating results.

2022 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities for the Three Months Ended ~~June 30, 2022~~

~~The following list sets forth information regarding all unregistered securities sold by us during~~March 31, 2023

During the three months ended ~~June 30, 2022:~~

●

~~On June30, 2022, we issued 5,419,923 shares of our common stock upon the automatic conversion of our outstanding Series 1 convertible notes at a conversion price of $9.39 per share.~~

March 31, 2023, we have issued and sold the securities described below without registering the securities under the Securities Act.

On February 21, 2023 we entered into an earn-in agreement pursuant to which we agreed to issue up to $1,400,000 worth of our common stock to Exiro Minerals USA Corp. as partial consideration for the right to earn in on the White Hill Copper Project. The first tranche of 10,281 shares was issued on March 3, 2023 at a deemed price of $14.59 per share. Additional shares may be issued by the Company in connection with an earn-in right over the course of up to six years. Such shares will be valued at the greater of $11.75 per share or the 5-day volume-weighted average price of such shares for

the five consecutive trading day period ending on the trading day prior to the applicable anniversary date of the agreement that requires the issuance.

~~Table of Contents~~

●

~~On June 30, 2022, we issued 8,209,035 shares of our common stock upon the automatic conversion of our outstanding Series 2 convertible notes at a conversion price of $10.58 per share.~~

●

On June 30, 2022, we issued 945,626 shares of our common stock at a price of $10.58 per share to Central Arizona Resources Ltd. as partial consideration for the assignment to one of our wholly-owned subsidiaries of certain rights associated with one of the Company’s projects.

The ~~issuances~~issuance of the above securities ~~were~~was exempt ~~either pursuant to Rule 701 under the Securities Act, as transactions pursuant to compensatory benefit plans, or~~ pursuant to Section 4(a)(2)of the Securities Act, as ~~transactions by an issuer not involving~~the securities were issued to financially sophisticated purchaser in a ~~public offering.~~

privately negotiated transaction.

Use of Proceeds from our IPO

On June 27, 2022, our Registration Statement on Form S-1 (File No. 333-265175) relating to our IPO of our common stock was declared effective by the SEC.

On June 30, 2022, we completed our IPO and issued and sold 14,388,000 shares of our common stock at a price to the public of $11.75 per share for aggregate gross proceeds of $169.1 million. BMO Capital Markets Corp. and Jefferies LLC acted as joint book-running managers for the IPO and as representatives of the underwriters.

The net proceeds from the IPO to us, after deducting underwriting discounts and commissions and offering expenses of ~~$10.9~~$11.1 million, were ~~$158.2~~$158.0 million. No IPO expenses were paid directly or indirectly to any of our directors or officers (or their associates) or persons owning 10.0% or more of any class of our equity securities or to any other affiliates. ~~There has been no material change in our~~As at March 31, 2023, the Company's use of net proceeds is materially in-line with the planned use of ~~the~~ net proceeds ~~from our IPO~~as described in the ~~Final Prospectus.~~

final prospectus.

~~Table of Contents~~

Item 6. Exhibits.


Exhibit Number		Description
10.1*		Executive Employment Agreement dated January 24, 2022 between the Company and Glen Kuntz
~~Exhibit~~ ~~Number~~ 10.2*		Executive Employment Agreement dated January 4, 2023 between the Company and Cassandra Joseph	~~Description~~
~~3.1~~ 10.3			~~Amended and Restated Certificate~~Heads of ~~Incorporation of~~Terms Agreement between Ivanhoe Electric Inc. and Saudi Arabian Mining Company Ma’aden dated January 11, 2023 (incorporated by reference to Exhibit ~~3.1~~10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on ~~June 27, 2022)~~January 11, 2023).
~~3.2~~ 31.1*			~~Amended and Restated Bylaws of Ivanhoe Electric Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed with the SEC on June 27, 2022)~~
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*			Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Exchange Act, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*			Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*			Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS			Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH			Inline XBRL Taxonomy Extension Schema Document
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

*	~~Filed herewith.~~

*Filed herewith.

~~Table of Contents~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: May 15, 2023		By:	/s/ Taylor Melvin
~~Date: August 12, 2022~~		~~By:~~	~~/s/ Robert Friedland~~ Taylor Melvin
			~~Robert Friedland~~
	Chief Executive Officer
			(Principal Executive Officer)


Date: ~~August 12, 2022~~ May 15, 2023		By:	/s/ ~~Catherine Barone~~ Jordan Neeser
			~~Catherine Barone~~ Jordan Neeser
			~~Interim~~ Chief Financial Officer
			(Principal Financial Officer)


	June 30,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	223,833	$	49,850
Accounts receivable		1,139		1,385
Inventory		6,344		5,878
Prepaid expenses, deposits and other		8,079		1,152
		239,395		58,265
Non-current assets:
Investments subject to significant influence		6,837		7,701
Other investments		1,605		1,802
Exploration mineral interests		82,269		73,039
Property, plant and equipment		3,443		2,523
Intangible assets		2,788		4,340
Other non-current assets		4,657		5,861
Total assets	$	340,994	$	153,531

Liabilities and Equity
Current liabilities:
Accounts payable and accrued liabilities	$	20,503	$	10,195
Deferred consideration payable		—		26,562
Lease liabilities, current		405		342
Contract liability		3,275		3,484
		24,183		40,583
Non-current liabilities:
Deferred income taxes		4,952		5,382
Convertible debt		24,879		78,832
Lease liabilities, net of current portion		751		55
Other non-current liabilities		371		865
Total liabilities		55,136		125,717

Commitments and contingencies (Note 15)

Equity:
Preferred stock, par value $0.0001; 50,000,000 shares authorized; NaN issued and outstanding		—		—
Common stock, par value $0.0001; 700,000,000 shares authorized; 92.9 million shares issued and outstanding as of June 30, 2022 (December 31, 2021 - 63.9 million)		9		6
Additional paid-in capital		406,851		75,743
Accumulated deficit		(122,132)		(52,314)
Accumulated other comprehensive income		(1,567)		(1,502)
Equity attributable to common stockholders		283,161		21,933
Non-controlling interests		2,697		5,881
Total equity		285,858		27,814
Total liabilities and equity	$	340,994	$	153,531


	March 31, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	106,995	$	139,660
Accounts receivable	2,207		1,497
Inventory	5,869		5,648
Prepaid expenses and deposits	3,085		4,226
	118,156		151,031
Non-current assets:
Investments subject to significant influence	6,118		5,998
Other investments	1,656		2,220
Exploration mineral interests	88,520		86,758
Property, plant and equipment	4,214		3,934
Intangible assets	546		1,249
Other non-current assets	8,157		9,296
Total assets	$	227,367	$	260,486

Liabilities and Equity
Current liabilities:
Accounts payable and accrued liabilities	$	12,934	$	13,943
Lease liabilities, current	831		706
Contract liability	3,572		2,783
	17,337		17,432
Non-current liabilities:
Deferred income taxes	3,878		3,888
Convertible debt	26,427		25,918
Due to related party	10,305		10,010
Lease liabilities, net of current portion	294		403
Other non-current liabilities	44		388
Total liabilities	58,285		58,039

Commitments and contingencies (Note 14)

Equity:
Common stock, par value $0.0001; 700.0 million shares authorized; 93.0 million shares issued and outstanding as of March 31, 2023 (December 31, 2022 - 700.0 million shares authorized; 93.0 million issued and outstanding)	9		9
Additional paid-in capital	414,897		409,683
Accumulated deficit	(238,202)		(202,128)
Accumulated other comprehensive income	(1,235)		(1,189)
Equity attributable to common stockholders	175,469		206,375
Non-controlling interests	(6,387)		(3,928)
Total equity	169,082		202,447
Total liabilities and equity	$	227,367	$	260,486


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Revenue	$	229	$	1,495	$	6,991	$	3,054
Cost of sales		(115)		(324)		(167)		(641)
Gross profit		114		1,171		6,824		2,413

Operating expenses:
Exploration expenses		23,863		8,348		41,186		14,609
General and administrative expenses		4,659		3,425		9,885		6,220
Research and development expenses		1,257		756		2,588		1,712
Selling and marketing expenses		21		22		57		45

Loss from operations		29,686		11,380		46,892		20,173

Other expenses (income):
Interest expense, net		523		26		1,035		115
Foreign exchange loss (gain)		242		22		431		(354)
Loss on revaluation of investments		6,102		1,475		1,443		258
Loss on revaluation of convertible debt		16,083		—		18,965		—
Share of loss of equity method investees		1,550		—		1,550		—
Other expenses, net		1,359		67		1,582		(422)

Loss before income taxes		55,545		12,970		71,898		19,770

Income taxes		(70)		52		1,251		(184)

Net loss		55,475		13,022		73,149		19,586
Less loss attributable to non-controlling interests		(1,109)		(2,286)		(3,331)		(4,197)
Net loss attributable to common stockholders or parent		54,366		10,736		69,818		15,389

Net loss		55,475		13,022		73,149		19,586
Other comprehensive income, net of tax:
Foreign currency translation adjustments		147		206		41		198
Other comprehensive income		147		206		41		198
Comprehensive loss	$	55,622	$	13,228	$	73,190	$	19,784

Comprehensive loss attributable to:
Common stockholders or parent		54,533		10,912		69,883		15,551
Non-controlling interests		1,089	$	2,316		3,307	$	4,233
	$	55,622	$	13,228	$	73,190	$	19,784

Net loss per share attributable to common stockholders
Basic and diluted	$	0.85	$	0.18	$	1.09	$	0.26
Weighted-average common shares outstanding
Basic and diluted		64,243,603		59,909,344		64,085,348		59,909,344


										Accumulated
				Additional						other
	Common Stock			paid-in		Net parent		Accumulated		comprehensive		Non-controlling
	Shares	Amount		capital		investment		deficit		income(loss)		interest		Total
Balance at January 1, 2021	—	$	—	$	—	$	43,520	$	—	$	(1,538)	$	6,710	$	48,692

Net loss	—		—		—		(4,653)		—		—		(1,911)		(6,564)
Other comprehensive income (loss)	—		—		—		—		—		13		(5)		8
Net transfer from parent	—		—		—		5,606		—		—		—		5,606
Other changes in non-controlling interests	—		—		—		—		—		—		398		398
Balance at March 31, 2021	—		—		—		44,473		—		(1,525)		5,192		48,140

Net loss	—		—		—		(2,353)		(8,383)		—		(2,286)		(13,022)
Other comprehensive loss	—		—		—		—		—		(175)		(31)		(206)
Net transfer from parent	—		—		—		23,534		—		—		—		23,534
Restructuring upon spin off (Note 1)	—		6		65,648		(65,654)		—		—		—		—
Share based compensation	—		—		236		—		—		—		80		316
Other changes in non-controlling interests	—		—		(28)		—		—		—		1,567		1,539
Balance at June 30, 2021	—	$	6	$	65,856	$	—	$	(8,383)	$	(1,700)	$	4,522	$	60,301

Balance at January 1, 2022	63,925,334	$	6	$	75,743	$	—	$	(52,314)	$	(1,502)	$	5,881	$	27,814

Net loss	—		—		—		—		(15,452)		—		(2,222)		(17,674)
Other comprehensive income	—		—		—		—		—		102		4		106
Share-based compensation	—		—		882		—		—		—		73		955
Balance at March 31, 2022	63,925,334		6		76,625		—		(67,766)		(1,400)		3,736		11,201

Net loss	—		—		—		—		(54,366)		—		(1,109)		(55,475)
Other comprehensive income (loss)	—		—		—		—		—		(167)		20		(147)
Issuance of common stock, net of issuance costs	14,388,000		2		158,200		—		—		—		—		158,202
Issuance of common stock upon conversion of debt	13,628,958		1		160,139		—		—		—		—		160,140
Issuance of common stock upon settlement of liability	945,626		—		11,111		—		—		—		—		11,111
Share-based compensation	—		—		784		—		—		—		54		838
Other changes in non-controlling interests	—		—		(8)		—		—		—		(4)		(12)
Balance at June 30, 2022	92,887,918	$	9	$	406,851	$	—	$	(122,132)	$	(1,567)	$	2,697	$	285,858


				Additional paid-in capital		Accumulated deficit		Accumulated other comprehensive Income (loss)		Non-controlling interest		Total
	Common Stock
	Shares	Amount
Balance at January 1, 2022	63,925,334	$	6	$	75,743	$	(52,314)	$	(1,502)	$	5,881	$	27,814
Net loss	—	—		—		(15,452)		—		(2,222)		(17,674)
Other comprehensive income	—	—		—		—		102		4		106
Share-based compensation	—	—		882		—		—		73		955
Balance at March 31, 2022	63,925,334	$	6	$	76,625	$	(67,766)	$	(1,400)	$	3,736	$	11,201














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 loss	—	—		—		—		(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


	Six months ended June 30,
	2022		2021
Operating activities
Net loss	$	(73,149)	$	(19,586)
Adjustments to reconcile net loss to cash provided by (used in) operating activities:
Depreciation of property, plant and equipment		410		218
Amortization of intangible assets		1,506		1,435
Amortization of operating lease right-of-use-assets		372		328
Share-based compensation		1,793		1,103
Unrealized foreign exchange (gain) loss		392		(225)
Interest expense		1,022		130
Income taxes		1,251		(184)
Loss on revaluation of convertible debt		18,965		—
Loss on revaluation of investments		1,443		258
Share of loss of equity method investees		1,550		—
Other		1,566		(1,215)

Changes in other operating assets and liabilities:
Trade accounts receivable		247		(373)
Inventory		(466)		(659)
Operating lease liabilities		(430)		(375)
Accounts payable and accrued liabilities		(102)		2,092
Other operating assets and liabilities		(567)		170
Net cash used in operating activities		(44,197)		(16,883)

Investing activities
Purchase of mineral interests		(25,727)		(3,050)
Purchase of property, plant and equipment and intangible assets		(615)		(1,707)
Purchase of investments subject to significant influence		(1,962)		—
Other		(110)		(515)
Net cash used in investing activities		(28,414)		(5,272)

Financing activities
Net proceeds from issuance of common stock		160,576		—
Proceeds from convertible notes		86,200		—
Net transfer from parent		—		23,152
Proceeds from subsidiary financings		—		1,382
Other		(12)		—
Net cash provided by financing activities		246,764		24,534

Effect of foreign exchange rate changes on cash and cash equivalents		(170)		124
Increase in cash and cash equivalents		174,153		2,379
Cash and cash equivalents, beginning of the year		49,850		9,341
Cash and cash equivalents, end of the period	$	223,833	$	11,844

Supplemental cash flow information
Cash paid for income taxes	$	438	$	348

Supplemental disclosure of non-cash investing and financing activities
Issuance of common stock upon conversion of debt	$	160,140	$	—
Issuance of common stock upon settlement of liability		11,111		—
Settlement of loan from parent		—		5,886
Issuance of common stock in exchange for assets (Note 1)		—		65,654


	Carried at fair value				Equity method
	Sama		Fjordland		SNC		Total
Balance at January 1, 2022		5,719		1,325		657		7,701
Change in fair value		(481)		(769)		—		(1,250)
Investment during the period		—		—		1,962		1,962
Share of loss		—		—		(1,551)		(1,551)
Foreign currency translation		—		(13)		(12)		(25)
Balance at June 30, 2022	$	5,238	$	543	$	1,056	$	6,837


	Santa Cruz		Tintic Project		San Matias		Pinaya Project		Mineral Royalty		Other		Total
Balance at December 31, 2021	$	35,075	$	19,588	$	13,607	$	2,511	$	1,708	$	550	$	73,039
Acquisition costs		4,952		4,025		—		—		—		250		9,227
Foreign currency translation		—		—		—		3		—		—		3
Balance at June 30, 2022	$	40,027	$	23,613	$	13,607	$	2,514	$	1,708	$	800	$	82,269


	Santa Cruz		Tintic		Pinaya		San Matias		Other		Total
Balance at December 31, 2022	$	40,880	$	27,138	$	2,525	$	15,315	$	900	$	86,758
Acquisition costs	—		1,763		—		—		—		1,763
Foreign currency translation	—		—		(1)		—		—		(1)
Balance at March 31, 2023	$	40,880	$	28,901	$	2,524	$	15,315	$	900	$	88,520


	Series 1		Series 2		VRB
	Convertible		Convertible		Convertible
	Notes (Note a)		Notes (Note a)		bond (Note b)		Total

Balance at December 31, 2021	$	54,975	$	—	$	23,857	$	78,832
Issuance of Series 2 Convertible Notes		—		86,200		—		86,200
Interest expense		—		—		1,022		1,022
Fair value adjustments		8,709		10,256		—		18,965
Conversion to common stock		(63,684)		(96,456)		—		(160,140)
Balance at June 30, 2022	$	—	$	—	$	24,879	$	24,879


		Grant date: February 1, 2023			Grant date: March 1, 2023
Exercise price		$	13.23		$	15.46
Number of options granted		500,000			100,000
Weighted average assumptions used to value stock option awards:
	Expected volatility	69.8		%	69.5		%
	Expected life of options (in years)	4			4
	Expected dividend rate	0		%	0		%
	Risk-free interest rate	3.73		%	4.52		%
Weighted average grant-date fair value (per option)		$	7.22		$	8.53


	Three months ended				Six months ended
	June 30:				June 30:
Revenue type	2022		2021		2022		2021
Software licensing (Note a)	$	9	$	0	$	6,711	$	0
Data processing services		220		1,464		280		2,950
Renewable energy storage systems (Note b)		—		31		—		104
Total	$	229	$	1,495	$	6,991	$	3,054


			Transactions for the		Transactions for the
			three months ended		six months ended
	Balance outstanding as at		June 30,		June 30,
	June 30,	December 31,
	2022	2021	2022	2021	2022	2021
Total Expenses
Global Mining (Note a)	1,208	993	3,345	1,803	6,082	3,250
Ivanhoe Capital Aviation (Note b)	—	—	250	—	500	—
HPX (Note c)	—	—	—	487	—	487
Total	1,208	993	3,595	2,290	6,582	3,737
Advances
Global Mining (Note a)	1,833	1,855	—	—	—	—


	Transactions for the		Transactions for the six
	three months ended		months ended
	June 30,		June 30,
	2022	2021	2022	2021
Expense classification
General and administrative expenses	1,580	1,153	3,052	1,935
Exploration expenses	2,015	1,137	3,530	1,802
	3,595	2,290	6,582	3,737


	June 30, 2022						December 31, 2021
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Financial assets:
Investments subject to significant influence		5,781		—		—		7,044		—		—
Other investments		1,605		—		—		1,802		—		—
Total financial assets	$	7,386	$	—	$	—	$	8,846	$	—	$	—
Financial liabilities:
Convertible notes		—		—		—		—		—		54,975
Deferred consideration payable		—		—		—		—		—		26,562
Total financial liabilities	$	—	$	—	$	—	$	—	$	—	$	81,537


	Three months ended June 30, 2022								Six months ended June 30, 2022
	Critical		Data		Energy				Critical		Data		Energy
	Metals		Processing		Storage		Total		Metals		Processing		Storage		Total
Revenue	$	—	$	229	$	—	$	229	$	—	$	6,991	$	—	$	6,991
Intersegment revenues		—		96		—		96		—		139		—		139
Loss (income) from operations		27,103		953		1,630		29,686		47,883		(4,596)		3,605		46,892
Segment Assets		309,574		7,259		24,161		340,994		309,574		7,259		24,161		340,994


	Three months ended June 30, 2021								Six months ended June 30, 2021
	Critical		Data		Energy				Critical		Data		Energy
	Metals		Processing		Storage		Total		Metals		Processing		Storage		Total
Revenue	$	—	$	1,464	$	31	$	1,495	$	—	$	2,950	$	104	$	3,054
Intersegment revenues		—		16		—		16		—		44		—		44
Loss (income) from operations		10,351		(101)		1,130		11,380		18,140		(282)		2,315		20,173
Segment Assets		59,522		9,245		9,256		78,023		59,522		9,245		9,256		78,023


			Three months
	Three months ended		ended June 30,		Percentage change
	June 30, 2022		2021		year-over-year
(In thousands)
CGI: Software licensing and data processing services:
Revenue	$	229	$	1,464	(84)	%
Cost of sales		(115)		(295)	(61)	%
Gross profit	$	114	$	1,169	(90)	%
VRB: Energy storage systems:
Revenue	$	—	$	31	(100)	%
Cost of sales		—		(29)	(100)	%
Gross profit	$	—	$	2	(100)	%
Total:
Revenue	$	229	$	1,495	(85)	%
Cost of sales		(115)		(324)	(65)	%
Gross profit	$	114	$	1,171	(90)	%


Mineral Project	Commitment	2022		2023		2024		2025		2026-2032		Total
In $ thousands)
Santa Cruz (USA)	Discretionary	$	18,665	$	6,550	$	10,300	$	596	$	—	$	36,111
Santa Cruz (USA)	Non-discretionary		600		800		920		—		—		2,320
Total Santa Cruz (USA)			19,265		7,350		11,220		596		—		38,431
Tintic (USA)	Discretionary		1,762		5,288		—		—		—		7.050
Hog Heaven (Montana)	Discretionary		—		3,500		500		500		39,000		43,500
Ivory Coast (Ivory Coast)	Discretionary		—		—		—		—		7,762		7,762
South Voisey’s Bay (Canada)	Discretionary		—		—		4,416		—		—		4,416
Crystal Haven (Australia)	Discretionary		—		7,000		—		35,000		—		42,000
Unity (USA)	Discretionary		—		2,000		2,250		—		—		4,250
Cave & Lincoln (USA)	Discretionary		100		150		200		250		2,250		2,950
Carolina Mining (USA)	Discretionary		—		—		—		5,000		20,000		25,000
Total			21,127		25,288		18,586		41,346		69,012		175,359


	Currency by Denomination (in USD Equivalents)
			Canadian		Chinese
	US dollars		dollars		Renminbi		Other		Total
(In $ thousands)
Jurisdiction of Entity:
USA	$	200,421	$	1,407	$	—	$	—	$	201,828
Cayman Islands		12,702		8		—		—		12,710
Canada		3,979		4,020		—		—		7,999
China		—		—		438		—		438
British Virgin Islands		387		1		—		—		388
Other		264		1		—		205		470
Total		217,753		5,437		438		205		223,833


	Payments due by period (in thousands)
			Less than						More than
	Total		1 year		1-3 years		4-5 years		5 years
Long-term debt obligations (a)	$	24,000	$	—	$	—	$	24,000	$	—
Leases		1,179		405		765		9		—
Other long-term contractual liabilities (b)		371		—		371		—		—
Total contractual obligations	$	25,550	$	405	$	1,136	$	24,009	$	—


	February 1, 2023 Grant Date	March 1, 2023 Grant Date
Risk-free interest rate	3.7%	4.5%
Dividend yield	nil	nil
Estimated volatility	69.8%	69.5%
Expected option life	4 years	4 years