ie-20230630

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

Registrant’s telephone number, including area code: (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

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 o

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 o

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 14, 2023, the registrant had 103,783,905 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

IVANHOE ELECTRIC INC. Form 10-Q

For the Quarter Ended June 30, 2023


		Page
PART I. FINANCIAL INFORMATION		3
Item 1.	Condensed Interim Consolidated Financial Statements	3
	Condensed Interim Consolidated Balance Sheets	3
	Condensed Interim Consolidated Statements of Loss and Comprehensive Loss	4
	Condensed Interim Consolidated Statements of Changes in Equity	5
	Condensed Interim Consolidated Statements of Cash Flows	6
	Notes to Condensed Interim Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II. OTHER INFORMATION		29
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities	29
Item 6.	Exhibits	30
Signatures		31

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

IVANHOE ELECTRIC INC.

Condensed Interim Consolidated Balance Sheets (Unaudited)

(Expressed in thousands of U.S. dollars)


	June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	63,801	$	139,660
Accounts receivable	2,130		1,497
Inventory	4,630		5,648
Prepaid expenses and deposits	5,977		4,226
	76,538		151,031
Non-current assets:
Investments subject to significant influence	8,382		5,998
Other investments	1,871		2,220
Exploration properties	209,890		86,758
Property, plant and equipment	3,987		3,934
Intangible assets	221		1,249
Other non-current assets	8,872		9,296
Total assets	$	309,761	$	260,486

Liabilities and Equity
Current liabilities:
Accounts payable and accrued liabilities	$	23,846	$	13,943
Note payable	35,081		—
Lease liabilities, current	768		706
Contract liability	2,810		2,783
	62,505		17,432
Non-current liabilities:
Note payable	48,325		—
Convertible debt	26,941		25,918
Deferred income taxes	4,259		3,888
Due to related party	—		10,010
Lease liabilities, net of current portion	216		403
Other non-current liabilities	767		388
Total liabilities	143,013		58,039

Commitments and contingencies (Note 15)

Equity:
Common stock, par value $0.0001; 700,000,000 shares authorized; 93.5 million shares issued and outstanding as of June 30, 2023 (December 31, 2022 - 700,000,000 authorized; 93.0 million issued and outstanding)	9		9
Additional paid-in capital	439,442		409,683
Accumulated deficit	(276,465)		(202,128)
Accumulated other comprehensive income	(2,058)		(1,189)
Equity attributable to common stockholders	160,928		206,375
Non-controlling interests	5,820		(3,928)
Total equity	166,748		202,447
Total liabilities and equity	$	309,761	$	260,486

Table of Contents

IVANHOE ELECTRIC INC.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss (Unaudited)

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue	$	1,314	$	229	$	1,993	$	6,991
Cost of sales	(1,256)		(115)		(1,440)		(167)
Gross profit	58		114		553		6,824

Operating expenses:
Exploration expenses	32,551		23,863		59,110		41,186
General and administrative expenses	12,658		4,659		23,291		9,885
Research and development expenses	2,138		1,257		3,981		2,588
Selling and marketing expenses	96		21		145		57

Loss from operations	47,385		29,686		85,974		46,892

Other expenses (income):
Interest expense, net	713		523		681		1,035
Foreign exchange (gain) loss	(1,312)		242		(1,473)		431
(Gain) loss on revaluation of investments	(1,321)		6,102		(946)		1,443
Loss on revaluation of convertible debt	—		16,083		—		18,965
Share of loss of equity method investees	606		1,550		1,228		1,550
Other (income) expenses, net	(1,096)		1,359		(1,837)		1,582

Loss before income taxes	44,975		55,545		83,627		71,898

Income tax expense (recovery)	(128)		(70)		(200)		1,251

Net loss	44,847		55,475		83,427		73,149
Less loss attributable to non-controlling interests	(6,584)		(1,109)		(9,090)		(3,331)
Net loss attributable to common stockholders or parent	38,263		54,366		74,337		69,818

Net loss	44,847		55,475		83,427		73,149
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	1,271		147		1,339		41
Other comprehensive loss	1,271		147		1,339		41
Comprehensive loss	$	46,118	$	55,622	$	84,766	$	73,190

Comprehensive loss attributable to:
Common stockholders or parent	39,086		54,533		75,206		69,883
Non-controlling interests	7,032		$	1,089	9,560		$	3,307
	$	46,118	$	55,622	$	84,766	$	73,190

Net loss per share attributable to common stockholders
Basic and diluted	$	0.41	$	0.85	$	0.80	$	1.09
Weighted-average common shares outstanding
Basic and diluted	93,124,994		64,243,603		93,045,066		64,085,348

Table of Contents

IVANHOE ELECTRIC INC.

Condensed Interim Consolidated Statements of Changes in Equity (Unaudited)

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

Six months ended June 30, 2023 and 2022


				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
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

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	—

SEC Form 10-Q filed by Ivanhoe Electric Inc.