10-K/A: Ivanhoe Electric Amends 10-K, Highlights Exploration Progress and Project Developments

Ivanhoe Electric files an amendment to its 2024 Annual Report on Form 10-K, correcting typographical errors and updating exhibits, while also providing updates on its mineral exploration projects and corporate activities.

Summary

• Ivanhoe Electric filed Amendment No. 1 to its Annual Report on Form 10-K for the year ended December 31, 2024, primarily to correct typographical errors in mineral resource tables and update certain exhibits.
• The company is focused on developing mines from mineral deposits, mainly in the United States, to support American supply chain independence for critical metals needed for electrification, with a focus on copper.
• The sole material mineral project is the Santa Cruz Project in Arizona, with an Initial Assessment completed in September 2023 estimating a life of mine (LOM) copper production of 1.6 million tonnes over a 20-year mine life, with projected cash costs of $1.36 per pound of copper produced.
• Ivanhoe Electric established an exploration joint venture with Maaden in Saudi Arabia in 2023, contributing $66.4 million to fund the Saudi JVCo, and announced its first mineral discovery in January 2025.
• In 2024, an exploration alliance was formed with BHP to search for critical minerals in the United States, with BHP providing initial funding of $15 million.
• Other international mineral projects include the Alacran Project in Colombia (62.5% interest through Cordoba Minerals Corp.), the Ivory Coast Project (interest in Sama Resources Inc. and 60% interest in a joint venture), and the wholly-owned Pinaya Project in Peru.
• The company owns patents to the Typhoon geophysical mineral exploration technology and a 94.3% controlling interest in Computational Geosciences Inc. (CGI).
• Ivanhoe Electric owns a 90.0% interest in VRB Energy Inc., focused on grid-scale energy storage systems utilizing vanadium redox flow batteries.
• The company has a Mined Land Reclamation Plan (MLRP) for full operations that will be completed and submitted for approval prior to construction of the Santa Cruz project.
• The economic analysis of the Santa Cruz Project, without inferred material, returns an after-tax net present value (NPV) at 8% of US$0.5 billion, an after-tax internal rate of return (IRR) of 14% and a payback period from the start of construction of 10 years.
• When the inferred material is included in the economic analysis, the after tax NPV @ 8% increases to US$1.3 billion, the after tax IRR increases to 23% and the payback period decreases to 7 years from the start of construction.

Sentiment

Score: 7

Explanation: The document is generally positive, highlighting exploration progress, project developments, and strategic partnerships. However, it also acknowledges risks and uncertainties associated with the projects, resulting in a moderately positive sentiment score.

Positives

• The Santa Cruz Project has excellent existing infrastructure including access to roads and interstate highways, railroads, power lines, and an abundant supply of water from dewatering operations and water rights associated with the private land constituting portions of Project.
• The company's focus on using clean and renewable energy in future mining operations is a positive ESG consideration.
• The Exploration Alliance with BHP provides significant funding and expertise for critical mineral exploration.
• The Joint Venture with Maaden provides access to a large area of underexplored land in Saudi Arabia.
• The company's commitment to promoting the health, safety and well-being of its workforce and striving to further strengthen its commitment to promoting an inclusive and diverse workplace is a positive ESG consideration.

Negatives

• The Santa Cruz Project is an exploration stage project without mineral reserves.
• The IA is preliminary in nature, it includes inferred mineral resources that are considered too speculative geologically to have modifying factors applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that this initial economic assessment will be realized, including whether the mine would be developed as set out in the IA.
• The economic analysis of the Santa Cruz Project is sensitive to material classification, mined grades, commodity prices and recovery assumptions within the processing plant.
• The company has a number of mineral project obligations and payments that are discretionary, and if the company fails to make the payment in the amounts and when due, it will lose the rights associated with the project.

Risks

• The Santa Cruz Project is subject to permitting and encumbrances, and there is no assurance that all permits will be received.
• The company is subject to environmental laws, regulations and permits, and violations during mining operations occur from time to time in the industry.
• The company's economic analysis relies upon a range of assumptions and forecasts that are subject to change depending upon macroeconomic conditions, operating strategy and new data collected through future study or operations and therefore actual economic outcomes often deviate significantly from forecasts.
• The company's exploration projects are subject to the risk of not discovering commercially viable mineral deposits.
• The company's international projects are subject to political, economic, and social risks in the countries in which they operate.

Future Outlook

The company is advancing the Santa Cruz project to complete a Preliminary Feasibility Study (PFS) by the end of the second fiscal quarter of 2025 and is continuing to investigate renewable power options for the Project.

Industry Context

The document highlights the company's focus on securing critical metals, particularly copper, which aligns with the growing global demand for these resources driven by the electrification of the economy and the clean energy transition. The company's projects are located in regions with a history of copper mining, such as Arizona, Utah, and Montana, which are considered attractive investment jurisdictions.

Comparison to Industry Standards

• The Santa Cruz Project's projected cash costs of $1.36 per pound of copper produced are competitive with other copper mining operations globally.
• The Alacran Project's after-tax NPV of $360 million and IRR of 23.8% are within the range of economic results for similar-sized copper-gold projects in South America.
• The company's use of Typhoon technology and CGI software for mineral exploration is an innovative approach that could provide a competitive advantage over companies using traditional exploration methods.
• The company's investment in VRB Energy and vanadium redox flow batteries aligns with the growing demand for grid-scale energy storage solutions, which is a key trend in the renewable energy sector.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential for increased shareholder value through successful exploration and development of mineral projects.
• Employees: Opportunities for employment and career advancement within the company.
• Local Communities: Potential for economic benefits through job creation and local spending, but also potential for environmental and social impacts.
• Suppliers: Opportunities for business through providing goods and services to the company's operations.
• Creditors: Potential for increased financial stability and creditworthiness of the company.

Next Steps

• Complete a Pre-Feasibility Study (PFS) for the Santa Cruz project by the end of the second fiscal quarter of 2025.
• Explore different mine access locations and mining orientations for the Santa Cruz long hole stoping areas.
• Optimize the stope size when additional geotechnical information is available.
• Evaluate more efficient materials handling methodologies.
• Conduct tradeoff and other studies analyzing alternative processing scenarios, including potentially heap leaching.
• Continue to investigate renewable power options for the Project to develop costs and timelines for installing solar and other green power generating facilities on or near the site.
• Continued exploration is proposed to test the Battle Butte Porphyry, searching for higher-grade copper-gold zones and the presence of additional porphyry centers across the Hog Heaven project.

Key Dates