Ivanhoe Electric Inc.
Ivanhoe Electric Inc.
02/23/2026 | Press release | Distributed by Public on 02/23/2026 07:19
Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes to those statements included elsewhere in this Annual Report. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under Item 1A. Risk Factors and elsewhere in this Annual Report. See "Cautionary Note Regarding Forward-Looking Statements."
Business Overview
We are a technology-driven United States minerals exploration and development company with a focus on copper and other critical metals vital to electric transmission and generation, manufacturing, infrastructure development, technology, and national security. Our wholly owned assets are located in the United States. We operate exploration joint ventures and alliances in Saudi Arabia, Chile and the United States. We use our powerful Typhoon™ geophysical surveying system, together with advanced data analytics provided by our 94.3%-owned subsidiary, Computational Geosciences Inc. ("CGI"), to accelerate and de-risk the mineral exploration process in the search for new deposits of critical metals that may otherwise be undetectable by traditional exploration technologies. We believe the United States is significantly underexplored and has the potential to yield major new discoveries of critical metals.
Through the advancement of our portfolio of critical metals exploration and development projects, headlined by the Santa Cruz Copper Project in Arizona, we intend to contribute to domestic supply by developing resources that support industrial and strategic sectors. We also operate a 50/50 joint venture with Saudi Arabian Mining Company ("Maaden") to explore for minerals on ~50,000 km2of underexplored Arabian Shield in Saudi Arabia. Finally, in 2024, we established an exploration alliance with BHP Mineral Resources Inc. ("BHP"), a subsidiary of BHP Group Limited, to search for critical minerals in the United States.
Our other mineral projects in the United States include the Tintic Project, located in Utah, the Hog Heaven Copper-Silver-Gold Project, located in Montana, the Bristol Project located in Nevada, and the Gleeson, Lomitas Negras, Globe-Miami and Perseverance Projects in Arizona.
Our other mineral projects outside of the United States include our the Alacrán Project in Colombia (the "Alacrán Copper Project") which is owned through our approximate 60.8% interest in publicly traded company Cordoba Minerals Corp. ("Cordoba").
In addition to our mineral projects, we also own a 90.0% controlling interest in VRB Energy, which itself owns 100% of VRB USA, an Arizona-based developer of advanced grid-scale energy storage systems utilizing vanadium redox flow batteries for integration with renewable power sources. VRB Energy also has a 49% interest in VRB China which is a joint venture with China Energy Storage Industry Co., Ltd. ("Red Sun") a subsidiary of privately held Shanxi Red Sun Co., Ltd. VRB China manufactures, develops and sells vanadium redox flow batteries for Asian, African and Middle Eastern markets.
Our shares of common stock are listed on the NYSE American and the TSX under the ticker symbol "IE".
Business Developments in the Year
Corporate Activities
In February 2025, we completed a public offering where we issued 11,794,872 units (the "Units") at a price of $5.85 per Unit for gross proceeds of approximately $69.0 million, after giving effect to the underwriter's exercise in full of its option to purchase additional Units. Each Unit consisted of (i) one share of our common stock and (ii) one accompanying warrant (the "Warrants"). Each Warrant was exercisable to purchase one share of our common stock at a price of $7.00 per share until February 17, 2026. Prior to the expiry date, all of the Warrants were exercised for additional gross proceeds of approximately $82.6 million. The net proceeds of the offering were used or are intended to be used on the preliminary feasibility study for the Santa Cruz Copper Project, drilling and other exploration activities and for other working capital and general corporate purposes.
In October 2025, we completed a public offering where we issued 11,500,000 shares of our common stock at $15.00 per share for gross proceeds of approximately $172.5 million, after giving effect to the underwriter's exercise in full of its option to purchase additional shares of common stock. We intend to use the net proceeds from this offering to complete the remaining payments owed from the purchase of land at our Santa Cruz Copper Project in Arizona, to fund early
development activities at the Santa Cruz Copper Project, to fund exploration activities at our current projects and joint ventures, and for other working capital and general corporate purposes.
Santa Cruz Copper Project
On June 23, 2025, we announced the completion of the Preliminary Feasibility Study (the "PFS") for the Santa Cruz Copper Project in Arizona. The PFS confirmed the economic viability of an underground copper mining operation combined with a heap leach processing facility utilizing modern technologies and designed to produce copper cathode for delivery to U.S. customers. Following completion of the PFS, we are conducting optimization studies and detailed engineering as we work towards the beginning of initial construction activities in the first quarter of 2026.
Situated entirely on private land in Arizona, the Santa Cruz Copper Project integrates underground mining with chloride-assisted heap leaching to produce copper cathode on site, eliminating the need for smelting, tailings storage, and transportation and refining of concentrates. This integrated approach significantly reduces the project's overall carbon intensity.
The findings of the PFS include that the Santa Cruz Copper Project is projected to produce 1.4 million tonnes of copper cathode over a 23-year mine life. With a base case copper price of $4.25/lb, the Santa Cruz Copper Project has an estimated after-tax Net Present Value of $1.4 billion at an 8% discount rate and an estimated Internal Rate of Return (IRR) of 20%. The initial project capital estimated in the PFS is $1.24 billion.
On November 19, 2025, we announced that we accelerated and completed the final three land acquisition payments, totaling $39.3 million, at the Santa Cruz Copper Project in Arizona, satisfying all remaining terms of the 2023 Purchase and Sale Agreement with Wolff-Harvard Ventures LLC. The promissory note previously issued, and now repaid, required the full outstanding balance to be paid by us prior to commencement of major mine construction activities.
On December 12, 2025, we announced that our wholly-owned subsidiary, Mesa Cobre, which owns the Santa Cruz Copper Project, closed a $200 million senior secured multi-draw bridge facility (the "Bridge Facility") from a syndicate of three international financial institutions. The Bridge Facility will support the development of the Santa Cruz Copper Project by providing enhanced liquidity for early construction activities and working capital requirements. The Bridge Facility is currently undrawn.
Cordoba Minerals Corp.
On May 8, 2025, Cordoba, signed a definitive Framework Agreement for the sale of the its remaining 50% interest in the Alacrán Copper Project to a consortium of investors including JCHX Mining Management Co., Ltd. ("JCHX"), a 19.2% shareholder of Cordoba, for up to $128.0 million, consisting of $88.0 million in cash on closing, $12.0 million in a deferred payment, and up to $28.0 million in a contingent payment. Cordoba shareholders approved the transaction at a meeting of shareholders held on September 15, 2025.
On February 10, 2026, the agreement was amended to, among other things, provide for the full $128.0 million purchase price to be paid at closing and remove any post-closing payments, waive the closing condition of an Environmental Impact Assessment, add a new closing condition of JCHX shareholder approval, and extend the outside date to March 10, 2026. Cordoba has also agreed to use commercially reasonable efforts to distribute to its shareholders the net proceeds after satisfying all liabilities and obligations, subject to required approvals, such that $10 million will remain in Cordoba.
Saudi Arabia Exploration Activities
On September 2, 2025, we announced that Maaden had made available an additional 1,345 square kilometers of exploration licenses to the Maaden Ivanhoe Electric Exploration and Development Limited Company ("Maaden Joint Venture") that we established with them in 2023.
Selected Financial Information
The selected financial information set forth below is presented in accordance with U.S. GAAP and is derived from our audited consolidated financial statements for the years ended December 31, 2025, 2024 and 2023. We did not declare or pay any dividends or distributions in any financial reporting period.
| Year Ended December 31, | |||||||||||||||||
| (In thousands, except per share amounts) | 2025 | 2024 | 2023 | ||||||||||||||
| Revenue | $ | 3,244 | $ | 2,901 | $ | 3,903 | |||||||||||
| Cost of sales | (1,126) | (1,018) | (2,986) | ||||||||||||||
| Gross profit | 2,118 | 1,883 | 917 | ||||||||||||||
| Expenses: | |||||||||||||||||
| Exploration expenses | 63,287 | 130,944 | 126,719 | ||||||||||||||
| General and administrative expenses | 39,242 | 44,740 | 48,204 | ||||||||||||||
| Research and development expenses | 275 | 2,853 | 6,120 | ||||||||||||||
| Net loss attributable to: | |||||||||||||||||
| Common stockholders or parent | 105,874 | 128,622 | 199,377 | ||||||||||||||
| Comprehensive loss attributable to: | |||||||||||||||||
| Common stockholders or parent | 106,211 | 129,825 | 200,261 | ||||||||||||||
|
Basic and diluted loss per share attributable to common stockholders or parent
|
$ | 0.79 | $ | 1.07 | $ | 1.95 | |||||||||||
| Total assets | 483,273 | 374,932 | 487,226 | ||||||||||||||
| Total non-current liabilities | 5,830 | 61,085 | 71,222 | ||||||||||||||
Segments
We account for our business in four business segments - (i) Santa Cruz Copper Project (ii) critical metals, (iii) data processing services and (iv) energy storage.
Significant Components of Results of Operations
Revenue, Cost of Sales and Gross Profit
We have not generated any revenue from our mineral projects because they are in the exploration or development stage.
We generate some revenue from our technology businesses, CGI and VRB Energy, which is included in the data processing business segment and energy storage systems business segments, respectively.
CGI generates revenue from the sale of data processing services to the mining and oil and gas industries. In prior years, CGI has also generated revenue from software licensing.
VRB Energy generates revenue from developing, manufacturing and selling vanadium redox flow energy storage systems. Prior to October 2024, all of VRB Energy's revenue was generated by VRB China. In October 2024, VRB Energy reduced its ownership interest in VRB China to 49% and commenced equity accounting for this investment. During 2025, VRB Energy was focused on progressing its Arizona-based business, VRB USA.
Exploration Expenses
Direct costs for the acquisition of mineral exploration rights, including option payments, are capitalized and recorded initially at cost as exploration properties. Exploration and evaluation costs are expensed in the period incurred until such time as it has been determined that a mineral property is commercially feasible, in which case subsequent exploration and evaluation costs incurred to develop a mineral property are capitalized. Commercial feasibility is generally established when a mineral property has proven and probable reserves, permits or rights to extract the resources and reserves have been obtained and financing to develop the property has been approved.
Exploration expenses include topographical, geological, geochemical and geophysical studies, exploratory drilling, trenching, sampling and activities in relation to identifying a Mineral Resource and then evaluating the technical feasibility and commercial viability of extracting the Mineral Resource, as well as value-added taxes in relation to these direct
exploration and evaluation costs incurred in foreign jurisdictions where recoverability of those taxes is uncertain. Exploration expenses also include salaries, benefits and non-cash stock-based compensation expenses of the employees performing these activities.
Exploration expenses also include payments under earn-in and option agreements where the option right is with respect to ownership interests in legal entities owning the underlying mineral project in the exploration project phase. Through our earn-in and option agreements, we have the right (and in some cases, the obligation) to fund and conduct exploration on the underlying mineral project prior to determining whether to acquire a minority or majority ownership interest through further funding the costs of such exploration and, in some cases, through direct payments to the owners of the project. In the event we cease making expenditures on an exploration mineral project or fail to incur the agreed level of exploration expenditures, we will not obtain an ownership right beyond any that may have been acquired as of the date of termination.
Included in exploration expenses are early stage projects and exploration costs that we incur in relation to generating new projects that may or may not proceed to earn-in agreements depending on our evaluation. These are categorized as "Project generation and other".
General and Administrative Expenses
Our general and administrative expenses consist of salaries and benefits, stock-based compensation, professional and consultant fees, insurance and other general administration costs.
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
For the year ended December 31, 2025 we recorded a net loss attributable to common stockholders of $105.9 million ($0.79 per share), compared to $128.6 million ($1.07 per share) for the year ended December 31, 2024, which was a decrease of $22.7 million. Significant contributors to this decrease in the loss for year ended December 31, 2025 included a decrease of $67.7 million in exploration expenditures, a decrease of $5.5 million in general and administrative expenditures and a decrease of $3.1 million in the share of loss of equity method investee when compared to the year ended December 31, 2024. These decreases were offset by a $10.3 million provision for credit loss expense being recorded for the year ended December 31, 2025. The net loss attributable to common stockholders for the year ended December 31, 2024 also included a one-off recognition of a $50.7 million gain on the disposal of a subsidiary, for which there was no similar amount in the year ended December 31, 2025.
Exploration expenses were $63.3 million for the year ended December 31, 2025 a decrease of $67.7 million from $130.9 million for the year ended December 31, 2024. Exploration expenses consisted of the following:
| Year Ended December 31, | ||||||||||||||
| (In thousands) | 2025 | 2024 | ||||||||||||
| Exploration Expenses: | ||||||||||||||
| Santa Cruz, USA | $ | 23,589 | $ | 72,384 | ||||||||||
|
Alacrán, Colombia
|
19,397 | 14,756 | ||||||||||||
| Gleeson, USA | 2,099 | - | ||||||||||||
| Tintic, USA | 2,075 | 11,274 | ||||||||||||
| Hog Heaven, USA | 1,911 | 10,855 | ||||||||||||
| Project Generation and other | 14,216 | 21,675 | ||||||||||||
| Total | $ | 63,287 | $ | 130,944 | ||||||||||
During the year ended December 31, 2025, exploration expenditures largely focused on activities at:
•the Santa Cruz Copper Project where $23.6 million of exploration expenditure was incurred in the year ended December 31, 2025 compared to $72.4 million incurred in the year ended December 31, 2024. Activities during the year ended December 31, 2025 at the Santa Cruz Copper Project were focused on the technical engineering studies required to support the PFS that was released on June 23, 2025 and conducting optimization studies and detailed engineering. The exploration expenditures incurred in the year ended December 31, 2024 were significantly higher due to the activities being focused on infill resource drilling, geotechnical, hydrological, and metallurgical drilling to obtain data for the technical studies; and
•the Alacrán Project where $19.4 million of exploration expenditure was incurred by Cordoba in the year ended December 31, 2025 compared to $14.8 million in the year ended December 31, 2024. Activities during the year ended December 31, 2025, focused on detailed engineering design of the Alacran mine and consultation associated with the EIA Approval process.
General and administrative expenses were $39.2 million for the year ended December 31, 2025, a decrease of $5.5 million from $44.7 million in the year ended December 31, 2024. Several items contributed to the decrease, including a $3.3 million decrease in administration expenditures at VRB for the year ended December 31, 2025, compared to the year ended December 31, 2024 as a result of 2024 including general and administration costs related to VRB China which was deconsolidated in October 2024 and therefore there were no similar amounts in 2025. In addition, there was a $2.1 million decrease in non-cash stock-based compensation expense from $11.9 million for the year ended December 31, 2024 to $9.8 million for the year ended December 31, 2025 primarily due to a change in the mix of long-term incentive compensation issued for our 2025 annual grants as we issued performance-based restricted share units ("PSU's") instead of stock options which have different vesting schedule.
The $10.3 million provision for credit loss expense for the year ended December 31, 2025 relates to the recording of a provision for expected credit loss recorded for the full amount of the second tranche payment due from Red Sun in relation to the October 2024 sale of 51.0% of VRB China. The second tranche payment was due on June 30, 2025 and has not been received. The expected credit loss has been recorded due to prolonged delinquency, repeated unfulfilled payment promises from Red Sun, an absence of contractual modification and a high degree of risk and uncertainty with cross-border collection risk and contractual remedies.
Revenue for the year ended December 31, 2025 was $3.2 million, an increase of $0.3 million from $2.9 million for the year ended December 31, 2024. CGI's software licensing and data processing services to the mining and oil and gas industries represented 100% of our revenue for the year ended December 31, 2025 ($3.2 million) and 98% for the year ended December 31, 2024 ($2.8 million). VRB Energy had no revenue for the year ended December 31, 2025 and $0.1 million for the year ended December 31, 2024.
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 |
Percentage change
year-over-year
|
|||||||||||||||
| (In thousands) | |||||||||||||||||
| CGI: Software licensing and data processing services: | |||||||||||||||||
| Revenue | $ | 3,244 | $ | 2,831 | 15 | % | |||||||||||
| Cost of sales | (1,126) | (966) | (17) | % | |||||||||||||
| Gross profit | 2,118 | 1,865 | 13 | % | |||||||||||||
| VRB Energy: Energy storage systems: | |||||||||||||||||
| Revenue | $ | - | $ | 70 | (100) | % | |||||||||||
| Cost of sales | - | (52) | 100 | % | |||||||||||||
| Gross profit | - | 18 | (100) | % | |||||||||||||
| Total | |||||||||||||||||
| Revenue | $ | 3,244 | $ | 2,901 | 12 | % | |||||||||||
| Cost of sales | (1,126) | (1,018) | (11) | % | |||||||||||||
| Gross profit | 2,118 | 1,883 | 12 | % | |||||||||||||
CGI's revenue for the year ended December 31, 2025 was $3.2 million, an increase of $0.4 million from $2.8 million for the year ended December 31, 2024. The increase of $0.4 million in CGI's revenue in 2025 was a result of more data processing services being contracted for by customers than in 2024. CGI's gross profit for the year ended December 31, 2025 was $2.1 million, a $0.3 million increase from $1.9 million for the year ended December 31, 2024. The increase in CGI's gross profit was consistent with the increase in revenue.
VRB Energy's energy storage system revenue for the year ended December 31, 2025 was $nil, a decrease of $0.1 million from $0.1 million for the year ended December 31, 2024. Due to the nature of VRB Energy's contracts, revenue is typically recognized when an energy storage system is installed and commissioned. VRB Energy did not complete any installations or commissionings during the year ended December 31, 2025 as it was establishing an Arizona-based business. VRB Energy did record minor ancillary revenue of $0.1 million in 2024 related to sales of certain monitoring system components by VRB China prior to VRB China being deconsolidated.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023
For the year ended December 31, 2024 we recorded a net loss attributable to common stockholders of $128.6 million ($1.07 per share), compared to $199.4 million ($1.95 per share) for the year ended December 31, 2023, which was a decrease of $70.8 million. Significant contributors to this decrease in the loss for the year ended December 31, 2024 included the recognition of a $50.7 million gain on the disposal of a subsidiary and a decrease of $27.3 million in share of loss of equity method investees.
Exploration expenses were $130.9 million for the year ended December 31, 2024 an increase of $4.2 million from $126.7 million for the year ended December 31, 2023. Exploration expenses consisted of the following:
| Year Ended December 31, | |||||||||||
| (In thousands) | 2024 | 2023 | |||||||||
| Exploration Expenses: | |||||||||||
| Santa Cruz, USA | $ | 72,384 | $ | 57,203 | |||||||
|
Alacrán, Colombia
|
14,756 | 28,068 | |||||||||
| Tintic, USA | 11,274 | 13,131 | |||||||||
| Hog Heaven, USA | 10,855 | 7,812 | |||||||||
| Project Generation and other | 21,675 | 20,505 | |||||||||
| Total | $ | 130,944 | $ | 126,719 | |||||||
During the year ended December 31, 2024, exploration expenditures largely focused on exploration activities at:
•the Santa Cruz Copper Project where $72.4 million of exploration expenditure was incurred in the year ended December 31, 2024 compared to $57.2 million incurred in the year ended December 31, 2023. Activities during the year ended December 31, 2024 at Santa Cruz were focused on a program of infill resource drilling, geotechnical, hydrological, and metallurgical drilling/laboratory testing along with advancing permitting and technical studies required to support a prefeasibility study;
•the Alacrán Project where $14.8 million of exploration expenditure was incurred by Cordoba in the year ended December 31, 2024 compared to $28.1 million in the year ended December 31, 2023. Activities during the year ended December 31, 2024, focused on preparing for and commencing detailed engineering design of the Alacran Project;
•the Tintic Project where $11.3 million of exploration expenditure was incurred in the year ended December 31, 2024 compared to $13.1 million in the year ended December 31, 2023. Activities during the year ended December 31, 2024 at Tintic were focused on diamond drilling in the Mammoth area; and
•the Hog Heaven Project in Montana where $10.9 million of exploration expenditure was incurred in the year ended December 31, 2024 compared to $7.8 million in the year ended December 31, 2023. Activities during the year ended December 31, 2024at Hog Heaven were focused on diamond drilling in the Flathead Mine, West Flathead and Battle Butte areas.
General and administrative expenses were $44.7 million for the year ended December 31, 2024, a decrease of $3.5 million from $48.2 million in the year ended December 31, 2023. Several items contributed to the decrease, including a $5.8 million decrease in non-cash stock-based compensation expense from $17.7 million for the year ended December 31, 2023 to $11.9 million for the year ended December 31, 2024 primarily due to less Ivanhoe Electric stock option and restricted stock units ("RSUs") grants occurring in 2024 than 2023 due to 2023 including increased stock based compensation grants as we expanded our management team. This decrease was offset by a $2.4 million increase in salary and wages from $4.7 million for the year ended December 31, 2023 to $7.1 million for the year ended December 31, 2024. The increase in salary and wages was due to the creation of a Company short term incentive program in which bonuses of $1.8 million were expensed as general and administrative costs in March 2024 and also the impact of additional compensation costs related to building out our management and administrative teams to appropriately support our activities as a public company.
During the year ended December 31, 2024, we recorded $8.7 million share of loss of equity method investees which was a decrease of $27.3 million from the $36.0 million share of loss of equity method investee recorded for the year ended December 31, 2023. The decrease in loss was due to the year ended December 31, 2023 including our recognition of a
$33.0 million share of loss from the Maaden joint venture upon its formation due to the expensing of the land access rights in accordance with our accounting policy for exploration and evaluation costs.
The $50.7 million gain on the disposal of a subsidiary resulted from the sale of our 51% interest in VRB China. As a result of the sale, we de-consolidated VRB China as of October 31, 2024 and accounted for our retained interest in VRB China using the equity method of accounting. We have recorded our retained interest in VRB China at a fair value of $35.8 million and recognized a gain on the sale of the controlling interest of VRB China of $50.7 million.
Revenue for the year ended December 31, 2024 was $2.9 million, a decrease of $1.0 million from $3.9 million for the year ended December 31, 2023. CGI's software licensing and data processing services to the mining and oil and gas industries represented 98% of our revenue for the year ended December 31, 2024 ($2.8 million) and 33% for the year ended December 31, 2023 ($1.3 million). VRB Energy's energy storage system revenue represented 2% of our revenue for the year ended December 31, 2024 ($0.1 million) and 67% for the year ended December 31, 2023 ($2.6 million).
| Year Ended December 31, | |||||||||||||||||
| 2024 | 2023 |
Percentage change
year-over-year
|
|||||||||||||||
| (In thousands) | |||||||||||||||||
| CGI: Software licensing and data processing services: | |||||||||||||||||
| Revenue | $ | 2,831 | $ | 1,300 | 118 | % | |||||||||||
| Cost of sales | (966) | (497) | (94) | % | |||||||||||||
| Gross profit | 1,865 | 803 | 132 | % | |||||||||||||
| VRB Energy: Energy storage systems: | |||||||||||||||||
| Revenue | $ | 70 | $ | 2,603 | (97) | % | |||||||||||
| Cost of sales | (52) | (2,489) | 98 | % | |||||||||||||
|
Gross profit
|
18 | 114 | (85) | % | |||||||||||||
| Total | |||||||||||||||||
| Revenue | $ | 2,901 | $ | 3,903 | (26) | % | |||||||||||
| Cost of sales | (1,018) | (2,986) | 66 | % | |||||||||||||
| Gross profit | 1,883 | 917 | 105 | % | |||||||||||||
CGI's revenue for the year ended December 31, 2024 was $2.8 million, an increase of $1.5 million from $1.3 million for the year ended December 31, 2023. The increase of $1.5 million in CGI's revenue in 2024 was a result of more data processing services being contracted for by customers than in 2023. CGI's gross profit for the year ended December 31, 2024 was $1.9 million, a $1.1 million increase from $0.8 million for the year ended December 31, 2023. The increase in CGI's gross profit was consistent with the increase in revenue.
VRB Energy's energy storage system revenue for the year ended December 31, 2024 was $0.1 million, a decrease of $2.5 million from $2.6 million for the year ended December 31, 2023. Due to the nature of VRB Energy's contracts, revenue is typically recognized when an energy storage system is installed and commissioned. VRB Energy did not complete any installations or commissionings during the year ended December 31, 2024. VRB Energy did record minor ancillary revenue of $0.1 million related to sales of certain monitoring system components by VRB China in October 2024 prior to VRB China being deconsolidated. During the year ended December 31, 2023, VRB Energy delivered, installed and commissioned energy storage systems of 2.18MW/6.25MWh to customers, which resulted in $2.6 million of revenue being recognized.
Stock-Based Compensation
On March 6, 2025, as part of our long-term incentive plan the following equity incentives were granted to certain of our officers and employees:
•776,557 RSU's that vest in three equal tranches beginning one year from the grant date. The fair value of the stock-settled RSU's is amortized over the vesting period. The total fair value of the March 6, 2025 RSU grant was $4.5 million.
•PSU's that vest on December 31, 2027, with the number of units to vest determined by our share price performance against constituents from a Base Metals Index. The number of units to vest ranges between zero times to two times the target number of PSU's. The total target number of PSU's is 714,822. The total fair value of the March 6, 2025 PSU grant was $5.1 million.
Liquidity, Capital Resources and Capital Requirements
Cash Resources
We have recurring net losses and negative operating cash flows and we expect that we will continue to operate at a loss until we are able to generate revenue from our mining projects and such revenue exceeds our expenses. We cannot assure you that any of our mining projects will advance to commercial production or be profitable once in commercial production.
We have funded our operations primarily through the sale of our equity securities.
At December 31, 2025, we had cash and cash equivalents of $173.3 million and a working capital balance of $126.3 million. Of the total cash and cash equivalents at December 31, 2025, $9.1 million was not available for the general corporate purposes of the Company as this amount was held by non-wholly-owned subsidiaries.
In addition, we received $81.5 million subsequent to December 31, 2025, as a result of approximately 11.6 million Warrants being exercised to purchase one share of our common stock at a price of $7.00 per share during January and February 2026.
As at February 23, 2026, we believe that we have sufficient cash resources and availability under the new Bridge Facility to carry out our business plans for at least the next 12 months, after which we expect to need additional financing to further advance our projects and conduct our business. We have based these estimates on our current assumptions, which may require future adjustments based on our ongoing business and development decisions. Accordingly, we may require additional cash resources earlier than we currently expect or we may need to curtail currently planned activities.
On December 12, 2025, we announced that Mesa Cobre closed a $200.0 million senior secured multi-draw Bridge Facility from a syndicate of three international financial institutions. The Bridge Facility will support the development of the Santa Cruz Copper Project by providing enhanced liquidity for early construction activities and working capital requirements. The Bridge Facility is currently undrawn.
On April 15, 2025, we received a Letter of Interest from the Export-Import Bank of the United States ("EXIM Bank") outlining the potential to provide up to $825 million in debt financing with a 15-year repayment tenor for the development of the Santa Cruz Copper Project in Arizona through EXIM Bank's Make More in America initiative.
EXIM Bank is the official export credit agency of the United States. It is a government agency that offers financial support to companies through means such as direct loans and loan guarantees, working capital guarantees, and export credit insurance. EXIM Bank's Make More in America initiative and its China and Transformational Exports Program are designed to boost the United States' competitiveness, strengthen supply chains, and reduce strategic vulnerabilities.
Following the receipt of the Letter of Interest from EXIM Bank, we are currently advancing through the formal application process. EXIM Bank will need to conduct all requisite due diligence necessary to determine if a final lending commitment would be made. Any final lending commitment will be dependent on meeting EXIM Bank's underwriting criteria, authorization process, and finalization and satisfaction of terms and conditions. All final lending commitments must be in compliance with EXIM Bank policies as well as program, legal and eligibility requirements. We are assessing EXIM Bank's interest together with other financing alternatives available to us for the development of the Santa Cruz Copper Project. The construction of the Santa Cruz Copper Project following a development decision will require additional capital beyond the amount that EXIM Bank may make available.
We may seek additional financing at any time through debt, equity, project specific debt, and/or other means, including asset sales. Our continued operations are dependent on our ability to obtain additional financing or to generate future cash flows. However, there can be no assurance that we will be successful in our efforts to raise additional capital on terms favorable to us, or at all.
Consolidated Cash Balances as of December 31, 2025
The table below discloses the amounts of consolidated cash disaggregated by currency denomination as of December 31, 2025 in each jurisdiction that our affiliated entities are domiciled.
| Currency by Denomination (in USD Equivalents) | ||||||||||||||||||||||||||||||||
| US dollars |
Canadian
dollars
|
Colombian Pesos | Other | Total | ||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||
| Jurisdiction of Entity: | ||||||||||||||||||||||||||||||||
| USA | $ | 165,726 | $ | 1,482 | $ | - | $ | - | $ | 167,208 | ||||||||||||||||||||||
| Canada | 1,755 | 770 | - | - | 2,525 | |||||||||||||||||||||||||||
| Colombia | 1,101 | - | 435 | - | 1,535 | |||||||||||||||||||||||||||
| Other | 1,653 | 297 | - | 45 | 1,995 | |||||||||||||||||||||||||||
| Total | $ | 170,235 | $ | 2,549 | $ | 435 | $ | 45 | $ | 173,263 | ||||||||||||||||||||||
Refer to Note 18 of our consolidated financial statements which outlines restrictions on transfers of net assets from our consolidated subsidiaries to the Company.
Convertible Bond - VRB Energy
On July 8, 2021, VRB Energy 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 Energy 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 or other agreed restructuring of the convertible bond with its holder occurs, VRB Energy must repay the outstanding principal and interest on maturity in July 2026. At December 31, 2025, the balance of principal and interest on the bond was $33.7 million and it is classified as a current liability on the balance sheet.
Bridge Facility - Mesa Cobre
On December 12, 2025, Mesa Cobre, closed a senior secured multi-draw Bridge Facility which will support the development of the Santa Cruz Copper Project by providing enhanced liquidity for early construction activities and working capital requirements. The Bridge Facility has a two-year maturity term, with a single repayment at maturity. It will bear interest at our election, either at (i) the forward-looking term rate based on the Secured Overnight Financing Rate administered by the Federal Reserve Bank of New York plus a margin of 5.0%, increasing by 0.5% on each of the 6th, 12th, and 18th month following the closing date, or(ii) the alternate base rate as defined in the Bridge Facility agreements. At December 31, 2025, the Bridge Facility was undrawn.
In connection with the Bridge Facility, (i) Mesa Cobre entered into a security agreement which granted a first priority lien on substantially all of its assets, subject to customary exceptions, (ii) Ivanhoe Electric guaranteed Mesa Cobre's payment obligations pursuant to a guaranty agreement whereby Ivanhoe Electric agrees to maintain at all times a tangible net worth of not less than $225.0 million, (iii) Ivanhoe Electric pledged its shares of Mesa Cobre pursuant to a pledge agreement, and (iv) Mesa Cobre executed a deed of trust and assignment of rents with respect to Mesa Cobre's real property rights.
Cash Flows
The following table presents our sources and uses of cash for the periods indicated:
| Year Ended December 31, | |||||||||||||||||
| (In thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Net cash (used in) provided by: | |||||||||||||||||
| Operating activities | $ | (89,200) | $ | (162,096) | $ | (150,515) | |||||||||||
| Investing activities | 4,587 | (14,470) | (150,766) | ||||||||||||||
| Financing activities | 214,722 | 18,895 | 366,454 | ||||||||||||||
| Effect of foreign exchange on cash | 855 | (2,063) | 210 | ||||||||||||||
| Total change in cash | $ | 130,964 | $ | (159,734) | $ | 65,383 | |||||||||||
Operating activities.
Net cash used in operating activities for all periods presented largely was spent on our exploration expenses and our general and administrative costs. We do not generate adequate cash from operations to cover our operating expenses and therefore rely on our financing activities to provide the cash resources to fund our operating and investing activities.
The net cash used in operating activities for the year ended December 31, 2025 of $89.2 million primarily was the result of $61.1 million of cash exploration expenditures and $29.4 million of cash general and administrative costs.
The net cash used in operating activities for the year ended December 31, 2024 of $162.1 million primarily was the result of $126.5 million of cash exploration expenditures and $32.8 million of cash general and administrative costs.
The net cash used in operating activities for the year ended December 31, 2023 of $150.5 million primarily was the result of $120.2 million of cash exploration expenditures and $30.5 million of cash general and administrative costs.
Investing activities.
Our investing activities generally relate to acquisitions of mineral property interests, purchases of shares in companies that we may partner with and capital expenditures at our projects.
Net cash provided by investing activities for the year ended December 31, 2025 of $4.6 million was partly attributable to $9.7 million of proceeds received in February 2025 from the October 2024 sale of VRB China. This receipt was offset by $2.8 million of deposits made for capital expenditures at the Santa Cruz Copper Project, $1.2 million of property, plant and equipment acquisitions and $1.1 million of payments for mineral interests.
Net cash used in investing activities for the year ended December 31, 2024 of $14.5 million was mainly attributable to $10.6 million related to acquisitions of exploration properties and $1.1 million for purchases of investments subject to significant influence. The $10.6 million of cash used for purchases of exploration properties largely consisted of a payment of $10.3 million for the Santa Cruz Copper Project. In addition, we acquired cash of $0.2 million when we commenced consolidating Sama Nickel Corporation in March 2024.
Net cash used in investing activities for the year ended December 31, 2023 of $150.8 million was mainly attributable to $80.5 million related to acquisitions of exploration properties and $68.7 million for purchases of investments subject to significant influence. The $80.5 million of payments for exploration properties, included $76.6 million paid to acquire land at the Santa Cruz Copper Project and $3.5 million of option payments at our Tintic Project. The $68.7 million for purchases of investments subject to significant influence primarily consists of our $66.0 million investment in the Maaden Joint Venture.
Financing activities.
During the year ended December 31, 2025, the net cash provided by financing activities of $214.7 million was primarily a result of $231.1 million raised in two public offerings that we completed in 2025. In February 2025, we completed a public offering where we issued 11,794,872 units (the "Units") at a price of $5.85 per Unit for net proceeds of approximately $65.8 million Each Unit consisted of (i) one share of our common stock and (ii) one accompanying warrant. In October 2025, we completed a public offering where we issued 11,500,000 shares of our common stock at $15.00 per share for net proceeds of approximately $165.3 million. We also received $6.0 million from the exercise of stock options and warrants during the year ended December 31, 2025.
In addition, in November 2025, we accelerated and completed the final three land acquisition payments, totaling $39.3 million, at the Santa Cruz Copper Project in Arizona, The promissory note previously issued, and now repaid, required the full outstanding balance to be paid by Ivanhoe Electric prior to commencement of major mine construction activities.
Also during the year ended December 31, 2025, our subsidiary, Cordoba received a $5.0 million bridge loan from JCHX which was in addition to $5.0 million which was previously received in December 2024. On June 25, 2025, JCHX paid Cordoba $20.0 million which was the third installment under the strategic arrangement signed in 2023 whereby JCHX acquired its 50% ownership of the Alacrán Copper Project. On June 26, 2025, Cordoba repaid the $10.0 million bridge loan using the proceeds from the third installment.
During the year ended December 31, 2024, there were no significant financing activities as we continued to fund our operations with the proceeds from our September 2023 public offering. Our subsidiary, Cordoba, raised $26.4 million during the year ended December 31, 2024 in relation to financing its Alacran project through its strategic arrangement with JCHX and also received a $5.0 million bridge loan from JCHX. During the year ended December 31, 2024, we also made a $12.1 million repayment of the promissory note.
During the year ended December 31, 2023, there was $366.5 million of net cash provided by financing activities which was primarily from the $319.6 million in net proceeds we raised through issuances our common stock. We raised net proceeds of $123.7 million as a result of the July 2023 private placement with Maaden and raised net proceeds of $175.5 million from our September 2023 public offering. In October 2023, we received approximately $20.0 million from Maaden exercising their "top-up right" to maintain their 9.9% interest. In addition, we received $3.4 million of proceeds from the exercise of employee stock options during the year ended December 31, 2023. Our subsidiary, Cordoba, raised $39.5 million during the year ended December 31, 2023 in relation to financing its Alacran project through its strategic arrangement with JCHX.
Material Cash Obligations
As of December 31, 2025, we had the following material known cash obligations:
| Material Cash Obligations (in thousands) | |||||||||||||||||||||||||||||
| Total | 2026 | 2027-2028 | 2029-2030 | 2031 onwards | |||||||||||||||||||||||||
|
Convertible debt(1)
|
$ | 33,738 | $ | 33,738 | $ | - | $ | - | $ | - | |||||||||||||||||||
| Leases | 2,397 | 1,253 | 1,144 | - | - | ||||||||||||||||||||||||
| Typhoon purchase obligations | 1,975 | 988 | 988 | - | - | ||||||||||||||||||||||||
| Mineral property obligations (non-discretionary) | 652 | 652 | - | - | - | ||||||||||||||||||||||||
| Total material cash obligations | $ | 38,762 | $ | 36,631 | $ | 2,132 | $ | - | $ | - | |||||||||||||||||||
___________
(1)The $24.0 million convertible bond issued by VRB Energy matures in 2026 if not converted to common shares of VRB Energy prior to such date. As of December 31, 2025, the value of the convertible bond including accrued interest was $33.7 million.
Off Balance Sheet Arrangements
As of December 31, 2025, we were not involved in any off-balance sheet arrangements that have or are reasonably likely to have a material effect on our financial condition, results of operations, or liquidity.
Related Party Transactions
See Note 20 of our consolidated financial statements for the years ended December 31, 2025 and 2024.
Critical Accounting Estimates
Our management's discussion and analysis of our financial condition and results of operations is based on our consolidated 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 are detailed in Note 2 to our consolidated financial statements included in this Annual Report. 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. 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 PSU's granted to certain of our officers and employees is determined based on estimated fair values of the PSU's at the time of grant using a Monte Carlo valuation model, which requires the input of the following subjective assumptions:
| Grant date: March 6, 2025 | |||||
| Expected volatility | 63.4 | % | |||
| Expected life of PSU's (in years) | 2.75 | ||||
| USA risk-free interest rate | 4.0 | % | |||
| Canada risk-free interest rate | 2.6 | % | |||
| Expected dividend rate | 0 | % | |||
| Weighted average grant-date fair value (per unit) | $ | 7.07 | |||
Income taxes
We make estimates and judgments in determining the provision for income tax expense, deferred tax assets and liabilities and liabilities for unrecognized tax benefits, including interest and penalties. We are subject to income tax laws in many jurisdictions, including the United States, Colombia, Canada, Australia, the Ivory Coast and Peru.
We report income tax in accordance with U.S. GAAP, which requires the establishment of deferred tax accounts for all temporary differences between the financial reporting and tax bases of assets and liabilities, using currently enacted tax rates. In addition, deferred tax accounts must be adjusted to reflect new rates if enacted into law.
Realization of deferred tax assets is contingent on the generation of future taxable income. As a result, we consider whether it is more likely than not that all or a portion of such assets will be realized during periods when they are available,
and if not, we provide a valuation allowance for amounts not likely to be recognized. In determining our valuation allowance, we have not assumed future taxable income from sources other than the reversal of existing temporary differences. The extent to which a valuation allowance is warranted may vary as a result of changes in our estimates of future taxable income. In addition to the potential generation of future taxable income through the establishment of economic feasibility, development and operation of mines on our exploration assets, estimates of future taxable income could change in the event of disposal of assets, the identification of tax-planning strategies or changes in tax laws that would allow the benefits of future deductible temporary differences in certain entities or jurisdictions to be offset against future taxable temporary differences in other entities or jurisdictions.
We recognize the effect of uncertain income tax positions if those positions are more likely than not of being sustained. The amount recognized is subject to estimates and our judgment with respect to the likely outcome of each uncertain tax position. The amount that is ultimately incurred for an individual uncertain tax position or for all uncertain tax positions in the aggregate could differ from the amount recognized. We had no uncertain tax positions as of December 31, 2025.
Ivanhoe Electric Inc. published this content on February 23, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 23, 2026 at 13:19 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]