Ivanhoe Electric Announces Public Offering of Units

Rhea-AI Summary

Ivanhoe Electric (NYSE American: IE) has announced plans for a US$50 million public offering of Units, with each Unit comprising one common stock share and one warrant exercisable for an additional share. The underwriters will have a 30-day option to purchase up to an additional US$7.5 million of Units.

The company plans to use the proceeds for a preliminary feasibility study on the Santa Cruz Project, mineral rights payments, drilling and exploration activities, and general corporate purposes. BMO Capital Markets is serving as the sole book-running manager for the offering.

The offering will be conducted under an effective Form S-3 registration statement and through a multi-jurisdictional disclosure system (MJDS) prospectus in Canadian provinces and territories (except Québec). The completion and terms of the offering are subject to market conditions.

Positive

• Secured funding for Santa Cruz Project feasibility study
• Additional capital for exploration and drilling activities
• Flexibility with warrant structure for future funding

Negative

• Potential dilution of existing shareholders through new share issuance
• Additional dilution risk from warrant exercise
• US$50 million offering size relatively large compared to market cap

Insights

Financial Analyst

This $50 million Unit offering, combining common shares and warrants, signals both opportunities and challenges for Ivanhoe Electric. The structure of the offering - pairing shares with warrants - typically indicates a company seeking to make the deal more attractive to investors in a challenging market environment. The warrant component provides additional upside potential for investors but represents future dilution risk for existing shareholders.

The focus on the Santa Cruz Project's preliminary feasibility study suggests a strategic pivot or acceleration of development plans. Mining companies typically pursue such studies when they have strong confidence in a project's potential, as these studies are important stepping stones toward production decisions. However, the timing and structure of this financing might indicate some urgency in securing funds, particularly given current market conditions in the mining sector.

The selection of BMO Capital Markets as sole book-runner is noteworthy. BMO's strong presence in the mining sector suggests they see potential in Ivanhoe's assets, though having a single book-runner (rather than a syndicate) might indicate a more focused, potentially challenging fundraising environment. The additional $7.5 million option for underwriters provides flexibility but also signals some uncertainty about initial demand.

For investors, this offering presents a complex proposition. While it provides necessary capital for project advancement, the dilutive effect and warrant overhang could pressure share price in the near term. The successful completion of this offering will be important for maintaining development momentum at Santa Cruz and other exploration activities, but investors should monitor the terms of the warrants and their potential impact on future share price dynamics.

Phoenix, Arizona--(Newsfile Corp. - February 11, 2025) - Ivanhoe Electric Inc. (NYSE American: IE) (TSX: IE) ("Ivanhoe Electric") Executive Chairman, Robert Friedland and President and Chief Executive Officer, Taylor Melvin are pleased to announce that Ivanhoe Electric intends to sell US$50 million of Units in an underwritten public offering. Each Unit consists of (i) one share of Ivanhoe Electric's common stock and (ii) one accompanying warrant (the "Warrants"), with each whole Warrant exercisable to purchase one whole share of Ivanhoe Electric's common stock. In addition, Ivanhoe Electric intends to grant the underwriters a 30-day option to purchase up to an additional US$7.5 million of Units. The offering is subject to market and other conditions, and there can be no assurance as to whether, or when, the offering may be completed or as to the actual size or terms of the offering.

Ivanhoe Electric intends to use the net proceeds of the offering for a preliminary feasibility study on the Santa Cruz Project, mineral rights payments, drilling and other exploration activities and for other working capital and general corporate purposes.

BMO Capital Markets is acting as sole book-running manager for the offering.

A registration statement (including a prospectus) on Form S-3 (No. 333-273195) relating to these securities has been filed with the U.S. Securities and Exchange Commission (the "SEC") and was automatically declared effective on July 10, 2023. This offering will be made only by means of a prospectus. Before investing in the offering, you should read the prospectus relating to the offering in its entirety as well as the other documents that Ivanhoe Electric has filed with the SEC that are incorporated by reference in the prospectus. Copies of the preliminary prospectus supplement, when available, and accompanying prospectus relating to the offering may be obtained for free on the SEC's website, www.sec.gov, or from BMO Capital Markets Corp., Attn: Equity Syndicate Department, 151 W 42nd Street, 32nd Floor, New York, NY 10036, email: bmoprospectus@bmo.com.

Ivanhoe Electric also obtained a receipt for a final base prospectus filed pursuant to the multi-jurisdictional disclosure system ("MJDS") with the securities commissions or similar securities regulatory authorities in each of the provinces and territories of Canada (except Québec) on July 20, 2023. Copies of the preliminary MJDS prospectus supplement, when available, and accompanying final base MJDS prospectus relating to the offering may be obtained from the underwriters at the addresses set out above and will be available under Ivanhoe Electric's profile on SEDAR+ at www.sedarplus.ca.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Ivanhoe Electric

We are a U.S. company that combines advanced mineral exploration technologies (Typhoon™ and Computational Geosciences Inc.) with electric metals exploration projects predominantly located in the United States, headlined by the Santa Cruz Copper Project in Arizona. Our mineral exploration efforts focus on copper as well as other metals, including nickel, vanadium, cobalt, platinum group elements, gold, and silver. We also operate a 50/50 joint venture with Saudi Arabian Mining Company Ma'aden to explore for minerals on ~48,500 km² of underexplored Arabian Shield in the Kingdom of Saudi Arabia.

Contact Information

Mike Patterson
Vice President, Investor Relations and Business Development
Email: mike@ivnelectric.com
Phone: 1-480-601-7878

Forward-Looking Statements

This press release contains statements that constitute "forward looking information" and "forward-looking statements" within the meaning of U.S. and Canadian securities laws. All statements other than statements of historical facts contained in this press release, including statements regarding the expected terms and consummation of the offering and the use of proceeds from the offering are forward-looking statements. Forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors, including risks and uncertainties related to market conditions and the ability to consummate the offering and sale of Units, the ability to satisfy the closing conditions to the offering and sale of Units; management's discretion over the use of proceeds of the offering; our mineral projects are all at the exploration stage and are subject to the significant risks and uncertainties associated with mineral exploration; we have no mineral reserves, other than at the San Matias project; we have inferred resources that may never be upgraded to a higher category of resource or reserve; we have a limited operating history on which to base an evaluation of our business and prospects; we depend on our material projects for our future operations; our mineral resource and reserve calculations and economic projections relating to our properties are only estimates; actual capital costs, operating costs, production and economic returns may differ significantly from those we have anticipated; the title to some of the mineral properties may be uncertain or defective; our business is subject to changes in the prices of copper, gold, silver, nickel, cobalt, vanadium and platinum group metals; we have claims and legal proceedings against one of our subsidiaries; our business is subject to significant risk and hazards associated with exploration activities, mine development, construction and future mining operations; we may fail to identify attractive acquisition candidates or joint ventures with strategic partners or be unable to successfully integrate acquired mineral properties or successfully manage joint ventures; our success is dependent in part on our joint venture partners and their compliance with our agreements with them; our business is extensively regulated by the United States and foreign governments as well as local governments; we and the VRB China Joint Venture may not receive the anticipated payments from Red Sun in connection with the VRB China Joint Venture transaction in full or in a timely manner; we may not have sufficient cash and cash equivalents to maintain our planned operations and may be unable to raise adequate additional capital through equity financings or other means on favorable terms or at all; 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 public health emergencies, pandemics, epidemics, or similar events. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements described in or incorporated by reference in Ivanhoe Electric's preliminary prospectus supplement relating to this offering and accompanying base prospectus that form a part of the registration statement on Form S-3, as amended, filed with the SEC and preliminary MJDS prospectus supplement relating to this offering and accompanying final base MJDS prospectus filed with Canadian securities commissions. Ivanhoe Electric expressly disclaims any obligation or undertaking to update the forward-looking statements contained in this press release to reflect any change in its expectations or any change in events, conditions, or circumstances on which such statements are based unless required to do so by applicable law. No assurance can be given that such future results will be achieved. Forward-looking statements speak only as of the date of this press release. We caution you not to place undue reliance on these forward-looking statements.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/240480

FAQ

What is the size of Ivanhoe Electric's (IE) February 2025 public offering?

Ivanhoe Electric announced a US$50 million public offering of Units, with an additional US$7.5 million option for underwriters.

How will Ivanhoe Electric (IE) use the proceeds from its 2025 offering?

The proceeds will fund a preliminary feasibility study on the Santa Cruz Project, mineral rights payments, drilling and exploration activities, and general corporate purposes.

What does each Unit in Ivanhoe Electric's (IE) offering include?

Each Unit consists of one share of common stock and one warrant exercisable to purchase one additional share of common stock.

Who is the book-running manager for Ivanhoe Electric's (IE) 2025 offering?

BMO Capital Markets is acting as the sole book-running manager for the offering.

What is the duration of the underwriters' option in IE's February 2025 offering?

The underwriters have a 30-day option to purchase up to an additional US$7.5 million of Units.