IVANHOE MINES LTD. Condensed consolidated interim financial statements of
Ivanhoe Mines Ltd.
March 31, 2024
(Stated in U.S. dollars) (Unaudited)
Ivanhoe Mines Ltd.
March 31, 2024
Table of contents
Condensed consolidated interim statements of financial position | 3 |
Condensed consolidated interim statements of comprehensive income | 4 |
Condensed consolidated interim statements of changes in equity | 5 |
Condensed consolidated interim statements of cash flows | 6 |
Notes to the condensed consolidated interim financial statements | 7 - 54 |
Ivanhoe Mines Ltd.
Condensed consolidated interim statements of financial position as at March 31, 2024
(Stated in U.S. dollars) (Unaudited)
March 31, | December 31, | January 01 | ||
Notes | 2024 | 2023 | 2023 | |
Restated* | Restated* | |||
$'000 | $'000 | $'000 | ||
ASSETS | ||||
Non-current assets | 2,618,107 | |||
Investment in joint venture | 4 | 2,517,551 | 2,047,040 | |
Property, plant and equipment | 5 | 1,251,823 | 1,146,354 | 630,295 |
Mineral properties | 6 | 288,738 | 270,618 | 264,995 |
Deferred tax asset | 7 | 231,012 | 223,631 | 208,356 |
Investments | 10 | 83,259 | 84,465 | 9,652 |
Loans receivable | 8 | 46,612 | 46,017 | 92,475 |
Other receivables | 13 | 29,560 | 25,145 | 15,141 |
Promissory note receivable | 9 | 26,800 | 26,800 | 26,756 |
Intangible assets | 10,117 | - | - | |
Right-of-use asset | 11 | 6,088 | 6,604 | 7,540 |
Other assets | 4,947 | 4,243 | 4,372 | |
Total non-current assets | 4,597,063 | 4,351,428 | 3,306,622 | |
Current assets | 411,133 | |||
Cash and cash equivalents | 12 | 574,294 | 597,451 | |
Prepaid expenses | 14 | 36,611 | 49,985 | 28,466 |
Other receivables | 13 | 27,632 | 22,491 | 15,742 |
Consumable stores | 3,210 | 1,521 | 1,011 | |
Current tax assets | 483 | 542 | 364 | |
Loans receivable | 8 | - | - | 19,629 |
Total current assets | 479,069 | 648,833 | 662,663 | |
Total assets | 5,076,132 | 5,000,261 | 3,969,285 | |
EQUITY AND LIABILITIES | ||||
Capital and reserves | 2,796,859 | |||
Share capital | 21 | 2,790,137 | 2,347,105 | |
Share option reserve | 21 | 149,968 | 147,862 | 141,541 |
Foreign currency translation reserve | 22 | (66,866) | (58,770) | (63,830) |
Accumulated profit | 753,697 | 819,249 | 509,801 | |
Equity attributable to owners of the Company | 3,633,658 | 3,698,478 | 2,934,617 | |
Non-controlling interests | 23 | (122,260) | (117,532) | (93,486) |
Total equity | 3,511,398 | 3,580,946 | 2,841,131 | |
Non-current liabilities | 327,629 | |||
Deferred revenue | 16 | 328,096 | 310,725 | |
Borrowings | 17 | 56,600 | 56,340 | 40,823 |
Rehabilitation provision | 18 | 14,766 | 14,636 | 1,093 |
Cash-settledshare-based payment liability | 19 | 11,089 | 9,704 | 9,023 |
Lease liability | 11 | 10,507 | 10,765 | 10,761 |
Deferred tax liability | 7 | 2,493 | 2,493 | 1,775 |
Advances payable | - | - | 3,123 | |
Total non-current liabilities | 423,084 | 422,034 | 377,323 | |
Current liabilities | 507,644 | |||
Convertible notes - host liability | 15 | 495,970 | 465,323 | |
Convertible notes - embedded derivative liability | 15 | 445,832 | 306,561 | 221,300 |
Trade and other payables | 20 | 101,947 | 108,935 | 61,637 |
Borrowings | 17 | 83,745 | 83,671 | - |
Cash-settledshare-based payment liability | 19 | 1,807 | 1,469 | 2,025 |
Lease liability | 11 | 675 | 675 | 546 |
Total current liabilities | 1,141,650 | 997,281 | 750,831 | |
Total liabilities | 1,564,734 | 1,419,315 | 1,128,154 | |
Total equity and liabilities | 5,076,132 | 5,000,261 | 3,969,285 |
- The prior periods presented have been restated in accordance with the amendments to IAS 1. See Note 3 for further information.
(Signed) Peter Meredith | (Signed) Martie Janse van Rensburg | |
Peter Meredith, Director | Martie Janse van Rensburg, Director |
The accompanying notes are an integral part of these condensed consolidated interim financial statements. | Page 3 |
Ivanhoe Mines Ltd.
Condensed consolidated interim statements of comprehensive income for the three months ended March 31, 2024
(Stated in U.S. dollars) (Unaudited)
Three months ended | |||
Notes | March 31, | ||
2024 | 2023 | ||
Operating income (expenses) | $'000 | $'000 | |
45,165 | |||
Share of profit from joint venture net of tax | 4 | 82,659 | |
Share-based payments | 24 | (8,933) | (7,702) |
Exploration and project evaluation expenditure | (8,901) | (3,381) | |
Foreign exchange loss | (6,487) | (1,314) | |
Salaries and benefits | (2,589) | (2,246) | |
Other expenditure | (2,310) | (1,986) | |
Travel costs | (1,901) | (1,660) | |
Legal fees | (363) | (1,041) | |
Professional fees | (351) | (324) | |
Profit from operating activities | 13,330 | 63,005 | |
Finance income | 26 | 62,457 | 57,826 |
Other income | 27 | 934 | 3,728 |
Loss on fair valuation of embedded derivative liability | 15 | (139,271) | (30,900) |
Finance costs | 25 | (8,944) | (10,465) |
Loss on fair valuation of financial asset | 10 | (1,075) | (1,595) |
(Loss) profit before income taxes | (72,569) | 81,599 | |
Income tax (expense) recovery | (62) | ||
Current tax | (45) | ||
Deferred tax | 3,221 | 926 | |
3,159 | 881 | ||
(Loss) profit for the period | (69,410) | 82,480 | |
Loss (profit) attributable to: | (65,552) | ||
Owners of the Company | 86,637 | ||
Non-controlling interests | (3,858) | (4,157) | |
(69,410) | 82,480 | ||
Other comprehensive loss | |||
Items that may subsequently be reclassified to (loss) profit: | (8,966) | ||
Exchange loss on translation of foreign operations, net of tax | (13,746) | ||
Items that may subsequently be reclassified (loss) to profit | (8,966) | (13,746) | |
Total comprehensive (loss) income for the period | (78,376) | 68,734 | |
Total comprehensive (loss) income attributable to: | (73,648) | ||
Owners of the Company | 74,154 | ||
Non-controlling interests | 23 | (4,728) | (5,420) |
(78,376) | 68,734 | ||
Basic (loss) profit per share | 28 | (0.05) | 0.07 |
Diluted (loss) profit per share | 28 | (0.05) | 0.07 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements. | Page 4 |
Ivanhoe Mines Ltd.
Condensed consolidated interim statements of changes in equity for the three months ended March 31, 2024
(Stated in U.S. dollars) (Unaudited)
Foreign | ||||||||
Share capital | currency | Equity | Non- | |||||
Number | Share option | translation | Accumulated | attributable | controlling | |||
of shares | Amount | reserve | reserve | profit | to owners | interests | Total | |
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | ||
Balance at January 1, 2023 | 1,216,754,579 | 2,347,105 | 141,541 | (63,830) | 509,801 | 2,934,617 | (93,486) | 2,841,131 |
Net profit (loss) for the period | - | - | - | - | 86,637 | 86,637 | (4,157) | 82,480 |
Other comprehensive loss | - | - | - | (12,483) | - | (12,483) | (1,263) | (13,746) |
Total comprehensive (loss) income | - | - | - | (12,483) | 86,637 | 74,154 | (5,420) | 68,734 |
Transactions with owners | ||||||||
Share-based payments charged to operations | ||||||||
(Note 24) | - | - | 6,400 | - | - | 6,400 | - | 6,400 |
Share unit awards vested (Note 21(c)) | 641,561 | 4,218 | (4,218) | - | - | - | - | - |
Options exercised (Note 21(b)) | 309,840 | 1,416 | (381) | - | - | 1,035 | - | 1,035 |
Balance at March 31, 2023 | 1,217,705,980 | 2,352,739 | 143,342 | (76,313) | 596,438 | 3,016,206 | (98,906) | 2,917,300 |
Balance at January 1, 2024 | 1,268,762,524 | 2,790,137 | 147,862 | (58,770) | 819,249 | 3,698,478 | (117,532) | 3,580,946 |
Net loss for the period | - | - | - | - | (65,552) | (65,552) | (3,858) | (69,410) |
Other comprehensive loss | - | - | - | (8,096) | - | (8,096) | (870) | (8,966) |
Total comprehensive loss | - | - | - | (8,096) | (65,552) | (73,648) | (4,728) | (78,376) |
Transactions with owners | ||||||||
Share-based payments charged to operations | ||||||||
(Note 24) | - | - | 7,210 | - | - | 7,210 | - | 7,210 |
Share unit awards vested (Note 21(c)) | 546,408 | 4,469 | (4,469) | - | - | - | - | - |
Options exercised (Note 21(b)) | 344,402 | 2,253 | (635) | - | - | 1,618 | - | 1,618 |
Balance at March 31, 2024 | 1,269,653,334 | 2,796,859 | 149,968 | (66,866) | 753,697 | 3,633,658 | (122,260) | 3,511,398 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements. | Page 5 |
Ivanhoe Mines Ltd.
Condensed consolidated interim statements of cash flows for the three months ended March 31, 2024
(Stated in U.S. dollars) (Unaudited)
Three months ended | |||
Notes | March 31, | ||
2024 | 2023 | ||
$'000 | $'000 | ||
Cash flows from operating activities | (72,569) | ||
(Loss) profit before income taxes | 81,599 | ||
Items not involving cash | 139,271 | ||
Loss on fair valuation of embedded derivative liability | 15 | 30,900 | |
Finance costs | 25 | 8,944 | 10,465 |
Share-based payments | 24 | 8,933 | 7,702 |
Unrealized foreign exchange loss | 3,737 | 1,290 | |
Decrease in fair valuation of financial asset | 10 | 1,075 | 1,595 |
Depreciation | 691 | 404 | |
Transfer from other assets to working capital items | 123 | 149 | |
Depreciation on right-of-use asset | 67 | 73 | |
Finance income | 26 | (62,457) | (57,826) |
Share of profit from joint venture net of tax | 4 | (45,165) | (82,659) |
Gain on disposal of property, plant and equipment | (2) | (2,769) | |
Other taxes | - | (1) | |
(17,352) | (9,078) | ||
Change in working capital items | 31 | (4,861) | (22,298) |
Interest paid | (2,070) | (56) | |
Income taxes paid | (20) | (47) | |
Interest received | 26 | 6,471 | 7,299 |
Net cash used in operating activities | (17,832) | (24,180) | |
Cash flows from investing activities | (120,660) | ||
Property, plant and equipment acquired | (69,804) | ||
Purchase of mineral properties | 6 | (18,120) | - |
Other assets acquired | (611) | (441) | |
Proceeds from sale of property, plant and equipment | 13 | 4,851 | |
Cash paid on behalf of joint venturer | 9 | - | (10) |
Net cash used in investing activities | (139,378) | (65,404) | |
Cash flows from financing activities | 1,618 | ||
Options exercised | 1,035 | ||
Partial repayment of aircraft financing facility | (755) | - | |
Principal portion of lease liability repaid | (327) | (70) | |
Net cash generated from financing activities | 536 | 965 | |
Effect of foreign exchange rate changes on cash | (6,487) | (11,687) | |
Net cash outflow | (163,161) | (100,306) | |
Cash and cash equivalents, beginning of year | 574,294 | 597,451 | |
Cash and cash equivalents, end of period | 411,133 | 497,145 |
The accompanying notes are an integral part of these condensed consolidated interim financial statements. | Page 6 |
Ivanhoe Mines Ltd.
Notes to the condensed consolidated interim financial statements March 31, 2024
(Stated in U.S. dollars unless otherwise noted) (Unaudited)
-
Basis of presentation and going concern assumption
Ivanhoe Mines Ltd. is a mining, development and exploration company incorporated in Canada which, together with its subsidiaries and joint venture, is focused on the mining, development and exploration of minerals and precious metals from its property interests located primarily in Africa.
The registered and records office of the Company is located at Suite 606-999 Canada Place, Vancouver, British Columbia, Canada V6C 3E1. The Company is listed on the Toronto Stock Exchange ("TSX") under the ticker symbol IVN. The shares of the Company are also traded on the OTCQX Best Market in the United States of America under the symbol IVPAF.
The Company's condensed consolidated interim financial statements have been prepared using accounting policies in accordance with IFRS Accounting Standards applicable to the preparation of interim financial statements, under International Accounting Standard 34, Interim Financial Reporting.
These condensed consolidated interim financial statements do not include all of the information and footnotes required by IFRS Accounting Standards for complete financial statements for year-end reporting purposes. Results for the three months ended March 31, 2024, are not necessarily indicative of future results.
These condensed consolidated interim financial statements have been prepared on the historical cost basis with the exception of certain financial instruments and share-based payments which are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets. The financial statements are also prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business.
The Company has an accumulated profit of $753.7 million at March 31, 2024 (December 31, 2023: $819.2 million). As at March 31, 2024, the Company's total assets exceeds its total liabilities by $3,511.4 million (December 31, 2023: $3,580.9 million) and current liabilities exceeds current assets by $662.6 million (December 31, 2023: $348.4 million). - Material accounting policies
The material accounting policies used in these condensed consolidated interim financial statements have been consistently applied to all periods presented, unless otherwise stated, and are as follows: - Statement of compliance
The accounting policies applied by the Company in these condensed consolidated interim financial statements are the same as those applied by the Company in its most recent annual consolidated financial statements as at and for the year ended December 31, 2023 except for the application of new and revised accounting standards mentioned in Note 3.
These unaudited condensed consolidated interim financial statements should be read in conjunction with the Company's audited consolidated financial statements as at and for the year ended December 31, 2023.
- Statement of compliance
Page 7
Ivanhoe Mines Ltd.
Notes to the condensed consolidated interim financial statements March 31, 2024
(Stated in U.S. dollars unless otherwise noted) (Unaudited)
- Material accounting policies (continued)
-
Significant accounting estimates and judgments
The preparation of condensed consolidated interim financial statements in conformity with IAS 34 requires the Company's management to make estimates and assumptions concerning the future. The resulting accounting estimates can, by definition, only approximate the actual results. Estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
Significant accounting judgments are accounting policies that have been identified as being complex or involving subjective judgments or assessments.
Significant accounting estimates and judgments include, amongst other things, the recoverability of assets, the determination of the functional currency, technical feasibility and commercial viability of projects, the classification of Kamoa Holding Limited as a joint venture, the determination of inputs into lease accounting, the valuation of the embedded derivative liability associated with the convertible notes, deferred revenue, deferred tax, provisions for tax claims, the provisionally-priced revenue, remeasurement of contract receivables and bill-and-hold arrangements of the Kamoa Holding Limited joint venture. - Future accounting changes
The following new standards, amendments to standards and interpretations have been issued but are not effective during the three months ended March 31, 2024. The Company has not yet adopted these new and amended standards. - Amendment to IAS 21 - Lack of Exchangeability. An entity is impacted by the amendments when it has a transaction or an operation in a foreign currency that is not exchangeable into another currency at a measurement date for a specified purpose. A currency is exchangeable when there is an ability to obtain the other currency (with a normal administrative delay), and the transaction would take place through a market or exchange mechanism that creates enforceable rights and obligations. (i)
The Company has considered the amendment and assessed that it will have no material impact on adoption. - Effective for annual periods beginning on or after January 1, 2025
- Amendment to IAS 21 - Lack of Exchangeability. An entity is impacted by the amendments when it has a transaction or an operation in a foreign currency that is not exchangeable into another currency at a measurement date for a specified purpose. A currency is exchangeable when there is an ability to obtain the other currency (with a normal administrative delay), and the transaction would take place through a market or exchange mechanism that creates enforceable rights and obligations. (i)
-
Significant accounting estimates and judgments
-
Application of new and revised standards
The following standards became effective for annual periods beginning on or after January 1, 2024. The Company adopted these standards in the current period and they did not have a material impact on its condensed consolidated interim financial statements unless specifically mentioned below. - Amendment to IFRS 16 - Leases on sale and leaseback. These amendments include requirements for sale and leaseback transactions in IFRS 16 to explain how an entity accounts for a sale and leaseback after the date of the transaction. Sale and leaseback transactions where some or all the lease payments are variable lease payments that do not depend on an index or rate are most likely to be impacted.
- Amendment to IAS 7 and IFRS 7 - Supplier finance. These amendments require disclosures to enhance the transparency of supplier finance arrangements and their effects on a company's liabilities, cash flows and exposure to liquidity risk. The disclosure requirements are the IASB's response to investors' concerns that some companies' supplier finance arrangements are not sufficiently visible, hindering investors' analysis.
Page 8
Ivanhoe Mines Ltd.
Notes to the condensed consolidated interim financial statements March 31, 2024
(Stated in U.S. dollars unless otherwise noted) (Unaudited)
3. Application of new and revised standards (continued)
-
Amendment to IAS 1 - Non-current liabilities with covenants and Amendment to IAS 1 - Classification of Liabilities as Current or Non-current.
The adoption of the amendments to IAS 1 has a material effect on the Company's financial statements, particularly impacting the classification of the host liability and embedded derivative liability associated with the convertible notes.
These amendments clarify how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments also aim to improve information an entity provides related to liabilities subject to these conditions. Furthermore, the amendments clarify that a conversion option does not affect the Company's classification of the liability, but only if the option meets the fixed-for-fixed criteria and is classified and recognized as a separate equity component in accordance with IAS 32, Financial Instruments: Presentation. If a conversion option in a loan agreement does not satisfy the fixed-for-fixed criteria, the entity would classify the liability as current.
The conversion feature included in the Company's convertible notes fails the 'fixed for fixed' criteria and is therefore not classified as an equity instrument. Although the terms of the convertible notes allow for settlement in the Company's own equity instruments, that alternative is not classified as an equity instrument, the terms of the convertible feature are taken into account in the classification of the liability. The convertible senior notes issued by the Company can be called by the holder at any time in the next 12 months, barring the conditions disclosed in Note 15 are met.
The impact of the adoption of the amendments to IAS 1 on the Company's consolidated statements of financial position as at December 31, 2023 and January 1, 2023 is as follows:
December 31, | IAS 1 | December 31, | |
2023 | Amendment | 2023 | |
(Restated) | |||
$'000 | $'000 | $'000 | |
Consolidated statements of financial | |||
position | |||
Non-current liabilities | |||
Convertible notes - host liability | 492,937 | (492,937) | - |
Convertible notes - embedded | |||
derivative liability | 306,561 | (306,561) | - |
Total non-current liabilities | 1,221,532 | (799,498) | 422,034 |
Current liabilities | |||
Convertible notes - host liability | 3,033 | 492,937 | 495,970 |
Convertible notes - embedded | - | ||
derivative liability | 306,561 | 306,561 | |
Total current liabilities | 197,783 | 799,498 | 997,281 |
Page 9
Ivanhoe Mines Ltd.
Notes to the condensed consolidated interim financial statements March 31, 2024
(Stated in U.S. dollars unless otherwise noted) (Unaudited)
3. Application of new and revised standards (continued)
- Amendment to IAS 1 - Non-current liabilities with covenants and Amendment to IAS 1 - Classification of Liabilities as Current or Non-current. (continued)
December 31, | IAS 1 | December 31, | |
2022 | Amendment | 2022 | |
(Restated) | |||
$'000 | $'000 | $'000 | |
Consolidated statements of financial | |||
position | |||
Non-current liabilities | |||
Convertible notes - host liability | 462,290 | (462,290) | - |
Convertible notes - embedded | |||
derivative liability | 221,300 | (221,300) | - |
Total non-current liabilities | 1,060,913 | (683,590) | 377,323 |
Current liabilities | |||
Convertible notes - host liability | 3,033 | 462,290 | 465,323 |
Convertible notes - embedded | - | ||
derivative liability | 221,300 | 221,300 | |
Total current liabilities | 67,241 | 683,590 | 750,831 |
Upon conversion, the convertible notes may be settled, at the Company's election, in cash, common shares or a combination thereof. Due to this election right and conversion feature the classification of the convertible notes (host liability and embedded derivative liability) as current liabilities does not impact the Company's liquidity.
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Ivanhoe Mines Ltd. published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 11:38:06 UTC.
