Mr. Robert Friedland report

IVANHOE ELECTRIC'S VRB ENERGY SUBSIDIARY SECURES $55 MILLION INVESTMENT

Ivanhoe Electric Inc.'s 90-per-cent-owned subsidiary, VRB Energy Inc., has executed a binding term sheet (the agreement) with a subsidiary of privately held Shanxi Red Sun Co. Ltd. and VRB Energy's wholly owned subsidiary, VRB Energy System (Beijing) Co. Ltd. The agreement outlines the binding framework for the formation of the joint venture, with Red Sun owning 51 per cent and VRB Energy owning 49 per cent.

In addition to the formation of the joint venture, Ivanhoe Electric and VRB Energy will establish a separate United States-based vanadium redox battery business, to be located in Arizona. A total of $20-million of the transaction proceeds will support Ivanhoe Electric's establishment of the U.S.-based battery business.

VRB Energy, a clean technology innovator, has commercialized the largest vanadium flow battery cell stack (50 kilowatts) and power module (one megawatt) on the market. This battery system has been certified by Underwriters Laboratories 1973, recognized as a global standard for commercially available battery energy storage. Red Sun is a private investment group based in Shanxi province, China, which focuses on investments in new energy and energy storage technology, biomedicine, and high-end agriculture.

The joint venture is being formed to manufacture and sell vanadium redox flow battery systems with a market focus in Asia, the Middle East and Africa. The restructuring will allow VRB Energy to concentrate on developing its U.S.-based vanadium redox flow battery systems business (VRB USA), which will be owned 100 per cent by VRB Energy.

The agreement was signed on Sept. 23, 2024, with the transaction expected to close in the fourth quarter of 2024, pending execution of definitive agreements and certain other conditions precedent.

Mr. Melvin commented: "Today's announcement is a significant milestone for our VRB Energy subsidiary and Ivanhoe Electric's establishment of a U.S.-based vanadium redox battery business in Arizona, supported by $20-million from the announced transaction. The agreement also allows us to benefit from the joint venture's growth in Asia, led by a strong and experienced local partner in Red Sun."

Mr. Charles Ge, VRB Energy's chief executive officer, commented: "Red Sun's strategic investment in the joint venture marks a key milestone in our mission to lead the vanadium redox battery market and accelerate the transition to clean energy. The joint venture strengthens our role in the global push for decarbonization and sustainable growth.

"By collaborating with Red Sun, we are advancing both our technology and the potential of long-duration energy storage, critical components for renewable energy solutions. Red Sun's support and investment allows us to scale production, drive innovation and deliver impactful solutions to meet market demand while shaping the future of energy storage. We are proud to join forces with Red Sun as we contribute to global efforts in building a sustainable energy infrastructure and addressing climate change."

Key terms of the joint venture between Red Sun and VRB Energy Inc.

• Red Sun will purchase shares from VRB Energy for $20-million in cash payable in two equal tranches.
• Red Sun will also complete a capital increase of $35-million through 2025 into the joint venture through the issuance of new shares.
• After closing, Red Sun will own 51 per cent and VRB Energy will own 49 per cent of the joint venture.
• The joint venture will operate through a board of directors with four representatives from Red Sun and two from VRB Energy, with customary pro rata funding and supermajority approval rights.
• VRB Energy will restructure its intellectual property that will include, among other things, transferring ownership of U.S. patent rights held by the joint venture back to VRB Energy.
• The joint venture aims to accelerate the manufacture and sale of vanadium redox flow battery systems by combining VRB Energy's technology with facilities and infrastructure to be leased or acquired from entities affiliated with the founders of Red Sun.

The transaction provides Ivanhoe Electric the opportunity to benefit from a newly capitalized joint venture operated by a strong and experienced local Chinese partner, Red Sun. Red Sun plans to establish two manufacturing sites for the joint venture, one in Changzhi City, Shanxi province, with a 300-megawatt production line and a second in Huaihua City, Hunan province, with a 200-megawatt production line. Combined, these production lines will provide approximately 10 times the production capacity of VRB Energy's existing facility. The joint venture will also construct a dedicated electrolyte plant with Red Sun's funding of the joint venture. This facility, to be constructed in Shanxi province, is expected to be completed in 2025 and have a production capacity of 5,000 cubic metres of electrolyte per year with the ability to expand as business conditions require.

As a non-participating, non-controlling shareholder in the joint venture, Ivanhoe Electric, through VRB Energy, will retain exposure to the growing grid-scale battery markets in Asia, the Middle East and Africa. Meanwhile, Ivanhoe Electric will focus on establishing and growing vanadium redox flow battery production in Arizona to serve North American, South American and European markets.

VRB Energy to focus on the development of domestic U.S. manufacturing for vanadium redox flow battery systems:

• VRB Energy will establish VRB USA to pursue domestic manufacturing of vanadium redox flow battery systems.
• A co-operation agreement for the joint venture will ensure global patent protection and will allow VRB USA to maintain access to intellectual property and associated rights, obtain the benefit of cross-licensing of new inventions and improvements, and utilize the joint venture as a preferred supplier for certain key equipment and electrolyte.
• The holding company of VRB USA, VRB Energy, will receive $20-million from Red Sun for the purchase of some of its shares in the joint venture.
• VRB USA will establish a domestic battery assembly facility in Arizona, capable of producing 50 megawatts per year of VRB-ESS vanadium flow batteries.

Transaction closing is expected in the fourth quarter of 2024

The agreement is a framework that sets out the binding parameters of the transactions disclosed in today's announcement. It will be replaced by more detailed definitive agreements, which will include key terms from the agreement. The transactions remain subject to certain conditions being satisfied, including execution of the definitive agreements, Chinese regulatory approvals, certain waivers under the convertible bond issued by VRB Energy and held by BCPG Public Company Ltd., and other customary regulatory approvals.

The disclosure of the transactions in this press release is necessarily of a summary nature and is qualified by text of the agreement itself, which will be filed with the U.S. Securities and Exchange Commission.

About Shanxi Red Sun Co. Ltd.

Shanxi Red Sun is a prominent Asian investment firm specializing in new energy and advanced technologies, with several publicly listed companies under its umbrella. Red Sun's diverse portfolio spans industries such as new energy, new materials, high-end manufacturing, advanced equipment, biopharmaceuticals, modern agriculture and cultural communication. Guided by a philosophy of sustained financial backing, comprehensive resource allocation and targeted industrial development, Red Sun has recently expanded its focus to include mineral resources, critical materials and key technologies in the energy storage supply chain. Moving forward, the group is committed to deepening its investments in new energy storage, positioning itself as a future leader in this rapidly growing sector.

About VRB Energy Inc.

VRB Energy is a clean technology innovator that has commercialized the largest vanadium flow battery on the market, the VRB-ESS, certified to UL1973 product safety standards. VRB-ESS is best suited for solar photovoltaic integration onto utility grids and industrial sites, as well as backup for electric vehicle charging stations. Vanadium flow battery systems are ideally suited to stabilize isolated microgrids, integrating solar and wind power in a safe, reliable, low-maintenance and environmentally friendly manner. VRB Energy grid-scale energy storage systems allow for flexible, long-duration energy with proven high performance. VRB Energy is a subsidiary of Ivanhoe Electric.

About Ivanhoe Electric Inc.

Ivanhoe Electric is a U.S. company that combines advanced mineral exploration technologies with electric metal exploration projects predominantly located in the United States. Ivanhoe Electric uses its accurate and powerful Typhoon geophysical surveying system, together with advanced data analytics provided by its subsidiary, Computational Geosciences Inc., to accelerate and derisk the mineral exploration process as Ivanhoe Electric seeks to discover new deposits of critical metals that may otherwise be undetectable by traditional exploration technologies. Ivanhoe Electric believes the United States is significantly underexplored and has the potential to yield major new discoveries of critical metals. Ivanhoe Electric's mineral exploration efforts focus on copper as well as other metals, including nickel, vanadium, cobalt, platinum group elements, gold and silver. Through the advancement of the company's portfolio of electric metals exploration projects, headlined by the Santa Cruz copper project in Arizona and the Tintic copper-gold project in Utah as well as other exploration projects in the United States, Ivanhoe Electric intends to support U.S. supply chain independence by finding and delivering the critical metals necessary for the electrification of the economy. Ivanhoe Electric also operates a 50/50 joint venture with Saudi Arabian mining company Ma'aden to explore for minerals on approximately 48,500 square kilometres of underexplored Arabian Shield in the Kingdom of Saudi Arabia.

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