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Non-controlling interests investment in subsidiary
6 Months Ended
Jun. 30, 2023
Noncontrolling Interest [Abstract]  
Non-controlling interests investment in subsidiary
11. Non-controlling interests investment in subsidiary:
On May 8, 2023, Cordoba closed the $100 million strategic arrangement with JCHX Mining Management Co., Ltd (“JCHX") to advance the Alacran Project in Colombia. Upon closing, JCHX received a 50% ownership interest in CMH Colombia S.A.S. (“CMH”), a Colombian company that owns 100% of the Alacran Project and is the joint venture vehicle for Cordoba and JCHX in this strategic project level partnership.
For its 50% interest, JCHX will pay the $100 million purchase price in three installments. As of the closing of the transaction, $40 million has been received as a first installment and partial payment for shares issued. A second installment of $40 million is receivable in cash upon the board of directors of Cordoba approving the Feasibility Study of the Alacran Project and the filing of the Environmental Impact Assessment (“EIA”) to the relevant Colombian Government authority, but in no event shall such second installment be paid later than the second anniversary of the closing of the transaction. A third and final installment of $20 million is receivable in cash upon the approval of the
EIA, which must be within two years of the transaction’s closing date. Should the EIA not be approved by the second anniversary of the closing date, JCHX will have the option to elect not to complete this final installment.
As partial consideration for the first installment, the outstanding balance of principal and interest (totaling $10.5 million) owing under Cordoba’s bridge loan to JCHX was applied as a payment in kind and the bridge loan was extinguished.
The second installment is secured by a pledge and call option over 20% of the shares of CMH held by JCHX. In the event JCHX pays the second installment but does not pay the third installment, JCHX’s and Cordoba’s ownership of CMH shares will be adjusted to 40% and 60%, respectively.
The Company currently retains control over the relevant activities of CMH therefore continues to consolidate the entity.
The Company measures its non-controlling interest and loss attributable to non-controlling shareholders on the basis of a hypothetical liquidation at book value. Upon closing, the Company recorded the difference between the consideration received and the carrying value of the interest given up of $18.0 million in additional paid in capital.
CMH’s loss is attributable to Ivanhoe Electric’s shareholders in the Company’s basic and diluted loss per share based on the extent to which the parties are eligible to participate in dividends, if any, during the period.