Ivanhoe Electric's VRB Energy Subsidiary and Red Sun Sign Definitive Agreements for Formation of New Grid Scale Battery Joint Venture
Ivanhoe Electric to Allocate $20 million of Transaction Proceeds to Establish US-Domiciled Vanadium Redox Flow Battery Business
Phoenix, Arizona--(Newsfile Corp. - October 15, 2024) - 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 today the signing of Definitive Agreements (the "Agreements") between the Company's 90%-owned subsidiary, VRB Energy Inc. ("VRB Energy"), a subsidiary of privately held Shanxi Red Sun Co., Ltd. ("Red Sun"), and certain other affiliates, finalizing the terms of the transaction announced on September 23, 2024 (refer to Ivanhoe Electric's September 23, 2024 news release).
The Joint Venture, which will receive a $35 million capital increase from Red Sun, is being formed to expand manufacturing and sales of vanadium redox flow battery systems. In addition to the formation of the Joint Venture, Ivanhoe Electric and VRB Energy, using $20 million of the transaction proceeds, will establish a separate United States-based vanadium redox battery business, to be located in Arizona.
Mr. Melvin commented: "Today's signing of the definitive agreements between our VRB Energy subsidiary and Red Sun allows Ivanhoe Electric to retain exposure to growing grid-scale battery markets through the creation of our Joint Venture. This transaction also provides us with $20 million that we will invest in the establishment of a domestic battery assembly facility in Arizona, capable of producing 50 megawatts per year of VRB-ESS® vanadium flow batteries."
The agreements were signed on October 15, 2024. The establishment of the 51% / 49% joint venture is expected to occur by the end of the month, pending certain other conditions precedent, with several post-transfer matters to be subsequently completed following certain Chinese regulatory filings. Ivanhoe Electric has completed an 8-K filing of the Agreement with the U.S. Securities and Exchange Commission.