Ivanhoe Mines issues first quarter financial results and review of mine development and exploration activities CITIC Metal to invest an additional C$612 million ($454 million) in Ivanhoe Mines at C$3.98 per share to fast track production

May 8, 2019

Ivanhoe Mines issues first quarter financial results and review of mine development and exploration activities

CITIC Metal to invest an additional C$612 million ($454 million) in Ivanhoe Mines at C$3.98 per share to fast track production at the Kakula Copper Mine in D.R. Congo

New Kamoa North Bonanza Zone has an implied strike length of 2.7 kilometres of shallow, thick, massive sulphide mineralization, with copper grades up to 18.48% over 13.6 metres

TORONTO, CANADA ‒ Ivanhoe Mines (TSX: IVN; OTCQX: IVPAF) today announced its financial results for the quarter ended March 31, 2019. All figures are in U.S. dollars unless otherwise stated. Ivanhoe Mines is a Canadian mining company focused on advancing its three mine-development projects in Southern Africa: the Platreef palladium-platinum-nickel-copper-gold-rhodium discovery in South Africa; the Kamoa- Kakula copper discovery in the Democratic Republic of Congo (DRC); and the extensive upgrading of the historic Kipushi zinc-copper-lead-germanium mine, also in the DRC. The company also is exploring for new copper discoveries on its wholly-owned Western Foreland exploration licences, adjacent to the Kamoa-Kakula mining licence.

HIGHLIGHTS

• On April 25, 2019, China-based CITIC Metal agreed to invest an additional C$612

million ($454 million) in Ivanhoe by way of a private placement at C$3.98 per share, a premium of 29% over Ivanhoe’s share price at that time. The investment will be CITIC Metal’s second major financing in less than a year, bringing its total investment in Ivanhoe to $1 billion.

• The CITIC Metal investment is expected to close no later than September 7, 2019,

much sooner than could be expected for a typical project-finance facility. The additional funds will allow Ivanhoe to fast track production at the Kakula Copper Mine.

• CITIC Metal, currently Ivanhoe Mines’ largest shareholder with a 19.3% ownership

stake, will come to own 29.9% of Ivanhoe’s issued and outstanding common shares when the placement is completed. Robert Friedland will remain Ivanhoe’s second- largest shareholder.

• CITIC Metal’s existing standstill provision will be amended to a maximum ownership

stake of 29.9% and extended until January 8, 2023 to provide sufficient time to bring the Kakula mine to production, and to advance subsequent, planned expansions at Kamoa-Kakula, and production at the Kipushi and Platreef projects. Ivanhoe’s entire shareholder base is expected to benefit from the economic growth and significant cash flows that result from commercial production at three mines.

• On May 2, 2019, Ivanhoe announced assays from ten new drill holes at the latest

high-grade discovery at Kamoa-Kakula ─ the Kamoa North Bonanza Zone. Multiple, thick drill intercepts of more than 10% copper were recorded at the new discovery, including 18.48% copper over 13.6 metres.

• The Kamoa North Bonanza Zone has been extended to at least 350 metres, with an

implied strike length of at least 2.7 kilometres. Four rigs are drilling at Kamoa North to delineate the extent of the discovery and assess its potential to be fast-tracked to production.

• Any material mined at Kamoa North could be processed at a nearby, standalone

plant, or hauled to the plant that will be constructed at Kakula. This has the potential of significantly increasing the copper grades during the initial stages of production at Kamoa-Kakula.

• The controlling east-west striking fault responsible for the massive copper sulphide

mineralization in the Kamoa North Bonanza Zone is visible on airborne magnetic images and can be traced over a distance length of at least 10 to 20 kilometres. It trends west onto the adjacent Western Foreland exploration licences that are 100%- owned by Ivanhoe Mines.

• In the far northern portion of the Kamoa-Kakula’s mining licence, the Kamoa

geology team has been drill testing the shallow, high-grade copper trend and has successfully followed it to within 15 metres of the northern boundary of the Kamoa- Kakula mining licence.

• Development at the underground Kakula Mine, the first of multiple, planned mining

areas at Kamoa-Kakula, is making steady progress. Construction of the twin northern declines has been completed and underground development activities now are focused on constructing lateral access drives. In addition, development of a ventilation and access decline on the southern side of the Kakula orebody is underway and construction of the mine’s first ventilation shaft is progressing.

• Other engineering and construction activities underway at Kamoa-Kakula include

construction of a permanent road between the mine site and the Kolwezi airport, construction of the first phase of accommodations for 1,000 employees and contractors, and earthworks for the processing plant.

• On February 6, 2019, Ivanhoe announced an independent pre-feasibility study (PFS)

for the Kakula Mine. The stage one, 6 Mtpa operation, with estimated development capital of $1.1 billion, yields an after-tax NPV8% of $5.4 billion and an IRR of 47% over a 25-year mine life. Initial production is scheduled for early 2021, and the mine is expected to average 6.8% copper over the first five years, with mine-site cash costs of $0.43 per pound of copper.

• Ivanhoe also announced an updated independent preliminary economic assessment

(PEA) for an expanded Kakula-Kamoa production rate of 18 Mtpa, supplied initially by a 6 Mtpa mine at Kakula, followed by two 6 Mtpa mines at Kansoko and Kakula West, and a direct-to-blister smelter. The PEA envisions the staged mine expansions and smelter will be funded from internal cash flows and yields an after-tax NPV8% of $10.0 billion and an IRR of 41%. All figures in the PFS and PEA are on a 100%-project basis.

• Once the expanded PEA production rate of 18 Mtpa is achieved, Kamoa-Kakula is

projected to become the world’s second largest copper mine, with peak annual production of more than 700,000 tonnes of copper.

• Ivanhoe’s DRC exploration team is continuing with its regional drilling program

targeting Kamoa-Kakula-style copper mineralization in the Western Foreland region, just to the west of the Kamoa-Kakula mining-licence area. The projected extensions of the Kamoa North Bonanza Zone and the Kamoa Far North high-grade corridor onto the Western Foreland licences are two new, high-priority exploration targets.

• In July 2018, Ivanhoe announced a new Mineral Resource estimate for the Kipushi

Mine in the DRC that increased zinc-rich Measured and Indicated Mineral Resources to 11.8 million tonnes at an average grade of 35.3% zinc.

• The updated Mineral Resource will be used in the preparation of the Kipushi

definitive feasibility study (DFS). The DFS, which will update and refine the findings of the PFS issued in December 2017, is nearing completion. Similar to the PFS, the DFS will focus on the initial mining of Kipushi’s Big Zinc Zone.

• Discussions are continuing with potential strategic partners and lenders to support

Ivanhoe’s continuing advance toward a new era of production at Kipushi. Ivanhoe has made significant progress in upgrading the mine’s underground infrastructure and the company now has a much clearer path to a resumption of production from the high-grade Big Zinc orebody.

• At the Platreef palladium-platinum-nickel-copper-gold-rhodium mine development

project in South Africa, the project’s first shaft (Shaft 1) has been extended to a depth of 855 metres below surface. The 850-metre-level station was approximately 70% complete at the end of March 2019.

• The 850-metre-level station, as well as the already completed 750-metre-level, will

provide underground access to the high-grade orebody, enabling mine development to proceed. As sinking of Shaft 1 advances, one more station will be developed at a depth of 950 metres. Shaft 1 is expected to reach its projected, final depth of 982 metres below surface in early 2020.

• Surface construction for Platreef’s Shaft 2 is focused on the concrete foundation

(hitch) for the headframe, which is expected to be completed by mid-2019. Shaft 2 will have an internal diameter of 10 metres and will be equipped with two 40-tonne rock-hoisting skips with a capacity to hoist a total of six million tonnes of ore per year – the single largest hoisting capacity at any mine in Africa.

• Ivanhoe continues to advance the arrangement of project financing for the

development of the Platreef Project with a syndicate of international banks.

Discussions also are underway with leading South African financial institutions regarding the financing of the black economic empowerment partners’ contribution to the development capital, which would reduce the amount that would have to be contributed by Ivanhoe on their behalf.

• Ivanhoe is investigating an alternative production plan for the Platreef Project,

targeting significantly lower initial capital, to accelerate first production by using Shaft 1 as the mine’s initial production shaft.

• On May 1, Ivanhoe announced that Lars-Eric Johansson, who has served as

Ivanhoe’s President and Chief Executive Officer since May 2007, will retire at the end of June 2019.

• Also on May 1, Ivanhoe announced the appointment of Tony Giardini as its new

President. Mr. Giardini’s extensive experience as a senior-level finance and mining executive positions him well to oversee the construction and operation of Ivanhoe’s three mine development projects. Mr. Johansson will work alongside Mr. Giardini until the end of June to ensure a smooth and seamless transition.

• On April 25, Ivanhoe announced the establishment of a long-term relationship with

innovative, privately-held, technology and metals company, High Power Exploration (HPX). Ivanhoe agreed to provide HPX with a $50 million secured loan facility, convertible into HPX shares or at least a 25% interest in an HPX Tier One copper- gold exploration and development project in the United States. HPX agreed to provide Ivanhoe with access to its proprietary suite of exploration hardware and software for Ivanhoe’s use in exploration activities in Southern Africa.

• At the end of Q1 2019, Kamoa-Kakula had recorded 13.4 million work hours free of

lost-time injuries, Kipushi 457,458 work hours free of lost-time injuries, and Platreef 1.3 million work hours free of lost-time injuries.

On April 25, 2019 CITIC Metal agreed to invest an additional C$612 million ($454 million) in Ivanhoe Mines at C$3.98 per share, bringing its investment in Ivanhoe to $1 billion. Left to right: Peter Zhou (Vice President, Corporate Development, Asia, Ivanhoe Mines), Yufeng “Miles” Sun (President, CITIC Metal Group / Chairman, CITIC Resources Holdings / Co-Chairman, Ivanhoe Mines), Robert Friedland (Executive Co-Chairman, Ivanhoe Mines) and Manfu Ma (Vice President, CITIC Metal Group).

Principal projects and review of activities

1. Platreef Project

64%-owned by Ivanhoe Mines South Africa

The Platreef Project is owned by Ivanplats (Pty) Ltd, which is 64%-owned by Ivanhoe Mines. A 26% interest is held by Ivanplats’ historically-disadvantaged, broad-based, black economic empowerment (B-BBEE) partners, which include 20 local host communities with approximately 150,000 people, project employees and local entrepreneurs. A Japanese consortium of ITOCHU Corporation; Japan Oil, Gas and Metals National Corporation and Japan Gas Corporation, owns a 10% interest in Ivanplats, which it acquired in two tranches for a total investment of $290 million.

The Platreef Project hosts an underground deposit of thick, platinum-group metals, nickel, copper and gold mineralization on the Northern Limb of the Bushveld Igneous Complex in Limpopo Province, approximately 280 kilometres northeast of Johannesburg and eight kilometres from the town of Mokopane.

On the Northern Limb, platinum-group metals mineralization is hosted primarily within the Platreef, a mineralized sequence that is traced more than 30 kilometres along strike. Ivanhoe’s Platreef Project, within the Platreef’s southern sector, is comprised of two contiguous properties: Turfspruit and Macalacaskop. Turfspruit, the northernmost property, is contiguous with, and along strike from, Anglo Platinum’s Mogalakwena group of mining operations and properties.

Since 2007, Ivanhoe has focused its exploration and development activities on defining and advancing the down-dip extension of its original discovery at Platreef, now known as the Flatreef Deposit, which is amenable to highly mechanized, underground mining methods. The Flatreef area lies entirely on the Turfspruit and Macalacaskop properties, which form part of the company’s mining right.

The Platreef Mine site, showing Shaft 1’s headframe and the box cut for Shaft 2.

Health and safety at Platreef

As at the end of Q1 2019, the Platreef Project had reached a total of 1,305,357 lost-time, injury-free hours worked in accordance with South Africa’s Mine Health and Safety Act and Occupational Health and Safety Act. At the end of March 2019, it had been nearly twelve months since the last lost-time injury occurred at the Platreef Project, which continues to strive toward its workplace objective of an environment that causes zero harm to employees, contractors, sub-contractors and consultants.

Platreef alternative production plan

Ivanhoe Mines is investigating an alternative production plan for the Platreef Project, targeting significantly lower initial capital, to accelerate first production by using Shaft 1 as the mine’s initial production shaft. This plan will focus on initially targeting the development of mining zones accessible from Shaft 1 and maximizing the hoisting capacity of this shaft, followed by expansions to the production rate as outlined in the company’s 2017 definitive feasibility study (DFS).

Shaft 1 now extends to a depth of 855 metres below surface

Shaft 1 reached the top of the high-grade Flatreef Deposit (T1 mineralized zone) at a depth of 780.2 metres below surface in Q3 2018 and has since been extended to a depth of 855 metres below surface. The 850-metre-level station development is underway and was an estimated 70% complete at the end of March 2019. The thickness of the mineralized reef (T1 & T2 mineralized zones) at Shaft 1 is 29 metres, with grades of platinum-group metals ranging up to 11 grams per tonne (g/t) 3PE (platinum, palladium and rhodium) plus gold, as well as significant quantities of nickel and copper. The 29-metre intersection yielded approximately 3,000 tonnes of ore, estimated to contain more than 400 ounces of platinum-group metals. The ore is stockpiled on surface for metallurgical sampling.

The 750-metre-level and 850-metre-level stations will provide initial, underground access to the high-grade orebody, enabling mine development to proceed during the construction of Shaft 2. As sinking of Shaft 1 advances, one more station will be developed at a mine-working depth of 950 metres. Shaft 1 is expected to reach its projected, final depth of 982 metres below surface in early 2020.

The DFS planned for Shaft 1 to ultimately become the primary ventilation shaft during the project’s four-Mtpa production case.

Limpopo Premier Stanley Chupu Mathabatha (centre) cutting a ceremonial ribbon, alongside members of the Platreef shaft-sinking team, to signify the completion of the 850-metre top-cut station development.

Shaft 2 early-works construction progressing

Shaft 2, to be located approximately 100 metres northeast of Shaft 1, will have an internal diameter of 10 metres. It will be lined with concrete and sunk to a planned, final depth of more than 1,104 metres below surface. It will be equipped with two, 40-tonne, rock-hoisting skips capable of hoisting a total of six million tonnes of ore a year – the single largest hoisting capacity at any mine in Africa.

The headgear for the permanent hoisting facility was designed by South Africa-based Murray & Roberts Cementation. Nine blasts were successfully completed in 2018 enabling the excavation of Shaft 2’s box cut to a depth of approximately 29 metres below surface and the construction of the concrete hitch (shaft collar foundation) for the 103-metre-tall concrete headgear that will house the shaft’s permanent hoisting facilities and support the shaft collar. Excavation of the box cut and construction of the hitch foundation is expected to be completed in June 2019, enabling the beginning of pre-sinking work that will extend the depth of the shaft to 84 metres below surface.

Figure 1: Schematic section of the Platreef Mine, showing Flatreef’s T1 and T2 thick, high-grade mineralized zones (red and dark orange), underground development work completed to date in shafts 1 and 2 (white) and planned development work (gray).

Ongoing construction of the foundation that will support Shaft 2’s 103-metre-tall concrete headframe.

Underground mining to incorporate highly productive, mechanized methods

Ivanhoe plans to develop the Platreef Mine in phases. The initial production plans are designed to establish an operating platform to support future expansions. Production is expected to be increased to 8 Mtpa in subsequent phases, and then further increased to a steady-state 12 Mtpa phase, which would establish Platreef among the largest platinum-group-metals mines in the world.

The mining zones in the current Platreef mine plan occur at depths ranging from approximately 700 metres to 1,200 metres below surface.

Planned mining methods will use highly productive, mechanized methods, including long-hole stoping and drift-and-fill mining. Each method will utilize cemented backfill for maximum ore extraction. As per the DFS, the ore will be hauled from the stopes to a series of internal ore passes and fed to the bottom of Shaft 2, where it will be crushed and hoisted to surface.

Platreef project financing continuing to advance

Ivanhoe continues to advance the arrangement of project financing for the development of the Platreef Project with a syndicate of international banks.

In addition, preliminary discussions are underway with leading South African financial institutions regarding the financing of the black economic empowerment partners’ contribution to the development capital which would thereby reduce the amount that would otherwise have to be contributed by Ivanhoe on their behalf.

Long-term supply of bulk water secured for the Platreef Mine

On May 7, 2018, Ivanhoe announced the signing of a new agreement to receive local, treated water to supply most of the bulk water needed for the first phase of production at Platreef. The Mogalakwena Local Municipality has agreed to supply a minimum of five million litres of treated water a day for 32 years, beginning in 2022, from the town of Mokopane’s new Masodi Treatment Works. Initial supply will be used in Platreef’s ongoing underground mine development and surface infrastructure construction.

Under terms of the agreement, which is subject to certain suspensive conditions, Ivanplats will provide financial assistance to the municipality for certified costs of up to a maximum of R248 million (approximately $19.6 million) to complete the Masodi treatment plant. Ivanplats will purchase the treated wastewater at a reduced rate of R5 per thousand litres for the first 10 million litres per day to offset a portion of the initial capital contributed.

Ivanplats received its Integrated Water Use Licence in January 2019, which is valid for 30 years and enables the Platreef Project to make use of water as planned in the 2017 DFS.

Anthony Baloyi, Mokopane Micraas, Abatian Manmela and Ruddy Malete (left to right), of South Africa-based Malecombo Steel Fixers, installing steel rebar for Shaft 2’s concrete foundation, which is expected to be completed in June 2019.

Development of human resources and job skills

Work has progressed on the implementation of Ivanhoe’s Social and Labour Plan (SLP). The Company has pledged a total of R160 million ($11 million) during the first five years, culminating in November 2019, of which R110 million ($8 million) already had been spent by March 2019. The approved plan includes R67 million ($5 million) for the development of job skills among local residents and R88 million ($6 million) for local economic development projects.

On April 1, 2019, a ceremony was held at Masodi Secondary School where recipients of the Ivanplats Scholarship Program received new uniforms and school supplies.

2. Kipushi Project

68%-owned by Ivanhoe Mines Democratic Republic of Congo

The Kipushi copper-zinc-germanium-lead mine, in the Democratic Republic of Congo, is adjacent to the town of Kipushi and approximately 30 kilometres southwest of Lubumbashi. It is located on the Central African Copperbelt, approximately 250 kilometres southeast of the Kamoa-Kakula Project and less than one kilometre from the Zambian border. Ivanhoe acquired its 68% interest in the Kipushi Project in November 2011; the balance of 32% is held by the state-owned mining company, La Générale des Carrières et des Mines (Gécamines).

Health, safety and community development

At the end of Q1 2019, the Kipushi Project reached a total of 457,458 work hours free of losttime injuries. It has been more than four months since the last lost-time injury occurred at the Kipushi Project.