Ivanhoe Mines issues Q1 financial results and review of mine construction progress and exploration activities

May 13, 2021

Ivanhoe Mines issues Q1 financial results and review of mine construction progress and exploration activities ■ Copper production at the Kamoa-Kakula Mine to begin imminently; first phase projected to produce approximately 200,000 tonnes of copper per year ■ Kamoa-Kakula’s Phase 2 expansion, scheduled for Q3 2022, will double annual copper output to approximately 400,000 tonnes ■ Ivanhoe Mines pledges net-zero greenhouse gas emissions at the Kamoa-Kakula Copper Mine

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Expanded 2021 exploration program underway on Ivanhoe’s Western Foreland licences, searching for DRC’s next tier-one copper discovery

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Development of the world-scale Platreef palladium, platinum, rhodium, nickel, copper and gold project in South Africa making good progress

HIGHLIGHTS

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

Ivanhoe Mines’ Kamoa-Kakula joint-venture copper project, has advanced ahead of schedule and first copper concentrate production is expected within a few weeks. Lower-grade ore will be fed into the plant during the final commissioning phase, to ensure plant performance and copper recovery are satisfactory before increasing the head grade.

• Kamoa-Kakula’s Phase 2 construction is progressing slightly ahead of plan and is

scheduled to start up in Q3 2022, which will see a doubling of mill throughput to 7.6 million tonnes per annum (Mtpa). Phases 1 and 2 combined are forecast to produce approximately 400,000 tonnes of copper per year. Based on independent benchmarking, the project’s phased expansion scenario to 19 Mtpa would position Kamoa-Kakula as the world’s second-largest copper mining complex, with peak annual copper production of more than 800,000 tonnes.

• Kamoa-Kakula’s initial production guidance, on a 100%-project basis, is between

80,000 and 95,000 tonnes of copper in concentrate for the remainder of 2021.

• At the end of April 2021, Kamoa-Kakula’s pre-production ore stockpiles held three

million tonnes grading 4.74% copper, containing more than 140,000 tonnes of copper.

• Given the current copper price environment, Ivanhoe, together with its partner Zijin,

is exploring the acceleration of the Kamoa-Kakula Phase 3 concentrator expansion from 7.6 Mtpa to 11.4 Mtpa, which may be fed from expanded mining operations at Kansoko or a new mining area at Kamoa North (including the Bonanza Zone). Kamoa Copper also is refining its longer-term downstream processing strategy, including the potential construction of a smelter or hydrometallurgical processing facility.

• In March 2021, Ivanhoe Mines completed a US$575 million, 2.50% convertible senior

notes offering. The funding positions Ivanhoe and joint-venture partners to fast- track additional hydropower upgrades to provide sufficient clean and renewable electricity for Kamoa-Kakula expansions to 19 million tonnes of ore per annum and beyond, including a smelter. Funding also allows for expansion and acceleration of the Western Foreland exploration program, in pursuit of the next world-scale copper discovery.

• In April 2021, Ivanhoe announced that Ivanhoe Mines Energy DRC signed an

agreement with the DRC’s state-owned power company SNEL to upgrade a major turbine at the Inga II hydropower facility. The upgraded turbine is expected to produce 162 megawatts of clean, renewable hydropower, providing the Kamoa- Kakula Copper Mine with sufficient, sustainable electricity for future expansions, including a copper smelter.

• In May 2021, Ivanhoe pledged to achieve net-zero operational greenhouse gas

emissions (Scope 1 and 2) at the industry-leading Kamoa-Kakula Copper Mine.

Since the mine already is powered by clean, renewable hydro-generated electricity, the focus of the company’s net-zero commitment will be on electrifying the project’s mining fleet with new, state-of-the-art equipment powered by electric batteries or hydrogen fuel cells, when commercially available.

• In February, Ivanhoe began its 2021 exploration program on its Western Foreland

licences that cover a combined area of approximately 2,550 square kilometres in close proximity to Kamoa-Kakula. The 2021 exploration budget has been increased to $21 million to include additional drilling and surveys. The budget may be further expanded based on program results.

• To support Ivanhoe’s growth plans, future capital needs and widen shareholder

support, the company is considering the viability of seeking one or more listings on international stock exchanges. Any such listing(s) would be subject to market conditions and meeting listing requirements.

• In February 2021, Ivanhoe announced that its South African subsidiary, Ivanplats, is

arranging project-level financing of up to $420 million to advance development of the world-scale Platreef palladium, platinum, rhodium, nickel, copper and gold project in South Africa.

• Ivanplats has signed a non-binding term sheet with Orion Mine Finance, a leading

international provider of production-linked stream financing to base and precious metals mining companies, for a $300-million gold, palladium and platinum streaming facility. Ivanplats also has appointed two prominent, international commercial banks

• Societe Generale and Nedbank – as mandated lead arrangers for a senior project

debt facility of up to $120 million.

• Ivanplats’ proposed financings follow the November 30, 2020 issuance of the

outstanding findings of an independent Platreef Integrated Development Plan 2020 (Platreef IDP20), which consists of an updated feasibility study (Platreef 2020 FS) and a preliminary economic assessment (Platreef 2020 PEA). The initial capital cost for the phased development plan under the Platreef 2020 PEA, starting at a mining rate of 700,000 tonnes per annum (700 ktpa), is estimated at $390 million.

• Detailed engineering is underway on Platreef’s 700-ktpa initial mine design, 770-ktpa

concentrator and associated infrastructure for the phased development plan, which is scheduled to be incorporated into an updated feasibility study before the end of 2021. The Shaft 1 changeover is progressing well in preparation for permanent hoisting by early 2022.

• At the Kipushi Mine redevelopment project in the DRC, the Kipushi Project’s draft

feasibility study, and development and financing plan are being reviewed by Ivanhoe Mines together with its joint-venture partner and state-owned mining company, Gécamines. The project is maintaining a reduced workforce to conduct maintenance activities and pumping operations.

• Ivanhoe has made excellent progress in upgrading Kipushi’s underground

infrastructure to allow for mining to quickly begin at the ultra-high-grade Big Zinc orebody. Resumption of production at the mine now requires the construction of a surface processing plant and other related surface production facilities.

Discussions are continuing with Gécamines to advance a new era of production at Kipushi and it is anticipated that these discussions will be concluded with the finalization of the feasibility study and the agreement on the development and financing plan by mid-2021.

• At the end of Q1 2021, Kamoa-Kakula had reached 628,000 work hours free of a lost-

time injury, Kipushi had reached 3.14 million work hours free of a lost-time injury, and Platreef had reached 202,000 work hours free of a lost-time injury.

Principal projects and review of activities

1. Kamoa-Kakula Project

39.6%-owned by Ivanhoe Mines Democratic Republic of Congo

The Kamoa-Kakula Project, a joint venture between Ivanhoe Mines and Zijin Mining, has been independently ranked as the world’s fourth-largest copper deposit by international mining consultant Wood Mackenzie. The project is approximately 25 kilometres west of the town of Kolwezi and about 270 kilometres west of Lubumbashi.

Ivanhoe sold a 49.5% share interest in Kamoa Holding Limited (Kamoa Holding) to Zijin Mining in December 2015 for an aggregate consideration of $412 million. In addition, Ivanhoe sold a 1% share interest in Kamoa Holding to privately-owned Crystal River for $8.32 million – which Crystal River will pay through a non-interest-bearing, 10-year promissory note. Since the conclusion of the Zijin transaction in December 2015, each shareholder has been required to fund expenditures at the Kamoa-Kakula Project in an amount equivalent to its proportionate shareholding interest in Kamoa Holding.

A 5%, non-dilutable interest in the Kamoa-Kakula Project was transferred to the DRC government on September 11, 2012, for no consideration, pursuant to the 2002 DRC mining code. Following the signing of an agreement with the DRC government in November 2016, in which an additional 15% interest in the Kamoa-Kakula Project was transferred to the DRC government, Ivanhoe and Zijin Mining now each hold an indirect 39.6% interest in the Kamoa- Kakula Project, Crystal River holds an indirect 0.8% interest and the DRC government holds a direct 20% interest. Kamoa Holding holds an 80% interest in the project.

The Kakula concentrator plant and some of approximately 7,000 employees and contractors who helped construct the mine ahead of schedule and within budget.

Phase 1 concentrator plant now energized with permanent hydroelectricity.

Health and safety at Kamoa-Kakula

At the end of March 2021, the Kamoa-Kakula Project reached 627,876 work hours free of a lost-time injury. Nine lost-time injuries occurred in Q1 2021. The project continues to strive toward its workplace objective of zero harm to all employees and contractors.

Kamoa-Kakula has successfully focused on prevention, preparation and mitigation in managing the risks associated with COVID-19. Large-scale testing, combined with focused preventative measures, ensured that positive cases were quickly identified, isolated and treated, with cross contamination kept to a minimum. Maintaining this high standard of risk management remains a daily focus, to prevent future cases.

The Kamoa COVID-19 hospital continues to treat patients when required, as construction progresses for the expansion and upgrade of the primary healthcare wing of the hospital. Kamoa-Kakula’s highly experienced doctors and nurses apply the latest medical treatments, supported by a world-leading emergency response and paramedic team.

As the pandemic evolves, the medical team at Kamoa-Kakula continues to review and update its risk mitigation protocols, while ensuring that new medical advances are investigated and applied to protect the health and safety of the workforce and community members.

The new primary healthcare wing of the Kamoa hospital under construction.

Initial 3.8-Mtpa Kakula concentrator plant nearing completion, with first copper concentrate production within weeks

Overall progress of Kamoa-Kakula’s first phase, 3.8-Mtpa mining and milling operation (covering mine infrastructure, concentrator plant and surface infrastructure) now is approximately 94% complete (as of end of April), compared to 90% at the end of March.

Overall construction of the project’s first phase, 3.8-Mtpa concentrator plant and associated facilities is advancing rapidly and is approximately 98% complete (as of end of April), up from 92% complete at the end of March. The concentrator plant is essentially mechanically complete, with first copper concentrate production scheduled for later this month or early June. Lower-grade ore will be fed into the plant during the final commissioning phase, to ensure plant performance and copper recovery are satisfactory before increasing the head grade.

Structural steel erection, platework installation and piping and valve installation for the first concentrator plant are effectively complete, as is electrical, controls and instrumentation installation.

The main mine 220-kilovolt (kV) Kamoa Consumer Substation (KCS) has been energized on grid power, as has the 33kV KCS substation. In addition, the main plant 33kV substation and all the plant medium-voltage and low-voltage substations have been energized, and the concentrator plant is fully energized.

Construction complete (C1) sign off is nearing completion with approximately 75% of the certificates signed off and handed over from construction to commissioning. C2 (pre commissioning) commissioning is well underway with some areas (crushing and screening, milling) more than 90% complete. Early C3 activities (checking for leaks, certain instrument calibration, control-loop checks) have started with water being circulated through certain areas in the plant.

Electrical installation at the backfill plant is ongoing and the backfill plant is scheduled to be completed in July 2021, well before paste backfill is required for mining operations.

The backfill plant will be used to mix tailings from the processing plant with cement to produce paste backfill. The backfill will be pumped back into the mine and used to help support minedout areas. Approximately one-half of the mine’s tailings will be sent back underground, significantly reducing the surface tailings storage. Construction of the tailings storage facility is progressing well and is scheduled to be completed on time to receive tailings from the processing plant.

Construction and commissioning of the surface bulk reclaim tip, bypass conveyor system and run-of-mine stockpile feed conveyor now is complete. The bulk reclaim tip system will be used to feed ore from Kakula’s surface stockpiles to the processing circuit, as well as ore from the Kansoko Mine when second phase operations begin.

The Phase 1 concentrator plant, now mechanically complete.

Copper production guidance for 2021

The Kamoa-Kakula concentrator plant is essentially mechanically complete and first copper concentrate production is scheduled for later this month or early June 2021. Assuming first production starts at that time, Ivanhoe’s guidance for contained copper in concentrate expected to be produced by the Kamoa-Kakula Project for the balance of 2021 assumes a ramp-up from first production in line with published technical disclosures, and is as follows:

Kamoa-Kakula Project 2021 Guidance

Contained Copper in Concentrate 80,000 to 95,000 tonnes

All figures in the above table are on a 100%-project basis. Metal reported in concentrate is prior to refining losses or deductions associated with smelter terms. Cost guidance is expected to be provided once the Kamoa-Kakula Project’s Phase 1 plant has reached steady state production. Guidance involves estimates of known and unknown risks, uncertainties and other factors which may cause the actual results to be materially different.

Kamoa-Kakula’s Phase 1 backfill plant with concentrator plant in the background.

Construction of Phase 2 of the Kamoa-Kakula project is well underway and Phase 3 expansion is being explored

Construction of the second 3.8-Mtpa concentrator plant is progressing well toward a Q3 2022 start-up, with the current focus on earthworks and civil works. Both earthworks and civil works are tracking slightly ahead of schedule. With orders for all the long-lead items of equipment for the Phase 2 concentrator placed in September 2020, procurement activities have focused on the remainder of the plant equipment. Structural steel fabrication is underway with the first batch complete and due to arrive on site in June 2021.

Given the current copper price environment, Ivanhoe and its partner Zijin are exploring the acceleration of the Kamoa-Kakula Phase 3 concentrator expansion from 7.6 Mtpa to 11.4 Mtpa, which may be fed from expanded mining operations at Kansoko, or new mining areas at Kamoa North (including the Bonanza Zone) and Kakula West.

Foundations for the Phase 2 ball mills and flotation cells advancing rapidly.

Underground development more than 13 kilometres ahead of plan at the end of Q1 2021

Kamoa-Kakula also set a monthly mine development record in March, with advancement of more than 3,100 metres, bringing total underground development to approximately 38.6 kilometres – approximately 13.5 kilometres ahead of schedule. A total of 8.8 kilometres of underground development was completed in Q1 2021. Good progress continued in early Q2 2021 and further increased the underground development to more than 42 kilometres at the end of April 2021, which is 15 kilometres ahead of schedule.

Drift-and-fill stoping operations are progressing well at the Kakula Mine, with approximately 70% of the ore production coming from stoping operations and the remainder coming from mine development activities. Drift-and-fill stoping is a highly-productive mining method of extracting underground ore, where a single tunnel, known as a stope, is extracted leaving an open void that is subsequently backfilled to allow for the extraction of the neighbouring stope in sequence. The backfill plant, which will mix tailings from the processing plant with cement to produce paste backfill, will begin pumping backfill to the underground operations in July 2021.

Large-scale, mechanized mining operations are progressing well at the Kakula and Kansoko mines. April represented the third consecutive month of mining in excess of the 3.8-Mtpa milling rate, reducing start-up risk as the stockpile is not expected to be drawn down significantly until the Phase 2 processing plant comes on stream in Q3 2022.

Pre-production ore stockpiles now hold approximately 3.0 million tonnes grading 4.74% copper, containing more than 140,000 tonnes of copper

At the end of December 2020, Kamoa-Kakula’s pre-production surface stockpiles contained approximately 1.52 million tonnes of high-grade and medium-grade ore at an estimated blended grade of 4.03% copper, containing more than 61,000 tonnes of copper. The project’s combined medium-grade and high-grade ore mined was approximately 300,000 tonnes at an average grade of 5.45% copper in January 2021, approximately 339,000 tonnes at an average grade of 5.50% copper in February 2021, and approximately 400,000 tonnes at an average grade of 5.36% copper in March 2021. This brings the project’s total pre-production high- and medium-grade ore surface stockpiles to approximately 2.56 million tonnes at an estimated grade of 4.60% copper as of the end of March 2021.

A further 409,000 tonnes were mined in April and comprised 357,000 tonnes grading 5.70% copper from the Kakula Mine, including 121,000 tonnes grading 8.40% copper from the mine’s high-grade centre, and 51,000 tonnes grading 5.85% copper from the Kansoko Mine.

The project’s pre-production surface stockpiles now contain more than 3.0 million tonnes of high-grade and medium-grade ore at an estimated blended average of 4.74% copper. Kamoa- Kakula now has reached the 3.0-million-tonne target of mined high-grade and medium-grade ore, several months ahead of the timeline estimated in the 2020 pre-feasibility study.

Kakula’s main pre-production stockpile and concentrator plant. This stockpile, one of three at Kamoa-Kakula, currently contains approximately 1.64 million tonnes grading 4.93% copper.

Kamoa-Kakula close to finalizing agreements for the sale of its copper concentrates during Phase 1 operations

Kakula is expected to produce an extremely high-grade, clean copper concentrate (containing over 55% copper) that will be highly coveted by smelters around the world. Metallurgical test work indicates that the Kakula concentrates contain extremely low arsenic levels by world standards – approximately 0.01%.

Offtake agreements for copper concentrates produced during Phase 1 operations are nearing final, and include arrangements to utilize local smelter capacity to produce blister copper ingots, and also to export concentrates directly.

Upon receipt of final documentation and board approvals from Kamoa-Kakula’s joint-venture partners, as well as from Kamoa Copper SA, Ivanhoe plans to issue a news release providing details of the marketing arrangements.