Ivanhoe Mines Ltd. Class A · TSX:IVN
Ivanhoe Mines Ltd. Class A — Investor Presentation (May 2023)
36 slides from Ivanhoe Mines Ltd. Class A's investor presentation, May 2023
Slide 1: Investor Presentation
INVESTOR PRESENTATION TSX: IVN | OTCQX: IVPAF MAY 2023
Slide 2: Disclaimer and Forward-Looking Statements
DISCLAIMER AND FORWARD-LOOKING STATEMENTS The information contained in this presentation and other information furnished by or on behalf of Ivanhoe Mines Ltd. (“Ivanhoe”) is confidential and has been prepared to assist the recipients hereof in conducting their own evaluation of Ivanhoe and does not
Slide 3: Ivanhoe at a Glance
IVANHOE AT A GLANCE CORPORATE INFORMATION TSX: IVN LISTINGS OTCQX: IVPAF SHARE PRICE C$11.53 / share(1) MARKET CAP US$10.4 billion(1) SHARES, OPTIONS, Common Shares: 1,218.0 million(2) RSUs & DSUs Options, RSUs & DSUs: 20.4 million(2) CASH POSITION US$497 million(3) CITIC Metal 26.0% Zijin Mining 13
Slide 4: A Leading Producer, Developer and Explorer in Africa
A LEADING PRODUCER, DEVELOPER AND EXPLORER IN AFRICA World’s fastest growing, highest-grade major copper mine World’s highest-grade zinc project OWNERSHIP: OWNERSHIP: KAMOA-KAKULA KIPUSHI Ivanhoe Mines (39.6%) Ivanhoe Mines (62%) Zijin Mining Group (39.6%) Gécamines (38%) Government of DRC (20%) Cry
Slide 5: The World's Next Diversified Major Miner
THE WORLD’S NEXT DIVERSIFIED MAJOR MINER Ivanhoe will be a responsible, leading supplier of critical metals for the clean-energy transition, including copper, nickel, zinc and PGMs. IN PRODUCTION FIRST PRODUCTION Q3 2024 FIRST PRODUCTION Q3 2024 EXPLORATION KAMOA-KAKULA PLATREEF KIPUSHI WESTERN FORE
Slide 6: DRC: Awakening a Copper Giant
DRC: AWAKENING A COPPER GIANT Recently tied Peru as the 2nd As the host country, and as a largest global copper producer shareholder of Kamoa Copper, the DRC sees this local value creation Abundant hydro-power capacity as a strategic imperative Median population age of 17 His Excellency Félix Tshise
Slide 7: Kamoa-Kakula: Shared Value and Local Partnership
KAMOA-KAKULA: SHARED VALUE AND LOCAL PARTNERSHIP 20% OWNERSHIP APPROX. 4% DRC GDP DRC government direct Kamoa-Kakula's contribution in 2022 of $2.35 Bn project shareholding >$40M IN COMMUNITY SPEND Kamoa-Kakula's total social and community development contribution to date 97% LOCAL EMPLOYMENT Congol
Slide 8: Kamoa-Kakula
KAMOA-KAKULA The World’s fastest-growing, highest-grade, lowest-carbon major copper mine 8
Slide 9: Kamoa-Kakula: Improving Throughput & Recoveries
KAMOA-KAKULA: IMPROVING THROUGHPUT & RECOVERIES De-bottlenecking program complete Ore tonnes milled (000’s tonnes) Copper ore grade processed (%) ahead of schedule in Q1 2023. Phase 1 5.44% 5.60% and 2 production capacity increased to 5.40% 5.42% ~450 kt per annum in Q2 2023. 2,082 1,950 2,006 1,930
Slide 10: Kamoa-Kakula: Another Record Quarterly Performance
KAMOA-KAKULA: ANOTHER RECORD QUARTERLY PERFORMANCE (Figures shown on 100% basis for Kamoa-Kakula) Record quarterly revenue and EBITDA achieved in Q1 2023 Copper Sold (kt) 86.8 kt payable copper sold in the quarter, lower than copper produced, resulting in higher inventories at quarter-end 85.8 93.8
Slide 11: Kamoa-Kakula: C1 Cash Costs Remain Stable
KAMOA-KAKULA: C1 CASH COSTS REMAIN STABLE (All values in US$ per pound of payable copper) Q1 2023 cash costs (C1) towards lower Quarterly Breakdown of C1 Cash Cost (US$ per lb.) end of 2023 guidance range of $1.40/lb. to $1.50/lb. $0.56 Logistics charges easing. Higher $0.51 $0.50 processing costs d
Slide 12: Kamoa-Kakula: High Margins Continue in Q1 2023
KAMOA-KAKULA: HIGH MARGINS CONTINUE IN Q1 2023 (Figures shown on 100% basis for Kamoa-Kakula) Quarterly Revenue (US$ million) Quarterly EBITDA (US$ million) / Realized Copper Price (US$/lb.) / EBITDA Margin (%) $4.34/lb. $4.04/lb. 67% 66% $3.50/lb. $3.54/lb. 673 451 452 689 58% 55% 494 460 286 254 Q
Slide 13: Key Highlights: Kamoa-Kakula IDP 2023
KEY HIGHLIGHTS: KAMOA-KAKULA Shown on 100%-basis 2023 PFS 2023 PEA IDP 2023 Mine Life 33 Years 42 Years Total Ore Milled 476 Mt 657 Mt Feed Grade 3.94% 3.70% Total Copper in Concentrate 16 Mt 21 Mt Mill Feed Grade (10 year average) 4.94% Copper in Concentrate (10 year average) 620 ktpa C1 Cash Cost
Slide 14: Kamoa-Kakula 2023 Integrated Development Plan
KAMOA-KAKULA 2023 INTEGRATED DEVELOPMENT PLAN Four-stage ramp up to 19.2 Mtpa processing capacity 20.0 Phase 4 (2030) 6.0 18.0 Kamoa 2 Phase 3 5.0 16.0 (Q4 2024) Kansoko Sud PEA only 14.0 Kamoa 3 - 6 4.0 Grade (% Cu) 12.0 Milled (Mt) Kamoa Kamoa 1 10.0 Stockpile 3.0 8.0 Kakula 2.0 6.0 Stockpile Kaku
Slide 15: Kamoa-Kakula: The World's Best Copper Mine
KAMOA-KAKULA: THE WORLD’S BEST COPPER MINE World’s projected top 20 copper mines in 2025, by key metrics 6.0% Bubble size: M&I Resource Kamoa-Kakula Copper Head Grade (%) 5.0% Kamoto 4.0% 3.0% Polish Copper 2.0% Oyu Tolgoi Grasberg Kansanshi Escondida 1.0% Collahuasi 0.0% 0 200 400 600 800 1,000 1,2
Slide 16: 500ktpa Smelter Brings Transformative Benefits
500KTPA SMELTER BRINGS TRANSFORMATIVE BENEFITS $906 million estimated capital cost for the massive, 100-hectare site 500,000 tonnes of 99+% pure blister anode copper production annually 650,000 to 800,000 tonnes of by- product acid production; in high demand in the DRC Volume of shipments per unit o
Slide 17: Smelter Drives Cash Cost (C1) to the Lowest Quartile
SMELTER DRIVES CASH COST (C1) TO THE LOWEST QUARTILE $4.50 Potential Improvements $4.00 - Higher by-product acid sales price (than $150/t) C1 Cash Cost (US$/lb.) $3.50 - Normalization of logistics charges from recent peaks $3.00 - Export via rail along the Lobito Corridor, Angola $2.50 $2.00 $1.50 $
Slide 18: Kamoa-Kakula Phase 3: Construction on Schedule
KAMOA-KAKULA PHASE 3: CONSTRUCTION ON SCHEDULE Phase 3 expansion, copper smelter and refurbishment of turbine #5 on schedule for Q4 2024 completion All major equipment for Phase 3 concentrator ordered; 50% of total concrete poured, ahead of schedule; first steel erection expected in June 2023 Declin
Slide 19: New Export Routes from DRC
NEW EXPORT ROUTES FROM DRC KAMOA-KAKULA Dar es Salaam ~40% of exports 2,466 km Roundtrip: 40 days Lobito Proposed new commercial road border at Kipushi to Rail to Lobito 1,601 km also benefit Kamoa-Kakula operations Roundtrip: ~20 days Zambian Hubs 40% of exports ~2% of exports 2,860 km Beira Roundt
Slide 20: Western Foreland Exploration, DRC
WESTERN FORELAND EXPLORATION, DRC ~US$19 million 2023 exploration budgeted, including ~70,000 metres of drilling 2023 program continues with regional, wide- spaced exploration drilling targeting Kamoa- Kakula-style copper mineralization Maiden Resource for Makoko & Kiala copper discoveries targeted
Slide 21: Platreef
PLATREEF World’s largest precious metals development project 21
Slide 22: Platreef: World's Largest Undeveloped Precious Metals Project
PLATREEF: WORLD’S LARGEST UNDEVELOPED PRECIOUS METALS PROJECT Multi-generational resource with significant exploration upside World’s best PGM project: highest margin and lowest cash costs Industry disruptor – safe, mechanized and highly productive mining Target to become the largest PGM mine; phase
Slide 23: Platreef: What Makes the Flatreef Unique?
PLATREEF: WHAT MAKES THE FLATREEF UNIQUE? 29 meters By way of visual comparison Khomanani Mine, Rustenburg Shaft 1 headframe, Platreef Deposit Merensky Reef / UG2 Flatreef(1) Bushveld Location Western / Eastern Limb Northern Limb Underground: narrow-reef, manual, Underground: efficient mechanised, M
Slide 24: Platreef: Shaft 2 Concrete Pour Complete
PLATREEF: SHAFT 2 CONCRETE POUR COMPLETE 79-metre high continuously-poured concrete base of Shaft 2 complete, top 20 metres of steel to follow; once complete totaling ~100-metre-high headframe Pilot-hole drilling of Shaft 2 over 680 metres complete Headframes of Platreef’s Shaft 1 (left) and Shaft 2
Slide 25: Platreef: Optimization of Shaft 3 in Progress
PLATREEF: OPTIMIZATION OF SHAFT 3 IN PROGRESS Reaming of Shaft 3 commenced, with 150m of 950m complete. Completion targeted Q4 2023. Pilot hole for Shaft 2 approx. 700m out of 950m complete; reaming planned to start Q3 2023. Optimization work underway to accelerate Phase 2 expansion by installing ho
Slide 26: Platreef: Potential to Become Among the World's Largest Primary PGM Producers
PLATREEF: POTENTIAL TO BECOME AMONG THE WORLD’S LARGEST PRIMARY PGM PRODUCERS Platreef 2014 PEA 3PE+Au Production 2019 (Pd Eq. oz) (LoM Average) 1,600 3PE+Au Production Palladium Equivalent Production (koz) 1,400 Ni+Cu Production Ni+Cu Production 2019 (Pd Eq. oz) Platreef 1,200 2022 FS (Phase 2) 1,0
Slide 27: Platreef: Industry Leading Cash Cost
PLATREEF: INDUSTRY LEADING CASH COST Global primary PGM producer net total cash cost + sustaining capital (2021), US$/3PE+Au oz Quartile 1 Quartile 2 Quartile 3 Quartile 4 1,800 1,600 Platreef 2022 FS 1,400 cash cost: US$514/oz 3PE+Au 1,200 US$/3PE+Au 1,000 800 600 400 200 0 Western Limb Eastern Lim
Slide 28: Key Highlights: February 2022 FS
KEY HIGHLIGHTS: FEBRUARY 2022 FS Shown on 100%-basis in US$ 2022 FS (Phase 1 → 2) Annual Throughput 0.7Mt → 5.2Mt Annual 3PE+Au 113koz → 591koz Annual Ni + Cu 8Mlb → 42Mlb Total Cash Costs (LOM) (1) $514/oz 3PE+Au Initial / Expansion Capital $0.5 Bn / $1.5 Bn LONG- After-tax NPV8%(2) $1.7 Bn TERM PR
Slide 29: Kipushi
KIPUSHI World’s highest-grade zinc project
Slide 30: Kipushi: Historic, Ultra-High-Grade Zinc Deposit
KIPUSHI: HISTORIC, ULTRA-HIGH-GRADE ZINC DEPOSIT World’s top 10 major zinc mines (ranked by 2020 production) Brownfield, ultra-high-grade zinc mine 600 35 with significant, rehabilitated underground infrastructure Contained Zinc Production (kt) Contained zinc production (kt) 500 30 Ore milled head g
Slide 31: Kipushi: Production from Q3 2024
KIPUSHI: PRODUCTION FROM Q3 2024 Surface civil works advancing well; over 2,400 cubic metres of foundation concrete poured; steel erection underway Underground development ahead of schedule; 682 metres of development completed in Q1 2023, over 30% more than planned Stoping of the ultra-high-grade Bi
Slide 32: Kipushi: Strategic Partnership with Gécamines
KIPUSHI: STRATEGIC PARTNERSHIP WITH GECAMINES Off-take term sheet signed with Gécamines and Glencore for 100% of Kipushi's zinc concentrate, together with US$250 million facility Agreement advancing for a new commercial DRC-Zambia border-crossing at Kipushi New border will benefit both the Kipushi M
Slide 33: Three long-life, world-class Robust, experienced Committed support from key Strong balance sheet with 2023
29 Cu Three long-life, world-class Robust, experienced Committed support from key Strong balance sheet with 2023 production guidance mines with low costs, low management team with an partners CITIC and Zijin cash & cash equivalents of of 390kt to 430kt of copper capital intensity and established tra
Slide 34: Appendix: Strong Balance Sheet Supports Ivanhoe's Growth
APPENDIX: STRONG BALANCE SHEET SUPPORTS IVANHOE’S GROWTH (100% Basis, US$ millions) Q1 2023 Remaining 2023 FY Funding Ivanhoe Mines cash and cash equivalents Capital Expenditure Capex Spent Capex Guidance Arrangements of $497 million Kamoa-Kakula Kamoa-Kakula joint venture boasts a Phase 2, 3 & Join
Slide 35: Appendix: Significant Cash Flow Attributable to Ivanhoe
APPENDIX: SIGNIFICANT CASH FLOW ATTRIBUTABLE TO IVANHOE As at Shareholder Loan Balances March 31, 2023 ($ million) Kamoa-Kakula (39.6% equity interest) Ivanhoe will receive distributions (once payable) in excess of its Total shareholder loans payable by Kamoa Holding $3,199 ownership percentage at K
Slide 36: Appendix: Health & Safety Constantly Improving
APPENDIX: HEALTH & SAFETY CONSTANTLY IMPROVING 40% reduction in the total injury frequency rate across all sites during 2022 A safe start to 2023 at all sites; further reduction in TRIFR during Q1 2023 Ivanhoe Mines’ Total Recordable Injury Frequency Rate (TRIFR) by Project 6.82 5.15 4.23 2.90 Indus