Ivanhoe Mines Ltd. Class A · TSX:IVN
Ivanhoe Mines Ltd. Class A — Investor Presentation (March 2018)
63 slides from Ivanhoe Mines Ltd. Class A's investor presentation, Mar 15, 2018
Slide 1: 24 years in Southern Africa. 3 advanced, unique projects.
24 years in Southern Africa. 3 advanced, unique projects. Positioned to realize urbanization’s resource opportunities with minerals to help build a better world. March 15, 2018
Slide 2: Forward-looking statements & Qualified Person
Forward-looking statements & Qualified Person Certain statements in presentation constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws, including, without limitation, the timing and results of: (i) statements regarding the ongoing d
Slide 3: Building futures for our stakeholders, today, and writing new stories of epic discoveries
Building futures for our stakeholders, today, and writing new stories KAMOA-KAKULA of epic discoveries Copper discoveries in Southern Africa’s & mine development Democratic Republic legendary mineral fields of Congo’s Central African Copperbelt KIPUSHI PLATREEF Zinc, copper, silver Platinum-group el
Slide 4: Platreef Discovery & Mine Development
Platreef Discovery & Mine Development South Africa
Slide 5: Shaft 1 has reached a depth of more than 70% of planned depth
March 15, 2018: Shaft 1 has reached a depth of more than 700 metres below surface, more than 70% to the planned final depth of 980 metres, at Ivanhoe’s Platreef platinum, palladium, rhodium, gold, nickel, copper and gold mine. Development work focused on initial production by early 2022. 5
Slide 6: Box-cut construction of Shaft 2
Box-cut construction of Shaft 2 6
Slide 7: July 31, 2017: Definitive feasibility study issued for Platreef Project
July 31, 2017: Definitive feasibility study issued for Platreef Project First phase envisages annual throughput rate of 4Mtpa, producing 476,000 ounces of platinum, palladium, rhodium and gold, plus 33 million pounds of nickel and copper. Projected to be Africa’s lowest-cost producer of PGMs, wi
Slide 8: Platreef's potential US$351 per 3PE+Au ounce at bottom of cash-cost curve
Platreef’s potential US$351 per 3PE+Au ounce (net of base-metal by-products) at the bottom of the world’s cash-cost curve 1,600 1,400 1,200 Ivanhoe’s Platreef Project 1,000 at the bottom of the cash-cost curve. 800 600 400 200 0 4E oz production Platreef 4Mtpa FS Northern limb Zimbabwe Eastern Limb
Slide 9: Platreef will be world's largest platinum-group metals mine
At 12 million tonnes/year, Platreef will be world’s largest platinum-group metals mine 1,400 Platreef Phase 3 (12 Mtpa) Ni + Cu + Cr production (eq. Pt oz) 1,200 Ir + Ru production (eq. Pt oz) 1,000 Platreef Phase 2 (8 Mtpa) 4E production (eq. Pt oz) 800 Platreef Phase 1 (4 Mtpa) 600 400 200 - Impal
Slide 10: July 2017: Site visit by government institutions arranging debt financing
July 2017: A site visit by German, Swedish and Canadian government institutions appointed to arrange debt financing for Platreef. Expressions of interest received for approximately US$900 million of a US$1 billion finance package. 10
Slide 11: April 2017: Ivanhoe announces start of surface construction for Shaft 2
April 2017: Ivanhoe announces start of surface construction for Shaft 2, which will be Platreef's main production shaft with a hoisting capacity of six million tonnes a year. Illustration shows two perspectives of Shaft 2’s 103-metre-tall concrete headgear and internal permanent hoisting facilities.
Slide 12: Ivanhoe's Shaft 2 vs. Impala's Shaft 16
Ivanhoe’s Shaft 2 vs. Impala’s Shaft 16 Conceptual Purpose Production shaft Production shaft Northern Limb of Bushveld Western Limb of Bushveld Location Complex Complex Total depth Approx. 1,100 metres 1,657 metres Diameter 10 metres 10 metres Hoisting capacity 6 million tonnes/year 2.7 million tonn
Slide 13: Platreef's B-BBEE deal is a top performer in South Africa's platinum sector
Platreef’s B-BBEE deal is a top performer in South Africa’s platinum sector BEE partner’s 26% ownership stake in Platreef Project is one of the broadest empowerment transactions ever done in South African mining. • 20% held by a trust to benefit 20 local host communities, with estimated combined pop
Slide 14: Ongoing shaft development by members of Platreef's shaft-sinking team
Ongoing Shaft 1 development by members of Platreef’s shaft-sinking team Shaft 1 is expected to reach its projected, final depth of 980 metres below surface in 2019 14
Slide 15: Removal of broken rock from shaft-sinking development
Removal of broken rock from shaft-sinking development 15
Slide 16: The remote-operated cactus grab used to remove broken rock
The remote-operated cactus grab used to remove broken rock from shaft-sinking development 16
Slide 17: Strong and supportive strategic partners
Strong and supportive strategic partners ITOCHU Corporation; Japan Oil, Gas and Metals National Corporation; and Japan Gas Corporation acquired 10% for approx. US$300 million. Potential Japanese government-supported project financing and off-take agreements. Itochu team site visit. 17
Slide 18: Flatreef mining method: long-hole stoping
Flatreef mining method: long-hole stoping Highly mechanized Safe working mining conditions Blast-hole drifts 5m 5m The Flatreef Deposit average thickness of 24 metres = 8 storeys Mucking drifts Highly skilled operators 18
Slide 19: The future of underground mining is automation
The future of underground mining is automation Ivanhoe’s Platreef Platinum Project in South Africa is ideally suited for mechanized, autonomous mining. Source: ASI Robots Illustration source: ABB Mining. Source: MINEX Forum 19
Slide 20: The looming platinum supply cliff for Southern Africa's existing producing mines
The looming platinum “supply cliff” for Southern Africa’s existing producing mines (’000 oz.) Southern Africa’s projected platinum production plunge PwC, Sept. 2016 Existing shafts alone will barely maintain current production to 2021. Then, closures of mined-out shafts will help trigger a long
Slide 21: Even new production likely to provide only short-lived lift in platinum output
Even new production now under development likely to provide only short-lived lift in platinum output (’000 oz.) Southern Africa’s projected platinum production plunge 2022: EXPECTED START OF INITIAL PRODUCTION FROM IVANHOE’S PLATREEF PROJECT PwC Ivanhoe’s Platreef is among new projects whose ramp-
Slide 22: Kamoa Mine Development & Kakula Discovery
Kamoa Mine Development & Kakula Discovery Democratic Republic of Congo
Slide 23: Kamoa, Kakula and Kakula West
Kamoa, Kakula and Kakula West Indicated and Inferred Mineral Resource areas, with existing power and rail infrastructure 23
Slide 24: Kamoa-Kakula as the world's fourth largest copper discovery
February 2018: A new resource estimate establishes Kamoa-Kakula as the world’s fourth largest copper discovery. Copper grades at the two adjacent deposits are the highest, by a wide margin, of the world’s top 10 copper deposits. 24
Slide 25: Indicated Mineral Resources, Kamoa-Kakula Project, February 2018
Indicated Mineral Resources, Kamoa-Kakula Project, February 2018 Cut-off Contained Contained Tonnes Area Copper Category Grade Copper Copper (millions) (Sq. km) Grade (Cu%) (kTonnes) (billion lbs) Indicated 3.0 396 33.2 4.79% 19,000 41.8 Indicated 2.5 535 44.0 4.25% 22,800 50.2 Indicated 2.0 780 53.
Slide 26: Among the world's largest copper deposits, highest copper grades
Among the world’s largest copper deposits, Kamoa-Kakula also has the highest copper grades Measured & Indicated Resource and Grade Inferred Resource and Grade 150 3.0% Contained Copper (Mt) 125 2.5% Copper Grade (%) 100 2.0% 75 1.5% 50 1.0% 25 0.5% - - Source: Wood Mackenzie *Note: Selected based on
Slide 27: Kamoa-Kakula is the largest undeveloped copper deposit in the world
Kamoa-Kakula is the largest undeveloped copper deposit in the world Measured & Indicated Resource and Grade Inferred Resource and Grade 45 3.0% 40 Contained Copper (Mt) 2.5% Copper Grade (%) 35 30 2.0% 25 1.5% 20 15 1.0% 10 0.5% 5 - - Source: Wood Mackenzie *Note: Contained copper in undeveloped dep
Slide 28: Kamoa-Kakula is the largest high-grade copper deposit in the world
Kamoa-Kakula is the largest high-grade copper deposit in the world 45 Measured & Indicated Resource Inferred Resource 40 5.9 Contained Copper (Mt) 35 30 25 11.7 20 36.6 15 6.4 10 16.9 4.8 0.0 0.4 5 10.2 0.4 0.1 0.0 0.0 0.3 4.6 1.4 0.9 0.7 0.5 0.3 0.4 0.3 - Source: Wood Mackenzie *Note: Contained cop
Slide 29: Largest copper discovery ever made on the African continent
Kamoa-Kakula is the largest copper discovery ever made on the African continent Measured & Indicated Resource Inferred Resource Historical Production 45 40 Contained Copper (Mt) 35 30 25 20 15 10 5 - Source: Wood Mackenzie and USGS 29
Slide 30: Extent of Kakula / Kakula West Discovery
Extent of Kakula / Kakula West Discovery Kakula West discovery extends known mineralization to more than 13 km, and remains open. 30
Slide 31: Kakula and Kakula West grades at 3% copper cut-off
Kakula and Kakula West discovery areas showing grades of Indicated and Inferred Mineral Resource blocks at a 3% copper cut-off 31
Slide 32: Kakula and Kakula West grades at 1% copper cut-off
Kakula and Kakula West discovery areas showing grade of Indicated and Inferred Mineral Resource blocks at a 1% copper cut-off 32
Slide 33: Kakula and Kakula West thickness at 1% copper cut-off
Kakula and Kakula West discovery areas showing the thickness of Indicated and Inferred Mineral Resource blocks at a 1% copper cut-off 33
Slide 34: Expansion of Indicated and Inferred Mineral Resources since May 2017
Kakula and Kakula West discovery areas showing expansion of Indicated and Inferred Mineral Resources since May 2017 34
Slide 35: Kakula's development options: up to six-million-tonne-per-year mines
Development options: Up to six-million- tonne-per-year mines! That’s 18 million tonnes per year! 1. Kakula Mine − being fast tracked to production with capacity of 6 Mtpa. 2. Kansoko Mine − development ready, also with capacity of 6 Mtpa. Kakula’s 3. Kakula West and Kamoa underground North – potenti
Slide 36: Underground development advanced declines more than 300 metres
Underground development has advanced each of the service and conveyor declines more than 300 metres toward the mineralized zone 36
Slide 37: Kamoa-Kakula PEA long-term development plan
Kamoa-Kakula PEA long-term development plan Source: OreWin 2017 37
Slide 38: 2025 Top producing mines by paid copper production
2025 Top 20 producing mines by paid copper production Note: Kamoa-Kakula production based on projected peak copper production (which occurs in year nine) of the 12 Mtpa development plan for the Kamoa-Kakula Project as detailed in the Kakula 2017 PEA. Source: Wood Mackenzie (based on public disclosur
Slide 39: Top largest new greenfield projects
Top 10 largest new greenfield projects (Nominal production and head grade) First ten years average grade 400 7.0% 350 6.0% 300 5.0% 250 4.0% 200 3.0% 150 100 2.0% 50 1.0% -- -- Nominal Production (kt/a) Copper Resource Grade (%Cu) Note: Top 10 largest new greenfield copper projects defined as the 10
Slide 40: Drilling at the Kakula West Copper Discovery
Drilling at the Kakula West Copper Discovery 40
Slide 41: Excellent visual drill intercepts continue to be returned at Kakula West
Excellent visual drill intercepts continue to be returned at Kakula West 41
Slide 42: Poultry project supplying Kamoa-Kakula Sustainable Livelihoods Project
The poultry project that supplies chickens and eggs to the Kamoa-Kakula Project – one of the initiatives of the Kamoa-Kakula Sustainable Livelihoods Project 42
Slide 43: Pineapples harvested from livelihoods garden
Pineapples being harvested from the livelihoods garden – one of the initiatives of the Kamoa-Kakula Sustainable Livelihoods Project 43
Slide 44: July 21, 2017 – First delivery of copper ore from Kansoko Mine
July 21, 2017 – The first delivery of copper ore from the Kansoko Mine is stockpiled on surface 44
Slide 45: Zijin Mining acquired 49.5% stake in Kamoa Project for US$412 million
December 8, 2015: Zijin Mining acquired 49.5% stake in Kamoa Project for US$412 million Zijin has committed to use its best efforts to arrange or procure project financing for 65% of the capital required to develop the first phase of the Kamoa Project, to be detailed in the ongoing feasibility stu
Slide 46: Mwadingusha hydroelectric power station
Mwadingusha hydroelectric power station Mwadingusha is the first of three hydroelectric power plants in the DRC that Ivanhoe and Zijin will upgrade to secure a supply of clean, sustainable electricity for the development of Kamoa-Kakula. Mwadingusha is now supplying 32 megawatts (MW) of electric
Slide 47: 120kV power line at the Kamoa-Kakula Project
120kV power line at the Kamoa-Kakula Project 47
Slide 48: Kipushi Mine Exploration and Upgrading
Kipushi Mine Exploration and Upgrading Democratic Republic of Congo
Slide 49: Kipushi Fault Zone mined 1924-1993; Big Zinc never mined
Kipushi Fault Zone was mined 1924-1993 to approx. 1,150-metre level. Big Zinc discovered prior to 1993 closure; never mined. 49
Slide 50: Planned and existing development at Kipushi
Planned and existing development at Kipushi 50
Slide 51: Pre-feasibility study for the rebirth of the Kipushi mine
December 13, 2017: Ivanhoe announced a pre-feasibility study for the rebirth of the historic Kipushi zinc-copper-silver-germanium mine The planned return to production would establish Kipushi as the world’s highest-grade major zinc mine 51
Slide 52: Ivanhoe signed MOU with SNCC to rebuild Kipushi-Munama spur line
October 30, 2017: D.R. CONGO Ivanhoe signed an MOU with DRC’s state-owned KIPUSHI MINE railway company, Société Nationale des Chemins de Fer du ZAMBIA Congo (SNCC) Kipushi to Munama National to rebuild the Kipushi- railway 34 km spur line (SNCC) Munama spur line, which has been inactive since 2011.
Slide 53: Think Zinc. Demand growing in farming & food.
Think Zinc. Demand growing in farming & food. Zinc aids plant growth, increases food-crop production and quality. More than 50% of all soils in India and China are said to be zinc-deficient. 0 lb Zn 5 lb Zn/acre 10 lb Zn 15 lb Zn/acre 20 lb Zn Demonstration of zinc fertilizers at work in Louisiana
Slide 54: Some human health benefits from zinc
Some human health benefits from zinc Zinc stopped cancer-cell growth in tests; research pursuing potential to block esophageal tumour cells. Oct. 3, 2017 Zinc lozenges may help colds go away 3 times faster. May 16, 2017 Shortage of zinc in the body can affect cardiovascular health. April 18, 2017 54
Slide 55: Capital intensity for zinc projects
Capital intensity for zinc projects Source: Wood Mackenzie, December 2017. Note: All comparable “probable” and “base case” projects as identified by Wood Mackenzie. Source: Wood Mackenzie (based on public disclosure and information gathered in the process of routine research. The Kipushi 2017 PFS ha
Slide 56: New lighting installed at 1,200-metre level
New lighting installed at 1,200-metre level 56
Slide 57: Upgraded 1,150-metre-level ore conveyor belt at Kipushi
Upgraded 1,150-metre-level ore conveyor belt at the historic, high-grade Kipushi zinc-copper- lead-germanium mine 57
Slide 58: Control room operator at Kipushi's Shaft 5
Control room operator at Kipushi’s Shaft 5 58
Slide 59: Scooptram loader and haul truck, new underground mining equipment
A scooptram loader and haul truck, part of the fleet of new underground mining equipment 59
Slide 60: Know for Sure health initiative with Deki Readers
Sponsored by Ivanhoe Mines and Zijin Mining, in collaboration with Fio Corporation, of Toronto, and the DRC Ministry of Health, Know for Sure has equipped 252 health facilities with Deki Readers and trained more than 600 healthcare workers to effectively utilize the technology 60
Slide 61: Putting people first
Putting people first A representative of the Know for Sure initiative, holding a Deki Reader used to conduct rapid diagnostic testing for malaria, explains to children how to get access to testing for themselves and their parents. 61
Slide 62: Members of Kipushi's geology team at the drill core shed
Members of Kipushi’s geology team at the drill core shed 62
Slide 63: Thank you.
Thank you.