34 slides from Ivanhoe Mines Ltd. Class A's earnings presentation, Nov 6, 2023
Slide 1: 2023 Q3 Financial Results
www.ivanhoemines.com | TSX: IVN; OTCQX: IVPAF 2023 Q3 FINANCIAL RESULTS November 6, 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”) has been prepared to assist the reader in understanding the business and financial results of Ivanhoe for the periods indicated a
Slide 3: Opening Remarks
DRC President, His Excellency Félix Tshisekedi, cuts the ribbon to mark the formal opening of the new Kamoa Centre of Excellence on October 5 th OPENING REMARKS Robert Friedland, Founder & Executive Co-Chairman 3
Slide 4: Q3 2023 Highlights
Kamoa-Kakula’s senior mining managers celebrating the joining (holing) of the Kansoko and Kamoa 1 mines on September 29th Q3 2023 HIGHLIGHTS Marna Cloete, President 4
Slide 5: Q3 2023: Highlights of Another Record Quarter
Q3 2023: HIGHLIGHTS OF ANOTHER RECORD QUARTER (Figures shown on 100% basis for Kamoa-Kakula) 103,947 tonnes Another quarterly production record and cash Copper Produced costs remain within guidance Phase 3 concentrator ahead of schedule to 96,509 tonnes increase copper production capacity to over 60
Slide 6: Health & Safety: Striving for Continuous Improvement
HEALTH & SAFETY: STRIVING FOR CONTINUOUS IMPROVEMENT Ivanhoe Mines’ Total Recordable Injury Frequency Rate (TRIFR) by Project 6.82 5.15 4.23 2.66 Industry Average TRIFR(1) 3.04 2.76 2.80 0.71 2.40 1.90 1.82 1.55 1.50 2020 2021 2022 2023 YTD 2020 2021 2022 2023 YTD 2020 2021 2022 2023 YTD Kamoa-Kakul
Slide 7: Kamoa-Kakula: The Greenest Major Copper Mine
KAMOA-KAKULA: THE GREENEST MAJOR COPPER MINE 2022 Scope 1, 2 & 3 copper GHG emissions intensity curve1 Updated GHG assessment confirms Kamoa- 16 Kakula Copper Complex as the world’s Top 10 largest copper lowest carbon-emitting major copper mine 14 mining operations (2022) Scope 1, 2 and 3 Emissions
Slide 8: Kamoa Centre of Excellence Officially Opened
KAMOA CENTRE OF EXCELLENCE OFFICALLY OPENED Where the future leaders of the Copperbelt will be made Inaugural class of students started in September 2023 Formally opened by DRC President on October 5th, 2023 DRC President, His Excellency Félix Tshisekedi, with the future leaders of the mining indust
Slide 9: Q3 2023 Financial Overview
Construction crew working on the Platreef Phase 1 concentrator, having recently completed the installation of the ball mill Q3 2023 FINANCIAL OVERVIEW David van Heerden, Chief Financial Officer 9
Slide 10: Kamoa-Kakula: Quarterly Performance
KAMOA-KAKULA: QUARTERLY PERFORMANCE (Figures shown on 100% basis for Kamoa-Kakula) Copper sold and revenue lower in Q3 2023, offset by slightly higher copper prices Quarterly Revenue(1) (US$ million) Copper Sold (kt) / Realized Copper Price (US$/lb.) $4.04/lb. $3.79/lb. $3.84/lb. $3.54/lb. 101.5 96.
Slide 11: Kamoa-Kakula: Cash Costs Maintained in Q3 2023
KAMOA-KAKULA: CASH COSTS MAINTAINED IN Q3 2023 (Figures shown on 100% basis for Kamoa-Kakula) C1 cash costs within FY 2023 guidance ($1.40 - $1.50/lb.) Cash costs year to date at $1.43/lb. below mid-point of guidance C1 Cash Cost (US$ per lb.) EBITDA(1) (US$ million) / EBITDA Margin (%) 67% 66% 65%
Slide 12: Kamoa-Kakula: Q3 2023 EBITDA Waterfall
KAMOA-KAKULA: Q3 2023 EBITDA WATERFALL (Figures shown on 100% basis for Kamoa-Kakula, US$ millions) Quarter-on-quarter decrease in EBITDA from decreased tonnes sold and increased cash costs; offset by remeasurement of contract receivables ( $34) ($8 ) ($1) ( $32) $41 $457 $423 EBITDA Tonnes sold Cop
Slide 13: Ivanhoe Mines Consolidated Financial Results
IVANHOE MINES CONSOLIDATED FINANCIAL RESULTS (Figures shown on 100% basis for Kamoa-Kakula) Group-Level Adjusted EBITDA(1) (US$ million) Net Profit / Normalized Net Profit(2) (US$ million) Normalized Profit Net Profit $113 $114 $104 $162 $172 $172 $152 $95 $85 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023
Slide 14: Strong Balance Sheet Supports Growth Projects
STRONG BALANCE SHEET SUPPORTS GROWTH PROJECTS (Figures shown on 100% basis, US$ millions) YTD Remaining 2023 FY Funding Ivanhoe Mines cash and cash equivalents Capital Expenditure of $303 million Capex Spent Capex Guidance Arrangements Kamoa-Kakula JV cash flow Phase 2, 3 & generation and Kamoa-Kaku
Slide 15: Operations & Project Update
Steel erection of the Direct-to-Blister Furnace OPERATIONS & PROJECT UPDATE Robert Friedland, Founder and Co-Executive Chairman Mark Farren, Chief Operating Officer Alex Pickard, Senior VP, Corporate Development & IR 15
Slide 16: Kamoa-Kakula: Record Quarterly Production
KAMOA-KAKULA: RECORD QUARTERLY PRODUCTION (Figures shown on 100% basis for Kamoa-Kakula) Ore tonnes milled (‘000’s tonnes) / Record quarterly production of close to Copper ore grade processed (%) 104,000 tonnes of copper in concentrate 5.40% 5.42% 5.21% 5.37% Brings year-to-date copper production 2,
Slide 17: Kamoa-Kakula: Tailings Recovery Project Advancing
KAMOA-KAKULA: TAILINGS RECOVERY PROJECT ADVANCING Average global copper head grade since 2000 (%) 1.00% 0.90% FY 2022 Kamoa-Kakula tailings copper grade (%) 0.80% 0.70% 0.60% 0.50% 2000 2005 2010 2015 2020 2025 2030 Testwork shows potential to increase copper Source: BMO Research, Wood Mackenzie rec
Slide 18: Trial Copper Shipments on Lobito Corridor in Q4 2023
TRIAL COPPER SHIPMENTS ON LOBITO CORRIDOR IN Q4 2023 Rail to Lobito 1,739 km Dar es Salaam G7 and EU join the US investment partnership Roundtrip: ~20 days to accelerate the development of Lobito KAMOA-KAKULA Railway Corridor 2,466 km Lobito Roundtrip: ~40 days Corridor is a significantly lower carb
Slide 19: Phase 3 Concentrator Ahead of Schedule
PHASE 3 CONCENTRATOR AHEAD OF SCHEDULE Phase 3 concentrator ahead schedule for Q3 2024 completion Phase 3 concentrator 62% complete; total of 1,980 of truck deliveries have already arrived and been offloaded, with a further 274 en-route to site Kamoa-Kakula Phase 3 concentrator construction site 19
Slide 20: Smelter Construction on Schedule for Q4 2024
SMELTER CONSTRUCTION ON SCHEDULE FOR Q4 2024 Smelter project 62% complete; all major equipment being manufactured with deliveries due to commence in coming quarter Aerial view of the 100-hectare smelter construction site, with Phase 1 & 2 concentrators in the background 20
Slide 21: Kamoa-Kakula Phase 3: Inga Refurbishment
KAMOA-KAKULA PHASE 3: INGA REFURBISHMENT Refurbishment of Turbine #5 50% completed; on- schedule and on-budget to produce 178 MW of green hydroelectric power from Q4 2024 Old turbine, transformers, alternators, and all associated control equipment have been successfully dismantled and removed All re
Slide 22: Power Stability Initiatives in Progress
POWER STABILITY INITIATIVES IN PROGRESS Phased backup generator roll-out: ✓ Q3 2023: 48 MW • Q4 2023: 58 MW • Q1 2024: 78 MW = Phase 1 & 2 demand • Q2 2024: 128 MW Long-term DRC grid improvement projects are underway, in conjunction with SNEL Close to securing additional power from the Zambian grid
Slide 23: Platreef: Phase 1 Advancing on Schedule
PLATREEF: PHASE 1 ADVANCING ON SCHEDULE Phase 1 processing plant construction on Over 2,000 metres of lateral schedule for first production in Q3 2024 development completed to date Phase 1 Concentrator plant with Shaft 1 (left) and Shaft 2 (left) in the background 23
Slide 24: Platreef: Optimization of Shaft 3 in Progress
PLATREEF: OPTIMIZATION OF SHAFT 3 IN PROGRESS Hoisting capacity in Shaft 3 will de-risk Phase 1 and accelerate Phase 2 production Market update expected in Q4 2023 Inspection of the recently completed underground crushing and loading feeder on the 950-metre level 24
Slide 25: Kipushi: Ahead of Schedule for Q2 2024
KIPUSHI: AHEAD OF SCHEDULE FOR Q2 2024 New 800,000 tonnes-per-annum concentrator over 67% complete, expected in Q2 2024 Stoping (mining) of Kipushi’s ultra-high-grade Big Zinc orebody to commence within a month Underground development ~20% ahead of schedule, Aerial view of the Kipushi with 2,744 met
Slide 26: Western Foreland Exploration, DRC
WESTERN FORELAND EXPLORATION, DRC ~37,500m of drilling completed as at quarter end Diamond core drilling advancing on schedule with number of contractor rigs increased to six Maiden Mineral Resource estimate for Makoko & Kiala copper discoveries expected imminently Additional $2 million added to rem
Slide 27: Western Foreland Exploration, DRC: Coming Soon!
WESTERN FORELAND EXPLORATION, DRC COMING SOON! Drilling contractor conducting diamond-core drilling…somewhere in the Western Foreland 27
Slide 28: Q3 Financial Results: Management Q&A
www.ivanhoemines.com | TSX: IVN; OTCQX: IVPAF Q3 FINANCIAL RESULTS MANAGEMENT Q&A 28
Slide 29: Appendices
Q3 FINANCIAL RESULTS APPENDICES www.ivanhoemines.com | TSX: IVN; OTCQX: IVPAF
Slide 30: Kamoa-Kakula: Breakdown of C1 Cash Costs
KAMOA-KAKULA: BREAKDOWN OF C1 CASH COSTS (All values in US$ per pound of payable copper) C1 cash costs remain within lower end of Quarterly Breakdown of C1 Cash Cost (US$ per lb.) guidance. FY 2023 guidance of $1.40/lb. to $1.50/lb. re-affirmed Logistics charges remain stable. Higher 0.50 mining cos
Slide 31: Kamoa-Kakula YTD C1 Cash Costs Within Guidance
KAMOA-KAKULA YTD C1 CASH COSTS WITHIN GUIDANCE (Figures shown on 100% basis for Kamoa-Kakula) $4.50 $4.00 C1 Cash Cost (US$/lb.) $3.50 $3.00 Q4 2024 completion of Phase 3 expansion and direct-to-blister smelter to drive cash cost improvement to the first quartile $2.50 $2.00 < $1.20/lb. target YTD C
Slide 32: Significant Cash Flow Attributable to Ivanhoe
SIGNIFICANT CASH FLOW ATTRIBUTABLE TO IVANHOE As at Shareholder Loan Balances September 30, 2023 ($ million) Kamoa-Kakula (39.6% equity interest) Ivanhoe will receive Total shareholder loans payable by Kamoa Holding $3,404 distributions (once Portion of shareholder loan receivable by Ivanhoe $1,686
Slide 33: Ivanhoe Mines' Adjusted EBITDA
IVANHOE MINES’ ADJUSTED EBITDA (All values in US$ million) Reconciliation of profit after tax to Ivanhoe’s EBITDA and Ivanhoe Mines Adjusted EBITDA (US$ million) adjusted EBITDA: Ivanhoe’s profit after taxes $ 107 Finance income ($ 57) Current and deferred tax recovery ($ 1) Finance costs $9 Unreali
Slide 34: Mokopane Feeder Exploration, South Africa
MOKOPANE FEEDER EXPLORATION, SOUTH AFRICA High-resolution magnetic survey and airborne gravity survey completed Review and analysis of both survey data sets nearing completion; diamond drilling program to start in Q4 2023 Recently completed results from the high-resolution Falcon Gravity survey acro