Ivanhoe Mines Ltd. Class A · TSX:IVN
Ivanhoe Mines Ltd. Class A — Investor Presentation (October 2017)
69 slides from Ivanhoe Mines Ltd. Class A's investor presentation, October 2017
Slide 1: 24 years in Southern Africa. 3 advanced, unique projects.
24 years in Southern Africa. 3 advanced, unique projects.
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: Kamoa Mine Development & Kakula Discovery
Kamoa Mine Development & Kakula Discovery Democratic Republic of Congo Preparations underway to start the development of the twin declines at the Kakula box cut.
Slide 4: Congo produces more copper than Canada!
Congo produces more copper than Canada! DRC: Approx. 1,000,000 tonnes Canada: 720,000 tonnes Sources: Wood Mackenzie, Bernstein Research, Reuters, Natural Resources Canada, USGS
Slide 5: D.R. Congo
D.R. CONGO Kamoa-Kakula Project gKolwezi ANGOLA CENTRAL AFRICAN COPPERBELT ZAMBIA
Slide 6: Kamoa-Kakula is the largest high-grade copper deposit in the world
Kamoa-Kakula is the largest high-grade copper deposit in the world Measured & Indicated Resource Inferred Resource Contained Copper (Mt) 5.2 11.7 31.4 6.4 16.9 10.1 0.1 0.4 0.0 9.8 4.6 1.3 0.7 0.5 2.2 0.6 0.3 Source: Wood Mackenzie *Note: Contained copper in high-grade deposits (Measured & Indicated
Slide 7: Among the world's largest copper deposits, Kamoa-Kakula also has the 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 Kamoa-Kakula now ranks among the five largest copper deposits in the world* Contained Copper (Mt) Copper Grade (%) 150.0 3.0% 125.0 2.5% 100.
Slide 8: 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 40.0 3.5% Contained Copper (Mt) 35.0 3.0% Copper Grade (%) 30.0 2.5% 25.0 2.0% 20.0 1.5% 15.0 1.0% 10.0 5.0 0.5% - - *Source: Wood Mackenzie Note: Contained copper
Slide 9: Kamoa-Kakula is the 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 40 35 Contained Copper (Mt) 30 25 20 15 10 5 - Source: Wood Mackenzie and USGS
Slide 10: Kakula & Kakula West − re-writing the Kamoa Story
Kakula & Kakula West − re-writing the Kamoa Story Kakula is substantially richer, thicker and more consistent than other mineralization found elsewhere on the Kamoa Project. Kakula West is a new high-grade extension of Kakula. 14 rigs drilling at Kakula, Kakula West and other targets. Lookin
Slide 11: September 2017: Kakula West confirmed as significant new discovery
September 2017: Kakula West confirmed as significant new discovery and potential new high-grade mining area Potential new high-grade mining area at similar grades to Kakula. New Kakula resource estimate by end of 2017 based on Kakula’s entire strike length of at least 12 kilometres, 60% longer t
Slide 12: The Kakula mineralized system is at least 12 kilometres long and is still open
The Kakula mineralized system is at least 12 kilometres long and is still open in both directions Kamoa Mining Licence
Slide 13: Extent of Kakula / Kakula West Discovery
Extent of Kakula / Kakula West Discovery 2017 drilling at Kakula West and saddle area Kakula West discovery extends known mineralization to at least 12 km, and remains open.
Slide 14: Drill-hole location plan for the Kakula resource area and Kakula West
Drill-hole location plan for the Kakula resource area and Kakula West 1% composite grade thickness
Slide 15: Kakula resource area drill-hole location plan on 2% composite grade thickness
Kakula resource area drill-hole location plan superimposed on 2% composite grade thickness contours
Slide 16: Chalcocite-rich drill core from DD1210 at Kakula resource area
Chalcocite-rich drill core at a depth of 938 metres from DD1210 drilled at the western edge of the Kakula resource area Chalcocite (copper sulfide, Cu2S) is opaque and dark-grey to black and is 80% copper by weight).
Slide 17: Chalcocite-rich drill core from DD1236 between Kakula West and Kakula
Chalcocite-rich drill core from DD1236 drilled in the gap between Kakula West and Kakula Chalcocite (copper sulfide, Cu2S) is opaque and dark-grey to black and is 80% copper by weight).
Slide 18: Copper Discovery – Excellent visual drill intercepts at Kakula West
Drilling at the Kakula West Copper Discovery – Excellent visual drill intercepts continue to be returned at Kakula West
Slide 19: Chalcocite is approximately 80% copper by weight
Fine-grained chalcocite mineralization in siltstone intersected in a recent hole drilled between Kakula and Kakula West. Drilling results from Kakula West show a rapidly growing area of shallow copper mineralization characterized by finely disseminated chalcocite in siltstone and maroon diamictite.
Slide 20: +12% copper in hole DD1041
+12% copper in hole DD1041 Massive chalcocite Disseminated massive chalcocite
Slide 21: Strip-log of drill hole DD1124 showing high-grade copper assays
Strip-log of drill hole DD1124 showing high-grade copper assays and a typical Kakula-style mineralization profile
Slide 22: May 17, 2017: Updated Mineral Resource estimate for the Kakula Discovery
May 17, 2017: Updated Mineral Resource estimate for the high-grade Kakula Discovery • Kakula’s Indicated Resources total 349 million tonnes at a grade of 3.23% copper, containing 24.9 billion pounds of copper at a 1% copper cut-off. At a 3% copper cut-off, Indicated Resources total 116 million tonne
Slide 23: Consolidated Mineral Resource Statement, Kamoa-Kakula Project
Consolidated Mineral Resource Statement, Kamoa-Kakula Project – May 17, 2017, 1% copper cut-off over an approximate minimum thickness of 3 metres True Contained Contained Tonnes Area Copper Deposit Category Thickness Copper Copper (millions) (Sq. km) Grade (metres-m) (kTonnes) (billion lbs) Indicate
Slide 24: Planned Kakula 2016 PEA development and infrastructure
Planned Kakula 2016 PEA development and infrastructure for Kakula and Kansoko mines
Slide 25: 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! • A new PEA is being worked on based on the May 2017 Kakula Mineral Resource estimate. • Kakula − mine capacity of approximately 6 Mtpa. • Kansoko Mine − mine capacity of approximately 6 Mtpa.
Slide 26: June 28, 2017 – first blast at the Kakula box cut
June 28, 2017 – first blast at the Kakula box cut
Slide 27: Box cut construction is complete at Kakula
Box cut construction is complete at Kakula. Development of twin declines set to begin to provide access to the bonanza copper discovery
Slide 28: Kansoko Mine box cut and surface facilities
Kansoko Mine box cut and surface facilities
Slide 29: July 21, 2017 – The first delivery of copper ore
July 21, 2017 – The first delivery of copper ore from the Kansoko Mine is stockpiled on surface
Slide 30: Mwadingusha hydroelectric power station
Mwadingusha hydroelectric power station Mwadingusha is the first of three hydroelectric power plants in the DRC that Ivanhoe will upgrade to secure a supply of clean, sustainable electricity for the development of Kamoa. The supply of the initial 11 MW of electricity to the grid commenced in Sep
Slide 31: National railways to link DRC mines with international seaports
National railways to link DRC mines with international seaports
Slide 32: Kipushi Mine Exploration and Upgrading
Kipushi Mine Exploration and Upgrading Democratic Republic of Congo
Slide 33: The birth of a spectacularly high-grade mine
The birth of a spectacularly high-grade mine In 1924, Kipushi began mining 18% copper from a surface open pit, before transitioning to Africa’s richest underground copper, zinc and germanium mine. Mining continued until 1993. 1928
Slide 34: Kipushi Zinc-Copper Project
Kipushi Zinc-Copper Project 1993: High-grade zinc-copper-germanium mine suspended production. Dec 2013: Ivanhoe restored access to mine’s main working level. March 2014: Exploration drilling commenced. Oct 2015: Exploration drill program completed with 24,035 metres of drilling in 96 holes.
Slide 35: World's major zinc mines, annual zinc production and head grades
World’s major zinc mines, showing estimated annual zinc production and zinc head grades 600 35% Annual Zinc Production (kt) Contained Zinc 500 Zinc grade (%) 30% Zinc Head Grade (%) 25% 400 20% 300 15% 200 10% 100 5% -- -- Source: Wood Mackenzie. World’s major zinc mines defined as the world’s 10 la
Slide 36: Top zinc projects by contained zinc
Top 20 zinc projects by contained zinc Contained zinc in Measured & Indicated resources (Mt) Zinc grade (%) 16 50% 14 45% Contained zinc 40% 12 Zinc grade (%) 35% 10 Zinc equivalent grade (%) 30% 8 25% 6 20% 15% 4 10% 2 5% -- -- Source: Wood Mackenzie. Note: All tonnes and metal grades of individual
Slide 37: Ivanhoe signs MOU with DRC's state-owned railway company
Ivanhoe signs MOU with DRC’s state-owned railway company to rebuild the Kipushi- Munama spur line, which has been inactive Representatives of the SNCC and Ivanhoe's since 2011. Kipushi team at Munama railway station. D.R. CONGO KIPUSHI MINE ZAMBIA Kipushi to Munama 34 km spur line National railway (
Slide 38: Kipushi Fault Zone and Big Zinc
Kipushi Fault Zone was mined 1924-1993 to approx. 1,150-metre level. Big Zinc discovered prior to 1993 closure; never mined.
Slide 39: New conveyor belt installed at Kipushi's 1,150-metre level
KICO team members at the new conveyor belt installed at Kipushi’s 1,150-metre level
Slide 40: New lighting installed at 1,200-metre level
New lighting installed at 1,200-metre level 42
Slide 41: Titan underground drilling team at Kipushi's 1,274-metre-level
Members of the Titan underground drilling team at Kipushi’s 1,274-metre-level
Slide 42: Control room operator at Kipushi's Shaft 5
Control room operator at Kipushi’s Shaft 5
Slide 43: New underground mining equipment fleet
A scooptram loader and haul truck, part of the fleet of new underground mining equipment
Slide 44: 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.
Slide 45: Core from Hole KPU008 in the Serie Recurrente zone
Core from Hole KPU008 in the Serie Recurrente zone - 11 metres of 17% copper and 89.6 g/t silver Depth of 217.0 to 218.5metres
Slide 46: World's best drill hole?
World’s best drill hole? Our geology team holding hands and showing Big Zinc intersection of 44.8% zinc over 340 metres.
Slide 47: Platreef Discovery & Mine Development
Platreef Discovery & Mine Development South Africa
Slide 48: 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 49: Platreef's potential cash cost at the bottom of the world's 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 Ivanhoe’s Platreef Project at the bottom of the cash-cost curve. Source: SFA (Oxford). Data for Platreef Project and Waterberg are based on each project’s reported DFS and PFS pa
Slide 50: 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 Source: Production estimates for projects other than Ivanhoe’s Platreef Project have been prepared by SFA (Oxford). Production data for the Platreef Project (platinum, palladium, rhodium, gold, nickel and copper)
Slide 51: October 2017: Shaft reaches depth more than halfway to planned final depth
October 2017: Shaft 1 reaches a depth of 500 metres below surface, more than half way to the planned final depth of 980 metres, at Ivanhoe’s Platreef platinum, palladium, rhodium, gold, nickel and copper mine. Development work focused on initial production by early 2022.
Slide 52: Shaft-sinking crew member during development of the 450-metre station
Shaft-sinking crew member during development of the 450-metre station
Slide 53: 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.
Slide 54: April 2017: 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 55: Shaft 2 early-works surface construction progressing on schedule
Shaft 2 early-works surface construction progressing on schedule
Slide 56: 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 57: May 2016: PGM Indicated and Inferred Resources
May 2016: 42 million oz. of PGMs in Indicated plus 58 million oz. of PGMs in Inferred Resources Indicated Mineral Resources contain an estimated 42.0 million oz. of PGMs plus gold – a gain of 45% – with an extra 52.8 million ounces in Inferred Resources, at the base case cut-off grade of 2 g/t.
Slide 58: Exploration targets of 245–410 million tonnes
Open to expansion to the south and west, beyond the area of the current Indicated Resources (in green) and Inferred Resources (in blue). Four target areas contain an estimated 245 – 410 million tonnes. Approximately 48km2 of unexplored ground beyond these exploration target areas.
Slide 59: Pre-shift safety meeting with members of the shaft-sinking team
Pre-shift safety meeting with members of the shaft-sinking team
Slide 60: Sinking platform in operation in Shaft 1
Sinking platform in operation in Shaft 1 Shaft 1 is expected to reach the Flatreef mineralization at a depth of approximately 783 metres below surface in the third quarter of next year.
Slide 61: Removal of broken rock underway from shaft sinking in Shaft 1
Removal of broken rock underway from shaft sinking in Shaft 1
Slide 62: Core shed at the Platreef Project
Core shed at the Platreef Project
Slide 63: Flatreef: Merensky Grades at Platreef Widths
Flatreef: Merensky Grades at Platreef Widths Typical Merensky Reef, Drill hole UMT378 1091.63m Western Limb Merensky Flatreef(1) Reef 4 - 10 3.8 g/t Grade g/t 3PE 4PE True ~ 0.4 – 1.5 19 m thickness m Grade - 1117.00m thickness < 5 - 15 85.6 (m-g/t) 25-metre intercept @ 9.90 g/t 4PE, 0.45% Ni (1) In
Slide 64: Drill hole TMT006 – lithology and grade profile
Drill hole TMT006 – lithology and grade profile Shaft 1
Slide 65: Bulk power from Eskom, South Africa's state utility
Bulk power from Eskom, South Africa’s state utility Medupi power station started generating power in March 2015; expected to be fully operational by 2020, providing 4,800 MW of power to national grid. Kusile started generating power in Dec 2016; expected to provide a total of 4,800 MW of power by 20
Slide 66: 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.
Slide 67: 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
Slide 68: Automation and the smart mining trend
AUTOMATION, a central feature of the ‘smart mining’ trend aiming to deliver new levels of efficiency, safety and value, is part of the operational DNA being designed for Ivanhoe’s Kamoa Copper Project in the DRC and Platreef Platinum Project in South Africa.
Slide 69: Thank you.
Thank you. IVANHOE MINES NEW HORIZONS