31 slides from Ivanhoe Mines Ltd. Class A's earnings presentation, Jul 31, 2024
Slide 1: Q2 2024 Financial Results
www.ivanhoemines.com | TSX: IVN; OTCQX: IVPAF Q2 2024 FINANCIAL RESULTS July 31, 2024
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
Kamoa Copper staff celebrating the first batch of concentrate from the Phase 3 concentrator OPENING REMARKS Robert Friedland, Founder & Executive Co-Chairman 3
Slide 4: Q2 2024 Highlights
Kamoa-Kakula’s new 5 million-tonne-per-annum Phase 3 concentrator, which produced first concentrate on June 10, 2024 Q2 2024 HIGHLIGHTS Marna Cloete, President 4
Slide 5: Q2 2024: Highlights of a Record Second Quarter
Q2 2024: HIGHLIGHTS OF A RECORD SECOND QUARTER (Figures shown on 100% basis for Kamoa-Kakula) Phase 3 concentrator completed ahead of 100,812 tonnes schedule, increasing copper production capacity Copper Produced to over 600 ktpa Kamoa-Kakula now importing 65 MW of power via Zambia, a further 10 MW
Slide 6: Health & Safety: Industry Leading Performance
HEALTH & SAFETY: INDUSTRY LEADING PERFORMANCE Ivanhoe Mines’ TRIFR by Project 5.15 4.23 2.66 Industry Average(2) 2.80 2.76 1.37 2.20 1.01 1.90 1.70 0.75 1.55 0.00 2021 2022 2023 H124 2021 2022 2023 H124 2021 2022 2023 H124 Kamoa-Kakula Platreef Kipushi TRIFR: Total recordable injury frequency rate =
Slide 7: Kamoa-Kakula's Shared Benefits
KAMOA-KAKULA’S SHARED BENEFITS First dividend paid ($98 million) ~3 years from first production ~5,500 full time jobs created (91% Congolese) Kamoa-Kakula set to be ~7% of 2024 DRC GDP(1) Largest mineral exporter by volume in the DRC Inaugural class at Kamoa Centre of Excellence graduated; expansion
Slide 8: Q2 2024 Financial Overview
Commissioning team next to a recently constructed apron feeder at Kakula North Q2 2024 FINANCIAL OVERVIEW David van Heerden, Chief Financial Officer 8
Slide 9: Kamoa-Kakula: Quarterly Financial Results
KAMOA-KAKULA: QUARTERLY FINANCIAL RESULTS (Figures shown on 100% basis for Kamoa-Kakula) Higher realized copper price and increased tonnes sold, drives record revenue in Q2 2024 Copper Sold (kt) Quarterly Revenue(1) ($ million) / Realized Copper Price ($/lb.) $4.34/lb. $3.79/lb. $3.84/lb. $3.82/lb.
Slide 10: Kamoa-Kakula: Quarterly Financial Results
KAMOA-KAKULA: QUARTERLY FINANCIAL RESULTS (Figures shown on 100% basis for Kamoa-Kakula) Decrease in C1 cash cost during Q2 2024 driven by lower logistics costs and increased production volumes; C1 cash cost within the lower range of FY2024 guidance ($1.50 - $1.70/lb.) Record EBITDA for Q2 of $547 m
Slide 11: Kamoa-Kakula: Q2 2024 EBITDA Waterfall
KAMOA-KAKULA: Q2 2024 EBITDA WATERFALL (Figures shown on 100% basis for Kamoa-Kakula, US$ millions) Quarter on Quarter EBITDA increase driven primarily by an increase in tonnes sold and higher copper prices Quarter on Quarter EBITDA Waterfall $2 ($3) $27 $127 $29 $547 $365 EBITDA Tonnes sold Copper
Slide 12: Ivanhoe Mines Consolidated Financial Results
IVANHOE MINES CONSOLIDATED FINANCIAL RESULTS (Figures shown on 100% basis for Kamoa-Kakula) Record share of profit from Kamoa-Kakula of $90 million drives Ivanhoe’s Normalized Net Profit of $115 million Net Profit / Normalized Net Profit(1) ($ million) Share of Profit from Kamoa-Kakula JV ($ million
Slide 13: Ivanhoe Mines' Record Adjusted EBITDA
IVANHOE MINES’ RECORD ADJUSTED EBITDA Ivanhoe Mines Adjusted EBITDA(1) (US$ million) Initiatives to further grow EBITDA over next 18 months: • Steady state production at Kamoa- Kakula’s Phase 3 expected shortly • Steady state production at Kipushi expected during Q3 $203 $172 • Kipushi concentrator
Slide 14: Net Cash Position After Convertible Note Redemption
NET CASH POSITION AFTER CONVERTIBLE NOTE REDEMPTION Redemption of $575 million Net Cash / (Debt)(1) ($ million) 2.50% convertible notes due 2026 moves Ivanhoe into a positive net cash position of $88 million $88 Convertible ($375) notes Significant funding capacity at the corporate and project level
Slide 15: Strong Balance Sheet Supports Ivanhoe's Growth
STRONG BALANCE SHEET SUPPORTS IVANHOE’S GROWTH (Figures shown on 100% basis, US$ millions) H1 2024 2024 2025 Funding $300 million added to Kamoa- Capital Expenditure Actual Guidance Guidance Arrangements Kakula capex guidance over 18 Kamoa-Kakula months for ‘Project 95’ to increase JV cash flow copp
Slide 16: Operations & Project Update
Kamoa-Kakula’s Phase 1 and 2 concentrator (foreground) with the smelter construction site (background) OPERATIONS & PROJECT UPDATE Mark Farren, Chief Operating Officer Alex Pickard, EVP, Corporate Development & IR 16
Slide 17: Kamoa-Kakula: Quarterly Production
KAMOA-KAKULA: QUARTERLY PRODUCTION (Figures shown on 100% basis for Kamoa-Kakula) 100,812 tonnes of copper in Ore tonnes milled (‘000’s tonnes) / concentrate produced in Q2 2024; Copper ore grade processed (%) tonnes and grade improved following 5.37% 4.95% 4.80% 4.91% improved stability of power gr
Slide 18: Phase 3 Concentrator Nearing Steady State
PHASE 3 CONCENTRATOR NEARING STEADY STATE Phase 3 concentrator completed well ahead of schedule, first concentrate produced on June 10 Ramping up to steady state imminently; recently achieved 16,703 daily tonnes milled – 19% above design capacity Concentrate production smelted at nearby LCS; prior t
Slide 19: Power Stability Initiatives in Progress
POWER STABILITY INITIATIVES IN PROGRESS Long-term DRC grid improvement projects underway, in conjunction with SNEL; completion targeted for H2 2025 55 MW of imported power received via the Zambian interconnector during Q2; increased to 65 MW in July 10 MW of further imported power expected end of Q3
Slide 20: Smelter Completion on Schedule for Q4 2024
SMELTER COMPLETION ON SCHEDULE FOR Q4 2024 Direct-to-blister copper smelter project over 85% complete and on target for construction completion by end of 2024 500,000 tonne-per-annum direct-to- blister smelter construction site 20
Slide 21: Project 95 to Deliver Low-Cost Production Growth
PROJECT 95 TO DELIVER LOW-COST PRODUCTION GROWTH Targeting increased Phase 1 & 2 Kamoa-Kakula’s industry-leading capital intensity recoveries to ~95%; basic (US$/t of copper) engineering complete Recent Up to 30 ktpa of additional copper Recent projects up production from Phase 1 & 2 to $35,000/t pr
Slide 22: Growth Beyond Phase 3 – Targeting >20 Mtpa
GROWTH BEYOND PHASE 3 – TARGETING >20 MTPA Project 95: basic engineering complete, moving to execution Optimized Phase 3: increased recoveries & increased throughput to 6+ Mtpa; work to start once at steady state Phase 4 expansion: - Tailings recovery from high-grade tailings (>0.7% copper) - Expans
Slide 23: Western Forelands Exploration, DRC
WESTERN FORELANDS EXPLORATION, DRC ~40,000m of the 70,000m FY2024 diamond drilling program completed during H1 2024 9 diamond rigs operational during Q2, with 6 focused on Makoko West and Kitoko 23
Slide 24: Potential of Greater Makoko & Kitoko?
POTENTIAL OF GREATER MAKOKO & KITOKO? MAKOKO KAKULA MAKOKO WEST WEST KITOKO 24
Slide 25: Kipushi: Completed Ahead of Schedule
KIPUSHI: COMPLETED AHEAD OF SCHEDULE Kipushi first concentrate produced on June 14; ramp up to steady state expected in September Basic engineering underway to increase processing capacity of concentrator by 20% to 960,000 tonnes per annum 360,000 tonnes of development ore stockpiled on surface at a
Slide 26: Kipushi: Off-take and Financing in Place
KIPUSHI: OFF-TAKE AND FINANCING IN PLACE 2024 Production guidance of 100,000 – 140,000 tonnes of zinc in concentrate Off-take agreements signed with CITIC Metal and Trafigura, plus $170 million in financing facilities First batch of concentrate from the Kipushi concentrator 26
Slide 27: Platreef: Phase 1 Completed on Schedule
PLATREEF: PHASE 1 COMPLETED ON SCHEDULE Phase 1 concentrator completed on-schedule. First ore deferred until H2 2025 to prioritize Shaft #3 development and Phase 2 underground development Ivanplats’ project team celebrating the on-schedule completion of the new 770 ktpa concentrator 27
Slide 28: Platreef: Optimization of Shaft 3 in Progress
PLATREEF: OPTIMIZATION OF SHAFT 3 IN PROGRESS Phase 2 expansion will be accelerated by re- purposing ventilation Shaft #3 for hoisting Shaft #3 will generate additional hoisting capacity of approx. 4 Mtpa, bringing total hoisting capacity to approx. 5 Mtpa Phase 1 + 2 concentrators targeting total p
Slide 29: Management Q&A
July investor site visit to Kamoa-Kakula Q1 FINANCIAL RESULTS MANAGEMENT Q&A 29
Slide 30: Appendices
Q1 FINANCIAL RESULTS APPENDICES www.ivanhoemines.com | TSX: IVN; OTCQX: IVPAF
Slide 31: Significant Cash Flow Attributable to Ivanhoe
SIGNIFICANT CASH FLOW ATTRIBUTABLE TO IVANHOE As at Shareholder Loan Balances June 30, 2024 ($ million) Kamoa-Kakula (39.6% equity interest) Ivanhoe will receive distributions (once payable) in Total shareholder loans payable by Kamoa Holding $3,729 excess of its ownership Portion of shareholder loa