34 slides from Ivanhoe Mines Ltd. Class A's earnings presentation, Aug 3, 2023
Slide 1: 2023 Q2 Financial Results
www.ivanhoemines.com | TSX: IVN; OTCQX: IVPAF 2023 Q2 FINANCIAL RESULTS August 3, 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
OPENING REMARKS Robert Friedland, Founder & Executive Co-Chairman 3
Slide 4: Q2 2023 Highlights
Q2 2023 HIGHLIGHTS Marna Cloete, President 4
Slide 5: Q2 2023: Highlights of Another Record Quarter
Q2 2023: HIGHLIGHTS OF ANOTHER RECORD QUARTER (Figures shown on 100% basis for Kamoa-Kakula) 103,786 tonnes Another quarterly production record and cash Copper Produced costs at the lower end of guidance 101,526 tonnes Significant cash flow is funding Phase 3 Payable Copper Sold expansion to increas
Slide 6: Health & Safety: Improvement Continues
HEALTH & SAFETY: IMPROVEMENT CONTINUES A safe first half of 2023 across all sites; further reduction in TRIFR achieved during H1 2023 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 3.15 2.80 1.55 0.61 1.90 1.82 1.00 20
Slide 7: Kamoa Centre of Excellence Nears Completion
KAMOA CENTRE OF EXCELLENCE NEARS COMPLETION Where the future leaders of the copperbelt will be made Students funded by bursaries from Kamoa-Kakula First student intake in September 2023 7
Slide 8: Q2 2023 Financial Overview
Christelle Nday (centre left) and Micheline Kyenge (centre right), President and Vice President of Kamoa's Women In Mining, conducted a tour of Kamoa-Kakula for a group of Grade 10 students from the nearby Mutoshi Technical Institute Q2 2023 FINANCIAL OVERVIEW David van Heerden, Chief Financial Offi
Slide 9: Kamoa-Kakula: Another Record Quarter
KAMOA-KAKULA: ANOTHER RECORD QUARTER (Figures shown on 100% basis for Kamoa-Kakula) Record quarterly copper sold and revenue achieved in Q2 2023, despite lower copper prices Quarterly Revenue(1) (US$ million) Copper Sold (kt) / Realized Copper Price (US$/lb.) $4.04/lb. $3.79/lb. $3.50/lb. $3.54/lb.
Slide 10: Kamoa-Kakula: High Margins Maintained in Q2 2023
KAMOA-KAKULA: HIGH MARGINS MAINTAINED IN Q2 2023 (Figures shown on 100% basis for Kamoa-Kakula) C1 cash costs remain stable towards lower end of FY 2023 guidance ($1.40 - $1.50/lb.) High EBITDA margins maintained at 65% C1 Cash Cost (US$ per lb.) EBITDA(1) (US$ million) / EBITDA Margin (%) 67% 66% 6
Slide 11: Kamoa-Kakula: Q2 2023 EBITDA Waterfall
KAMOA-KAKULA: Q2 2023 EBITDA WATERFALL (Figures shown on 100% basis for Kamoa-Kakula, US$ millions) Quarter-on-quarter rise in EBITDA from increased tonnes sold followed by completion of de- bottlenecking; offset by lower copper prices and remeasurement of contract receivables $70 ($43) $6 ($57) $24
Slide 12: Kamoa-Kakula C1 Cash Costs at Lower End of Guidance
KAMOA-KAKULA C1 CASH COSTS AT LOWER END OF 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 Q2 2023 C1 $2.00 < $1.20/
Slide 13: Kamoa-Kakula: Industry-Leading Cash Cost Discipline
KAMOA-KAKULA: INDUSTRY-LEADING CASH COST DISCIPLINE (Net C1 cash cost or unit cost for selected copper producers or copper division of major mining companies, where reported) within range +27% +26% Cash cost 2022 actual vs. +16% +11% +10% 2022 guidance +7% +8% Ivanhoe Peer 1 Peer 2 Peer 3 Peer 4 Pee
Slide 14: Ivanhoe Mines Consolidated Financial Results
IVANHOE MINES CONSOLIDATED FINANCIAL RESULTS (Figures shown on 100% basis for Kamoa-Kakula) Group-Level Adjusted EBITDA(1) (US$ million) Net Profit / Normalized Net Profit(2) (US$ million) Normalized Net Profit Net Profit $352 Includes gain on initial recognition of deferred tax at Kipushi of $113 m
Slide 15: Strong Balance Sheet Supports Growth Projects
STRONG BALANCE SHEET SUPPORTS GROWTH PROJECTS (Figures shown on 100% basis, US$ millions) H1 2023 Remaining 2023 FY Funding Ivanhoe Mines cash and cash equivalents Capital Expenditure of $393 million Capex Spent Capex Guidance Arrangements Kamoa-Kakula JV cash flow Kamoa-Kakula joint venture boasts
Slide 16: Operations & Project Update
Aerial view of the Phase 1 and 2 concentrator, overlaid with a 3D rendering of the adjacent smelter complex, which is currently under construction OPERATIONS & PROJECT UPDATE Alex Pickard, Senior VP, Corporate Development & IR Robert Friedland, Founder & Executive Co-Chairman Marna Cloete, President
Slide 17: Kamoa-Kakula: Record Throughput & Production
KAMOA-KAKULA: RECORD THROUGHPUT & PRODUCTION (Figures shown on 100% basis for Kamoa-Kakula) De-bottlenecking program completed Ore tonnes milled (‘000’s tonnes) / ahead of schedule in Q1 2023. Phase 1 Copper ore grade processed (%) and 2 production capacity increased to 5.60% 5.40% 5.42% 5.21% ~450k
Slide 18: Kamoa-Kakula: Promising Testwork to Improve Recoveries
KAMOA-KAKULA: PROMISING TESTWORK TO IMPROVE RECOVERIES Despite exceeding design recovery rate, tailings grade of ~0.8% copper is higher than most copper mines globally due to fine-grained copper sulphides Extensive study work ongoing (13 workstreams) Highly promising preliminary test work results sh
Slide 19: Kamoa-Kakula Phase 3: Concentrator Progress
KAMOA-KAKULA PHASE 3: CONCENTRATOR PROGRESS Phase 3 expansion, copper smelter and refurbishment of turbine #5 on schedule for Q4 2024 completion Phase 3 concentrator 38% complete; 85% structural steel & platework fabricated and shipped; 90% of total concrete poured; 571 of the total 1,799 trucks loa
Slide 20: Kamoa-Kakula Phase 3: Smelter Construction
KAMOA-KAKULA PHASE 3: SMELTER CONSTRUCTION Smelter project 56% complete. concrete foundations nearing completion; all major equipment being manufactured with deliveries due to commence in coming quarter Steel erection of the Direct-to-Blister Furnace (left) and off-gas handling (centre) 20
Slide 21: New Export Routes from DRC Emerging
NEW EXPORT ROUTES FROM DRC EMERGING Dar es Salaam U.S. International Development Finance Corp. LOBITO RAILWAY CORRIDOR evaluating $250 million in financing for ‘key 2,466 km economic’ rail corridor connecting the Lobito KAMOA-KAKULA Roundtrip: ~40 days Angolan port of Lobito to the DRC Copperbelt Ra
Slide 22: Western Foreland Exploration, DRC
WESTERN FORELAND EXPLORATION, DRC ~17,500m drilling completed of total 70,000m targeted for 2023 (43,000m diamond core and 27,000m air core) Diamond core drilling advancing on schedule with six rigs Air core drilling behind schedule due to late wet season (typically Nov – April), additional rig arri
Slide 23: Mokopane Feeder Exploration, South Africa
MOKOPANE FEEDER EXPLORATION, SOUTH AFRICA High-resolution magnetic survey completed; airborne gravity survey delayed, expected to be complete in Q3 2023 Review and analysis of both survey data sets to be completed in October with diamond drilling to start later in Q4 2023 Aircraft conducting airborn
Slide 24: Platreef: Phase 1 Advancing on Schedule
PLATREEF: PHASE 1 ADVANCING ON SCHEDULE Phase 1 processing plant construction on schedule for first production in Q3 2024 Steel erection well underway at the Phase 1 Concentrator 24
Slide 25: Platreef: Optimization of Shaft 3 in Progress
PLATREEF: OPTIMIZATION OF SHAFT 3 IN PROGRESS 340 metres reamed to date of the 950-metre, 5.1-metre- diameter Shaft 3; completion targeted Q4 2023 Optimization work nearing completion to accelerate Phase 2 expansion by installing hoisting capacity in Shaft 3 Battery-electric Epiroc jumbo drill rig 2
Slide 26: Platreef: Shaft 2 Construction
PLATREEF: SHAFT 2 CONSTRUCTION Installation of structural steel inside Platreef’s Shaft 2 concrete headframe has commenced Pilot-hole drilling of Shaft 2 complete; reaming expected to commence in Q3 2023 Looking down the 79-metre-high concrete base of Shaft 2 headframe. Once completed, the headframe
Slide 27: 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 $250 million facility Underground inspection visit with representatives from Ivanhoe Mines, Kipushi Corporation, Gécamines and Glencore 27
Slide 28: Kipushi: Underground Development Ahead of Schedule
KIPUSHI: UNDERGROUND DEVELOPMENT AHEAD OF SCHEDULE Underground development ahead of schedule; 1,526 metres of development completed year to date, over 20% more than planned Stoping of the ultra-high-grade Big Zinc orebody to commence ahead of schedule in January 2024 Peet De Beer (Superintendent II,
Slide 29: Kipushi: On Schedule for Production in Q3 2024
KIPUSHI: ON SCHEDULE FOR PRODUCTION IN Q3 2024 800,000 tonnes-per-annum concentrator over 50% complete; over 7,000 cubic metres of foundation concrete poured; 780 tonnes of structural steel assembled; delivery of mechanical equipment commenced Concrete foundations of the zinc flotation plant (left),
Slide 30: Q2 Financial Results: Management Q&A
www.ivanhoemines.com | TSX: IVN; OTCQX: IVPAF Q2 FINANCIAL RESULTS MANAGEMENT Q&A 30
Slide 31: Appendices
Q2 FINANCIAL RESULTS APPENDICES www.ivanhoemines.com | TSX: IVN; OTCQX: IVPAF
Slide 32: Kamoa-Kakula: C1 Cash Costs Remain Stable
KAMOA-KAKULA: C1 CASH COSTS REMAIN STABLE (All values in US$ per pound of payable copper) C1 cash costs at the lower end of range. Quarterly Breakdown of C1 Cash Cost (US$ per lb.) FY 2023 guidance of $1.40/lb. to $1.50/lb. re-affirmed 0.56 Logistics charges continue to ease. Higher 0.50 TC/RCs; fut
Slide 33: Significant Cash Flow Attributable to Ivanhoe
SIGNIFICANT CASH FLOW ATTRIBUTABLE TO IVANHOE As at Shareholder Loan Balances June 30, 2023 ($ million) Kamoa-Kakula (39.6% equity interest) Ivanhoe will receive distributions Total shareholder loans payable by Kamoa Holding $3,300 (once payable) in excess of its Portion of shareholder loan receivab
Slide 34: Ivanhoe Mines' Adjusted EBITDA
IVANHOE MINES’ ADJUSTED EBITDA Reconciliation of profit after tax to Ivanhoe’s EBITDA and Ivanhoe Mines Adjusted EBITDA (US$ million) adjusted EBITDA: Ivanhoe’s profit after taxes $ 87 Finance income ($ 62) Current and deferred tax recovery ($ 2) Finance costs $6 Unrealized foreign exchange loss(1)