Ivanhoe Mines Ltd. Class A · TSX:IVN
Ivanhoe Mines Ltd. Class A — Investor Presentation (January 2018)
76 slides from Ivanhoe Mines Ltd. Class A's investor presentation, Jan 18, 2018
Slide 1: Ivanhoe Mines - New Horizons
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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
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: Kamoa Mine Development & Kakula Discovery
Kamoa Mine Development & Kakula Discovery Democratic Republic of Congo
Slide 5: 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 5
Slide 6: 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. Looking for another Kakula. 6
Slide 7: New comprehensive Mineral Resource estimate for Kakula
January 2018: Ivanhoe is working to prepare a new, comprehensive Mineral Resource estimate for the Kakula Copper Discovery based on drilling completed at the project between mid April and December 31, 2017. 7
Slide 8: 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 9: Among the world's largest copper deposits, highest 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* 150.0 3.0% Contained Copper (Mt) Copper Grade (%) 125.0 2.5% 100.
Slide 10: 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 11: 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 11
Slide 12: The Kakula mineralized system is more than 12 kilometres long
The Kakula mineralized system is more than 12 kilometres long and is still open in both directions Kamoa Mining Licence 12
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 more than 12 km, and remains open. 13
Slide 14: Drill-hole location plan for Kakula and Kakula West
Drill-hole location plan for the Kakula resource area and Kakula West 1% composite grade thickness 14
Slide 15: Kakula drill-hole plan on 2% composite grade thickness contours
Kakula resource area drill-hole location plan superimposed on 2% composite grade thickness contours 15
Slide 16: 2017 Kakula PEA – alternate development scenarios
2017 Kakula PEA – alternate development scenarios Mine Kakula Kakula + Kansoko Annual mining rate 6 million tonnes 6 + 6 million tonnes(1) Average head grade; first 10 years 6.4% copper 5.7% copper Annual copper production first 10 years 284,000 tonnes 370,000 tonnes Mine-site cash cost first 10 yea
Slide 17: 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! • Kakula Mine − being fast tracked to production with capacity of 6 Mtpa. • Kansoko Mine − development ready, also with capacity of 6 Mtpa. • Kakula West and Kamoa North – potential additional mining area
Slide 18: Development work underway on twin declines at Kakula
November 2017: Development work underway on twin declines to access the high-grade copper resources at the Kakula Discovery 18
Slide 19: Deposits included within Kakula 2017 PEA and Kamoa 2017 PFS
Deposits included within Kakula 2017 PEA (six Mtpa and 12 Mtpa case) and Kamoa 2017 PFS (six Mtpa) Source: OreWin 2017 19
Slide 20: Kamoa-Kakula PEA long-term development plan
Kamoa-Kakula PEA long-term development plan Source: OreWin 2017 20
Slide 21: 2018 Mine-site cash costs
2018 Mine-site cash costs (includes all operational cash costs at mine site) Note: Represents mine-site cash costs that reflect the direct cash costs of producing paid concentrate or cathode incorporating mining, processing and mine-site G&A costs. Kakula is based on the average mine-site cash cost
Slide 22: 2018 C1 copper cash costs
2018 C1 copper cash costs (includes mining, processing, transportation and offsite realization costs) Note: Represents C1 cash costs that reflect the direct cash costs of producing paid metal incorporating mining, processing and offsite realization costs, having made appropriate allowance for the co
Slide 23: Capital intensity for large-scale copper projects
Capital intensity for large-scale copper projects Note: Recently approved, probable and possible projects with nominal copper production capacity in excess of 200 kt/a (based on public disclosure and information gathered in the process of routine research). The Kakula 2017 PEA has not been reviewed
Slide 24: 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 25: 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 26: Chalcocite-rich drill core from DD1210
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). 26
Slide 27: Chalcocite-rich drill core from DD1236
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). 27
Slide 28: 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 28
Slide 29: 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 30: Massive chalcocite in a recent drill hole from Kakula West
Massive chalcocite in a recent drill hole from Kakula West Results show a rapidly growing area of shallow copper mineralization characterized by finely disseminated chalcocite in siltstone and maroon diamictite. The style and overall geometry of mineralization are typical of the high-grade Kakula tr
Slide 31: Bonanza chalcocite mineralization in core from Kakula
Bonanza chalcocite (super high-grade copper) mineralization in core from Kakula 31
Slide 32: Core from Kakula drill hole DD1016
Core from Kakula drill hole DD1016, which intersected 8.75 metres (true width) of 9.84% copper at a 3.0% copper cut-off, beginning at a downhole depth of 362.0 metres. 32
Slide 33: +12% copper in hole DD1041
+12% copper in hole DD1041 Massive chalcocite Disseminated massive chalcocite 33
Slide 34: Western Foreland Exploration Licences
Western Foreland Exploration Licences Western Foreland Kolwezi Exploration Licences Kamoa Kakula Legend 34
Slide 35: Kakula – bottom-loaded, high-grade copper
Kakula – bottom-loaded, high-grade copper is consistent at higher cut-offs 35
Slide 36: High-grade development ore from Kansoko copper mine
High-grade development ore from the construction of the Kansoko copper mine 36
Slide 37: The future of underground mining is automation
The future of underground mining is automation Industry is developing autonomous haulage trucks that receive commands from a control room located remotely and can detect and avoid obstacles. Source: ASI Robots Kamoa-Kakula deposits are ideally suited for autonomous mining. 37
Slide 38: Zijin Mining acquired 49.5% stake in Kamoa Project
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 39: First delivery of copper ore from Kansoko Mine stockpiled
July 21, 2017: The first delivery of copper ore from the Kansoko Mine is stockpiled on surface 39
Slide 40: 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 41: National railways linking DRC mines with international seaports
National railways linking DRC mines with international seaports 41
Slide 42: Kipushi Mine Exploration and Upgrading
Kipushi Mine Exploration and Upgrading Democratic Republic of Congo 42
Slide 43: Pre-feasibility study for 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. 43
Slide 44: MOU to rebuild Kipushi-Munama spur line
D.R. CONGO October 30, 2017: Ivanhoe signed an MOU KIPUSHI MINE with DRC’s state-owned railway company, Société ZAMBIA Nationale des Chemins de Fer du Congo (SNCC) Kipushi to Munama National to rebuild the Kipushi- 34 km spur line railway Munama spur line, which (SNCC) has been inactive since 2011.
Slide 45: 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. 45
Slide 46: Planned and existing development at Kipushi
Planned and existing development at Kipushi 46
Slide 47: 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 47
Slide 48: World's major zinc mines by production and head grade
World’s major zinc mines, showing estimated annual zinc production and zinc head grades Source: Wood Mackenzie. Independent research by Wood Mackenzie concludes that at the forecast production and head grade, the Kipushi Project, once in production, will rank among the world’s largest zinc mines. Wo
Slide 49: Top zinc projects by contained zinc
Top 20 zinc projects by contained zinc Source: Wood Mackenzie. Note: All tonnes and zinc grades of the above-mentioned projects (except for Kipushi) are based on public disclosure and have been compiled by Wood Mackenzie. 49
Slide 50: Upgraded 1,150-metre-level ore conveyor belt
Upgraded 1,150-metre-level ore conveyor belt at the historic, high-grade Kipushi zinc-copper- lead-germanium mine
Slide 51: New lighting installed at 1,200-metre level
New lighting installed at 1,200-metre level 51
Slide 52: Titan underground drilling team at Kipushi
A member of the Titan underground drilling team at Kipushi’s 1,274-metre-level 52
Slide 53: Control room operator at Kipushi's Shaft 5
Control room operator at Kipushi’s Shaft 5 53
Slide 54: Know for Sure health program
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 over 250 health facilities with Deki Readers and trained more than 600 healthcare workers to effectively utilize the technology. 54
Slide 55: Shaft 5 hoisting winder
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Slide 56: 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. 56
Slide 57: Platreef Discovery & Mine Development
Platreef Discovery & Mine Development South Africa 57
Slide 58: Platreef Shaft 1 sinking progress
January 2018: Shaft 1 has reached a depth of more than 600 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. 59
Slide 59: 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 60: Platreef at the bottom of the world's 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 61: 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 62: Debt financing for Platreef
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. 63
Slide 63: 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 64: 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 65: A model of the planned Platreef Mine
A model of the planned Platreef Mine 66 66
Slide 66: 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 67: Sinking platform in operation in Shaft 1
Sinking platform in operation in Shaft 1 Shaft 1 is expected to reach its projected, final depth of 980 metres below surface in 2019. 68
Slide 68: Extraordinary 90-metre intercept reported in October 2013
Extraordinary 90-metre intercept reported in October 2013 Shaft 1 90-metre intersection includes: TMT006 4.51 g/t of platinum, palladium, (includes 90-metre rhodium and gold (3PE+Au) intercept) over 90.64 metres (297 feet) at a 1 g/t 2PE+Au cut-off; 40.79 metres (134 feet) grading 6.88 grams p
Slide 69: 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 70: Drill hole TMT006 – lithology and grade profile
Drill hole TMT006 – lithology and grade profile Shaft 1 71
Slide 71: 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 72: 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 73
Slide 73: 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 74
Slide 74: Automation, a central feature of smart mining
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. 75
Slide 75: 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 (2) 2022: EXPECTED START OF INITIAL PRODUCTION FROM IVANHOE’S PLATREEF PROJECT PwC Ivanhoe’s Platreef is among new projects whose r
Slide 76: Thank you.
Thank you. IVANHOE M INES NEW HORIZONS