Ivanhoe Mines Ltd. Class A · TSX:IVN
Ivanhoe Mines Ltd. Class A — Investor Presentation (March 2019)
58 slides from Ivanhoe Mines Ltd. Class A's investor presentation, March 2019
Slide 1: Over 20 years in Southern Africa. 3 advanced, unique projects.
Over 20 years in Southern Africa. 3 advanced, unique projects. Positioned to realize urbanization’s resource opportunities with minerals to help build a better world.
Slide 2: Platreef discovery & mine development
Platreef discovery & mine development South Africa
Slide 3: The Bushveld Complex produces ~70% of global platinum
The Bushveld Complex produces ~70% of global platinum Waterberg Discovery “The opening up of the Northern Limb may be the most significant Mogalakwena Mine PLATREEF change in the economics Mokopane of any commodity since DISCOVERY the introduction of bulk mining techniques of the USA’s copper porphy
Slide 4: Revenue per tonne of ore at the Platreef Project has risen steadily since 2016
Revenue per tonne of ore at the Platreef Project has risen steadily since 2016 Source: Bloomberg. Based on historical weekly commodity prices at the end of each week.
Slide 5: 750-metre and 850-metre stations on Shaft 1 provide underground access
750-metre and 850-metre stations on Shaft 1 will provide underground access to the high-grade Flatreef orebody
Slide 6: Platreef's underground mine development team includes three members from local communities
Platreef’s underground mine development team includes three members from local communities (from left): Nkone Madubana, Learner Sinker; Katlego Nkwana, Learner Sinker; and Caroline Dzivhani, Geologist – who recently became fully certified underground miners
Slide 7: Platreef's Shaft 2 box cut, with Shaft 1 headframe in the background
Platreef’s Shaft 2 box cut, with Shaft 1 headframe in the background
Slide 8: Platreef's Shaft 2 box cut, with the 11.5-metre shaft ring
Platreef’s Shaft 2 box cut, with the 11.5-metre shaft ring set-up for the 10-metre internal diameter shaft.
Slide 9: December 2018: Ivanhoe Mines secured long-term supply of treated bulk water
December 2018: Ivanhoe Mines secured long-term supply of treated bulk water to process ore Agreement provides a minimum of five million litres of treated water a day for 32 years, beginning in 2022, from the town of Mokopane’s new Masodi Treatment Works. Recycling of local, treated water is part of
Slide 10: 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 four million tonnes of ore per year, producing 476,000 ounces of platinum, palladium, rhodium and gold (3PE+Au), plus 33 million pounds of nickel and copper. Projected to be Af
Slide 11: Platreef's potential US$351 per 3PE+Au ounce at the bottom of the 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 at the bottom 1,000 of the cash-cost curve. 800 600 400 200 0 3PE+Au oz production Platreef 4Mtpa FS Northern limb Zimbabwe Eastern L
Slide 12: Platreef Shaft 2
PLATREEF SHAFT 2 LARGEST HOISTING CAPACITY PRODUCTION SHAFT IN THE PRECIOUS METALS INDUSTRY Illustration shows two cut-away perspectives of Shaft 2’s 103-metre-tall concrete headframe and internal permanent hoisting facilities.
Slide 13: A model of the planned Platreef Mine
A model of the planned Platreef Mine Shaft 2 Shaft 1 13
Slide 14: Platreef's B-BBEE partnership a top performer in South Africa's platinum sector
Platreef's B-BBEE partnership a top performer in South Africa’s platinum sector Platreef 26% ownership stake by Black Economic Empowerment (BBE) partners is one of the broadest empowerment transactions ever settled in South African mining. • 20% held by a trust to benefit 20 local host communities,
Slide 15: May 2016: 42 million oz. of PGMs in Indicated plus 58 million oz. in Inferred
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 – with an extra 52.8 million ounces in Inferred Resources, at the base case cut-off grade of 2 g/t. Indicated Minera
Slide 16: 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 17: Kipushi Mine development & upgrading for a new era
Kipushi Mine development & upgrading for a new era Democratic Republic of Congo
Slide 18: Kipushi: world's highest grade zinc-copper-silver-germanium mine in southeast DRC
Kipushi: world's highest grade zinc-copper-silver- germanium mine in southeast DRC on the Zambian border Kamoa-Kakula Kipushi
Slide 19: March 2019: LME zinc inventories fall to lowest in more than a decade
March 2019: LME zinc inventories fall to lowest in more than a decade Source: Bloomberg, LME
Slide 20: December 13, 2017: Ivanhoe announced a pre-feasibility study for Kipushi
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.
Slide 21: Kipushi Fault Zone was mined 1924-1993; Big Zinc never mined
Kipushi Fault Zone was mined 1924-1993 to approx. 1,150-metre level. Big Zinc discovered prior to 1993 closure; never mined.
Slide 22: Planned and existing development at Kipushi
Planned and existing development at Kipushi
Slide 23: World's major zinc mines, showing estimated annual zinc production and head grades
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 24: Top 20 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.
Slide 25: Kipushi mine-to-market overview
Kipushi mine-to-market overview 1 Resource 2 Mining 3 Processing 4 Transport 5 China Sulphide DMS plant, replacement including Rail from orebodies crushing, Zinc Sublevel Kipushi Mine with zones screening, concentrate open stoping, site to Durban of zinc-rich HLS and exported to pillar retreat (via
Slide 26: Big Zinc Mineral Resource outline and Fault Zone copper intercepts
Big Zinc Mineral Resource outline and Fault Zone and Fault Zone Splay copper intercepts in recent drill holes
Slide 27: Primary rock crusher 1,150 metres underground, ready for production
Primary rock crusher 1,150 metres underground, ready for production
Slide 28: New lighting installed at 1,200-metre level
New lighting installed at 1,200-metre level
Slide 29: Control room operators at Kipushi's Shaft 5
Control room operators at Kipushi’s Shaft 5
Slide 30: Shaft 5 main pumping station at the 1,200-metre level
Shaft 5 main pumping station at the 1,200-metre level
Slide 31: Shaft 5 hoisting winder
Shaft 5 hoisting winder
Slide 32: Community adult literacy program at Kipushi
Community adult literacy program at Kipushi, sponsored by Ivanhoe Mines and implemented in partnership with AlfaCongo
Slide 33: World's best drill hole? Big Zinc intersection of 44.8% zinc over 340 metres
World’s best drill hole? Our geology team holding hands and showing Big Zinc intersection of 44.8% zinc over 340 metres
Slide 34: Kamoa-Kakula: Our world's best copper discovery
Kamoa-Kakula: Our world’s best copper discovery Hole DD1450, which intersected 22.3 metres of 13.05% copper
Slide 35: Ivanhoe Mines delegation meets with DRC President Tshisekedi
Kinshasa, March 15, 2019 Ivanhoe Mines delegation meets with DRC President Tshisekedi
Slide 36: Independent pre-feasibility study for the Kakula copper mine
Independent pre-feasibility study (PFS) for the Kakula copper mine announced on February 6 Democratic Republic of Congo The stage one, 6 Mtpa operation at Kakula, with estimated development capital of US$1.1 billion, yields an after-tax NPV8% of US$5.4 billion and an IRR of 47% over a 25-year mine l
Slide 37: The Kakula Mine's first stage will average 6.8% copper over the first 5 years
The Kakula Mine’s first stage will average 6.8% copper over the first 5 years, with mine-site cash costs of US$0.43/lb copper. Democratic Republic of Congo
Slide 38: Updated PEA for an expanded Kakula-Kamoa production rate of 18 Mtpa
Updated independent preliminary economic assessment (PEA) completed for an expanded Kakula-Kamoa production rate of 18 Mtpa, supplied initially by a 6 Mtpa mine at Kakula, followed Democratic Republic by two 6 Mtpa minesof Congo at Kansoko and Kakula West, and a world-scale direct-to-blister smelter
Slide 39: The PEA yields an after-tax NPV8% of US$10.0 billion and IRR of 41%
The PEA envisions the staged mine expansions and smelter will be funded from internal cash flows and yields an after-tax NPV8% of US$10.0 billion and an IRR of 41%. Democratic Republic of Congo
Slide 40: Kamoa-Kakula is projected to become the world's second largest copper mine
Once the expanded PEA production rate of 18 Mtpa is achieved, Kamoa-Kakula is projected to become the world’s second largest copper mine, with peak annual production of more than 700,000 Democratic tonnes of Republic copper. of Congo
Slide 41: World's projected top 20 producing mines in 2025
Projected 18 Mtpa Kamoa-Kakula PEA production (year-12 peak copper production shown) compared world’s projected top 20 producing mines in 2025 by paid copper production Note: Kamoa-Kakula 2019 PEA production based on projected peak copper production (which occurs in year 12) of the 18 Mtpa alternati
Slide 42: Kamoa-Kakula study overview
Kamoa-Kakula study overview Kamoa Kamoa-Kakula 2019 PEA 2019 PFS Kakula 2019 PFS
Slide 43: Kamoa-Kakula 18 Mtpa development plan
Kamoa-Kakula 18 Mtpa development plan
Slide 44: Kamoa North: two new high-grade corridors trending onto Ivanhoe's 100%-owned ground
Kamoa North − two new high-grade corridors trending onto Ivanhoe’s 100%-owned ground
Slide 45: Kamoa North DD1450: 22.3 metres of 13.05% copper
Kamoa North DD1450: 22.3 metres of 13.05% copper in shallow, flat-lying discovery hole
Slide 46: Among the world's largest copper deposits, Kamoa-Kakula also has the 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 150 3.0% 125 2.5% Copper Grade (%) 100 2.0% 75 1.5% 50 1.0% 25 0.5% - - Source: Wood Mackenzie *Note: Selected based on contained copper (Mea
Slide 47: 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 45 3.0% 40 Contained Copper (Mt) 2.5% Copper Grade (%) 35 30 2.0% 25 1.5% 20 15 1.0% 10 0.5% 5 - - Source: Wood Mackenzie *Note: Contained copper in undeveloped dep
Slide 48: Kakula and Kakula West discovery areas showing Indicated and Inferred grades
Kakula and Kakula West discovery areas showing grades of Indicated and Inferred Mineral Resource blocks at a 3% copper cut-off
Slide 49: Kakula's new southern box cut is nearing completion
Kakula’s new, southern box cut is nearing completion. A third decline tunnel will be driven from the bottom of the box cut to provide access and ventilation to the southern side of the underground, high-grade Kakula Deposit 4 9
Slide 50: Construction of new 20-kilometre by-pass road linking Kamoa-Kakula to Kolwezi
Construction of new, 20-kilometre by-pass road linking the Kamoa-Kakula Project to Kolwezi
Slide 51: Kamoa-Kakula Sustainable Livelihoods Project
Chickens and eggs are among successes of the Kamoa-Kakula Sustainable Livelihoods Project, contributing to prospering economies in 14 communities near Ivanhoe's DRC projects.
Slide 52: Nine fish ponds near Kamoa-Kakula teach aquaculture skills
Nine fish ponds near Kamoa-Kakula are designed to teach aquaculture skills to local communities, help enhance nutrition, and provide opportunities for earning additional income
Slide 53: Opening assembly for the new Kaponda secondary school
The opening assembly for the new Kaponda secondary school constructed by Kamoa Copper in a local community near the Kamoa-Kakula Project
Slide 54: Mwadingusha hydroelectric plant upgrade
Mwadingusha hydroelectric plant upgrade Mwadingusha is the first of three hydroelectric power plants in the DRC being upgraded by Ivanhoe, Zijin and SNEL to secure a supply of clean, sustainable electricity for the development of Kamoa-Kakula. Its output has tripled, to 32 megawatts (MW), and sh
Slide 55: National railways linking DRC mines with international seaports
National railways linking DRC mines with international seaports
Slide 56: Makoko Drilling Area – Western Foreland
Makoko Drilling Area – Western Foreland A drilling rig in operation at Ivanhoe’s 100%-owned Western Foreland exploration area, located to the west of the Kamoa-Kakula Project. Ivanhoe is exploring for Kamoa-Kakula- style copper mineralization on high-priority targets identified from an airborne grav
Slide 57: Makoko high-grade copper shows characteristics identical to Kamoa-Kakula
Makoko high-grade copper shows characteristics identical to tier-one Kamoa-Kakula Discoveries Western Foreland 57
Slide 58: Thank you.
Thank you.