Ivanhoe Mines Ltd. Class A · TSX:IVN
Ivanhoe Mines Ltd. Class A — Investor Presentation (September 2017)
76 slides from Ivanhoe Mines Ltd. Class A's investor presentation, Sep 11, 2017
Slide 1: 24 years in Southern Africa. 3 advanced, unique projects.
24 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: 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, KAMOA-KAKULA in Southern Africa’s Copper 39.6%-owned storied mineral fields Democratic Republic of Congo’s Central African Copperbelt KIPUSHI PLATREEF Platinum-group elements Zinc-copper- & gold-nickel-copper silver-germanium 64%-owned 68%-owned South Af
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
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. 14 rigs drilling at Kakula, Kakula West and other targets. Lookin
Slide 7: 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 Drilling at Kakula West to Kakula. New Kakula resource estimate by end of 2017 based on Kakula’s entire strike length of at least 12
Slide 8: The Kakula mineralized system is at least 12 kilometres long
The Kakula mineralized system is at least 12 kilometres long and is still open in both directions Kamoa Mining Licence
Slide 9: 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 10: Drill-hole location plan for Kakula resource area and Kakula West
Drill-hole location plan for the Kakula resource area and Kakula West 1% composite grade thickness
Slide 11: Kakula West drill-hole plan on 1% grade thickness contours
Kakula West drill-hole location plan superimposed on 1% composite grade thickness contours
Slide 12: Kakula West drill-hole plan on 2% grade thickness contours
Kakula West drill-hole location plan superimposed on 2% composite grade thickness contours
Slide 13: Kakula resource area drill-hole plan, 1% contours
Kakula resource area drill-hole location plan superimposed on 1% composite grade thickness contours
Slide 14: Kakula resource area drill-hole plan, 2% contours
Kakula resource area drill-hole location plan superimposed on 2% composite grade thickness contours
Slide 15: 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).
Slide 16: Consistently high grade and bottom-loaded
Consistently high grade and bottom-loaded DD1163 on the eastern edge of Kakula West; More than five metres of 9.5% copper.
Slide 17: Almost 30 metres of 4.2% copper in DD1171!
Almost 30 metres of 4.2% copper in DD1171! One of several Kakula West holes that have discovered massive copper-rich areas between 20 and 50 metres thick
Slide 18: Almost 50 metres of 2.3% copper in DD1160!
Almost 50 metres of 2.3% copper in DD1160! One of several Kakula West holes that have discovered massive copper-rich areas between 20 and 50 metres thick
Slide 19: More than 6 metres of 9.2% copper!
More than 6 metres of 9.2% copper! DD1167 on the northwest portion of Kakula resource area
Slide 20: 16 metres of 3.1% copper!
16 metres of 3.1% copper! DD1182 on the south-western limit of the Kakula resource area
Slide 21: Planned infill drilling at Kakula and saddle area
Planned infill drilling at Kakula and saddle area September 2017
Slide 22: Drilling at the Kakula West Copper Discovery
Drilling at the Kakula West Copper Discovery
Slide 23: Excellent visual drill intercepts continue at Kakula West
Drilling at the Kakula West Copper Discovery – Excellent visual drill intercepts continue to be returned at Kakula West
Slide 24: Bornite and chalcocite in vein intersected in DD1174
Bornite and chalcocite in vein intersected in DD1174 from a moderate to strong zone of mixed chalcocite from Kakula West
Slide 25: 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 26: +12% copper in hole DD1041
+12% copper in hole DD1041 Massive chalcocite Disseminated massive chalcocite
Slide 27: 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 28: High-grade copper intersection in drillhole DD1093
High-grade copper intersection in drillhole DD1093
Slide 29: May 17, 2017: Updated Mineral Resource estimate for Kakula
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 30: Strip-log of drill hole DD1124
Strip-log of drill hole DD1124 showing high-grade copper assays and a typical Kakula-style mineralization profile
Slide 31: Consolidated Mineral Resource Statement, Kamoa-Kakula Project
Consolidated Mineral Resource Statement, Kamoa-Kakula Project – May 16, 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 32: 2016 Kakula PEA – alternate development scenarios
2016 Kakula PEA – alternate development scenarios Mine Kakula Kakula + Kansoko Annual mining rate 4 million tonnes 4 + 4 million tonnes(1) Average head grade; first 10 years 6.90% copper 5.81% copper Annual copper production first 10 years 216,000 tonnes 292,000 tonnes Mine-site cash cost first 10 y
Slide 33: Planned Kakula 2016 PEA development and infrastructure
Planned Kakula 2016 PEA development and infrastructure for Kakula and Kansoko mines
Slide 34: 2017 PEA
2017 PEA six-million-tonne-per-year mines !! • 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 35: Second blast at Kakula box cut
SECOND BLAST AT KAKULA BOX CUT The second blast at the box cut for the Kakula Mine was detonated on August 16, 2017
Slide 36: Box cut construction underway at Kakula
Box cut construction underway now at Kakula to provide access to the bonanza copper discovery
Slide 37: Kansoko Sud section line looking north
Kansoko Sud section line looking north, showing 1.5% copper cut-off composites
Slide 38: Removing broken rock from the declines at Kansoko Mine
Removing broken rock from the declines at the Kansoko Mine
Slide 39: High-grade development ore stockpiled
High-grade development ore stockpiled from construction of the Kamoa-Kakula
Slide 40: 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* Contained Copper (Mt) Copper Grade (%) 150.0 3.0% 125.0 2.5% 100.
Slide 41: Kamoa-Kakula is the largest high-grade copper deposit
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 42: Kamoa-Kakula is the largest undeveloped copper deposit
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 43: 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 44: 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 45: 120kV power line at the Kamoa Project
120kV power line at the Kamoa Project
Slide 46: Rebuilt railway to link DRC mines with Lobito
Rebuilt railway to link DRC mines with Angola’s Atlantic port of Lobito Reconstruction completed to Dilolo station in DRC. Sources: Railwaysafrica.com, enr.com, Stratfor & Grindrod
Slide 47: Kipushi Mine Exploration and Upgrading
Kipushi Mine Exploration and Upgrading Democratic Republic of Congo
Slide 48: Kipushi Fault Zone 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 49: 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 50: World's major zinc mines by production and grade
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 51: 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 52: 2016 Kipushi PEA
2016 Kipushi PEA Steady-state mining rate 1.1 million tonnes/year Average head grades 32.2% zinc and 5.4% copper Zinc concentrate production 530,000 tonnes/year @ 53% zinc Total cash costs (after credits) $0.54/lb zinc Initial capex $409 million After-tax NPV8 @ $1.01/lb zinc $533 million (1) After-
Slide 53: Titan underground drilling team at Kipushi
Members of the Titan underground drilling team at Kipushi’s 1,274-metre-level
Slide 54: Control room operator at Kipushi's Shaft 5
Control room operator at Kipushi’s Shaft 5
Slide 55: 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 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.
Slide 57: Platreef Discovery & Mine Development
Platreef Discovery & Mine Development South Africa
Slide 58: July 31, 2017: Definitive feasibility study issued for Platreef
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 59: 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 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 60: Platreef will be world's largest PGM 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 61: July 2017 site visit by government institutions for 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 62: 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 63: Work underway for Shaft 2 early-works construction
Work underway for Shaft 2 early-works construction
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: 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 66: May 2016 resource update
May 2016 resource update Potential for safe, mechanized mining and substantial by-product credits. Significant exploration upside; open along strike for several km. Platreef 43-101-Compliant Mineral Resource, April 22, 2016 @ 2 g/t 3PE+Au cut-off 3PE+ Contained Metal Tonnage Nickel Copper Au 3PE
Slide 67: Platreef vs. Mogalakwena
Platreef vs. Mogalakwena Measured & Indicated Resources Platreef Mogalakwena Tonnes (Mt) 346 2,521 (3) Grade (g/t 3PE + Au) 3.77 2.61 (3) Nickel (%) 0.32 0.18 Copper (%) 0.16 0.10 Prill Split (%) - Pt / Pd / Rh / Au 45 / 45 / 3 / 7 42 / 50 / 3 / 5 Platinum Equivalent Grade (g/t) (1) 3.17 1.99 Nickel
Slide 68: Exploration targets: 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 69: 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 2018.
Slide 70: 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 71: 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 72: Drill hole TMT006 – lithology and grade profile
Drill hole TMT006 – lithology and grade profile Shaft 1
Slide 73: 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 74: 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 75: Short-lived lift in platinum output from new production
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) 2020: 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. N Ww HORIZONS
Ivanhoe Mines — Investor Presentation (September 2017) on 6ix