Ivanhoe Mines Ltd. Class A · TSX:IVN
Ivanhoe Mines Ltd. Class A — Investor Presentation (May 2018)
59 slides from Ivanhoe Mines Ltd. Class A's investor presentation, May 10, 2018
Slide 1: Ivanhoe Mines – May 10, 2018
| IVANHOEMINES N E—E W HORIZON S
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: Kamoa-Kakula, Platreef, Kipushi
KAMOA-KAKULA Initial development for 2 adjacent mines on world’s 4th-largest copper discovery Democratic Republic of Congo’s Central African Copperbelt PLATREEF KIPUSHI Mine projected to be Ultra-high-grade historic mine being Africa’s lowest-cost producer upgraded to produce of platinum-group metal
Slide 4: Appointment of Kgalema Motlanthe as non-executive director
April 10, 2018: Appointment of former South African President Kgalema Motlanthe as non-executive director “Mr. Motlanthe is widely recognized as one of the African continent’s wise men. We are honoured to be able to welcome to our board an individual with such respected credentials in the internatio
Slide 5: Platreef Discovery & Mine Development
Platreef Discovery & Mine Development South Africa
Slide 6: Shaft 1 has reached a depth of more than 900 metres
April 23, 2018: Shaft 1 has reached a depth of more than 750 metres below surface. Construction of the 750-metre station has begun to provide initial mine development access to the orebody. Development work focused on initial production by early 2022. 6
Slide 7: Trainee operators with Platreef's load-haul-dump machine
Trainee operators from the local Mokopane community with Platreef’s new 5.5-tonne, load-haul-dump machine (LHD). 7
Slide 8: Ivanhoe Mines secures long-term supply of treated bulk water
May 7, 2018: Ivanhoe Mines secures long-term supply of treated bulk water Recycling of local, treated water is part of a sustainable approach to minimize Platreef’s environmental footprint. 8
Slide 9: Box-cut construction of Shaft 2
Box-cut construction of Shaft 2 (main production shaft) 9
Slide 10: 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 11: 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 12: 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 - Ruste
Slide 13: Platreef Project Financing Progressing
Platreef Project Financing Progressing: 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. 13
Slide 14: Shaft 2 headgear and hoisting facilities illustration
Illustration shows two perspectives of Shaft 2’s 103-metre- tall concrete headgear and internal permanent hoisting facilities. 14
Slide 15: 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 16: Platreef's B-BBEE deal is a top performer
Platreef’s B-BBEE deal is a top performer in South Africa’s platinum sector BEE partner’s 26% ownership stake in Platreef Project is one of the broadest empowerment transactions ever done in South African mining. • 20% held by a trust to benefit 20 local host communities, with estimated combined pop
Slide 17: Ongoing Shaft 1 development
Ongoing Shaft 1 development by members of Platreef’s shaft-sinking team Shaft 1 is expected to reach its projected, final depth of 980 metres below surface in 2019. 17
Slide 18: Removal of broken rock from shaft-sinking development
Removal of broken rock from shaft-sinking development 18
Slide 19: 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 19
Slide 20: 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 20
Slide 21: The looming platinum supply cliff
The looming platinum “supply cliff” for Southern Africa’s existing producing mines (’000 oz.) Southern Africa’s projected platinum production plunge PwC, Sept. 2016 Existing shafts alone will barely maintain current production to 2021. Then, closures of mined-out shafts will help trigger a long
Slide 22: 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 2022: EXPECTED START OF INITIAL PRODUCTION FROM IVANHOE’S PLATREEF PROJECT PwC Ivanhoe’s Platreef is among new projects whose ramp-
Slide 23: Kamoa Mine Development & Kakula Discovery
Kamoa Mine Development & Kakula Discovery Democratic Republic of Congo
Slide 24: Kamoa, Kakula and Kakula West
Kamoa, Kakula and Kakula West Indicated and Inferred Mineral Resource areas, with existing power and rail infrastructure 24
Slide 25: New resource estimate establishes Kamoa-Kakula as 4th largest copper discovery
February 2018: A new resource estimate establishes Kamoa-Kakula as the world’s fourth largest copper discovery. Copper grades at the two adjacent deposits are the highest, by a wide margin, of the world’s top 10 copper deposits. 25
Slide 26: Indicated Mineral Resources, Kamoa-Kakula Project, February 2018
Indicated Mineral Resources, Kamoa-Kakula Project, February 2018 Cut-off Contained Contained Tonnes Area Copper Category Grade Copper Copper (millions) (Sq. km) Grade (Cu%) (kTonnes) (billion lbs) Indicated 3.0 396 33.2 4.79% 19,000 41.8 Indicated 2.5 535 44.0 4.25% 22,800 50.2 Indicated 2.0 780 53.
Slide 27: Kamoa-Kakula has the highest copper grades among largest deposits
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% Contained Copper (Mt) 125 2.5% Copper Grade (%) 100 2.0% 75 1.5% 50 1.0% 25 0.5% - - Source: Wood Mackenzie *Note: Selected based on
Slide 28: 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 29: Largest high-grade copper deposit in the world
Kamoa-Kakula is the largest high-grade copper deposit in the world 45 Measured & Indicated Resource Inferred Resource 40 5.9 Contained Copper (Mt) 35 30 25 11.7 20 36.6 15 6.4 10 16.9 4.8 0.0 0.4 5 10.2 0.4 0.1 0.0 0.0 0.3 4.6 1.4 0.9 0.7 0.5 0.3 0.4 0.3 - Source: Wood Mackenzie *Note: Contained cop
Slide 30: Extent of Kakula / Kakula West Discovery
Extent of Kakula / Kakula West Discovery Kakula West discovery extends known mineralization to more than 13 km, and remains open. 30
Slide 31: Kakula and Kakula West resource grades at 3% copper cut-off
Kakula and Kakula West discovery areas showing grades of Indicated and Inferred Mineral Resource blocks at a 3% copper cut-off 31
Slide 32: Kakula and Kakula West resource thickness at 1% copper cut-off
Kakula and Kakula West discovery areas showing the thickness of Indicated and Inferred Mineral Resource blocks at a 1% copper cut-off 32
Slide 33: 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! 1. Kakula Mine − being fast tracked to production with capacity of 6 Mtpa. 2. Kansoko Mine − development ready, also with capacity of 6 Mtpa. Kakula’s underground 3. Kakula West and Kamoa roadway North –
Slide 34: Underground development advancing service and conveyor declines
Underground development has advanced each of the service and conveyor declines almost 500 metres toward the mineralized zone 34
Slide 35: Kamoa-Kakula PEA long-term development plan
Kamoa-Kakula PEA long-term development plan Source: OreWin 2017 35
Slide 36: 2025 Top 20 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 37: Top 10 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 38: Drilling at the Kakula West Copper Discovery
Drilling at the Kakula West Copper Discovery 38
Slide 39: Excellent visual drill intercepts continue at Kakula West
Excellent visual drill intercepts continue to be returned at Kakula West 39
Slide 40: Poultry project of Kamoa-Kakula Sustainable Livelihoods Project
The poultry project that supplies chickens and eggs to the Kamoa-Kakula Project – one of the initiatives of the Kamoa-Kakula Sustainable Livelihoods Project 40
Slide 41: Lettuce harvested from the livelihoods garden
Lettuce being harvested from the livelihoods garden – one of the initiatives of the Kamoa-Kakula Sustainable Livelihoods Project 41
Slide 42: 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 43: 120kV power line at the Kamoa-Kakula Project
120kV power line at the Kamoa-Kakula Project 43
Slide 44: Kipushi Mine Exploration and Upgrading
Kipushi Mine Exploration and Upgrading Democratic Republic of Congo
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: Pre-feasibility study for rebirth of historic 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. 47
Slide 48: MOU with SNCC to rebuild Kipushi-Munama spur line
October 30, 2017: D.R. CONGO Ivanhoe signed an MOU with DRC’s state-owned KIPUSHI MINE railway company, Société Nationale des Chemins de Fer du ZAMBIA Congo (SNCC) Kipushi to Munama National to rebuild the Kipushi- railway 34 km spur line (SNCC) Munama spur line, which has been inactive since 2011.
Slide 49: Some human health benefits from zinc
Some human health benefits from zinc Zinc stopped cancer-cell growth in tests; research pursuing potential to block esophageal tumour cells. Oct. 3, 2017 Zinc lozenges may help colds go away 3 times faster. May 16, 2017 Shortage of zinc in the body can affect cardiovascular health. April 18, 2017 49
Slide 50: P5 shaft rock crusher
P5 shaft rock crusher, another important step to hoist ore to surface 50
Slide 51: Main component for P5 rock crusher placed in position
Main component for the P5 rock crusher to be placed in position during May 2018 51
Slide 52: Upgraded 1,150-metre-level ore conveyor belt at Kipushi
Upgraded 1,150-metre-level ore conveyor belt at the historic, high-grade Kipushi zinc-copper- lead-germanium mine 52
Slide 53: Control room operators at Kipushi's Shaft 5
Control room operators at Kipushi’s Shaft 5 53
Slide 54: New underground mining equipment fleet
A scooptram loader and haul truck, part of the fleet of new underground mining equipment 54
Slide 55: Know for Sure malaria testing initiative
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 252 health facilities with Deki Readers and trained more than 600 healthcare workers to effectively utilize the technology 55
Slide 56: Putting people first
Putting people first A representative of the Know for Sure initiative, holding a Deki Reader used to conduct rapid diagnostic testing for malaria, explains to children how to get access to testing for themselves and their parents. 56
Slide 57: Community adult literacy program at Kipushi
Community adult literacy program at Kipushi, sponsored by Ivanhoe Mines and implemented in partnership with Alpha Congo. 57
Slide 58: Final upgrading work on Kipushi's ore-conveyor system
Final upgrading work on Kipushi’s new, underground ore-conveyor system 58
Slide 59: Thank you.
4 Thank you. NS ars y | IW | y