Ivanhoe Mines Ltd. Class A · TSX:IVN
Ivanhoe Mines Ltd. Class A — Q1 2024 Earnings Presentation
33 slides from Ivanhoe Mines Ltd. Class A's earnings presentation, Apr 30, 2024
Slide 1: 2024 Q1 Financial Results
www.ivanhoemines.com | TSX: IVN; OTCQX: IVPAF 2024 Q1 FINANCIAL RESULTS April 30, 2024
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
The Kamoa construction team, alongside our dedicated contractors, celebrate the first ore feed to the Phase 3 HPGR stockpile. OPENING REMARKS Robert Friedland, Founder & Executive Co-Chairman 3
Slide 4: The green new deal is nothing without copper
The green new ool, you have deal is... nothing without copper! 4 IVANHOE MINES
Slide 5: Q1 2024 Highlights
Pre-commissioning of Kamoa-Kakula’s new 5 million- tonne-per-annum Phase 3 concentrator underway well ahead of schedule, with first ore expected in May Q1 2024 HIGHLIGHTS Marna Cloete, President 5
Slide 6: Q1 2024: Highlights of the First Quarter
Q1 2024: HIGHLIGHTS OF THE FIRST QUARTER (Figures shown on 100% basis for Kamoa-Kakula) Kamoa-Kakula secures 15 MW of imported grid 86,203 tonnes power; significantly improved production in April Copper Produced (~32,000 tonnes of copper), a further 40 MW expected from tomorrow, May 1 85,155 tonnes
Slide 7: Health & Safety: Striving for Continuous Improvement
HEALTH & SAFETY: STRIVING FOR CONTINUOUS IMPROVEMENT Ivanhoe Mines’ TRIFR(1) by Project 5.15 4.23 2.66 Industry Average(2) 2.80 2.76 2.21 2.20 1.90 1.09 1.70 1.55 0.75 0.00 2022 2023 2024 Q124 2022 2023 2024 Q124 2022 2023 2024 Q124 Kamoa-Kakula Platreef Kipushi (1) Total recordable injury frequency
Slide 8: Ivanhoe Mines' 7th Annual Sustainability Report
IVANHOE MINES’ 7TH ANNUAL SUSTAINABILITY REPORT Kamoa-Kakula generated 6% of DRC GDP; $860 million paid government taxes and royalties $2.7 billion spent on domestic suppliers (YoY increase of 80%) 845 local enterprises supported group- wide (YoY 150% increase) 849 scholarships and bursaries distrib
Slide 9: Sustainability: 2024 Strategic Drivers & Objectives
SUSTAINABILITY: 2024 STRATEGIC DRIVERS & OBJECTIVES 1 Decarbonization strategy 2 Tailings storage management 3 Embedding human rights into business practice 4 Responsible sourcing best practice 5 Diversity and inclusion Agriculture is a major component of Kamoa's Sustainable Livelihoods initiative 9
Slide 10: Q1 2024 Financial Overview
Construction crews celebrate the lifting of Kamoa- Kakula’s second anode furnace into place at the direct-to-blister smelter construction site Q1 2024 FINANCIAL OVERVIEW David van Heerden, Chief Financial Officer 10
Slide 11: Kamoa-Kakula: Quarterly Financial Results
KAMOA-KAKULA: QUARTERLY FINANCIAL RESULTS (Figures shown on 100% basis for Kamoa-Kakula) Copper sold lower in Q1 2024 due to grid instability, offset marginally by higher copper price Copper Sold (kt) Quarterly Revenue(1) ($ million) / Realized Copper Price ($/lb.) $4.04/lb. $3.79/lb. $3.84/lb. $3.8
Slide 12: Kamoa-Kakula: Quarterly Financial Results
KAMOA-KAKULA: QUARTERLY FINANCIAL RESULTS (Figures shown on 100% basis for Kamoa-Kakula) C1 cash costs towards lower end of FY2024 guidance ($1.50 - $1.70/lb.) Q1 2024 EBITDA of $365 million with EBITDA margin of 59% C1 Cash Cost ($ per lb.) EBITDA ($ million) / EBITDA Margin (%) 66% 65% 61% 59% 56%
Slide 13: Kamoa-Kakula: Q1 2024 EBITDA Waterfall
KAMOA-KAKULA: Q1 2024 EBITDA WATERFALL (Figures shown on 100% basis for Kamoa-Kakula, US$ millions) Quarter-on-quarter increase in EBITDA from increase in remeasurement of contract receivables and improved copper prices; offset by decrease in tonnes sold and increase in cash costs Quarter-on-quarter
Slide 14: Ivanhoe Mines Consolidated Financial Results
IVANHOE MINES CONSOLIDATED FINANCIAL RESULTS Normalized profit of $70 million, excluding non-cash $139 million impact of convertible bond Share price of Ivanhoe Mines (C$) Net Profit / Normalized Net Profit(1) ($ million) Normalized Net Profit Net Profit 26% 14% 15% $113 $114 $95 Q1 2023 Q2 2023 Q3
Slide 15: Strong Balance Sheet to Execute Five Major Projects
STRONG BALANCE SHEET TO EXECUTE FIVE MAJOR PROJECTS (Figures shown on 100% basis, US$ millions) Q1 2024 2024 2025 Funding Ivanhoe moves to net cash Capital Expenditure position following redemption of Actuals Guidance Guidance Arrangements $575 million 2.50% convertible Kamoa-Kakula notes due 2026 P
Slide 16: Operations & Project Update
Kamoa-Kakula’s state-of-the-art 500,000 tonne-per-annum smelter under construction OPERATIONS & PROJECT UPDATE Mark Farren, Chief Operating Officer Alex Pickard, EVP, Corporate Development & IR 16
Slide 17: Kamoa-Kakula: Quarterly Production
KAMOA-KAKULA: QUARTERLY PRODUCTION (Figures shown on 100% basis for Kamoa-Kakula) 86,203 tonnes of copper in concentrate Ore tonnes milled (‘000’s tonnes) / produced in Q1 2024; tonnes and grade Copper ore grade processed (%) were impacted by intermittent grid 5.21% 5.37% 4.95% 4.80% power instabili
Slide 18: Power Stability Initiatives in Progress
POWER STABILITY INITIATIVES IN PROGRESS Long-term DRC grid improvement projects underway, in conjunction with SNEL; completion targeted for mid-2025 15 MW of imported power secured from Zambian grid since mid-March Agreement signed to secure additional 40 MW of imported power sourced from Mozambique
Slide 19: Phase 3 Concentrator Ahead of Schedule
PHASE 3 CONCENTRATOR AHEAD OF SCHEDULE Phase 3 concentrator 94% complete, ahead of schedule for first production in May 2024 Pre-commissioning of Phase 3 concentrator underway Kamoa-Kakula Phase 3 concentrator construction site 19
Slide 20: Smelter Construction on Schedule for Q4 2024
SMELTER CONSTRUCTION ON SCHEDULE FOR Q4 2024 Construction of the direct-to-blister copper smelter project is 82% complete and on target for completion by the end of 2024 Aerial view of the 100-hectare smelter construction site, with Phase 1 & 2 concentrators in the background 20
Slide 21: Kamoa-Kakula Phase 3: Inga Refurbishment
KAMOA-KAKULA PHASE 3: INGA REFURBISHMENT Refurbishment of hydropower at Inga II approximately 62% complete for Q1 2025 Wet commissioning and synchronization to the grid is delayed until mid Q1 2025 due to late delivery in the first quarter of the turbine runner and shaft All critical-path equipment
Slide 22: Growth Beyond Phase 3 – Targeting >20 Mtpa
GROWTH BEYOND PHASE 3 – TARGETING >20 MTPA Optimization of Phase 3: targeting increased throughput beyond 5 Mtpa; work starting immediately Project 95: targeting increased recoveries to ~95%; engineering complete in May Tailings recovery from existing tailings (~0.7% copper) Studies underway to acce
Slide 23: Western Forelands Exploration, DRC
WESTERN FORELANDS EXPLORATION, DRC ~17,000m of drilling completed as at quarter end Drilling at high-grade Kitoko discovery continued to define the extent of mineralization Nearly 5 million contained tonnes of copper already delineated across Makoko and Kiala discoveries 23
Slide 24: Kitoko Strike Remains Open
KITOKO STRIKE REMAINS OPEN MAKOKO KAKULA WEST KITOKO Open in all directions 24
Slide 25: Kipushi: Ahead of Schedule for Q2 2024
KIPUSHI: AHEAD OF SCHEDULE FOR Q2 2024 Stoping of ultra-high grade Big Zinc orebody started ahead of schedule; approximately 260,000 tonnes of development ore stockpiled on surface Kipushi concentrator pre-commissioning commenced ahead of schedule, with first feed expected in June Aerial view of the
Slide 26: Kipushi: Development Ahead of Schedule
KIPUSHI: DEVELOPMENT AHEAD OF SCHEDULE Underground development continues ahead of schedule, with over 5,500 metres completed to date Stoping of Kipushi’s ultra-high-grade Big Zinc orebody commenced in December 2023, ahead of schedule Underground development of Kipushi’s Big Zinc orebody 26
Slide 27: Platreef: Optimization of Shaft 3 in Progress
PLATREEF: OPTIMIZATION OF SHAFT 3 IN PROGRESS Ramp-up of Phase 1 deferred until mid-2025 to accommodate Shaft #3 development Phase 2 expansion will be accelerated by re- purposing ventilation Shaft #3 for hoisting Shaft #3 will generate additional hoisting capacity of approx. 4 Mtpa, bringing total
Slide 28: Q1 Financial Results: Management Q&A
www.ivanhoemines.com | TSX: IVN; OTCQX: IVPAF Q1 FINANCIAL RESULTS MANAGEMENT Q&A 28
Slide 29: Appendices
Q1 FINANCIAL RESULTS APPENDICES www.ivanhoemines.com | TSX: IVN; OTCQX: IVPAF
Slide 30: 2024 Cash Cost Guidance
2024 CASH COST GUIDANCE $3.50 2024 guidance range: $3.00 $1.50/lb. –$1.70/lb. C1 Cash Cost ($/lb.) $2.50 Reflects the early commissioning of the Phase 3 concentrator in Guidance range: $2.00 late June 2024, requiring $1.50 - $1.70 additional backup generation $1.50 2024 Guidance Backup power may inc
Slide 31: Significant Cash Flow Attributable to Ivanhoe
SIGNIFICANT CASH FLOW ATTRIBUTABLE TO IVANHOE As at Shareholder Loan Balances March 31, 2024 ($ million) Kamoa-Kakula (39.6% equity interest) Ivanhoe will receive Total shareholder loans payable by Kamoa Holding $3,611 distributions (once Portion of shareholder loan receivable by Ivanhoe $1,787 paya
Slide 32: Ivanhoe Mines' Adjusted EBITDA
IVANHOE MINES’ ADJUSTED EBITDA (All values in US$ million) Reconciliation of profit after tax to Ivanhoe’s EBITDA and Ivanhoe Mines Adjusted EBITDA (US$ million) adjusted EBITDA: Ivanhoe’s profit (loss) after taxes ($ 69) Finance income ($ 62) Current and deferred tax recovery ($ 3) Finance costs $9
Slide 33: Strong Balance Sheet Supports Ivanhoe's Growth
STRONG BALANCE SHEET SUPPORTS IVANHOE’S GROWTH Below figures as at March 31, 2024 (All values in $ million) Net Debt(1) ($ million) / Net Debt to LTM EBITDA Cash and cash equivalents of $411 million 0.6x 1.2x nmf Redemption of $575 million 2.50% convertible notes due 2026 – reduces total debt to $69