Ivanhoe Mines Ltd. Class A · TSX:IVN
Ivanhoe Mines Ltd. Class A — Investor Presentation (June 2024)
42 slides from Ivanhoe Mines Ltd. Class A's investor presentation, Jun 5, 2024
Slide 1: Investor Presentation
TSX: IVN | OTCQX: IVPAF INVESTOR PRESENTATION June 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”) is confidential and has been prepared to assist the recipients hereof in conducting their own evaluation of Ivanhoe and does not
Slide 3: Ivanhoe at a Glance
IVANHOE AT A GLANCE CORPORATE INFORMATION TSX: IVN LISTINGS OTCQX: IVPAF SHARE PRICE C$18.75 / share(1) MARKET CAP US$17.5 billion(1) SHARES, OPTIONS, Common Shares: 1,269.7 million(2) RSUs & DSUs Options, RSUs & DSUs: 17.7 million(2) CASH POSITION US$411 million(2) DEBT OUTSTANDING US$716 million(2
Slide 4: A Leading Producer, Developer and Explorer in Africa
A LEADING PRODUCER, DEVELOPER AND EXPLORER IN AFRICA World’s fastest growing major copper mine with the highest grades World’s highest-grade zinc project OWNERSHIP: OWNERSHIP: KAMOA-KAKULA KIPUSHI Ivanhoe Mines (39.6%) Ivanhoe Mines (62%) Zijin Mining Group (39.6%) Gécamines (38%) Government of DRC
Slide 5: The World's Newest Diversified Major Miner
THE WORLD’S NEWEST DIVERSIFIED MAJOR MINER Ivanhoe will be a responsible, leading supplier of critical metals for the clean-energy transition, including copper, nickel, zinc and PGMs. EXPLORATION COMPLETION Q3 2024 FIRST PRODUCTION JUNE 2024 GROWING PRODUCTION WESTERN FORELANDS PLATREEF KIPUSHI KAMO
Slide 6: DRC: Awakening a Copper Giant
DRC: AWAKENING A COPPER GIANT Recently became the joint 2nd As the host country, and as a largest global copper producer shareholder of Kamoa Copper, the DRC sees this local value creation Abundant hydro-power capacity as a strategic imperative Median population age of 17 His Excellency Félix Tshise
Slide 7: Kamoa-Kakula
KAMOA-KAKULA The world’s fastest-growing, highest- Construction of Kamoa-Kakula’s Phase 3, grade, lowest-carbon major copper mine 5 Mtpa concentrator nears completion 7
Slide 8: Ivanhoe Mines' Kamoa-Kakula Copper Complex
IVANHOE MINES’ KAMOA-KAKULA COPPER COMPLEX The world’s fastest growing, highest grade, lowest-carbon, major copper mine Democratic Republic of the Congo is tied as world’s 2nd largest copper producer Mechanized underground mine; employing safe, modern mining methods The world’s third largest copper
Slide 9: Stakeholders Shared Value and Local Partnership
STAKEHOLDERS SHARED VALUE AND LOCAL PARTNERSHIP $2.8M INVESTED IN LOCAL BUSINESSES 20% OWNERSHIP Development of infrastructure and provision of DRC government direct farming and aquaculture inputs project shareholding $70M IN COMMUNITY SPEND total social and community development contribution to dat
Slide 10: 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 11: 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 12: High Grade Copper = Unrivaled Capital Returns
HIGH GRADE COPPER = UNRIVALED CAPITAL RETURNS US$3.6 billion of EBITDA US$ million generated in 2.5 years; higher than combined EBITDA: $3.6 billion Phase 1, 2 and 3 Capex of Capex: $3.5 billion US$3.5 billion $1,500 $1,681 Remaining capex for Phase 3 expansion, plus subsequent expansions to $700 be
Slide 13: Multi-Generational, World-Class Copper Complex
MULTI-GENERATIONAL, WORLD-CLASS COPPER COMPLEX 800 Kamoa-Kakula 2023 PEA 30-year Production Profile 700 600,000 tpa copper production Copper in Concentrate (kt) 600 500 400 NPV8%: $23.9 billion @ $4.00/lb. Cu 300 200 100 – 2025 2027 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 Kakula
Slide 14: Kamoa-Kakula: The World's Best Copper Mine
KAMOA-KAKULA: THE WORLD’S BEST COPPER MINE World’s projected top 20 copper mines in 2025, by key metrics 6.0% Bubble size: M&I Resource Kamoa-Kakula Copper Head Grade (%) 5.0% Kamoto 4.0% 3.0% Polish Copper 2.0% Oyu Tolgoi Grasberg Kansanshi Escondida 1.0% Collahuasi 0.0% 0 200 400 600 800 1,000 1,2
Slide 15: Kamoa-Kakula: The Greenest Major Copper Mine
KAMOA-KAKULA: THE GREENEST MAJOR COPPER MINE 2022 Scope 1, 2 & 3 copper GHG emissions intensity curve1 Kamoa-Kakula Copper Complex is the world’s 16 lowest carbon-emitting major copper mine Top 10 largest copper 14 mining operations (2022) Scope 1, 2 and 3 Emissions Intensity Scope 1, 2 and 3 carbon
Slide 16: New Smelter Brings Transformational Benefits
NEW SMELTER BRINGS TRANSFORMATIONAL BENEFITS ~$1 billion estimated capital cost for the massive, 100-hectare site 500,000 tonnes of 99+% pure blister anode copper production annually 650,000 to 800,000 tonnes of by- product acid production; in high demand in the DRC Volume of shipments per unit of c
Slide 17: Kamoa-Kakula C1 Cash Costs
KAMOA-KAKULA C1 CASH COSTS (Figures shown on 100% basis for Kamoa-Kakula) $4.50 $4.00 C1 Cash Cost (US$/lb.) $3.50 Completion and ramp up of direct-to-blister smelter to drive cash cost improvement to the first quartile $3.00 $2.50 $2.00 2023 C1 Cash Cost: >20% reduction following $1.45/lb. copper $
Slide 18: Kamoa-Kakula Phase 3 Expansion: First Concentrate
KAMOA-KAKULA PHASE 3 EXPANSION: FIRST CONCENTRATE Phase 3 expansion consists of 5 Mtpa concentrator, copper smelter and refurbishment of turbine #5 Phase 3 concentrator construction now complete, with first concentrate on track for June Smelter project 82% complete and on schedule for Q4 2024 comple
Slide 19: Kamoa-Kakula: Project 95 to Boost Recoveries
KAMOA-KAKULA:PROJECT 95 TO BOOST RECOVERIES “Project 95” launched to target increase of overall copper recoveries to 95%, up from 87% achieved in 2023 Based on 2023 recovery rate (above design rate of 86%), more than 50,000 tonnes of copper reported to tailings Test work using conventional fine grin
Slide 20: Shipments Commence Along Lobito Corridor
SHIPMENTS COMMENCE ALONG LOBITO CORRIDOR Dar es Salaam DRC TANZANIA G7 and EU join the US investment LOBITO RAIL CORRIDOR KAMOA partnership to accelerate the 2,466 km ANGOLA Roundtrip: ~40 days development of Lobito Railway Corridor Lobito KIPUSHI Rail to Lobito 1,739 km ZAMBIA First commercial expo
Slide 21: Western Forelands Exploration Project
WESTERN FORELANDS EXPLORATION PROJECT The next great copper frontier…
Slide 22: Western Forelands Overview
WESTERN FORELANDS OVERVIEW Same underlying geological sequence as Kamoa-Kakula 2,650km2 licence Western Forelands’ area; 7x larger than licences are 60 - 100% Kamoa-Kakula owned by Ivanhoe Mines mining right Over 48 million tonnes of copper discovered by Ivanhoe geologists since 2008 – over 2x globa
Slide 23: Makoko & Kiala Discoveries
MAKOKO & KIALA DISCOVERIES Makoko first drilled in 2018 – over 20km step-out from Kakula, with significant resource drilling in 2022-2023 Makoko Indicated Mineral Resource of 16Mt at 3.55% copper plus Inferred Mineral Resource of 154Mt at 1.97% copper (1.5% cut-off) Kiala contains Indicated Mineral
Slide 24: Makoko & Kiala: Exceptional Grade
MAKOKO & KIALA: EXCEPTIONAL GRADE Already the fourth-largest copper discovery in past decade Contained, M&I 30.0 4.0 Contained Copper in Resources (Mt) Contained, Inferred Copper Grade in Resources (%) 25.0 Grade, M&I (%) 3.0 20.0 Grade, Inferred (%) 15.0 2.0 10.0 1.0 5.0 -- -- *The Kamoa discovery,
Slide 25: Western Forelands: Kitoko Discovery
WESTERN FORELANDS: KITOKO DISCOVERY Kitoko is Ivanhoe’s fifth high-grade Core from Kitoko discovery hole DD008, highlighting two sedimentary copper discovery in the DRC layers of high-grade mineralization Discovery hole of 5.2 metres at 11.6% copper; 2 km strike delineated so far and open in all dir
Slide 26: 2024 Exploration Work Plan: Large-Scale Drill Program
2024EXPLORATION: 2024 WORK PLAN LARGE-SCALE DRILL PROGRAM • 2024 budget of $75 million (direct exploration & licence acquisitions) • 70,200m diamond drilling • 10 Diamond rigs • 16,000m already completed in 2024 (during wet season) • 24,480m air core drilling DRC Zambia
Slide 27: Kipushi
KIPUSHI Kipushi’s 800ktpa concentrator World’s highest-grade, lowest-carbon major zinc mine construction site, with Shaft P5 in the background
Slide 28: Kipushi: Historic, Ultra-High-Grade Zinc Deposit
KIPUSHI: HISTORIC, ULTRA-HIGH-GRADE ZINC DEPOSIT World’s top 10 major zinc mines (ranked by 2020 production) Brownfield, ultra-high-grade zinc mine with significant, rehabilitated 600 35 underground infrastructure Contained Zinc Production (kt) Contained zinc production (kt) 500 30 Ore milled head g
Slide 29: Kipushi: First Production Expected in June 2024
KIPUSHI: FIRST PRODUCTION EXPECTED IN JUNE 2024 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 29
Slide 30: 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 31: Kipushi: Strategic Partnership with Gécamines
KIPUSHI: STRATEGIC PARTNERSHIP WITH GECAMINES Agreement advancing for a new commercial DRC-Zambia border-crossing at Kipushi New border will benefit both the Kipushi Mine and Kamoa-Kakula as an additional route for exporting products from DRC Trucks fully-loaded with concentrate preparing to leave f
Slide 32: Platreef
PLATREEF Platreef Phase 1 800ktpa concentrator World’s largest precious metals development project construction site, with Shaft #1 and Shaft #2 in the background 32
Slide 33: Platreef: World's Largest Undeveloped Precious Metals Project
PLATREEF: WORLD’S LARGEST UNDEVELOPED PRECIOUS METALS PROJECT Multi-generational resource with significant exploration upside World’s best PGM project: highest margin and lowest cash costs Industry disruptor – safe, mechanized and highly productive mining Target to become the largest PGM mine; phase
Slide 34: Platreef: What Makes the Flatreef Unique?
PLATREEF: WHAT MAKES THE FLATREEF UNIQUE? 29 meters By way of visual comparison Khomanani Mine, Rustenburg Shaft 1 headframe, Platreef Deposit Merensky Reef / UG2 Flatreef(1) Bushveld Location Western / Eastern Limb Northern Limb Underground: narrow-reef, manual, Underground: efficient mechanised, M
Slide 35: Platreef: Shaft 2 Construction
PLATREEF: SHAFT 2 CONSTRUCTION Construction of Shaft #2 headgear 55% complete, installation of 1,124 tonnes of internal structural steel inside Shaft #2’s headgear advancing well Production winder and the main and material winder expected to be delivered in early Q3 2024 Reaming to initial diameter
Slide 36: 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 37: Platreef: Potential to Become Among the World's Largest Primary PGM Producers
PLATREEF: POTENTIAL TO BECOME AMONG THE WORLD’S LARGEST PRIMARY PGM PRODUCERS Platreef 2014 PEA 3PE+Au Production 2019 (Pd Eq. oz) (LoM Average) 1,600 3PE+Au Production Palladium Equivalent Production (koz) 1,400 Ni+Cu Production Ni+Cu Production 2019 (Pd Eq. oz) Platreef 1,200 2022 FS (Phase 2) 1,0
Slide 38: Platreef: Industry Leading Cash Cost
PLATREEF: INDUSTRY LEADING CASH COST Global primary PGM producer net total cash cost + sustaining capital (2021), US$/3PE+Au oz Quartile 1 Quartile 2 Quartile 3 Quartile 4 1,800 1,600 Platreef 2022 FS 1,400 cash cost: US$514/oz 3PE+Au 1,200 US$/3PE+Au 1,000 800 600 400 200 0 Western Limb Eastern Lim
Slide 39: Three long-life, world-class Robust, experienced Committed support from key Strong balance sheet with 2024
29 Cu Three long-life, world-class Robust, experienced Committed support from key Strong balance sheet with 2024 production guidance mines with low costs, low management team with an partners CITIC and Zijin cash & cash equivalents of of 440kt to 490kt of copper capital intensity and established tra
Slide 40: 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 $575 million 2.50% convertible Kamoa-Kakula notes due 2026 P
Slide 41: Significant Cash Flow Attributable to Ivanhoe
SIGNIFICANT CASH FLOW ATTRIBUTABLE TO IVANHOE As at Shareholder Loan Balances March 31, 2024 ($ 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 42: 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