Ivanhoe Mines Issues 2022 Fourth Quarter and Annual Financial Results, plus Overview of Construction and Exploration Activities

Kamoa-Kakula Copper Complex sold 323,733 tonnes of payable copper in 2022 and recognized record annual revenue of $2.15 billion and record EBITDA of $1.39 billion

Ivanhoe Mines recognized a record profit of $434 million in 2022, driven by record income from the Kamoa-Kakula joint venture of $405 million

Kamoa-Kakula’s 2022 cost of sales total $1.09 per lb. of payable copper; C1 cash costs of $1.39 per lb. within guidance

Kamoa-Kakula sold 92,208 tonnes of payable copper in Q4 2022 for record quarterly revenue of $673 million and record EBITDA of $451 million at a margin of 67%

Kamoa-Kakula’s Phase 3 expansion on target for Q4 2024 completion; increasing copper production to a ten-year average of 620,000 tonnes per annum,
at C1 cash cost of $1.22/lb.

Ivanhoe Mines commences optimization work to accelerate Phase 2 expansion of the Tier-One Platreef palladium, nickel, platinum, rhodium, copper and gold mine in South Africa; Phase 1 on target for first production in Q3 2024

Construction ongoing at ultra-high-grade Kipushi zinc-copper-germanium-silver mine; on track for Q3 2024 production

Johannesburg, South Africa–(Newsfile Corp. – March 13, 2023) – Ivanhoe Mines (TSX: IVN) (OTCQX: IVPAF) today announced its financial results for the year ended December 31, 2022. Ivanhoe Mines is a leading Canadian mining company that is advancing its four principal mining and exploration projects in Southern Africa: the Phase 3 expansion of the Kamoa-Kakula Copper Complex in the Democratic Republic of Congo (DRC) that commenced commercial operations in July 2021; the construction of the Platreef palladium, nickel, platinum, rhodium, copper and gold project in South Africa, scheduled for first production in the third quarter of 2024; the restart of the historic Kipushi zinc-copper-lead-germanium mine in the DRC, also scheduled for first production in the third quarter of 2024; and the exploration for new copper discoveries on Ivanhoe’s 2,407-square-kilometre Western Foreland exploration project, which is adjacent to Kamoa-Kakula. All figures are in U.S. dollars unless otherwise stated.

FINANCIAL HIGHLIGHTS

• Ivanhoe Mines reported a record profit of $434 million for 2022, compared with a profit of $45 million for 2021. Ivanhoe’s profit in Q4 2022 was $37 million compared to a profit of $24 million in Q3 2022.

• Kamoa-Kakula sold 323,733 tonnes of copper in 2022, and recognized record revenue of $2.15 billion, record operating profit of $1.27 billion and record EBITDA of $1.39 billion.

• During Q4 2022, Kamoa-Kakula sold 92,208 tonnes of payable copper and recognized record revenue of $673 million, record operating profit of $418 million and record EBITDA of $451 million.
• Kamoa-Kakula’s cost of sales per pound (lb.) of payable copper sold was $1.08/lb. for Q4 2022 compared with $1.05/lb. in Q3 2022. Cash costs (C1) per pound of payable copper produced in Q4 2022 totalled $1.42/lb., compared to $1.43/lb. in Q3 2022.

• Ivanhoe Mines presents adjusted EBITDA for the group of $489 million for 2022, and $162 million for Q4 2022, which includes an attributable share of EBITDA from Kamoa-Kakula.

• Since entering Phase 1 commercial production on July 1, 2021, the Kamoa-Kakula joint venture has generated $1.22 billion of net cash from operating activities, which has funded both the Phase 2 and Phase 3 expansion activities to date.

• Ivanhoe Mines has a strong balance sheet with cash and cash equivalents of $597 million on hand as at December 31, 2022, and total debt of $739 million, the majority of which relates to the $575 million of unsecured 2.5% convertible notes that mature in April 2026, unless redeemed earlier.

OPERATIONAL HIGHLIGHTS

• Production at the Kamoa-Kakula Copper Complex for the fourth quarter of 2022 was 92,761 tonnes of copper in concentrate.

• The debottlenecking program of Kamoa-Kakula’s Phase 1 and Phase 2 concentrators was completed ahead of schedule, increasing nameplate processing capacity by 22% to a combined total of 9.2 million tonnes of ore per annum. The final installation and commissioning of a fourth Larox filter press are now also complete, increasing copper production capacity to 450,000 tonnes per annum.

• Kamoa-Kakula’s Phase 3 expansion, 500,000-tonne-per-annum on-site, direct-to-blister copper smelter and refurbishment of Turbine #5 at the Inga II hydroelectric facility are all advancing on schedule and are expected to be complete in late 2024. At current copper prices, it is expected that cashflow from Kamoa-Kakula’s Phase 1 and Phase 2 operations will be sufficient to fund the 2023 and 2024 expansion capital cost requirements of $2.53 billion.

• In January 2023, Ivanhoe Mines announced outstanding economic results of an updated, independent Integrated Development Plan (2023 IDP) for the world-leading Kamoa-Kakula Copper Complex. The Pre-Feasibility Study (PFS) for a phased expansion from 9.2 to 19.2 million tonnes per annum yields an after-tax NPV8% of approximately $19 billion, over a 33-year mine life. Kamoa-Kakula to rank as the fourth largest copper producer globally from 2025, with lowest-quartile C1 cash costs.

• Ivanhoe continues its expansive copper exploration program on its Western Foreland licences that cover approximately 2,407 square kilometres adjacent to Kamoa-Kakula. The 2023 exploration program is budgeted at approximately $19 million and includes up to 70,000 metres of total drilling.

• In mid-2023, Ivanhoe plans to release a maiden Mineral Resource estimate for its Makoko and Kiala high-grade copper discoveries in the Western Foreland, to be followed by a Preliminary Economic Assessment.

• Ivanhoe has commenced an optimization study at its Tier-One Platreef palladium, nickel, platinum, rhodium, copper and gold mine in South Africa to potentially accelerate production from the Phase 2 expansion. The study will consider the implications of converting the 5.1-metre-diameter ventilation shaft (Shaft 3), which is under construction, to a production shaft with the capability to hoist.

• Underground development work at Platreef continues to focus on establishing underground infrastructure on the 750-metre, 850-metre and 950-metre levels around Shaft 1, as well as developing towards the first reef and stoping areas on all three levels. Mine development across all three levels has progressed well, with more than 750 metres of lateral development completed to date. The first concentrate is scheduled for Q3 2024.

• The pilot drilling required for the raise-boring of Platreef’s Shaft 2 commenced in February 2023. Headgear construction began in November 2022 with more than 70 metres of the 104-metres completed to date. In addition, raise boring of Shaft 3 also commenced in February 2023.

• Surface earthworks and civil works for the Kipushi concentrator continue on schedule, with over 1,700 cubic metres of foundation concrete poured to date. First concentrate is on track for Q3 2024.

• Underground mine development around Kipushi’s Big Zinc orebody is advancing ahead of schedule. Development waste, as well as low-grade mineralized rock from the advancement of the perimeter and access drives surrounding the Big Zinc orebody, is being hoisted to the surface and stockpiled.

• At the end of December 2022, Kamoa-Kakula achieved 1.53 million work hours free of a lost-time injury. Zero lost time injuries have been recorded on the construction projects of the Phase 3 expansion, smelter construction and Inga II Turbine #5 refurbishment. In addition, the Platreef Project reached 408,360 hours worked free of a lost-time injury, and the Kipushi Project reached 658,142 hours worked free of a lost-time injury.
• According to estimates by the United States Geological Survey, the Democratic Republic of the Congo is now the World’s second-largest copper-producing country, tied with Peru, having produced 2.2 million tonnes in 2022. This achievement would not be possible without Kamoa-Kakula, the fastest-growing major copper mine on the planet.