Ivanhoe Mines Issues 2015 Year-End Results and Review of Operations

March 24, 2016

IVANHOE MINES ISSUES 2015 YEAR-END RESULTS AND REVIEW OF OPERATIONS

Mine construction and upgrading activities at Ivanhoe’s three key development projects in Sub-Saharan Africa highlight Ivanhoe’s achievements in 2015

TORONTO, CANADA ‒ Ivanhoe Mines (TSX: IVN) today announced its financial results for the year ended December 31, 2015. All figures are in US dollars unless otherwise stated. Ivanhoe Mines is a Canadian mining company focused on advancing its three mine-development projects in Sub-Saharan Africa: the Platreef platinum-palladium-gold-nickel-copper discovery in South Africa; and the Kipushi zinc-copper-lead-germanium mine and the Kamoa copper discovery in the DRC.

HIGHLIGHTS

• On December 8, 2015, Ivanhoe Mines and Zijin Mining Group Co. Ltd., of China, completed

a landmark, strategic co-development transaction on the Kamoa Copper Project in the Democratic Republic of Congo (DRC) whereby Zijin, through a subsidiary company, acquired a 49.5% interest in Kamoa Holding Limited for a total of $412 million in a series of payments. Ivanhoe received an initial $206 million from Zijin on December 8, 2015; the remaining $206 million will be received in five equal installments, payable every 3.5 months from December 8, 2015. In addition, Ivanhoe sold a 1% share interest in Kamoa Holding to privately-owned Crystal River Global Limited for $8.32 million.

• The first installment payment from Zijin, in the amount of $41.2 million, was received by

Ivanhoe Mines on March 23, 2016.

• In an earlier, separate transaction, on April 20, 2015, Zijin Mining Group completed a

private placement to help advance Ivanhoe’s three mine-development projects in Africa.

Zijin acquired approximately 9.9% of Ivanhoe Mines’ issued and outstanding common shares at a price of C$1.36 per share. The placement provided Ivanhoe Mines with gross proceeds of approximately C$105 million.

• Ivanhoe Mines recorded a total comprehensive profit of $668.3 million for the year ending

December 31, 2015. The profit was attributable mainly to the gain on the partial sale of Kamoa Holding of $357.7 million and the re-measurement to fair value of the interest retained in the joint venture of $376.1 million.

• On January 25, 2016, the Kamoa exploration team reported a new discovery at its Kakula

Prospect. The Kakula Discovery is situated within the 400-square-kilometre Kamoa Mining Licence area and represents a major extension of the Kamoa copper deposit, which the company discovered in 2008. Two exploration drill holes completed in late 2015 in the Kakula exploration area — DD996 (13.14 metres true width of 5.26% copper) and DD997 (14.94 metres true width of 5.33% copper) — rank among the highest-grade and highest- grade-thickness intersections drilled to date within the Kamoa copper deposit licence area.

• On February 23, 2016, Ivanhoe Mines reported the positive findings of an independent pre-

feasibility study (PFS) for the first phase of development of the Kamoa Copper Project.

First phase of development envisages an annual production rate of three million tonnes of ore per annum at an average grade of 3.86% copper over a 24-year mine life, resulting in annual copper production of approximately 100,000 tonnes. Initial capital costs, including contingency, is estimated at $1.2 billion, approximately $200 million lower than estimated in the Kamoa 2013 preliminary economic assessment (PEA).

• Construction work on the twin declines at Kamoa began in March 2016. The declines are

designed to intersect the high-grade copper mineralization in the initial mining area at Kansoko Sud, approximately 150 metres below surface. Ivanhoe's drilling program in this area defined a thick, near-surface zone of high-grade copper mineralization, where a drill hole intercepted 15.7 metres (true width) of 7.04% copper. Byrnecut Underground Congo SARL (BUCS) was awarded the contract for the permanent support of the box-cut walls and the initial 1.2 kilometres of development for each of the two declines.

• Also in the DRC, on January 27, 2016, Ivanhoe Mines announced the receipt of a new,

independent, Mineral Resource estimate for the company’s historic, high-grade, Kipushi zinc-copper-germanium-lead-silver mine. Kipushi’s Big Zinc Zone is estimated to contain Measured and Indicated Mineral Resources of 10.2 million tonnes at 34.89% zinc, containing 7.8 billion pounds of zinc and adjacent zones of copper-rich mineralization containing Measured and Indicated Mineral Resources of 1.6 million tonnes at 4.01% copper, containing 144 million pounds of copper.

• With a current Mineral Resource now established at Kipushi, Ivanhoe Mines is continuing

its upgrading work at the mine and evaluating technical and infrastructure options to best advance the project. A preliminary economic assessment is expected to be finalized in the near future.

• At the Platreef PGM Project in South Africa, Shaft 1 development has made good progress.

Pre-sinking of the shaft has been completed to a depth of 54 metres below surface. The changeover from pre-sinking activities to main-sinking activities is expected to be completed by April 2016, which will enable the start of the main sinking. Aveng Mining, the shaft sinking contractors, expects to sink at a daily average rate of approximately 2.5 metres. Shaft 1 is expected to reach the Flatreef Deposit at a depth of 777 metres below surface by late 2017.

• The headgear design for the six-million-tonne-per-year permanent hoisting facility for

Platreef’s Shaft 2 has been completed by South Africa-based Murray & Roberts Cementation. Ivanhoe expects to start Shaft 2 early works in 2017, including civil work for the box cut and hitch foundation.

• Ivanhoe announced in February 2015 that Ivanplats, Ivanhoe’s 64%-owned subsidiary that

owns the Platreef Project, had achieved Level 3 status in its first verification assessment on a broad-based, black economic empowerment scorecard, the highest-ranking platinum- sector mining company in compliance with South Africa’s black empowerment laws. Ivanplats again achieved Level 3 status in February 2016, further demonstrating the company’s dedication and commitment toward transformation on all levels of business.

• The three projects achieved a combined nine million hours of lost-time-injury-free (LTIF)

work by the end of 2015, reflecting, in part, the company’s continued efforts to prioritize the management of health and safety on its job sites. Ivanhoe had recorded 0.5 million LTIF hours at Platreef, 4.56 million hours at Kamoa and 3.90 million hours at Kipushi to the end of 2015. The Platreef Project reported two lost-time injuries in Q4 2015.

Principal Projects and Review of Activities

1. Platreef Project

64%-owned by Ivanhoe Mines South Africa

The Platreef Project in South Africa’s Limpopo Province is owned by Ivanplats (Pty.) Ltd., which is 64%owned by Ivanhoe Mines. A Japanese consortium of ITOCHU Corporation and its affiliate, ITC Platinum, plus Japan Oil, Gas and Metals National Corporation and JGC Corporation, owns a 10% interest in Ivanplats, which it acquired in two tranches for a total investment of $290 million.The remaining 26% interest is held by Ivanhoe’s broad-based, black economic empowerment partners, which include communities, employees and entrepreneurs.

Ivanhoe announced in February 2015 that Ivanplats had achieved Level 3 status in its first verification assessment on a B-BBEE scorecard, the highest-ranking platinum-sector mining company in compliance with South Africa’s black empowerment laws. Ivanplats again achieved Level 3 status in February 2016, further demonstrating the company’s dedication and commitment toward transformation on all levels of business.

The Platreef Project hosts an underground deposit of thick, platinum-group metals, nickel, copper and gold mineralization in the Northern Limb of the Bushveld Igneous Complex, approximately 280 kilometres northeast of Johannesburg and eight kilometres from the town of Mokopane in Limpopo Province.

Figure 1: Aerial view of the Platreef Project site.

Health and safety at Platreef

The Platreef Project reached 5,379,302 million hours worked by February 29, 2016. The project recorded 4.8 million lost-time-injury-free hours at Platreef up until the end of Q3 2015. Two unfortunate lost-time injuries (LTIs) were recorded in October 2015 and since then, the project has recorded more than 750,000 worker hours without a LTI. The Platreef Project continues to strive toward its workplace objective of an environment that causes zero harm to employees, contractors, sub-contractors and consultants.

Shaft 1 construction

Shaft 1 development has made good progress. The pre-sinking activities have been completed and the shaft depth was 54 metres below surface on February 15, 2016. The changeover from pre-sinking activities to main sinking activities is expected to be completed by April 2016, which will enable the start of the main sinking. Aveng Mining, the shaft-sinking contractor, expects sinking to advance at an average daily rate of approximately 2.5 metres. Shaft 1 is expected to reach the Flatreef Deposit at a depth of 777 metres below surface by late 2017. Sinking will continue to a planned final depth of 975 metres below surface. Development work will include three stations at depths of 450 metres, 750 metres and 850 metres below surface.

Work has been completed on the internal electricity substation, which will have a capacity of five million volt-amperes (MVA). Construction is underway on the power transmission lines from Eskom, the South African public electricity utility, which will supply the electrical power to be used for the sinking of Shaft 1. Back-up generators have been installed to ensure continuous sinking operations even if the power supply from Eskom is interrupted.

Figure 2: Lowering of the five-deck stage and bank steelwork into Shaft 1.

Figure 3: Construction of headgear for main sinking operations.

Figure 4: Shaft 1 main-sink headgear.

Figure 5: Internal view of shaft-sinking activities during the pre-sink phase.

Other on-site work includes the construction of the primary terraces for Shaft 1, storm-water drains and ponds, workshops and stores. A total of 511, or 74%, of the 693 permanent and contract workers presently employed by Ivanplats are from the local area.

Platreef implementing a phased approach to a large, underground, mechanized mine

Ivanhoe completed a pre-feasibility study (PFS) in January 2015 that covered the first phase of development that is expected to include construction of an underground mine, concentrator and other associated infrastructure.

In August 2015, Ivanhoe started work on a feasibility study (FS) based on the first phase of development. The FS is being managed by principal consultant, DRA Global, along with other specialized sub-consultants including Stantec Consulting, Murray & Roberts Cementation, SRK, Golder Associates and Digby Wells Environmental. The FS is scheduled to be completed by Q2 2017.

There will be opportunities to refine and modify the timing and capacities of subsequent phases of production to suit market conditions during the development and commissioning of the first phase.

Mineral resources in the Flatreef underground discovery

The Flatreef Mineral Resource, with a strike length of 6.5 kilometres, lies predominantly within a flat-to- gently dipping portion of the Platreef mineralized belt at relatively shallow depths of approximately 700 to 1,100 metres below the surface.

The Flatreef Deposit is characterized by its very large vertical thicknesses of high-grade mineralization and a platinum-to-palladium ratio of approximately 1:1, which is significantly higher than other recent PGM discoveries on the Bushveld’s Northern Limb. The grade shells used to constrain mineralization in the Flatreef Indicated Mineral Resource area have average true thicknesses of approximately 24 metres at a cut-off grade of 2.0 grams per tonne (g/t) of platinum, palladium and gold (2PE+Au). The Indicated Mineral Resource grade at an equivalent 2.0-gram-per-tonne 3PE+Au cut-off is 4.1 g/t 3PE+Au, 0.34% nickel and 0.17% copper. Flatreef’s Indicated Mineral Resources of 214 million tonnes contain an estimated 28.5 million ounces of platinum, palladium, gold and rhodium, 1.6 billion pounds of nickel and 0.8 billion pounds of copper. Ivanhoe has declared an initial Probable Mineral Reserve of 15.5 million ounces of platinum, palladium, rhodium and gold, using a declining Net Smelter Return (NSR) cut-off of $100/t-$80/t.

Planned mining methods

The selected mining areas in the current Platreef mine plan occur at depths ranging from approximately 700 metres to 1,200 metres below the surface. The main access to the ore body and ventilation system is expected to be comprised of four vertical shafts. Shaft 2 will host the main personnel transport cage, material and ore-handling systems, while Shafts 1, 3 and 4 will be utilized for ventilation to the underground workings. Shaft 1, now under development, will be used for initial access to the ore body and early underground development.

Mining will be performed using highly productive, mechanized methods, including long-hole stoping, drift-and-bench and drift-and-fill mining methods. The mined-out areas within the ore body will be backfilled with a paste mixture that utilizes tailings from the process plant and cement. The ore will be hauled from the stopes to a series of ore passes that connect to a main haulage level, which will be connected to Shaft 2, where it will be hoisted to the surface for further processing.

Figure 6: Final design of Shaft 2 headgear.

Shaft 2 will have an internal diameter of 10.0 metres and will be capable of hoisting six million tonnes per year. The headgear design for the six-million-tonne-per-year permanent hoisting facility has been completed by South Africa-based Murray & Roberts Cementation. Ivanhoe expects to start Shaft 2 early works in 2017, including civil work for the box-cut and hitch-foundation.

Bulk water and electricity supply

The Olifants River Water Resource Development Project (ORWRDP) is designed to deliver water to the Eastern and Northern limbs of South Africa’s Bushveld Igneous Complex. The project consists of the new De Hoop Dam, the raised wall of the Flag Boshielo Dam and related pipeline infrastructure that ultimately will deliver water to Pruissen, southeast of the Northern Limb. The Pruissen Pipeline Project will be developed to deliver water onward from Pruissen to the municipalities, communities and mining projects on the Northern Limb. Ivanhoe is a member of the ORWRDP’s Joint Water Forum. The Minister of Water & Sanitation has directed that the Trans-Caledon Tunnel Authority will serve as the implementing agent for the outstanding phases of the ORWRDP scheme, which include the Phase 2B pipeline from Flag Boshielo Dam to Mokopane.

Participants in the water development scheme are required to indicate their water requirements so that the total water demand may be calculated relative to the scheme’s capacity. The Platreef Project’s water requirement for the first phase of development is projected to peak at approximately 10 million litres per day. Ivanhoe also is continuing to investigate various alternative bulk water sources, including bulk grey water allocations from local municipalities.

The Platreef Project’s electricity requirement for a four-million-tonne-per-year underground mine, concentrator and associated infrastructure has been estimated at approximately 100 million voltamperes (MVA). As power is required for the initial mine development work, including shaft sinking, before the main power supply becomes available, an agreement with Eskom has been reached for the supply of 5MVA of temporary construction power. Ivanhoe opted for a self-build option for the permanent power, which enables Ivanhoe to manage the construction of the distribution lines from the Eskom Borutho sub-station to the Platreef Mine.

Figure 7: Construction of the Eskom Borutho substation.

Development of human resource and job skills

Work is progressing well on the further implementation of Ivanhoe’s Social and Labour Plan (SLP), to which the Company has pledged a total of R160 million ($10 million) during the first five years, until November 2019. The approved plan includes R67.2 million ($4 million) for the development of job skills among local residents and R87.7 million ($6 million) for local economic development projects.

Additional internal training is planned to provide members of the current workforce with opportunities to expand their skills.

Adult basic education and training for the communities has begun in four community centres run by the Department of Higher Education and Training, forging a partnership between Ivanhoe and the Department.

The first 80 students to participate in Platreef’s non-core training program started their training at the beginning of March 2016. Further related training programs are planned later in the year.

Ivanhoe awarded five fully-paid bursaries to local university students in 2015. To date in 2016, Ivanhoe awarded fully-paid bursaries to seven local university students in diverse disciplines. Ivanhoe also is investing in developing local artisans by establishing fully paid community Learnerships in Engineering.

Ivanhoe’s R24 million ($2 million) partnership between South Africa’s University of Limpopo and Laurentian University in Canada to develop and equip Limpopo University's geology department is well underway. A principal goal of the five-year partnership, which is renewable for a further five years, is to develop and equip the University of Limpopo’s geology department to become a centre of excellence in geosciences. Combined with a scholarship awarded to Laurentian by the International Development Research Centre, these funds will create educational opportunities for 35 University of Limpopo students to study in Canada. Ivanhoe also will provide in-service training opportunities for students from both universities and assist them in conducting research on the Northern Limb of the Bushveld Complex.

2. Kipushi Project

68%-owned by Ivanhoe Mines Democratic Republic of Congo (DRC)

The Kipushi copper-zinc-germanium-lead mine, in the Democratic Republic of Congo (DRC), is adjacent to the town of Kipushi and approximately 30 kilometres southwest of Lubumbashi. It also is located on the Central African Copperbelt, approximately 250 kilometres southeast of Ivanhoe’s Kamoa Project, and less than one kilometre from the Zambian border. Ivanhoe acquired its 68% interest in the Kipushi Project in November 2011; the balance of 32% is held by the state-owned mining company, La Générale des Carrières et des Mines (Gécamines).

Health and safety at Kipushi

The Kipushi Project achieved a total of 3,905,536 lost-time-injury-free hours (1,244 days) to the end of Q4 2015. Malaria remains the most frequent health concern at Kipushi; during 2015, there was an average of 11 cases each month among employees. In an effort to reduce the incidence of malaria in the Kipushi community, a Water Sanitation and Health (WASH) program has been initiated in cooperation with the Territorial Administrator and the local community. The main emphasis in the program’s first phase is cleaning storm drains in the municipality to prevent the accumulation of ponded water, where malarial mosquitos breed.

Following DRC government approval of the Fionet program, training of medical staff at medical service providers in the Kipushi Health Zone on the use of the Deki™ rapid malaria test reader started in December 2015 and will continue on an ongoing basis. The objective is to establish the Fionet program in 37 medical centres in the Kipushi Health Zone. The program eventually will be rolled out to 300 clinics in the Haut-Katanga province.

Figure 8: Training on usage of the Fionet Deki™ Rapid Malaria Test reader at the Cinquantenaire Hospital in Kipushi.

37 Sites Kipushi Health Zone

Figure 9: Community relations officer Olivia Simamba assisting with the government-sponsored oral polio vaccine program.

42,398 children OPV vaccinated In Kipushi Health Zone

Project development and infrastructure

Work began in March 2014 on the underground diamond-drilling program at the Kipushi Project, a major advance made possible by the successful dewatering program directed by Ivanhoe Mines during the previous three years following the company’s acquisition of the historic mine in November 2011.

The mine, which had been placed on care and maintenance in 1993, flooded in early 2011 due to a lack of pump maintenance over an extended period. At its peak, water reached 851 metres below the surface level. A major milestone was reached in December 2013 when Ivanhoe restored access to the mine’s principal haulage level at 1,150 metres below the surface. Since then, crews have been upgrading underground infrastructure to permanently stabilize the water levels and support the drilling program.

Recent improvements on Shaft 5 included dewatering to expose the main pump station at the 1,200metre-level, installation of new hoist ropes on the Shaft 5 Maryanne rescue hoist, stripping of the 1,200metre-level pump station and refurbishment and commissioning of the friction-reeler gearbox. Other improvements included the design and construction of permanent dams and pumping infrastructure at the 1,112-metre-level Cascade shaft complex, the completion of emergency exit ladders and platforms in shafts P2, P3 and P15, the installation of an emergency hoist in Shaft 3 and safety-cage door interlocks in shafts P2, P3 and P5 Maryanne.

Water levels were stabilized below the 1,150-metre-level haulway and the 1,272-metre-level hangingwall drift, enabling access for the drilling program that targeted the Série Récurrente, Fault and Big Zinc zones. The exploration drilling program has been completed and an updated resource has been declared on the previously underexplored Big Zinc deposit. A preliminary economic assessment for the Kipushi Project is being finalized and is expected to be published in the near future.

In March 2016, ongoing pumping succeeded in lowering the water in Shaft 5 below the 1,230-metrelevel to facilitate cleaning out of the shaft bottom in advance of the installation of new hoist ropes on the personnel cage, as well as repairs and upgrades to the hoisting infrastructure.

Figure 10: Sulzer centrifugal pump at the 1,200-metre-level pump station in Shaft 5.