IVN.TO · 2017-05-17 12:00:00

Ivanhoe Mines announces independent confirmation that the Kakula Discovery contains Indicated Mineral Resources of 116 million tonnes at 6.09% copper, plus Inferred Resources of 12 million tonnes at 4.45% copper, at a 3% cut-off

Drill Results Resource Estimates

May 17, 2017

Ivanhoe Mines announces independent confirmation

that the Kakula Discovery contains Indicated Mineral Resources

of 116 million tonnes at 6.09% copper, plus Inferred Resources

of 12 million tonnes at 4.45% copper, at a 3% cut-off

The Kakula Discovery in D.R. Congo remains open

for significant expansion in multiple directions

Kakula’s new estimate boosts combined Kamoa-Kakula

Indicated Mineral Resources to approximately ONE BILLION tonnes

at 3.02% copper, plus another 191 million tonnes

of Inferred Resources at 2.37% copper, at a 1.4% cut-off

Twelve drill rigs rapidly expanding bonanza-grade

copper resources along the Kakula trend,

including the new Kakula West Discovery

KOLWEZI, DEMOCRATIC REPUBLIC OF CONGO – Robert Friedland, Executive Chairman

of Ivanhoe Mines (TSX: IVN; OTCQX: IVPAF), and Lars-Eric Johansson, Chief Executive

Officer, announced today that the company has completed an independently verified,

updated Mineral Resource estimate for the extremely-high-grade Kakula Discovery on the

tier one Kamoa-Kakula Copper Project, near the mining centre of Kolwezi in the

Democratic Republic of Congo (DRC). The Kamoa-Kakula Project is a joint venture

between Ivanhoe Mines, Zijin Mining and the government of the Democratic Republic of

Congo.

The new Mineral Resource estimate covers a strike length of approximately 7.7

kilometres along the eastern section of the Kakula Discovery. It boosts the tonnage of

Kakula’s estimated Indicated Resources by 75% compared to the October 2016 resource

estimate – which covered a strike length of 4.1 kilometres.

Kakula’s Indicated Resources increased by 50 million tonnes, to the current total of 116

million tonnes at 6.09% copper, at a 3% cut-off grade. This compares to 66 million tonnes

at 6.59% copper estimated in October 2016, also at a 3% cut-off grade.

Kakula’s new estimated Inferred Resources are an additional 12 million tonnes at 4.45%

copper, at a 3% cut-off.

“With 12 rigs currently drilling at Kakula and Kakula West and another two rigs about to

begin testing important new targets on the licence area, Kakula is an international story

of discovery that has earned the mining world’s attention,” said Mr. Friedland.

“To keep the mine-planning process driving forward, we need to provide the mining

engineers with updated resource numbers for the expanded-case preliminary economic

assessment due to be issued in the third quarter.”

Mr. Johansson said that the copper grades at Kakula are significantly higher than the

average grades found at the adjacent, earlier Kamoa Discovery. “We’re highly confident

that fast-tracking mine development at Kakula will have a profound, positive impact on

the economics of the overall Kamoa-Kakula Project.

“Kakula alone already has enough resources, grading 6% copper or higher, to maintain

approximately 20 years of mining at a rate of six million tonnes per year. We’re also

confident that Kakula West has similar potential.”

The new Kakula resource estimate covers approximately two thirds of the known strike

extent of the high-grade, chalcocite-rich Kakula trend, which now is approaching 12

kilometres, and remains open along strike in both directions.

Kamoa-Kakula geologists now are planning for a resource estimate at the newly

discovered Kakula West area, located approximately three kilometres west of the new

Kakula resource boundary. Excellent visual drill intercepts at Kakula West show a rapidly

expanding area of shallow copper mineralization characterized by finely disseminated

chalcocite in siltstone and maroon diamictite. The style and the overall geometry of

mineralization at Kakula West are typical of the high-grade Kakula trend to the east.

The Kakula Discovery is approximately 10 kilometres southwest of Kamoa’s initial

Kansoko Mine development. Ivanhoe and Zijin have been conducting an aggressive

drilling program at the Kakula Discovery since April 2016. More than 85,000 metres of

drilling have been completed. Given the outstanding success to date in delineating high-

grade copper resources, the Kakula drilling program is expected to continue throughout

2017.

Nearly 200 square kilometres of the approximately 400-square-kilometre Kamoa-Kakula

Project area remain untested. The Kamoa-Kakula geology team, with the assistance of its

technical advisors, has intensively evaluated the structural and stratigraphic controls on

mineralization of the broader Kamoa-Kakula basin. This work has highlighted at least

nine high-priority targets located in the untested areas of the Kamoa-Kakula Project that

are planned to be drill tested this year.

“The potential exists to find another Kakula. Or perhaps something even better,” Mr.

Friedland said.

Figure 1. Kamoa-Kakula mining licence shows the Kamoa and Kakula Indicated

and Inferred Mineral Resource areas, and the Kakula West Discovery.

The Kakula Mineral Resource estimate was prepared by Ivanhoe Mines under the

direction of Dr. Harry Parker and Gordon Seibel, both RM SME, of Amec Foster Wheeler,

of Reno, Nevada, in accordance with the 2014 CIM Definition Standards for Mineral

Resources and Mineral Reserves. Dr. Parker and Mr. Seibel are the Qualified Persons for

the estimate, which has an effective date of May 16, 2017.

Highlights include:

 Indicated Mineral Resources total 349 million tonnes at a grade of 3.23% copper,

containing 24.9 billion pounds of copper at a 1% copper cut-off. At a 2% copper cut-

off, Indicated Mineral Resources total 210 million tonnes at a 4.41% copper grade,

containing 20.4 billion pounds of copper. At a higher cut-off of 3% copper, Indicated

Mineral Resources total 116 million tonnes at a grade of 6.09% copper, containing

15.6 billion pounds of copper.

 Inferred Mineral Resources total 59 million tonnes at a grade of 2.26% copper,

containing 3.0 billion pounds of copper at a 1% copper cut-off. At a 2% copper cut-

off, Inferred Mineral Resources total 27 million tonnes at a 3.19% copper grade,

containing 1.9 billion pounds of copper. At a higher cut-off of 3% copper, Inferred

Mineral Resources total 12 million tonnes at a grade of 4.45% copper, containing 1.1

billion pounds of copper.

 The average true thickness of the selective mineralized zone (SMZ) at a 1% cut-off is

12.0 metres in the Indicated Mineral Resources area and 6.4 metres in the Inferred

Mineral Resources area. At a higher 3% cut-off, the average true thickness of the SMZ

is 5.3 metres in the Indicated Mineral Resources area and 3.9 metres in the Inferred

Mineral Resources area.

A technical report on the new resource estimate will be filed on SEDAR at

www.sedar.com and on the Ivanhoe Mines website at www.ivanhoemines.com within 45

days of the issuance of this news release.

The Kakula Mineral Resources are defined within an area covering a total area of 12.8

square kilometres at a 1% copper cut-off. The total areal extent of Indicated Mineral

Resources is 9.8 square kilometres at a 1% copper cut-off and the areal extent of the

Inferred Mineral Resources is 3.0 square kilometres at a 1% cut-off. The average dip of

the mineralized zone in the Indicated Resources area is 15 degrees, while the average dip

is 18 degrees in the Inferred Mineral Resources area.

The Kakula Discovery remains open for significant expansion along trend to the west and

the southeast, while the remainder of the southern parts of the Kamoa-Kakula mining

licence area remains virtually untested (see figures 2 and 3). Twelve rigs now are drilling

in the Kakula Discovery Area and more than 25,000 metres have been drilled at Kakula

since the start of the year.

The May 2017 Kakula Mineral Resource estimate is based on the results from

approximately 61,400 metres of drilling in 121 holes. The May 2017 estimate includes drill

holes completed by April 18, 2017 in the eastern section of the high-grade, chalcocite-

rich Kakula trend; it does not include any holes drilled in the new Kakula West Discovery

area. The October 2016 Kakula Mineral Resource estimate was based on results from

approximately 24,000 metres of drilling in 65 holes.

Indicated Resources are defined when the drill-hole spacing approximates a 400-metre

grid, while Inferred Resources are defined when the drill-hole spacing approximates an

800-metre grid.

The May 2017 Kakula Mineral Resource estimate was prepared by Ivanhoe Mines under

the direction of Dr. Harry Parker and Gordon Seibel, both RM SME, of Amec Foster

Wheeler. Dr. Parker and Mr. Seibel are the Qualified Persons for the estimate, which has

an effective date of May 16, 2017. A technical report will be filed on SEDAR at

www.sedar.com and on the Ivanhoe Mines website at www.ivanhoemines.com within 45

days of the issuance of this news release.

The May 2017 Kakula Mineral Resources, along with sensitivities at various cut-offs, are

shown in tables 1, 2 and 3.

Table 1. Indicated and Inferred Mineral Resources at a 1% copper cut-off grade,

Kakula Deposit.

Category Tonnage

(Mt)

Area

(km2)

Copper

(%)

True

Thickness

(metres)

Contained

Copper

(kTonnes)

Contained

Copper

(billion lbs)

Indicated 349 9.8 3.23 12.0 11,281 24.9

Inferred 59 3.0 2.26 6.4 1,338 3.0

Notes:

1. Ivanhoe’s Mineral Resources Manager George Gilchrist, a Member of the Geology Society of South Africa and

Professional Natural Scientist (Pr. Sci. Nat) with the South African Council for Natural Scientific Professions (SACNASP),

estimated the Mineral Resources under the supervision of Dr. Harry Parker and Gordon Seibel, both RM SME, who are the

Qualified Persons for the Mineral Resources. The effective date of the estimate is May 16, 2017. Mineral Resources are

estimated using the CIM Definition Standards for Mineral Resources and Reserves (2014).

2. For Kakula, Mineral Resources are reported using a to tal copper (TCu) cut-off grade of 1% TCu and an approximate

minimum thickness of 3 metres. A 1% TCu cut-off is a natural cut-off grade on the Central African Copperbelt. There are

reasonable prospects for eventual economic extraction under assumptions of a copper price of US$3.00/lb, employment of

underground, mechanized, room-and-pillar and drift-and-fill mining methods, and that copper concentrates will be

produced and sold to a smelter. Mining costs are assumed to be $38/t. Concentrator and General and Administrative

(G&A) costs are assumed to be $19/t. Metallurgical recovery is assumed to be 77% at the 1% TCu cut-off and 88% at the

average grade of the Mineral Resource. Ivanhoe is studying (preliminary economic assessment in progress) reducing

mining costs using a convergence backfill method.

3. Reported Mineral Resources contain no allowances for hangi ng wall or footwall contact boundary loss and dilution. No

mining recovery has been applied.

4. Rounding as required by reporting guidelines may result in apparent differences between tonnes, grade and contained

metal content.

Table 2. Kakula Deposit Indicated Mineral Resources, Sensitivity Cases.