IVN.TO · 2021-05-26 12:00:00

Ivanhoe Mines begins new era of commercial copper production

Corporate Updates

May 26, 2021

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Kamoa-Kakula discovery enters production after 24 years of

dedicated exploration and development efforts

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Democratic Republic of Congo’s President Félix Tshisekedi

congratulates Ivanhoe for reaching the production milestone at

the world-class discovery

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Phase 2 concentrator expansion continues ahead of schedule

KOLWEZI, DEMOCRATIC REPUBLIC OF CONGO – Ivanhoe Mines (TSX: IVN; OTCQX:

IVPAF) Co-Chairs Robert Friedland and Yufeng “Miles” Sun are pleased to announce

the start of copper concentrate production at the Phase 1, 3.8 million-tonne-per-annum

(Mtpa) Kamoa-Kakula Mine, on May 25th, several months ahead of schedule.

His Excellency Félix Tshisekedi, President of the Democratic Republic of the Congo,

commented on the significance of the start of production at Kamoa-Kakula: “The start

of production of copper concentrate at the Kamoa-Kakula Mine indicates that the DRC

is open for business and investment. We congratulate Ivanhoe Mines for having

reached this milestone on this world-class discovery.”

First ore was introduced into the concentrator plant on May 20th to perform initial hot

commissioning tests on the ball mills and other processing equipment. The initial mill

feed grade reached approximately 4% copper shortly after start-up. As of May 25th, 5%

to 6% copper ore is being conveyed directly from Kakula’s underground mining

operations to the run-of-mine stockpile and the concentrator. Based on extensive

testwork, the concentrator is expected to produce a very high-grade, clean concentrate

grading approximately 57% copper, with extremely low arsenic levels.

“This is a historic moment for Ivanhoe Mines and the Democratic Republic of Congo,”

said Mr. Friedland. “Discovering and delivering a copper province of this scale, grade

and outstanding ESG credentials, ahead of schedule and on budget, is a unicorn in the

copper mining business. This accomplishment reflects the outstanding cooperation of

thousands of individuals, and all of our joint-venture partners at Kamoa-Kakula.

“Although this exploration journey started well over two decades ago, it also is

noteworthy that the Kakula deposit itself was discovered a little over five years ago,

which is remarkable progress by the mining industry’s glacial standards from first drill

hole to a new major mining operation.

“The initiation of production puts us on the path to establish Kamoa-Kakula as the

second largest, and perhaps eventually the largest, copper mining complex in the

world. What really excites our geologists is the profound potential to find additional

Kamoa-Kakula-like copper discoveries on our massive Western Foreland exploration

licences right next door, in an identical geologic setting.”

Co-Chairman Miles Sun also commented: “Today marks a monumental milestone not

only for Ivanhoe Mines, but also for Kamoa-Kakula’s host country – the Democratic

Republic of Congo, our young, dedicated Congolese employees, and local

communities. We all are extremely proud to be part of this remarkable achievement,

which is a true reflection of Ivanhoe’s 24 years of tenacity and commitment to the

country and industry.

“The inception of Phase 1 is the birth of a copper complex that will benefit generations

to come, and we very much look forward to the upcoming phases of expansion and

exploration opportunities. Huge congratulations to the entire Ivanhoe Mines team and a

roaring applause to all the hard-working suppliers and contractors for collectively

completing this mammoth undertaking!”

Mr. Jinghe Chen, an Ivanhoe Director and Chairman of Zijin Mining, added: “As a joint-

venture partner and a shareholder of Ivanhoe Mines, Zijin Mining is tremendously proud

to showcase the fruition of this exceptionally successful partnership with Ivanhoe in

bringing Phase 1 of Kamoa-Kakula into production ahead of time, while overcoming the

significant challenges presented by an unprecedented global pandemic. It truly has

required a global band of dedicated and exceptional talents that consist of the 7,000

workers onsite, and most importantly, the unwavering support from all our

stakeholders, to make this important milestone a reality.”

Copper production guidance for 2021

Ivanhoe’s guidance for contained copper in concentrate expected to be produced by the

Kamoa-Kakula Project for the balance of 2021 assumes a ramp-up from first production

in line with published technical disclosures, and is as follows:

Contained copper in concentrate 80,000 to 95,000 tonnes

All figures are on a 100%-project basis. Metal reported in concentrate is prior to refining

losses or deductions associated with smelter terms. Cost guidance is expected to be

provided once the Kamoa-Kakula Project’s Phase 1 plant has reached steady-state

production.

The company plans to provide an update on Phase 1 copper concentrate off-take

arrangements in the near term.

In April, the Kakula Mine mined 357,000 tonnes of ore grading 5.70% copper, including

121,000 tonnes grading 8.40% copper from the mine’s high-grade centre. The company

will update May’s production in early June, and will continue with its practice of

monthly progress updates.

Kakula is projected to be the world’s highest-grade major copper mine, with an initial

mining rate of 3.8 Mtpa, ramping up to 7.6 Mtpa in Q3 2022. Phase 1 is expected to

produce approximately 200,000 tonnes of copper per year, and phases 1 and 2

combined are forecast to produce approximately 400,000 tonnes of copper per year.

Based on independent benchmarking, the project’s phased expansion scenario to 19

Mtpa would position Kamoa-Kakula as the world’s second-largest copper mining

complex, with peak annual copper production of more than 800,000 tonnes.

Given the current copper price environment, Ivanhoe and its partner Zijin are exploring

the acceleration of the Kamoa-Kakula Phase 3 concentrator expansion from 7.6 Mtpa to

11.4 Mtpa, which may be fed from expanded mining operations at Kansoko, or new

mining areas at Kamoa North (including the Bonanza Zone) and Kakula West.

A 2020 independent audit of Kamoa-Kakula's greenhouse gas intensity metrics

performed by Hatch Ltd. of Mississauga, Canada, confirmed that the project will be

among the world's lowest greenhouse gas emitters per unit of copper produced.

The Kamoa-Kakula Copper Project is a joint venture between Ivanhoe Mines (39.6%),

Zijin Mining Group (39.6%), Crystal River Global Limited (0.8%) and the Government of

the Democratic Republic of Congo (20%).

Watch a new video highlighting the commissioning of Kamoa-Kakula’s Phase 1

concentrator plant and production of copper concentrate:

https://vimeo.com/555053503/10c1906415

(L-R) Mark Farren, Kamoa Copper’s CEO; Steve Amos, Kamoa Copper's Head of

Projects; and Wimpie Steyn, Risk Control Manager, holding some of Kamoa

Copper’s first copper concentrate.

Narcisse Kabuld, Crane Operator, with the first copper concentrate.

Kamoa Copper appoints SGS CONGO for on-site analytical services

Kamoa Copper has appointed Société Générale de Surveillance (SGS) CONGO S.A., an

accredited laboratory service provider for on-site analytical services. SGS is the world's

leading inspection, verification, testing and certification company and is headquartered

in Geneva, Switzerland. The new assay laboratory is equipped with state-of-the-art

equipment. Results for various mine, exploration and processing sample types will be

reported using a wide range of analytical techniques that are specifically selected to

provide accurate and precise results within the time required to efficiently control

concentrator and mine processes.

Process control samples will be analyzed using portable x-ray fluorescence (pXRF)

devices with a quick turnaround time for concentrator plant monitoring and control.

Metal accounting samples will be analyzed by using two simultaneous ICP-OES multi-

element instruments. The dual measurement mode of the ICP-OES instrumentation

enables the analysis of critical elements such as mercury, arsenic, lead, etc., by

providing high measurement sensitivity while the combination of two-sample digestion

methods (fusion and acid digestion) will cover a wide range of analytic levels.

The high-grade copper samples will be analyzed using classical iodide titration method,

which provides good accuracy and precision that is required for the dispatch samples.

Convenient and flexible potentiometric auto titrators provide efficient and accurate

results that are fully traceable to international methods and standards.

Ruth Karaj Irung, SGS Lab Assistant, in the weighing room at the new assay lab.

Aerial view of the Kakula Mine. The northern portal, run-of-mine stockpile and

main pre-production stockpiles are within the red circle. The Phase 1

concentrator, the concentrator storage shed, and the foundations for the Phase 2

concentrator are within the large yellow circle; the backfill plant is in the blue

circle; the main 220-kilovolt electrical substation is in the green circle; and the

green arrow points to the new 220-kilovolt powerline.

Kamoa-Kakula’s Phase 1 concentrator plant, with the foundations for the Phase 2

concentrator on the left. The concentrate storage building is in the background.

Kamoa-Kakula’s Phase 1 concentrator plant now in continuous operation.

Members of the commissioning team at one of two balls mills at the Phase 1

concentrator. (L-R) Eddie Mong, Instrumentation Superintendent, Kamoa Copper;

Aldo Groenewald, Commissioning Manager, DRA; Vongani Nkuna, Group

Manager, Metallurgy, Kamoa Copper; Raul Bowers, Lead Process Engineer, DRA.

Jack Shongo completing the painting of pipes at the concentrator plant.

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