Ivanhoe Mines issues 2017 full-year results and review of exploration and development activities Continued resource expansion and fast-tracking of mine development at ultra-high-grade Kakula Copper Discovery in D.R. Congo among highlights of Ivanhoe’s 2017 achievements

March 21, 2018

Ivanhoe Mines issues 2017 full-year results

and review of exploration and development activities

Continued resource expansion and fast-tracking of mine

development at ultra-high-grade Kakula Copper Discovery

in D.R. Congo among highlights of Ivanhoe’s 2017 achievements

TORONTO, CANADA ‒ Ivanhoe Mines (TSX: IVN; OTCQX: IVPAF) today announced its financial

results for the year ended December 31, 2017. All figures are in U.S. dollars unless otherwise

stated. Ivanhoe Mines is a Canadian mining company focused on advancing its three mine-

development projects in Southern Africa: The Platreef platinum-palladium-nickel-copper-gold

discovery in South Africa; the Kamoa-Kakula copper discovery in the Democratic Republic of

Congo (DRC); and the extensive upgrading of the historic Kipushi zinc-copper-lead-germanium

mine, also in the DRC.

2017 HIGHLIGHTS

 On February 26, 2018, Ivanhoe announced results of an independently verified, updated

Mineral Resource estimate showing that the ultra-high-grade Kakula Discovery alone now

contains Indicated Mineral Resources of 174 million tonnes at 5.62% copper, at a 3% copper

cut-off grade, and 585 million tonnes at 2.92% copper, at a 1% cut-off.

 The February 2018 Mineral Resource estimate boosts the combined Kamoa-Kakula

Indicated Mineral Resources to 1.03 billion tonnes at 3.17% copper, containing

approximately 72 billion pounds of copper, plus an additional 183 million tonnes of Inferred

Mineral Resources at 2.31% copper, at a 1.5% cut-off. The new Mineral Resource estimate

establishes the Kamoa-Kakula Project as the world’s fourth-largest copper discovery.

Kamoa-Kakula’s copper grades are the highest, by a wide margin, of the world’s top 10

copper deposits.

 Kakula’s strike length now extends to more than 13 kilometres and remains open for

significant expansion in multiple directions. A total of 13 rigs are continuing with resource

expansion and delineation drilling at the Kakula Discovery. Geophysical surveys are

underway at the Kamoa-Kakula Project to help identify new, high-priority targets in the

untested parts of the 400-square-kilometre mining licence.

 Ivanhoe’s DRC exploration team is continuing with its regional drilling program targeting

Kamoa-Kakula-style copper mineralization on its 100%-owned exploration licences in the

Western Foreland region, just to the west of the Kamoa-Kakula mining-licence area. The

company recently completed a regional, airborne gravity survey across the exploration

licences to help identify additional high-priority drill targets.

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 On November 28, 2017, Ivanhoe announced the findings of an independent, preliminary

economic assessment (PEA) for the development of the Kakula and Kamoa deposits. The

PEA analyzed options for an integrated, 12 million-tonne-per-annum (Mtpa), two-stage

development, beginning with initial production from a six-Mtpa underground mine and

surface processing facilities at Kakula, to be followed by a subsequent, separate,

underground, six-Mtpa mining operation at the nearby Kansoko Mine, along with the

construction of a smelter. The two-stage, modular, 12-Mtpa operation yields an after-tax

NPV8% of $7.2 billion and an IRR of 33% over a 44-year mine life. Combined production of

12 Mtpa would rank Kamoa-Kakula among the world’s five largest copper mines, with

projected annual production of more than 500,000 tonnes of copper.

 The planned initial, six-Mtpa mine at Kakula is estimated to cost $1.2 billion; subsequent

expansions and a smelter can be funded from cash flows or project finance. With the new,

expanded February 2018 Mineral Resource estimate, Ivanhoe and its joint-venture partner,

Zijin Mining, are exploring options to accelerate building of the first two mines at Kamoa-

Kakula, and the potential for expanding production to 18 Mtpa, and beyond.

 Underground mine development at the planned initial mine at Kakula is making good

progress and is expected to reach the high-grade copper mineralization later this year. The

service and conveyor declines each have been advanced more than 316 metres through

underground development work.

 In January 2018, Ivanhoe announced that ongoing upgrading work at the Mwadingusha

hydropower plant in the DRC – the first of three existing, state-owned hydroelectric plants

that Ivanhoe and Zijin Mining plan to modernize to supply power to Kamoa-Kakula – has

increased power output to 32 megawatts (MW). Upgrading of the other two hydroelectric

plants – Koni and Nzilo 1 – is expected to begin once Mwadingusha has been fully restored

to its installed capacity of 71 MW. Kamoa-Kakula has been conducting project development

activities with clean, hydroelectric power drawn from the national grid since October 2016.

 On March 9, 2018, DRC President Joseph Kabila Kabange signed a new mining code into

effect that revises and updates the country’s 2002 mining code. The international mining

companies that have operations in the DRC, including Glencore, Randgold, China

Molybdenum, MMG, Ivanhoe Mines and Zijin Mining, collectively are negotiating with the

DRC’s national government to resolve corporate concerns about anticipated impacts on

their DRC operations from changes in the new mining code.

 The detailed, DRC mining-code negotiations are scheduled to begin March 26, following an

initial, high-level meeting in Kinshasa on March 7 during which President Kabila gave an

assurance that the companies’ concerns would be resolved through transitional

arrangements, mining regulations and respect for existing agreements and guarantees.

 The international companies have confirmed their willingness to negotiate royalties and

changes to other taxes as part of this process. The companies expect that the negotiations

will give priority to respecting the legislated guarantee of stability and protection of rights

specified in Article 276 of the 2002 mining code, and other protections afforded under

established mining conventions and bilateral agreements.

 The Ivanhoe-sponsored Fionet program to improve malaria diagnostics and treatment was

expanded in 2017 to 300 Deki Readers installed in 252 medical-service providers in Haut-

Katanga and Lualaba provinces in southern DRC, which host Ivanhoe’s Kipushi and Kamoa-

Kakula projects. Deki devices provide automated readings of rapid diagnostic tests to

remove the human-error factor and avoid prescription of unnecessary medication.

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 On December 13, 2017, Ivanhoe announced the findings of an independent, pre-feasibility

study (PFS) for the redevelopment of the Kipushi zinc-copper-germanium-lead-silver mine

in the DRC. The PFS analyzed the plan to bring Kipushi’s Big Zinc Zone into production in

less than two years, with a life-of-mine, average annual production rate of 225,000 tonnes of

zinc and cash costs of $0.48 per pound of zinc.

 The Kipushi PFS study anticipates annual production of an average of 381,000 tonnes of

zinc concentrate over an 11-year, initial mine life at a total cash cost of approximately $0.48

per pound of zinc. The PFS focuses on the initial mining of Kipushi’s Big Zinc orebody,

which has an estimated 10.2 million tonnes of Measured and Indicated Mineral Resources

grading 34.9% zinc. The planned return to production would establish Kipushi as the

world’s highest-grade, major zinc mine.

 On October 30, 2017, Ivanhoe announced that the company had agreed to rebuild 34

kilometres of track to connect the Kipushi Mine with the DRC national railway at Munama,

south of the mining capital of Lubumbashi. The Kipushi-Munama spur line, which has been

inactive since 2011, will be rebuilt under terms of a memorandum of understanding (MOU)

signed by Ivanhoe Mines and the DRC’s state-owned railway company, Société Nationale

des Chemins de Fer du Congo (SNCC).The DRC national railway is a key part of the

international rail corridor that links the DRC Copperbelt to major seaports at Durban and

Richards Bay in South Africa, Dar es Salaam in Tanzania and Lobito in Angola.

 Discussions are continuing with potential strategic partners and lenders to support

Ivanhoe’s continuing advance toward a new era of production at Kipushi. Ivanhoe has made

significant progress in upgrading the mine’s underground infrastructure and the company

now has a much clearer path to a resumption of production from the incredibly high-grade

Big Zinc orebody.

 At the Platreef platinum-palladium-nickel-copper-gold discovery in South Africa, sinking of

Shaft 1 now has reached a depth of more than 700 metres below surface. Development of the

second of four planned shaft stations – the 750-metre-level substation – is expected to begin

in late April. Shaft 1 is expected to reach the top of the Flatreef orebody, at a depth of

approximately 780 metres, in the third quarter of this year. Sinking of the shaft will continue

to a planned final depth of 980 metres.

 Early-works surface construction for Platreef’s Shaft 2 began last May, with initial curtain

grouting around the box cut. Excavation of a surface box cut to a depth of approximately 29

metres is underway and the construction of the concrete hitch for the headframe is expected

to be completed by the end of this year.

 Ivanhoe is focused on advancing the Platreef Project along its critical path. The continued

development of shafts 1 and 2 will provide access to the Flatreef orebody and help to ensure

that the project is able to meet the scheduled, first-phase start-up of the underground mine

and concentrator by 2022.

 On July 31, 2017, Ivanhoe announced the positive results of an independent, definitive

feasibility study for the planned first phase of the Platreef Mine. The study envisages an

initial annual throughput rate of four million tonnes a year, producing 476,000 ounces of

platinum, palladium, rhodium and gold (3PE+Au), plus 33 million pounds of nickel and

copper.

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 The Platreef Mine is projected to be Africa’s lowest-cost producer of platinum-group metals,

with a cash cost of $351 per ounce of 3PE+Au, net of by-products, including sustaining

capital cost. There is good potential for relatively quick and capital-efficient expansion to six

and eight million tonnes a year, and beyond, using start-up infrastructure.

 Ivanhoe has appointed five leading mine-financing institutions as Initial Mandated Lead

Arrangers to arrange debt financing for the Platreef Mine’s development. They are: KfW

IPEX-Bank, a German government-owned institution; Swedish Export Credit Corporation;

Export Development Canada; Nedbank Limited (acting through its Corporate and Investment

Banking division); and Societe Generale Corporate & Investment Banking. Expressions of

interest have been received for approximately $900 million of the targeted $1 billion project

financing.

 Continuing strategic discussions concerning Ivanhoe Mines and its projects are ongoing

with several significant mining companies and investors across Asia, Europe, Africa and

elsewhere. Several investors that have expressed interest have no material limit on the

provision of capital.

 On March 12, 2018, Egizio Bianchini was appointed Ivanhoe Mines’ Executive Vice Chairman

and a member of the Board of Directors. He joined Ivanhoe Mines after a 29-year career at

BMO Capital Markets, a member of Canada-based BMO Financial Group, where he served as

Co-Head of the Global Metals & Mining Group, and as Vice Chairman from April 2011 to

March 2018. With more than 30 years’ experience in the metals and mining financial services

sector, Mr. Bianchini has an extensive track record in advising a wide range of metals and

mining companies around the world and in structuring and executing capital raisings.

 Ivanhoe Mines’ three projects achieved a combined 9.4 million work hours free of lost-time

injuries (LTI) during 2017. Platreef recorded 215,000 LTI free hours for the year, Kipushi

458,000 hours and Kamoa-Kakula more than 8.7 million hours.

Principal projects and review of activities

1. Platreef Project

64%-owned by Ivanhoe Mines

South Africa

The Platreef Project is owned by Ivanplats (Pty) Ltd, which is 64%-owned by Ivanhoe Mines. A 26%

interest is held by Ivanplats’ historically-disadvantaged, broad-based, black economic empowerment

(B-BBEE) partners, which include 20 local host communities with a total of approximately 150,000

people, project employees and local entrepreneurs. In January 2017, Ivanplats reconfirmed its Level 3

status in its third verification assessment on a B-BBEE scorecard. A Japanese consortium of ITOCHU

Corporation; Japan Oil, Gas and Metals National Corporation and Japan Gas Corporation, owns a 10%

interest in Ivanplats, which it acquired in two tranches for a total investment of $290 million.

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 in Limpopo Province,

approximately 280 kilometres northeast of Johannesburg and eight kilometres from the town of

Mokopane.

On the Northern Limb, platinum-group metals mineralization is hosted primarily within the Platreef, a

mineralized sequence that is traced more than 30 kilometres along strike. Ivanhoe’s Platreef Project,

within the Platreef’s southern sector, is comprised of two contiguous properties: Turfspruit and

Macalacaskop. Turfspruit, the northernmost property, is contiguous with, and along strike from, Anglo

Platinum’s Mogalakwena group of mining operations and properties.

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Since 2007, Ivanhoe has focused its exploration and development activities on defining and advancing

the down-dip extension of its original discovery at Platreef, now known as the Flatreef Deposit, which is

amenable to highly mechanized, underground mining methods. The Flatreef area lies entirely on the

Turfspruit and Macalacaskop properties, which form part of the company’s mining right.

Health and safety at Platreef

At the end of 2017, the Platreef Project reached a total of 215,496 lost-time-injury (LTI) free hours

worked in terms of South Africa’s Mines Health and Safety Act and Occupational Health and Safety Act.

The Platreef Project continues to strive toward its workplace objective of an environment that causes

zero harm to employees, contractors, sub-contractors and consultants.

Positive independent, definitive feasibility study for Platreef’s first-phase development;

Platreef projected to be Africa’s lowest-cost producer of platinum-group metals

On July 31, 2017, Ivanhoe Mines announced the positive results of an independent, definitive feasibility

study (DFS) for the planned first phase of the Platreef Project’s platinum-group metals, nickel, copper

and gold mine in South Africa.

The Platreef DFS covers the first phase of development that would include construction of a state-of-

the-art underground mine, concentrator and other associated infrastructure to support initial production

of concentrate by 2022. As Phase 1 is being developed and commissioned, there would be

opportunities to refine the timing and scope of subsequent phases of expanded production.

DFS highlights include:

 Indicated Mineral Resources containing an estimated 41.9 million ounces of platinum, palladium,

rhodium and gold, with an additional 52.8 million ounces of platinum, palladium, rhodium and gold

in Inferred Resources.

 Increased Mineral Reserves containing 17.6 million ounces of platinum, palladium, rhodium and

gold – an increase of 13% – following stope optimization and mine sequencing work.

 Development of a large, safe, mechanized, underground mine, with an initial four-Mtpa

concentrator and associated infrastructure.

 Planned initial average annual production rate of 476,000 ounces of platinum, palladium, rhodium

and gold (3PE+Au), plus 21 million pounds of nickel and 13 million pounds of copper.

 Estimated pre-production capital requirement of approximately $1.5 billion, at a ZAR:USD

exchange rate of 13 to 1.

 Platreef would rank at the bottom of the cash-cost curve, at an estimated $351 per ounce of

3PE+Au produced, net of by-products and including sustaining capital costs, and $326 per ounce

before sustaining capital costs.

 After-tax net present value (NPV) of $916 million, at an 8% discount rate.

 After-tax internal rate of return (IRR) of 14.2%.

The DFS was prepared for Ivanhoe Mines by principal consultant DRA Global, with economic analysis

led by OreWin, and specialized sub-consultants including Amec Foster Wheeler E&C Services (Amec

Foster Wheeler), Stantec Consulting, Murray & Roberts Cementation, SRK Consulting, Golder

Associates and Digby Wells Environmental.

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Benjamin Sekano (centre), Platreef’s Mine Manager, reviews shaft sinking plans

with geotechnical engineers at the 450-metre-level substation in Shaft 1.

Preliminary expressions of interest received for approximately $900 million

of the targeted $1 billion Platreef project financing

On July 19, 2017, Ivanhoe Mines announced the appointment of another two leading mine-financing

institutions – KfW IPEX-Bank, a German government-owned institution, and the Swedish Export Credit

Corporation (SEK) – as Initial Mandated Lead Arrangers (IMLAs) to arrange debt financing for the

ongoing development of the Platreef Mine.

KfW IPEX-Bank and SEK joined the three initial IMLAs – Export Development Canada, Nedbank

Limited (acting through its Corporate and Investment Banking division) and Societe Generale Corporate

& Investment Banking – that were appointed last year.

The five IMLAs will make best efforts to arrange a total debt financing of up to $1 billion for the

development of Platreef’s first-phase, four-Mtpa mine. Preliminary expressions of interest now have

been received for approximately $900 million of the targeted $1 billion project financing. Negotiation of

a term sheet is ongoing. In addition, preliminary discussions have begun with leading financial

institutions around the financing of the contribution by the black economic empowerment partners to the

development capital.

Shaft 1 has reached a depth of more than 700 metres below surface;

now within 72 metres of the top of the Flatreef orebody

Sinking of Platreef’s Shaft 1 had reached a depth of 584 metres at the end of December 2017 and

further advanced to 711 metres on March 19, 2018. The shaft is expected to intersect the upper contact

of the Flatreef Deposit (T1 mineralized zone), at an approximate shaft depth of 783 metres, during the

third quarter of this year. The grade for the T1 mineralized zone at this location is 4.83 grams per tonne

of 3PE (platinum, palladium and rhodium) plus gold, 0.33% nickel and 0.15% copper over a vertical

thickness of 12 metres.

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Shaft 1, with an internal diameter of 7.25 metres, will provide access to the Flatreef Deposit and enable

the initial underground development to take place during the development of Shaft 2. Ultimately, Shaft 1

will become the primary ventilation intake shaft during the project’s four-million-tonne-per-annum

production case.

The average sinking rate has ranged between 40 to 50 metres a month. The shaft includes a 300-

millimetre-thick, concrete-lined shaft wall. The main sinking phase is expected to reach its projected,

final depth of 980 metres below surface in 2019.

Shaft stations to provide access to horizontal mine workings for personnel, materials, pump stations

and services will be developed at depths of 450 metres, 750 metres, 850 metres and 950 metres.

The first off-shaft lateral development on the 450-metre level, which will serve as an intermediate water-

pumping and shaft cable-termination station, was successfully completed in September 2017. The next

off-shaft lateral development will be at the 750-metre level and will serve as the first mine-working level.

The 750-metre-level station development is expected to be completed by September 2018.

Shaft 2 early-works construction progressing

Shaft 2, to be located approximately 100 metres northeast of Shaft 1, will have an internal diameter of

10 metres, will be lined with concrete and sunk to a planned, final depth of more than 1,104 metres

below surface. It will be equipped with two, 40-tonne, rock-hoisting skips capable of hoisting a total of

six million tonnes of ore a year – the single largest hoisting capacity at any mine in Africa.

The headgear for the permanent hoisting facility was designed by South Africa-based Murray & Roberts

Cementation. The early-works for Shaft 2 include the excavation of a surface box cut to a depth of

approximately 29 metres below surface and the construction of the concrete hitch (foundation) for the

103-metre-tall concrete headgear (headframe) that will house the shaft’s permanent hoisting facilities

and support the shaft collar. Excavation of the box cut commenced in January 2018 and is expected to

be completed by the end of 2018.

Excavation of a surface box cut now underway as part of early-works

construction for Shaft 2 at the Platreef Mine in South Africa.

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Shaft 2 engineered to allow for future expansion options

Shaft 2 has been engineered with a crushing and hoisting capacity of six Mtpa. This will allow a

relatively quick and capital-efficient first expansion of the Platreef Project to six Mtpa by increasing

underground development and commissioning a third, two-Mtpa processing module and associated

surface infrastructure as required.

A further expansion to more than eight Mtpa would entail converting Shaft 1 from a ventilation shaft into

a hoisting shaft. This would require additional ventilation exhaust raises, as well as a further increase of

underground development, commissioning of a fourth, two-Mtpa processing module and associated

surface infrastructure, as described in the Platreef preliminary economic assessment as Phase 2 of the

project.

Underground mining to incorporate highly productive, mechanized methods

Ivanhoe plans to develop the Platreef Mine in phases. The initial annual production rate of four million

tonnes per annum (Mtpa) is designed to establish an operating platform to support future expansions.

This is expected to be followed by a potential doubling of production to eight Mtpa, and then a third

expansion phase to a steady-state 12 Mtpa, which would establish Platreef among the largest platinum-

group-metals mines in the world.

The mining zones in the current Platreef mine plan occur at depths ranging from approximately 700

metres to 1,200 metres below surface. Primary access to the mining zones will be by way of Shaft 2;

secondary access will be via Shaft 1. During mine production, both shafts also will serve as ventilation

intakes. Three additional ventilation exhaust raises are planned to achieve steady-state production.

Planned mining methods will use highly productive, mechanized methods, including long-hole stoping

and drift-and-fill. Each method will utilize cemented backfill for maximum ore extraction. The ore will be

hauled from the stopes to a series of internal ore passes and fed to the bottom of Shaft 2, where it will

be crushed and hoisted to surface.

The current mine plan has been improved beyond the earlier projections in the 2015 PFS mine plan by

optimizing stope design, employing a declining Net Smelter Return (NSR) strategy and targeting higher-

grade zones early in the mine’s life. This strategy has increased the grade profile by 23% on a 3PE+Au

basis in the first 10 years of operation and by 10% during the life of the mine.

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 Complex. The project consists of the new De

Hoop Dam, the raised wall of the Flag Boshielo Dam and related pipeline infrastructure that ultimately is

expected to deliver water to Pruissen, southeast of the Northern Limb. The Pruissen Pipeline Project is

expected to be developed to deliver water onward from Pruissen to the municipalities, communities and

mining projects on the Northern Limb. Ivanhoe Mines is a member of the ORWRDP’s Joint Water

Forum.

The Platreef Project’s water requirement for the first phase of development is projected to peak at

approximately 7.5 million litres per day, which is expected to be supplied by the water network. Ivanhoe

also is investigating various alternative sources of bulk water, including an allocation of bulk grey-water

from a local source.

The Platreef Project’s electrical power requirement for the phase one, four-Mtpa, underground mine,

concentrator and associated infrastructure has been estimated at approximately 100 million volt-

amperes (MVA). An agreement has been reached with Eskom, South Africa’s public electricity utility, for

the supply of phase-one power. Ivanhoe chose a self-build option for permanent power that will enable