Ivanhoe Mines issues first quarter financial results and review of mine development and exploration activities CITIC Metal to invest an additional C$612 million ($454 million) in Ivanhoe Mines at C$3.98 per share to fast track production

May 8, 2019

Ivanhoe Mines issues first quarter financial results

and review of mine development and exploration activities

CITIC Metal to invest an additional C$612 million ($454 million) in

Ivanhoe Mines at C$3.98 per share to fast track production

at the Kakula Copper Mine in D.R. Congo

New Kamoa North Bonanza Zone has an implied strike length

of 2.7 kilometres of shallow, thick, massive sulphide

mineralization, with copper grades up to 18.48% over 13.6 metres

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

financial results for the quarter ended March 31, 2019. 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

palladium-platinum-nickel-copper-gold-rhodium 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.

The company also is exploring for new copper discoveries on its wholly-owned Western

Foreland exploration licences, adjacent to the Kamoa-Kakula mining licence.

HIGHLIGHTS

 On April 25, 2019, China-based CITIC Metal agreed to invest an additional C$612

million ($454 million) in Ivanhoe by way of a private placement at C$3.98 per share, a

premium of 29% over Ivanhoe’s share price at that time. The investment will be

CITIC Metal’s second major financing in less than a year, bringing its total

investment in Ivanhoe to $1 billion.

 The CITIC Metal investment is expected to close no later than September 7, 2019,

much sooner than could be expected for a typical project-finance facility. The

additional funds will allow Ivanhoe to fast track production at the Kakula Copper

Mine.

 CITIC Metal, currently Ivanhoe Mines’ largest shareholder with a 19.3% ownership

stake, will come to own 29.9% of Ivanhoe’s issued and outstanding common shares

when the placement is completed. Robert Friedland will remain Ivanhoe’s second-

largest shareholder.

2

 CITIC Metal’s existing standstill provision will be amended to a maximum ownership

stake of 29.9% and extended until January 8, 2023 to provide sufficient time to bring

the Kakula mine to production, and to advance subsequent, planned expansions at

Kamoa-Kakula, and production at the Kipushi and Platreef projects. Ivanhoe’s entire

shareholder base is expected to benefit from the economic growth and significant

cash flows that result from commercial production at three mines.

 On May 2, 2019, Ivanhoe announced assays from ten new drill holes at the latest

high-grade discovery at Kamoa-Kakula ─ the Kamoa North Bonanza Zone. Multiple,

thick drill intercepts of more than 10% copper were recorded at the new discovery,

including 18.48% copper over 13.6 metres.

 The Kamoa North Bonanza Zone has been extended to at least 350 metres, with an

implied strike length of at least 2.7 kilometres. Four rigs are drilling at Kamoa North

to delineate the extent of the discovery and assess its potential to be fast-tracked to

production.

 Any material mined at Kamoa North could be processed at a nearby, standalone

plant, or hauled to the plant that will be constructed at Kakula. This has the potential

of significantly increasing the copper grades during the initial stages of production

at Kamoa-Kakula.

 The controlling east-west striking fault responsible for the massive copper sulphide

mineralization in the Kamoa North Bonanza Zone is visible on airborne magnetic

images and can be traced over a distance length of at least 10 to 20 kilometres. It

trends west onto the adjacent Western Foreland exploration licences that are 100%-

owned by Ivanhoe Mines.

 In the far northern portion of the Kamoa-Kakula’s mining licence, the Kamoa

geology team has been drill testing the shallow, high-grade copper trend and has

successfully followed it to within 15 metres of the northern boundary of the Kamoa-

Kakula mining licence.

 Development at the underground Kakula Mine, the first of multiple, planned mining

areas at Kamoa-Kakula, is making steady progress. Construction of the twin

northern declines has been completed and underground development activities now

are focused on constructing lateral access drives. In addition, development of a

ventilation and access decline on the southern side of the Kakula orebody is

underway and construction of the mine’s first ventilation shaft is progressing.

 Other engineering and construction activities underway at Kamoa-Kakula include

construction of a permanent road between the mine site and the Kolwezi airport,

construction of the first phase of accommodations for 1,000 employees and

contractors, and earthworks for the processing plant.

 On February 6, 2019, Ivanhoe announced an independent pre-feasibility study (PFS)

for the Kakula Mine. The stage one, 6 Mtpa operation, with estimated development

capital of $1.1 billion, yields an after-tax NPV8% of $5.4 billion and an IRR of 47%

over a 25-year mine life. Initial production is scheduled for early 2021, and the mine

is expected to average 6.8% copper over the first five years, with mine-site cash

costs of $0.43 per pound of copper.

3

 Ivanhoe also announced an updated independent preliminary economic assessment

(PEA) for an expanded Kakula-Kamoa production rate of 18 Mtpa, supplied initially

by a 6 Mtpa mine at Kakula, followed by two 6 Mtpa mines at Kansoko and Kakula

West, and a direct-to-blister smelter. The PEA envisions the staged mine expansions

and smelter will be funded from internal cash flows and yields an after-tax NPV8% of

$10.0 billion and an IRR of 41%. All figures in the PFS and PEA are on a 100%-project

basis.

 Once the expanded PEA production rate of 18 Mtpa is achieved, Kamoa-Kakula is

projected to become the world’s second largest copper mine, with peak annual

production of more than 700,000 tonnes of copper.

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

targeting Kamoa-Kakula-style copper mineralization in the Western Foreland region,

just to the west of the Kamoa-Kakula mining-licence area. The projected extensions

of the Kamoa North Bonanza Zone and the Kamoa Far North high-grade corridor

onto the Western Foreland licences are two new, high-priority exploration targets.

 In July 2018, Ivanhoe announced a new Mineral Resource estimate for the Kipushi

Mine in the DRC that increased zinc-rich Measured and Indicated Mineral Resources

to 11.8 million tonnes at an average grade of 35.3% zinc.

 The updated Mineral Resource will be used in the preparation of the Kipushi

definitive feasibility study (DFS). The DFS, which will update and refine the findings

of the PFS issued in December 2017, is nearing completion. Similar to the PFS, the

DFS will focus on the initial mining of Kipushi’s Big Zinc Zone.

 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 high-grade Big Zinc orebody.

 At the Platreef palladium-platinum-nickel-copper-gold-rhodium mine development

project in South Africa, the project’s first shaft (Shaft 1) has been extended to a

depth of 855 metres below surface. The 850-metre-level station was approximately

70% complete at the end of March 2019.

 The 850-metre-level station, as well as the already completed 750-metre-level, will

provide underground access to the high-grade orebody, enabling mine development

to proceed. As sinking of Shaft 1 advances, one more station will be developed at a

depth of 950 metres. Shaft 1 is expected to reach its projected, final depth of 982

metres below surface in early 2020.

 Surface construction for Platreef’s Shaft 2 is focused on the concrete foundation

(hitch) for the headframe, which is expected to be completed by mid-2019. Shaft 2

will have an internal diameter of 10 metres and will be equipped with two 40-tonne

rock-hoisting skips with a capacity to hoist a total of six million tonnes of ore per

year – the single largest hoisting capacity at any mine in Africa.

 Ivanhoe continues to advance the arrangement of project financing for the

development of the Platreef Project with a syndicate of international banks.

Discussions also are underway with leading South African financial institutions

4

regarding the financing of the black economic empowerment partners’ contribution

to the development capital, which would reduce the amount that would have to be

contributed by Ivanhoe on their behalf.

 Ivanhoe is investigating an alternative production plan for the Platreef Project,

targeting significantly lower initial capital, to accelerate first production by using

Shaft 1 as the mine’s initial production shaft.

 On May 1, Ivanhoe announced that Lars-Eric Johansson, who has served as

Ivanhoe’s President and Chief Executive Officer since May 2007, will retire at the

end of June 2019.

 Also on May 1, Ivanhoe announced the appointment of Tony Giardini as its new

President. Mr. Giardini’s extensive experience as a senior-level finance and mining

executive positions him well to oversee the construction and operation of Ivanhoe’s

three mine development projects. Mr. Johansson will work alongside Mr. Giardini

until the end of June to ensure a smooth and seamless transition.

 On April 25, Ivanhoe announced the establishment of a long-term relationship with

innovative, privately-held, technology and metals company, High Power Exploration

(HPX). Ivanhoe agreed to provide HPX with a $50 million secured loan facility,

convertible into HPX shares or at least a 25% interest in an HPX Tier One copper-

gold exploration and development project in the United States. HPX agreed to

provide Ivanhoe with access to its proprietary suite of exploration hardware and

software for Ivanhoe’s use in exploration activities in Southern Africa.

 At the end of Q1 2019, Kamoa-Kakula had recorded 13.4 million work hours free of

lost-time injuries, Kipushi 457,458 work hours free of lost-time injuries, and Platreef

1.3 million work hours free of lost-time injuries.

5

On April 25, 2019 CITIC Metal agreed to invest an additional C$612 million ($454 million)

in Ivanhoe Mines at C$3.98 per share, bringing its investment in Ivanhoe to $1 billion.

Left to right: Peter Zhou (Vice President, Corporate Development, Asia, Ivanhoe Mines),

Yufeng “Miles” Sun (President, CITIC Metal Group / Chairman, CITIC Resources

Holdings / Co-Chairman, Ivanhoe Mines), Robert Friedland (Executive Co-Chairman,

Ivanhoe Mines) and Manfu Ma (Vice President, CITIC Metal Group).

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 approximately

150,000 people, project employees and local entrepreneurs. 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 on 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

6

with, and along strike from, Anglo Platinum’s Mogalakwena group of mining operations and

properties.

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.

The Platreef Mine site, showing Shaft 1’s headframe and the box cut for Shaft 2.

7

Health and safety at Platreef

As at the end of Q1 2019, the Platreef Project had reached a total of 1,305,357 lost-time,

injury-free hours worked in accordance with South Africa’s Mine Health and Safety Act and

Occupational Health and Safety Act. At the end of March 2019, it had been nearly twelve

months since the last lost-time injury occurred at the Platreef Project, which continues to strive

toward its workplace objective of an environment that causes zero harm to employees,

contractors, sub-contractors and consultants.

Platreef alternative production plan

Ivanhoe Mines is investigating an alternative production plan for the Platreef Project, targeting

significantly lower initial capital, to accelerate first production by using Shaft 1 as the mine’s

initial production shaft. This plan will focus on initially targeting the development of mining

zones accessible from Shaft 1 and maximizing the hoisting capacity of this shaft, followed by

expansions to the production rate as outlined in the company’s 2017 definitive feasibility study

(DFS).

Shaft 1 now extends to a depth of 855 metres below surface

Shaft 1 reached the top of the high-grade Flatreef Deposit (T1 mineralized zone) at a depth of

780.2 metres below surface in Q3 2018 and has since been extended to a depth of 855 metres

below surface. The 850-metre-level station development is underway and was an estimated

70% complete at the end of March 2019. The thickness of the mineralized reef (T1 & T2

mineralized zones) at Shaft 1 is 29 metres, with grades of platinum-group metals ranging up to

11 grams per tonne (g/t) 3PE (platinum, palladium and rhodium) plus gold, as well as

significant quantities of nickel and copper. The 29-metre intersection yielded approximately

3,000 tonnes of ore, estimated to contain more than 400 ounces of platinum-group metals. The

ore is stockpiled on surface for metallurgical sampling.

The 750-metre-level and 850-metre-level stations will provide initial, underground access to

the high-grade orebody, enabling mine development to proceed during the construction of

Shaft 2. As sinking of Shaft 1 advances, one more station will be developed at a mine-working

depth of 950 metres. Shaft 1 is expected to reach its projected, final depth of 982 metres below

surface in early 2020.

The DFS planned for Shaft 1 to ultimately become the primary ventilation shaft during the

project’s four-Mtpa production case.

8

Limpopo Premier Stanley Chupu Mathabatha (centre) cutting a ceremonial ribbon,

alongside members of the Platreef shaft-sinking team, to signify the completion of the

850-metre top-cut station development.

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. It 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. Nine blasts were successfully completed in 2018 enabling the

excavation of Shaft 2’s box cut to a depth of approximately 29 metres below surface and the

construction of the concrete hitch (shaft collar foundation) for the 103-metre-tall concrete

headgear that will house the shaft’s permanent hoisting facilities and support the shaft collar.

Excavation of the box cut and construction of the hitch foundation is expected to be completed

in June 2019, enabling the beginning of pre-sinking work that will extend the depth of the shaft

to 84 metres below surface.