Ivanhoe Mines issues second quarter 2022 financial results, and review of mine construction and exploration activities

August 15, 2022

Ivanhoe Mines issues second quarter 2022 financial results, and

review of mine construction and exploration activities

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Ivanhoe Mines reports record profit of $351.5 million for Q2 2022

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Kamoa-Kakula Mining Complex in the Democratic Republic of

Congo sold record 85,794 tonnes of payable copper and

recognized revenue of $494.1 million in Q2 2022

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Kamoa Copper’s cost of sales total $1.15 per pound of payable

copper during the second quarter, with C1 cash costs

of $1.42 per pound

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Over the first half of 2022, Kamoa-Kakula milled approximately

three million tonnes at 5.59% copper, and produced

142,916 tonnes of copper

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Kamoa-Kakula produced record 32,877 tonnes of copper in July

for an annualized production rate of 387,100 tonnes of copper

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Platreef underground mining advancing well, with more than 200

metres of lateral development completed during the quarter

JOHANNESBURG, SOUTH AFRICA – Ivanhoe Mines (TSX: IVN; OTCQX: IVPAF)

President Marna Cloete and Chief Financial Officer David van Heerden are pleased to

announce the financial results for the three and six months ended June 30, 2022.

Ivanhoe Mines is a leading Canadian mining company developing and expanding its

four principal mining and exploration projects in Southern Africa: the Kamoa-Kakula

Mining Complex in the Democratic Republic of Congo (DRC), which commenced

commercial production in July 2021; the Platreef palladium, rhodium, nickel, platinum,

copper and gold discovery in South Africa; the historic Kipushi zinc-copper-lead-

germanium mine in the DRC; and the expansive exploration program for new copper

discoveries on Ivanhoe’s Western Foreland exploration licences, near Kamoa-Kakula.

All figures are in U.S. dollars unless otherwise stated.

NOTE TO READER - The press release of Ivanhoe Mines Ltd. dated August 15, 2022 (the “Press Release”) has been re-filed on SEDAR. The previously filed press

release had a typographical error on page 43 with respect to the capital expenditure table for the Kamoa-Kakula Mining Complex - Phase 3 and smelter early works.

This press release replaces the previously filed Press Release.

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HIGHLIGHTS

 Ivanhoe Mines recorded a profit of $351.5 million for Q2 2022, compared to a loss

of $108.6 million for the same period in 2021. The profit in the quarter includes

Ivanhoe Mines’ share of profit and finance income from the Kamoa-Kakula joint

venture of $84.6 million.

 Kamoa-Kakula set a new quarterly production record during the period, with 87,314

tonnes of copper in concentrate produced. Commercial production from the Phase

2 concentrator was declared on April 7, 2022.

 Ivanhoe Mines increases the lower end of its 2022 production guidance range for

Kamoa-Kakula to between 310,000 and 340,000 tonnes of copper in concentrate

following the early commissioning of the Phase 2 expansion.

 Kamoa-Kakula’s cost of sales per pound (lb.) of payable copper sold was $1.15/lb.

for Q2 2022, while cash costs (C1) per pound of payable copper produced totalled

$1.42/lb., compared to $1.21/lb. and $1.28/lb. in Q1 2022 and Q4 2021 respectively.

 Ivanhoe Mines reiterates its C1 cash cost guidance for Kamoa-Kakula of $1.20/lb. to

$1.40/lb. for the calendar year 2022. C1 cash costs over the first six months of 2022

total $1.34/lb.

 During Q2 2022, Kamoa Copper sold 85,794 tonnes of payable copper and

recognized revenue of $494.1 million, with an operating profit of $253.1 million and

an EBITDA of $286.3 million.

 Kamoa Copper mined 1.66 million tonnes of ore grading 5.57% copper in Q2 2022,

including 0.78 million tonnes grading 6.74% copper from the Kakula Mine’s high-

grade centre.

 Over the first half of 2022, Kamoa Copper milled approximately three million tonnes

of ore at an average feed grade of 5.59% copper, and produced 142,916 tonnes of

copper in concentrate.

 After the end of Q2, Kamoa Copper set another new monthly production record,

with 32,877 tonnes of copper produced in July, equivalent to an annualized

production rate of 387,100 tonnes.

 Kamoa Copper’s de-bottlenecking program is progressing to schedule. The

program will increase the combined design processing capacity of the Phase 1 and

Phase 2 concentrators to approximately 9.2 million tonnes of ore per annum.

Copper production from Kamoa-Kakula’s first two phases is projected to reach

approximately 450,000 tonnes per annum by Q2 2023.

 Basic engineering design for Kamoa Copper’s Phase 3, 5.0-million-tonne-per-

annum concentrator is nearing completion with engineering and procurement

activities underway. During June, orders were placed for the following long-lead

items: ball mills, concentrate filters, cone crushers and flotation cells. The

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earthworks contract also has been placed.

 Earthworks excavation for the Phase 3 direct-to-blister flash smelter is advancing

quickly. In June, purchase orders were placed for the smelter’s slag-cleaning

furnace and the anode refining furnaces.

 Ivanhoe Mines has a strong balance sheet with cash and cash equivalents of

$507.1 million as at June 30, 2022, and expects that Kamoa Copper’s operating and

expansion capital expenditures on Phase 3 will be funded from copper sales and

facilities at Kamoa-Kakula.

 Ivanhoe continues its copper exploration program on its Western Foreland licences

that cover approximately 2,407 square kilometres neighbouring the 400-square-

kilometre Kamoa-Kakula mining licences. The extensive 2022 drilling program is

well underway, with 39 diamond drill holes totalling 7,539 metres completed during

the second quarter.

 Lateral underground mine development on Platreef's 950-metre-level, towards the

location of the first ventilation shaft position, progressed well during the quarter.

Over 200-metres of lateral development has been completed since work

commenced in April 2022.

 Construction of Platreef’s first solar-power plant is scheduled to commence in Q3

2022, with commissioning expected in 2023. The electricity generated from this

power plant will be used for mine development and construction activities, as well

as for charging Platreef’s battery-powered underground mining fleet.

 The Platreef 2022 Feasibility Study yields an after-tax NPV8% of $1.7 billion and IRR

of 18.5% at long-term consensus metal prices. Based on spot metal prices at the

time of the study (February 23, 2022), the after-tax NPV8% increases to $4.1 billion

and the IRR increases to 29%.

 In June 2022, Kipushi and Gécamines approved the development budget for the

Kipushi Project in line with the 2022 Feasibility Study. Ordering of long-lead

equipment and other construction activities now has commenced. Financing and

offtake discussions are advancing with several interested parties.

 The Kipushi 2022 Feasibility Study yields an after-tax NPV8% of $941 million and

IRR of 40.9% at long-term consensus metal prices. At a zinc price of $1.60/lb. (the

current zinc spot price), the after-tax NPV8% increases to $2.0 billion and the IRR

increases to 68%.

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Watch a July fly-over of mining and construction activities at

Kamoa-Kakula: https://vimeo.com/739389126/d7bf137f91

Kamoa Copper undertaking optimization of logistics costs

Due to the early commissioning and highly successful ramp-up of the Phase 2

concentrator during Q2 2022, Kamoa Copper dispatched approximately 177,000 tonnes

of copper concentrates, a significant increase on approximately 103,000 tonnes

dispatched during Q1 2022.

Copper C1 cash costs per pound of payable copper for Q2 2022 were higher than Q1

2022 largely due to a 42% increase in logistics charges for the transportation of Kamoa-

Kakula’s copper products.

The increase in logistics charges for the quarter were impacted by limitations in truck

availability caused by the sharp increase in volumes, interrupted port operations at

Durban caused by flooding, customs clearing times and border congestion between the

DRC and Zambia, as well as higher diesel prices.

However, mine site operating costs are somewhat shielded from higher diesel prices, as

site power is provided by the DRC national grid at a rate of approximately 6 cents per

kilowatt hour, following the refurbishment of the Mwadingusha hydropower facility

under a public-private partnership with Société Nationale d'Électricité (SNEL), the DRC

state power utility company.

In addition, the Lualaba Copper Smelter located near Kolwezi, which is expected to treat

approximately 150,000 tonnes of copper concentrates from Kamoa-Kakula annually, is

undergoing scheduled maintenance that is expected to be completed in early

September. Until then, Kamoa Copper’s concentrate production will be wholly

transported and exported as copper concentrate (approximately 50% contained copper),

without the expected quantity of blister copper (approximately 99% contained copper),

thereby temporarily increasing logistics costs.

Kamoa Copper, working alongside its offtake partners, Zijin Mining and CITIC Metal as

well as the government of the DRC, is undertaking several initiatives to optimize the

transportation of Kamoa Copper’s products.

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These activities include working with its offtake partners, logistics service providers

and local entrepreneurs to increase regional trucking capacity, improving processes for

clearing products for export and opening up alternative export borders between the

DRC and Zambia. A second import-export border crossing recently was opened at

Sakania, in addition to the existing border at Kasumbalesa, DRC.

Kamoa Copper is also working to increase flexibility to ship from a variety of ports,

including Durban in South Africa, Dar es Salaam in Tanzania, Walvis Bay in Namibia and

Beira in Mozambique, and longer-term to the port of Lobito in Angola.

A step-change improvement in cash costs of 10% to 20% is anticipated once Kamoa

Copper’s on-site 500,000-tonne-per-annum, direct-to-blister flash smelter is

commissioned as part of the Phase 3 expansion, expected by the end of 2024. This cash

cost reduction is in large part due to the significant decrease in volumes shipped, with

approximately 600,000 tonnes of blister copper product shipped (including local toll

smelting) instead of approximately 1.3 million tonnes of copper concentrate. In addition,

the smelter will generate valuable by-product credits from the sale of sulphuric acid,

which is in deficit in the DRC Copperbelt.

Kakula Mine optimization work targeting grades towards 6% copper

Ongoing mining optimization work at the Kakula Mine is targeting improved head grade

during the second half of 2022 towards 6% copper. Kamoa Copper is also evaluating

additional material handling capacity at Kakula to increase mining rates to feed the de-

bottlenecked Phase 1 and 2 processing capacity of 9.2 million tonnes of ore per annum,

which will be incorporated into the Phase 3 expansion Pre-Feasibility Study scheduled

for the end of the year.

While the near-term expansion of underground infrastructure at Kakula takes place, ore

will be drawn periodically from the surface stockpiles to maximize copper production as

the Phase 1 and 2 concentrators are currently operating in excess of design capacity.

As at the end of June 2022, Kamoa-Kakula’s high- and medium-grade ore surface

stockpiles totalled approximately 4.6 million tonnes at an estimated grade of 4.42%

copper.

Management anticipates that the early commissioning of the Phase 2 concentrator plant

in March 2022, approximately four months ahead of schedule, has enabled Kamoa

Copper to increase the lower end of its full year 2022 production guidance from a range

of between 290,000 to 340,000 tonnes of copper in concentrate, to between 310,000 and

340,000 tonnes.

Ivanhoe Mines’ President Marna Cloete commented: “Ivanhoe Mines is very well

positioned to manage the current commodity-market volatility and industry-wide

inflationary pressures, with a strong balance sheet, tier-one, low-cost mining assets,

and an experienced management team. Kamoa-Kakula is the fastest-growing, highest-

grade major copper complex on the planet, and will be a long-life, cornerstone supplier

of critical, high-quality, low-carbon copper metal. We remain extremely confident in

copper's mid-to-long term fundamentals as the world navigates the transition to clean

energy. The increase in Kamoa Copper’s annual production guidance estimate is a

further testament to the excellent work by the mine operations team during the Phase 1

and Phase 2 construction and ramp-up.

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We are working closely with our partners to identify opportunities to improve the

efficiency of Kamoa-Kakula’s concentrate transport and logistics to mitigate any further

cost pressures over the coming quarters. We are confident we can work proactively

alongside the government of Democratic Republic of Congo to identify potential

infrastructure pathways that improve our trucking and shipping conditions. With

respect to Kamoa-Kakula’s on-site costs, these have been largely insulated from the

recent inflationary market conditions.”

Ivanhoe Mines to host conference call for investors on August 15

The company will hold an investor conference call to discuss the Q2 2022 financial

results at 10:30 a.m. Eastern time / 7:30 a.m. Pacific time on August 15. The conference

call dial-in is +1-647-484-0258 or toll free 1-800-289-0720, quote “Ivanhoe Mines Q2 2022

Financial Results” if requested. Media are invited to attend on a listen-only basis.

Link to join the live audio webcast: https://bit.ly/3I7kaCR

An audio webcast recording of the conference call, together with supporting

presentation slides, will be available on Ivanhoe Mines’ website at

www.ivanhoemines.com.

After issuance, the Financial Statements and Management’s Discussion and Analysis

will be available at www.ivanhoemines.com and at www.sedar.com.

Principal projects and review of activities

1. Kamoa-Kakula Mining Complex

39.6%-owned by Ivanhoe Mines

Democratic Republic of Congo

The Kamoa-Kakula Mining Complex, operated as the Kamoa Copper joint venture between

Ivanhoe Mines and Zijin Mining, has been independently ranked as the world’s fourth-largest

copper deposit by international mining consultant Wood Mackenzie. The project is

approximately 25 kilometres west of the town of Kolwezi and about 270 kilometres west of

Lubumbashi. Kamoa-Kakula began producing copper in May 2021 and achieved commercial

production on July 1, 2021.

Ivanhoe sold a 49.5% share interest in Kamoa Holding Limited (Kamoa Holding) to Zijin Mining

and a 1% share interest in Kamoa Holding to privately owned Crystal River in December 2015.

Kamoa Holding holds an 80% interest in the project. Since the conclusion of the Zijin

transaction, each shareholder has been required to fund expenditures at Kamoa-Kakula in an

amount equivalent to its proportionate shareholding interest. Ivanhoe and Zijin Mining each

hold an indirect 39.6% interest in Kamoa-Kakula, Crystal River holds an indirect 0.8% interest,

and the DRC government holds a direct 20% interest.

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Construction of an additional scavenger-cleaner flotation cell at the Phase 1

concentrator, part of the de-bottlenecking program to boost copper production to

approximately 450,000 tonnes per annum by Q2 2023.

Health and safety at Kamoa-Kakula

At the end of June 2022, Kamoa-Kakula reached 4,272,520 work hours free of a lost-time

injury. Two lost-time injuries occurred underground at the Kakula Mine in Q2 2022. Kamoa

Copper continues to strive toward its workplace objective of zero harm to all employees and

contractors.

Nursing staff inside the new medical facility at the Kamoa Hospital.

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Kamoa-Kakula summary of operating and financial data

Q2 2022 Q1 2022 Q4 2021 Q3 2021

Ore tonnes milled (000’s tonnes) 1,950 1,083 1,059 861

Copper ore grade processed (%) 5.44% 5.91% 5.96% 5.89%

Copper recovery (%) 84.0% 87.1% 86.4% 83.4%

Copper in concentrate produced (tonnes) 87,314 55,602 54,481 41,545

Payable copper sold (tonnes) 85,794 51,919 53,165 41,490

Cost of sales per pound ($ per pound) 1.15 1.08 1.12 1.08

Cash cost (C1) ($ per pound) 1.42 1.21 1.28 1.37

Sales revenue before

remeasurement ($'000) 699,381 467,453 458,880 355,022

Remeasurement of contract

receivables ($'000) (205,248) 52,142 29,656 (12,438)

Sales revenue after remeasurement ($'000) 494,133 519,595 488,536 342,584

EBITDA ($'000) 286,313 399,391 357,619 233,212

EBITDA margin (%) 58% 77% 73% 68%

C1 cash costs are prepared on a basis consistent with the industry standard definitions by Wood

Mackenzie cost guidelines, but are not measures recognized under IFRS. In calculating the C1 cash

cost, the costs are measured on the same basis as the Company's share of profit from the Kamoa

Holding joint venture that is contained in the financial statements. C1 cash costs are used by

management to evaluate operating performance and includes all direct mining, processing, and general

and administrative costs. Smelter charges and freight deductions on sales to final port of destination,

which are recognized as a component of sales revenues, are added to C1 cash cost to arrive at an

approximate cost of delivered, finished metal. C1 cash costs exclude royalties and production taxes

and non-routine charges as they are not direct production costs.