Ivanhoe Mines reports an increase in Indicated Mineral Resources of 58%

May 11, 2016

Ivanhoe Mines reports an increase in Indicated Mineral Resources of 58% and also an accompanying increase in Inferred Mineral Resources of 21% at its Platreef platinum-group metals, gold, nickel and copper project in South Africa

Indicated Mineral Resources now contain an estimated 42.0 million ounces of PGMs plus gold – a gain of 45% – with an additional 52.8 million ounces in Inferred Resources, at the base case cut-off grade of 2 grams/tonne

At a cut-off grade of 1 gram/tonne, Indicated Mineral Resources now contain an estimated 58.8 million ounces of PGMs plus gold, and an additional 94.3 million ounces in Inferred Resources

MIAMI, USA – Ivanhoe Mines (TSX: IVN) Executive Chairman Robert Friedland announced today that Ivanhoe Mines has reported a substantial increase in Indicated and Inferred Mineral Resources at the company’s Platreef Project in the heart of South Africa’s Bushveld Complex, the world’s premier platinum producing region. Details are to be featured in Mr. Friedland's presentation at the Bank of America Merrill Lynch Global Metals, Mining and Steel Conference in Miami later today.

The updated estimate is for Mineral Resources amenable to underground mining methods within Platreef's Flatreef Deposit. It is the first update of the overall resource estimate to be issued in more than three years. The new estimate includes the Turfspruit Cyclic Unit (TCU), which hosts the majority of the Flatreef Mineral Resources, and also two additional underground zones of mineralization – the Footwall (FW) and the Bikkuri (BIK) – that occur in close proximity to the TCU.

The Platreef mine development project now underway is based on the Tier One discovery by Ivanhoe Mines’ geologists of platinum-group metals (PGMs), nickel, copper and gold on the Bushveld’s Northern Limb, located near the town of Mokopane in Limpopo Province.

The Platreef Project is owned by Ivanplats (Pty.) Ltd., which is 64%-owned by Ivanhoe Mines. A 26% interest is held by Ivanplats’ broad-based, black economic empowerment partners, which include 20 local host communities that house approximately 150,000 people, historically-disadvantaged project employees and local entrepreneurs. A Japanese consortium of ITOCHU Corporation and its affiliate, ITC Platinum, plus Japan Oil, Gas and Metals National Corporation and JGC Corporation, owns a 10% interest in Ivanplats that was acquired in two tranches for a total investment of US$290 million.

Highlights of the Platreef Project’s updated Mineral Resource estimate include:

• An increase of 58% in the Indicated Mineral Resources tonnage to 346 million tonnes, at a grade of

3.77 grams per tonne (g/t) platinum, palladium, rhodium plus gold (3PE+Au), 0.32% nickel and 0.16% copper, at a cut-off grade of 2.0 g/t 3PE+Au.

• An increase of 21% in the Inferred Mineral Resources tonnage to 506 million tonnes, at a grade of

3.24 g/t 3PE+Au, 0.31% nickel and 0.16% copper, at a cut-off grade of 2.0 g/t 3PE+Au.

• An increase of 45% in the contained metal in Indicated Mineral Resources, at a cut-off grade of

2.0 g/t 3PE+Au, totaling 41.95 million ounces of 3PE+Au, plus a 47% increase in nickel to 2.44 billion pounds and a 50% increase in copper to 1.23 billion pounds.

• Contained metal in Inferred Mineral Resources, at a cut-off grade of 2.0 g/t 3PE+Au, has increased

by 11% to total 52.77 million ounces of 3PE+Au, nickel has increased by 13% to total 3.44 billion pounds and copper has increased by 18% to 1.78 billion pounds.

• An average thickness of 19 metres in the area of the TCU-T2 mineralized zone where Indicated

Mineral Resources are estimated and an average thickness of 13 metres for the area where Inferred Mineral Resources are estimated, using the 2.0 g/t 3PE+Au cut-off.

Mr. Friedland noted that the Flatreef Deposit is characterized by its very large vertical thicknesses of high-grade mineralization and a platinum-to-palladium ratio of approximately 1:1, which is significantly higher than other recent PGM discoveries on the Bushveld’s Northern Limb.

“The new resource estimate is further confirmation of our belief that the deposit will be a model for safe, mechanized, underground platinum mining in South Africa,” said Mr. Friedland.

“Ivanhoe’s geologists conducted an extensive core relogging program and reinterpreted the structure, stratigraphy and assimilation of host rocks. This re-interpretation, combined with the detailed infill and exploration drilling programs conducted during the past three years, has produced a significant increase in estimated Mineral Resources. There still remains significant exploration upside, as the deposit is open along strike and down dip for several kilometres. We plan to continue advancing this remarkable project at an accelerated pace.”

Dr. Patricia Makhesha, Managing Director of the Platreef Project, also praised the accomplishments of the company’s geological team, several of whom have been with the project for more than a decade.

“We’re confident that the Platreef Project will become a major mining operation and also will contribute significantly to job creation, skills training and economic development opportunities for people and businesses in the Mokopane region and Limpopo Province,” she added.

The updated Mineral Resource estimate was prepared by Ivanhoe Mines under the direction of Dr. Harry Parker, RM SME of Amec Foster Wheeler E&C Services Inc (Amec Foster Wheeler). Dr. Parker and Mr. Timothy Kuhl RM SME, also of Amec Foster Wheeler, have independently confirmed the Mineral Resource estimate and are the Qualified Persons for the estimate, which has an effective date of April 22, 2016. 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.

Substantial increase in Mineral Resources amenable to underground mining methods

The substantial increase in the Platreef Project’s Indicated and Inferred Mineral Resources in the updated 2016 estimate results primarily from the additional 97,737 metres of detailed infill and exploration drilling that was completed between August 2012 and February 2015. A plan view of the additional drilling is shown in Figure 1.

The increase also is driven by a revised and improved geological interpretation by Ivanhoe’s geologists, with additional Mineral Resources now estimated in areas that were drilled before 2013. Since the February 2013 Mineral Resource estimate, Ivanhoe’s geologists have completed relogging of cores and an updated geological interpretation of the entire portion of the Platreef Project amenable to underground mining. The result is estimation of Mineral Resources amenable to selective mining in areas previously categorized as being amenable only to bulk-mining methods.

The consolidated Mineral Resources for the Platreef Project are shown in Table 1 (2.0 g/t 3PE+Au base case highlighted; other cases are included to show the sensitivity of the Mineral Resources to changes in cut-off grades).

Table 1: Platreef Mineral Resource - all mineralized zones (2.0 g/t base case).

1. Mineral Resources have an effective date of April 22, 2016. The Qualified Persons for the estimate are Dr. Harry Parker, RM SME, and Timothy Kuhl, RM SME, who are employees of Amec Foster Wheeler E&C Services Inc. and independent of Ivanhoe. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

2. The 2 g/t 3PE+Au cut-off is considered the base case estimate and is highlighted. The rows are not additive.

3. Mineral Resources are reported on a 100% basis. Mineral Resources are stated from approximately -200 m to 650 m elevation (from 500 m to 1,350 m depth). Indicated Mineral Resources are drilled on approximately 100 x 100 m spacing (locally 150 m spacing); Inferred Mineral Resources are drilled on 400 x 400 m (locally to 400 x 200 m and 200 x 200 m) spacing.

4. Mineral Resources have been estimated on an externally undiluted basis and without consideration for mining recovery. Dilution and mining recoveries will vary with the geometry (dip, thickness, faulting and or irregularities in contacts) of the mineralization and the eventual mining method used.

5. Reasonable prospects for eventual economic extraction were determined using the following assumptions. Assumed commodity prices are Pt: $1,600/oz, Pd: $815/oz, Au: $1,300/oz, Rh: $1,500/oz, Cu: $3.00/lb and Ni: $8.90/lb. It has been assumed that payable metals would be 82% from a smelter/refinery and that mining costs (average $34.27/t) and process, G&A, and concentrate transport costs (average $15.83/t of mill feed for a 4 Mtpa operation) would be covered. The processing recoveries vary with block grade but typically would be 80%-90% for Pt, Pd and Rh; 70-90% for Au, 60-90% for Cu, and 65-75% for Ni.

6. 3PE+Au = Pt + Pd + Rh + Au.

7. Totals may not sum due to rounding.

The consolidated Mineral Resources for the Platreef Project now include Mineral Resources in the Bikkuri area (UMT-BIK) and additional Mineral Resources in the footwall of the key mineralized zone, the TCU, referred to collectively as the UMT-FW. The UMT-FW consists of two zones, the FWcpx and FWpnz. The location of the various mineralized zones (Resource Areas) in a plan view is shown in Figure 2.

Dr. Harry Parker, Consulting Mining Geologist and Geostatistician, and Timothy Kuhl, Principal Geologist, both of Amec Foster Wheeler, worked in collaboration with George Gilchrist, of Ivanhoe, on the Mineral Resource model and the Mineral Resource tabulation, and Dr. Parker and Mr. Kuhl are the Qualified Persons for the estimate. Dr. Parker and Mr. Kuhl are of the opinion that the Mineral Resources for the Platreef Project have been estimated using industry-leading practices and conform to the requirements of the 2014 Definition Standards for Mineral Resources and Mineral Reserves as set forth by the Canadian Institute of Mining and Metallurgy, incorporated by reference into NI 43-101.

Figure 1: Platreef’s Indicated Resources shown in green; Inferred Resources in blue; areas of resource expansion indicated with diagonal lines; exploration target areas in beige. Additional detail on the exploration target areas is shown in Figure 7.

Figure 2: Plan view showing location of the new resource areas relative to Shaft 1. Bikkuri Mineral Resources (UMT-BIK) is shown in green; the two separate domains of Footwall Mineral Resources (UMT-FW) are shown in orange (UMT-FWcpx) and purple (UMT-FWpnz).

Mineral Resources in the UMT-TCU

The Mineral Resources in the UMT-TCU, which make up the majority of the Mineral Resources amenable to selective mining for the Platreef Project, are those contained within, or immediately adjacent to, the TCU. The TCU is interpreted by Ivanplats’ geologists to be analogous to the Merensky Cyclic Unit of the Bushveld’s Western and Eastern limbs.

The mineralization is characterized by its very large vertical thicknesses of high-grade mineralization and a platinum-to-palladium ratio of approximately 1:1, which is significantly higher than average for the Bushveld’s Northern Limb. The 2.0 g/t 3PE+Au grade shell used to constrain UMT-TCU mineralization in the area where Indicated Mineral Resources are declared has an average true thickness of approximately 19 metres, compared with approximately 0.4 to 1.5 metres for a typical Merensky Reef intersection of the Bushveld’s Western and Eastern limbs, as illustrated in Figure 3.

Figure 3: Comparison of the relative widths of a typical Merensky and Platreef reefs.

The TCU hosts two mineralized zones that are laterally continuous across the Platreef Project (figures 4 and 5). The T1 mineralized zone (T1MZ) occurs within cyclical magmatic units and feldspathic pyroxenite immediately below the Main Zone, and the T2 mineralized zone (T2MZ) is hosted within a mineralized, PGMenriched pegmatoid distinct from the feldspathic pyroxenite above it and bound by a top chromite stringer. The T2MZ occurs at a stratigraphic position similar to the world-renowned Merensky Reef. The T2MZ can be subdivided into an upper pegmatoidal orthopyroxenite, referred to as the T2 Upper, and a lower, less continuous pegmatoidal harzburgite, referred to as the T2 Lower. Recognition of the TCU and the pegmatoidal pyroxenite in 2012 was a key interpretive breakthrough for the Platreef Project.

The T1MZ 2.0 g/t 3PE+Au grade shell has an average true thickness of 3.9 metres for the Indicated Mineral Resource area and 3.8 metres for the Inferred Mineral Resource area. The T2MZ 2.0 g/t 3PE+Au grade shell has an average true thickness of 19 metres for the Indicated Mineral Resource area and 15 metres for the Inferred Mineral Resource area. The TCU T2MZ also demonstrates significant concentration of the highest grade near the top of the mineralized zone (“top loading”) and continuity of grade at elevated cut-offs that could allow for more selective mining scenarios. This is illustrated in figures 4 and 5.

Figure 4: Flatreef cross section showing T1 and T2 mineralized zones (T1MZ and T2MZ), and the significant top loading of the T2 mineralized zone.

Figure 5: Strip log schematic of drill hole UMT273 showing top-loaded nature of T2MZ.

The 2013 Mineral Resource statement for mineralization considered amenable to selective mining methods was based solely on the Mineral Resource estimated for the TCU, and the 2014 pre-feasibility study only considered Indicated Mineral Resources within the TCU. Both Indicated and Inferred Mineral Resources for the TCU have been expanded as a result of exploration drilling, within the expansion areas shown in Figure 1.

The 58% increase in the tonnage of the Platreef Project’s Indicated Mineral Resources is driven primarily by the successful infill drilling program that was completed in February 2015. UMT-TCU Indicated Mineral Resource now totals 339 million tonnes at 3.79 g/t 3PE+Au, 0.32% nickel and 0.16% copper (see Table 2).

The Inferred Mineral Resources within the UMT-TCU increased by 10%, to now total 459 million tonnes at a grade of 3.29 g/t 3PE+Au, 0.31% nickel and 0.16% copper (see Table 2). The increase in Mineral Resources is supported by additional drilling in the Platreef Project’s Madiba Zone.

Mineral Resources in the UMT-BIK

Mineral Resources within the Bikkuri Reef are located in a separate reef above the TCU mineralization, but show similar geological characteristics to the TCU. The Bikkuri zones are thought to represent structurallyemplaced blocks of TCU stratigraphy, for which Mineral Resources have been estimated using the same approach as for the UMT-TCU. The mineralization occurs in two distinct locations within the Platreef Project, with one zone located to the north of Shaft 1 and the second located southeast of Shaft 1, as illustrated in Figure 2. The relative vertical position of the Bikkuri zone with respect to the TCU in the north area is shown in section view in Figure 6.

The Bikkuri reef area that is located to the north of Shaft 1, contains Mineral Resources that were previously reported in the 2013 Mineral Resource update, while the Bikkuri reef area that is located southeast of Shaft 1, was identified during the revised geological interpretation. Indicated Mineral Resources for the Bikkuri reef total seven million tonnes at a grade of 2.81 g/t 3PE+Au, 0.35% nickel and 0.19% copper and occur solely in the north area. Inferred Mineral Resources for the Bikkuri reef total 27 million tonnes at a grade of 2.72 g/t 3PE+Au, 0.30% nickel and 0.16% copper (see Table 3). The 2.0 g/t 3PE + Au grade shell used in the estimation of the Mineral Resource averages 5.7 metres in thickness in the Indicated Mineral Resources area.

Mineral Resources in the UMT-FW

The Mineral Resources in the UMT-FW are considered to be amenable to selective mining methods, and are supported by an enhanced level of geological understanding gained from detailed review and re-interpretation of the geology and structure of the footwall to the TCU. Two separate domains have been identified in the FW: the FWcpx domain and the FWpnz domain, as shown in Figure 2.

Mineralization in the FWcpx domain is hosted in a massive, essentially homogeneous, unit of clinopyroxenedominated pyroxenite that averages 84 metres in true thickness and sits below the UMT-TCU mineralized zone in the northwest of the project. Figure 6 shows the location of the UMT-FWcpx zone relative to the UMT-TCU.

Mineralization in the FWpnz domain is hosted in a series of pyroxenite-norite layers that are separated by metasedimentary rocks. Six stacked grade shells, or mineralized zones, coded AMZ to FMZ, were modelled using a 1.0 g/t 3PE+Au cutoff. The zones range in average thickness from approximately 12 to 34 metres.

The continuity of FW mineralization has been modelled based on limited drill data, as not all of the UMT drill holes extended into the FW. For this reason, estimation of Mineral Resources has been restricted to the northwestern area of the Platreef Project where drill spacing is in the order of 100 metres to 200 metres. Similar mineralization has been seen in drill holes across the entire Platreef Project, but the current drill spacing is insufficient to define Mineral Resources amenable to selective mining methods in these areas. This represents exploration upside for the Platreef Project.

Drill intercepts ≥ 2.0 g/t 3PE+Au in the FW domains are narrow, and suggest selective mining would be required. Grade continuity is best observed at a 1.0 to 1.5 g/t 3PE+Au cutoff. Discontinuous pods of mineralization at a 2.0 g/t 3PE+Au cutoff are present, but are not well defined at the current drill spacing, and additional drilling is required. The FWcpx domain includes thicker zones of low-grade mineralization that may permit mass mining methods at a lower cutoff (1 g/t 3PE+Au).

Inferred Mineral Resources in the UMT-FW, at a 2.0 g/t 3PE+Au cut-off grade, total 20 million tonnes at 2.76 3PE+Au, 0.34% nickel and 0.19% copper, and are shown in Table 4.

Figure 6: Section Line 5.5 showing the Turfspruit Cyclic Unit (TCU), shown in red, which hosts the majority of the Flatreef Mineral Resources, and also the additional underground zones of mineralization – the Footwall FWcpx shown in purple with cross hatches, the FWpnz, shown in green with diagonal lines and the Bikkuri (BIK), shown in gray – that occur in close proximity to the TCU.

Table 2: Mineral Resource for the TCU only (base case is highlighted), assuming selective underground mining methods.

See notes under Table 1. Mineral Resources in this table are not additive to the Mineral Resources in Table 1.

Table 3: Mineral Resources for the Bikkuri zone only (base case is highlighted), assuming selective underground mining methods. Indicated Mineral Resources - Tonnage

See notes under Table 1. Mineral Resources in this table are not additive to the Mineral Resources in Table 1.