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Kamoa-Kakula Copper Project sets fresh monthly record for underground development with 2,069 metres achieved in September; more than 22.6 kilometres now complete – 44% ahead of plan Construction of the project’s first 3.8 million-tonne-per-annum (Mtpa)

Mine Development & Operations

October 1, 2020

Kamoa-Kakula Copper Project sets fresh monthly record for

underground development with 2,069 metres achieved in September;

more than 22.6 kilometres now complete – 44% ahead of plan

Construction of the project’s first 3.8 million-tonne-per-annum (Mtpa)

processing plant and surface infrastructure at the high-grade Kakula

Mine more than 52% complete, with first production less than a year

away

Orders now being placed for the long-lead items for the project’s

second 3.8 Mtpa processing plant

Development from Kakula’s southern decline nearing the centre of the

orebody, where grades average between +5% and +8% copper

Pre-production surface stockpiles at Kakula North, Kakula South and

Kansoko now contain an estimated 803,000 tonnes of ore

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

IVPAF) Co-Chairs Robert Friedland and Yufeng “Miles” Sun announced today that

underground development at the Kamoa-Kakula Copper Project totalled 2,069 metres in

September, setting a new monthly record for the project and bringing the total

underground development to more than 22.6 kilometres – approximately 7.0 kilometres,

or 44% ahead of schedule.

The project’s monthly total of 2,069 metres of underground development is comprised

of 1,696 metres at the Kakula Mine and 373 metres at the Kansoko Mine, which is

located at the Kamoa Deposit – approximately 10 kilometres north of the Kakula Mine.

Several underground development headings at the Kakula Mine now have transitioned

into the higher-grade ore zones near the centre of the deposit, grading between

approximately +5% copper and +8% copper. October will be the first month of mining in

Kakula’s high-grade ore from the southern access drives, and this ore will be stored on

a separate high-grade surface stockpile near the southern decline. Mining on the

northern side of the orebody also will soon intersect the higher grade ore.

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The main access drives between northern and southern declines have less than 520

metres remaining before they connect in the high-grade centre of the deposit. The

connection is expected to occur next month and will significantly increase ventilation to

the centre of the orebody, allowing for additional mining crews to begin work in

Kakula’s high-grade ore zones.

In addition to driving the main connecting access drives, underground mining crews at

Kakula are focused on preparation work for developing the high grade, drift-and-fill

stoping blocks in the centre of the orebody, where the average grade is up to +8%

copper. Opening up of the mining footprint for these high-grade stoping areas entails

development work in areas of low-, medium- and high-grade ore, and is designed to

coincide with the start-up of the processing plant next year. This will allow mining crews

to deliver high-grade stoping ore directly from the underground to the processing plant.

Drift-and-fill stoping is a highly-efficient form of underground mechanized mining and

will allow the operation to efficiently recover significantly more tonnes from the

orebody. Once drift-and-fill stoping operations begin, mining at the Kakula Mine will

produce a significantly higher proportion of high-grade stoping ore than lower-grade

development ore.

Underground development at the Kansoko Mine currently is in low-to-medium-grade ore

zones, grading between approximately +2% and +3% copper. Kansoko is being

developed by training crews and will be a supplemental source of ore when the Kakula

concentrator processing capacity doubles to 7.6 Mtpa − currently planned to be

commissioned in Q2 2022.

Pre-production surface ore stockpiles now total more than 803,000 tonnes

In September, mining crews at the Kakula and Kansoko mines produced and

transported to surface approximately 132,000 tonnes of ore, bringing the project’s total

pre-production ore stockpiles to an estimated 803,000 tonnes. September’s ore

production is approximately 24% higher than August.

The ore being mined from the northern portion of the Kakula Mine is transported to

surface via the conveyor system and placed on a blended surface stockpile that now

contains 540,000 tonnes grading an estimated 3.73% copper; comprised of 125,000

tonnes of high-grade ore grading 6.00% copper, and 415,000 tonnes of medium-grade

ore grading 3.05% copper.

Two additional, pre-production ore stockpiles are located at the Kakula South decline

(approximately 168,000 tonnes grading 2.73% copper) and the Kansoko decline

(approximately 95,000 tonnes grading 2.34% copper).

“The new underground record achieved in September puts development progress

months ahead of plan,” said Mark Farren, Kamoa Copper’s CEO. “With each passing

month, our mining and engineering teams are increasingly confident that the forecasted

mining productivity rates used in our engineering studies are conservative – a

testament to the focus and dedication of the project’s mining crews as well as the

remarkable consistency of the Kakula and Kansoko orebodies.”

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“The next major milestone in the mine’s development will be the joining of the northern

and southern access drives, which is expected in November. Once this is achieved, the

opening up and ledging of the drift-and-fill blocks can commence in the high-grade core

of the deposit, where the average grade is up to +8% copper,” Mr. Farren added.

First copper production expected in less than a year

Initial production at the Kakula Mine processing plant is scheduled for Q3 2021. Kakula

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

rate of 3.8 Mtpa at an estimated average feed grade of more than 6.0% copper over the

first five years of operation. Kakula is the first of multiple, planned, high-grade mining

areas on the 400-square-kilometre Kamoa-Kakula mining licence.

The Kakula Mine will have one of the most favourable environmental footprints of any

tier-one copper mine worldwide. The mine will be powered by clean, renewable

hydroelectricity and be among the world's lowest greenhouse gas emitters per unit of

copper produced. Kakula also will have a relatively small surface footprint, as

approximately 55% of the mine’s tailings will be pumped back into underground

workings.

All long-lead items for Kakula’s initial 3.8-Mtpa processing plant now have been

delivered to site with the exception of the transformers, which are currently en

route and expected around the third week of October.

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Aerial view of the Kakula Mine showing the tonnes and grade of the main pre-

production stockpiles at the northern declines. The stockpile currently contains

approximately 540,000 tonnes grading 3.73% copper; comprised of

approximately 125,000 tonnes at 6.00% copper and 415,000 tonnes at 3.05%

copper.

Miner Fabrice Kasunka marking the face for drilling in the room-and-pillar mining

area of the Kakula Mine.

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Kakula southern decline medium-grade ore stockpile currently containing

approximately 168,000 tonnes grading 2.73% copper.

Miner Haliday Mujinga operating an Epiroc double-boom drilling rig at Kakula.

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Kansoko decline medium-grade ore stockpile currently containing approximately

95,000 tonnes grading 2.34% copper. Recently-erected transmission towers for

the new 35-kilometre powerline that will carry high-voltage hydroelectricity from

the national grid to Kamoa-Kakula can be seen in the background.

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Development work at the Kakula Mine now concentrated on accessing the

high-grade stoping zones within the next six months

Underground development of the Kakula Mine – the first of multiple, near-surface

copper deposits planned to be put into production on the 400-square-kilometre Kamoa-

Kakula mining licence – is significantly ahead of schedule. Mine connection drives

(interconnected, parallel tunnels providing access to the ore zones) are being driven

from both the north and the south to effect a holing in the centre of the high-grade zone.

The connection drifts are expected to be joined in November. This will increase

underground ventilation, allowing additional mining fleets to begin working in the high-

grade ore zones.

Development of the eastern perimeter drives also is well advanced and a second set of

connection drifts are being planned. Mining of medium-grade ore in the room-and-pillar

block is progressing well.

Kakula’s northern access drive #1, showing a high concentration of gray-

coloured chalcocite ore. Chalcocite, which is almost 80% copper by weight,

largely accounts for the mine’s average feed grade of 6.6% copper over the first

five years of operations, and 5.2% copper on average over a 21-year life.

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Figure 1: The eastern portion of the Kakula Mine ─ representing less than half of

the overall 13.3-kilometre-long Kakula Deposit ─ overlain on southern Manhattan

Island to provide a sense of the scale of the underground operations.