Underground development at the Kakula Copper Mine enters zone of ultra-high-grade ore Kakula’s northern and southern access drives to connect next month, allowing highly-productive stoping operations to begin in centre of orebody in +8% copper

October 19, 2020

Underground development at the Kakula Copper Mine enters

zone of ultra-high-grade ore

Kakula’s northern and southern access drives to connect next

month, allowing highly-productive stoping operations to begin in

centre of orebody in +8% copper

Excellent construction progress being made on Kakula’s

concentrator plant; first production now expected in July 2021

KOLWEZI, DEMOCRATIC REPUBLIC OF CONGO – Robert Friedland and Yufeng “Miles”

Sun, Co-Chairmen of Ivanhoe Mines (TSX: IVN; OTCQX: IVPAF), announced today

that excellent progress is being made advancing underground mine development at the

Kakula Mine in the Democratic Republic of Congo (DRC), with current mining grades of

up to 11% copper in one of the access drives being advanced from the northern decline.

Kakula’s northern and southern dual access drives are expected to be connected (the

mining term is “holing”) next month, allowing highly-productive mining (stoping)

operations to begin in high-grade zones. Approximately 260 metres of tunneling

remains until the access drives are connected (see figures 1 and 2).

“Development of the dual access drives from Kakula’s northern decline has entered a

zone of chalcocite-rich ore grading up to 11% copper over a height of 6.6 metres,” said

Mr. Friedland. “These copper grades are extraordinary in a global context, but are not

unexpected. They are real-time confirmation of the exceptional quality of the Kakula

resource, which sits at the apex of any ranking worldwide.”

In addition, access drift 1 from Kakula’s southern decline has moved from the medium-

grade ore zone (+5 copper) into the high-grade ore zone, and currently is traversing the

+8% copper zone as it approaches the “holing” position in the centre of the deposit.

Access drift 2 from Kakula’s southern decline currently is traversing the +5% copper

zone and is expected to quickly enter the +8% copper zone (see figures 1 and 2).

“We are looking forward to achieving our first “holing” between the northern and

southern declines,” said Mr. Friedland. “It will open up important high-grade copper

reserves, and enable ventilation to flow through dedicated underground airways, which

have been developed between Kakula’s northern and southern declines. This marriage

between Kakula’s northern and southern declines will facilitate the ramp up in

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production and dramatically increase the efficiency of our underground logistics, and

further improve safety.”

Figure 1: Underground development completed to October 18, 2020 (in black)

and scheduled development (green, brown, purple) to November 30, 2020. Also

shown are the +3%, +5% and +8% copper contours and the location where the

northern and southern access drives are scheduled to join in November (red

circle).

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Figure 2: Kakula’s underground development completed to October 18, 2020 (in

red). The black star shows where the northern and southern access drives are

scheduled to join in November.

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A Niton (portable XRF) reading on the tip of a chalcocite-rich piece of ore grading

67.8% copper from Kakula’s northern access drive spiral. Grey-colored

chalcocite has the greatest percentage of copper of all the common sulphide-

copper-bearing minerals ─ almost 80% copper by weight.

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Mine geologist Micheline Kyenge examines the chalcocite-rich face in Kakula’s

northern access drive spiral. The prevalence of the grey-coloured chalcocite

accounts for the ultra-high-copper grades recently encountered.

Excellent construction progress being made on Kakula’s concentrator

plant; first production now expected in July 2021, at the beginning of Q3

2021 guidance

Steve Amos, Kamoa Copper’s Head of Projects, stated: “The updated project schedule

for the initial 3.8 million-tonne-per-annum (Mtpa) concentrator plant indicates that first

ore now is expected at the beginning of our Q3 2021 planned window. There has been

an enormous effort by the project and construction teams to not only maintain the

milestone dates with the challenges presented by the pandemic, but to place ourselves

in a position to commission early. We are delighted with the progress made to date.”

“It will be enormously beneficial if we can commission early,” said Rochelle De Villiers,

Kamoa Copper’s Co-CFO. “We look forward to generating revenue as early as possible,

which will allow us to advance the project’s Phase 2 development with internal cash

flow. The long-lead items for the second 3.8 Mtpa concentrator plant have been ordered

and the second phase of our development now is officially underway.”

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Mark Farren, CEO of Kamoa Copper said: “We will leverage what we have learned thus

far into Phase 2 construction, and expand the project at a sustainable rate that

minimizes peak funding. Phases 1 and 2 combined are expected to produce

approximately 400,000 tonnes of copper per year.”

“Our engineers are already planning the steps necessary to implement phases 3, 4 and

5, which would expand the project’s production rate to at least 19 million tonnes of ore

a year.”

“We currently have more than 6,000 people on site, most of whom are employed by sub-

contractors for the construction of the mining infrastructure and concentrator. This will

transition gradually as we move into production. We expect to employ close to 2,000

permanent Kamoa Copper employees once both concentrator plants are operating and

the first two mines are producing at a steady state of 7.6 million tonnes of ore a year.”

“We have a talented, young Congolese workforce who are eager to learn and grow as

we develop this mine into a world-class operation. The once-in-a-century

metamorphosis from a giant, greenfields discovery into a successful world-leading

mining operation is inherently challenging; however, our people have the special blend

of experience and commitment to do it successfully,” Mr. Farren added.

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The two, 7-megawatt ball mills at Kakula’s initial 3.8 Mtpa processing plant, with

the girth gears now installed. A 3D illustration of the finished ball mills (shown in

green) is below, with the next two ball mills for the recently-initiated second

processing plant shown in magenta.

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Ongoing construction of Kakula’s initial 3.8 Mtpa processing plant, showing the

assembled ball mills and the first four flotation tanks.

Kapenda Mutombo pours concrete at Kakula’s copper concentrate storage area.