Kamoa-Kakula copper mine will generate NPV8% of US$11.1 billion at 19-Mtpa production rate

Ivanhoe Mines announces outstanding economic results of the independent Integrated Development Plan (IDP) for the tier one Kamoa-Kakula Copper Project

The IDP comprises three development scenarios: Kakula definitive feasibility study (DFS), Kakula-Kansoko pre-feasibility study (PFS), and Kamoa-Kakula preliminary economic assessment (PEA)

Ultra-high copper grades; clean, renewable hydropower; and approximately half of tailings stored underground, positions Kamoa-Kakula to produce the world’s most environmentally-responsible copper

The DFS evaluates the stage-one, 6-million-tonnes-per-annum (Mtpa) Kakula Mine currently being constructed; this first stage yields an after-tax NPV8% of US$5.5 billion, IRR of 77% over a 21-year mine life, and payback of 2.3 years

Ivanhoe fully funded to initial production at the Kakula Mine − expected in less than a year. Kakula’s expected average ore-feed grade is 6.6% copper, and mine-site cash cost US$0.48/lb. copper, in first five years of operation

The PFS evaluates mining 1.6 Mtpa from the Kansoko Mine, in addition to 6 Mtpa from Kakula, to fill a 7.6-Mtpa processing plant at Kakula; this scenario yields an after-tax NPV8% of US$6.6 billion, IRR of 69% over a 37-year mine life, and payback of 2.5 years

The PEA evaluates an integrated, multi-staged development to achieve a 19-Mtpa production rate; yielding a potential after-tax NPV8% of US$11.1 billion, IRR of 56% over a plus 40-year mine life, and payback of 3.6 years

The phased expansion scenario to 19 Mtpa would position Kamoa-Kakula as the world’s second largest copper mining complex, with peak annual copper production of more than 800,000 tonnes

Estimated remaining initial capital cost for all three development scenarios is between US$0.6 billion and US$0.7 billion, of which Ivanhoe’s share is approximately 50%, with subsequent expansions funded by cash flows

Kamoa-Kakula engineers are working to further optimize the mine plan and bring forward, from Q1 2023 to Q2 2022, the expansion of the

KOLWEZI, DEMOCRATIC REPUBLIC OF CONGO – KOLWEZI, DEMOCRATIC REPUBLIC OF CONGO – Ivanhoe Mines’ (TSX: IVN; OTCQX:IVPAF) Co-Chairs Robert Friedland and Yufeng “Miles” Sun announced today that the company and its partners, Zijin Mining Group, Crystal River Global Limited and the government of the Democratic Republic of Congo (DRC), welcome the extremely positive findings of an independent definitive feasibility study (DFS) for the development of the Kakula Copper Mine; together with an updated pre-feasibility study (PFS) that includes ore mined from the nearby Kansoko Copper Mine in addition to ore mined from Kakula; and an updated, expanded preliminary economic assessment (PEA) for the overall development plan of all the copper discoveries made to date at the Kamoa-Kakula Project on the Central African Copperbelt in the DRC.

Today’s DFS, PFS and updated PEA, collectively referred to as the Kamoa-Kakula Integrated Development Plan 2020 (Kamoa-Kakula IDP20), builds on the excellent results of the previous studies announced in February 2019. The new DFS incorporates the advancement of development and construction activities to date, and has once again confirmed the outstanding economics of the first phase Kakula Mine. As well, the expanded PEA shows the excellent potential to develop the project to a much larger scale and with a significantly larger production capacity.

On Thursday, September 10, 2020, Ivanhoe will host a virtual Investor Day to discuss the findings of the DFS, PFS and PEA for the Kamoa-Kakula Copper Project, including various options under consideration to accelerate the planned expansions. The Investor Day will include a virtual site tour of the Kamoa-Kakula Project, as well as remarks from Ivanhoe’s Co-Chairs Robert Friedland and Yufeng “Miles” Sun; the company’s President and CFO, Marna Cloete; and members of the company’s corporate development and technical teams. It also will feature a question and answer session.

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