Ivanhoe Mines Ltd. Class A · TSX:IVN
Ivanhoe Mines Ltd. Class A — Investor Presentation (February 2018)
64 slides from Ivanhoe Mines Ltd. Class A's investor presentation, Feb 27, 2018
Slide 1: Developing 3 of the world’s best mines
Developing 3 of the world’s best mines to supply vital metals for our urbanizing planet
Slide 2: Forward-looking statements & Qualified Person
Forward-looking statements & Qualified Person Certain statements in presentation constitute “forward-looking statements” or “forward-looking information” within the meaning of applicable securities laws, including, without limitation, the timing and results of: (i) statements regarding the ongoing d
Slide 3: Building futures for our stakeholders
Building futures for our stakeholders, today, and writing new stories KAMOA-KAKULA of epic discoveries Copper discoveries in Southern Africa’s & mine development Democratic Republic legendary mineral fields of Congo’s Central African Copperbelt KIPUSHI PLATREEF Zinc, copper, silver Platinum-group el
Slide 4: Platreef Discovery & Mine Development
Platreef Discovery & Mine Development South Africa
Slide 5: Shaft 1 has reached a depth of 671 metres
February 26, 2018: Shaft 1 has reached a depth of 671 metres below surface, nearing the Flatreef PGM, nickel and copper orebody at a depth of approximately 780 metres below surface. Development work focused on initial production by early 2022.
Slide 6: Definitive feasibility study issued for Platreef Project
July 31, 2017: Definitive feasibility study issued for Platreef Project First phase envisages annual throughput rate of 4Mtpa, producing 476,000 ounces of platinum, palladium, rhodium and gold, plus 33 million pounds of nickel and copper. Projected to be Africa’s lowest-cost producer of PGMs, wi
Slide 7: Platreef at the bottom of the world’s cash-cost curve
Platreef’s potential US$351 per 3PE+Au ounce (net of base-metal by-products) at the bottom of the world’s cash-cost curve 1,600 1,400 1,200 Ivanhoe’s Platreef Project 1,000 at the bottom of the cash-cost curve. 800 600 400 200 0 4E oz production Platreef 4Mtpa FS Northern limb Zimbabwe Eastern Limb
Slide 8: Platreef will be world’s largest platinum-group metals mine
At 12 million tonnes/year, Platreef will be world’s largest platinum-group metals mine 1,400 Platreef Phase 3 (12 Mtpa) Ni + Cu + Cr production (eq. Pt oz) 1,200 Ir + Ru production (eq. Pt oz) 1,000 Platreef Phase 2 (8 Mtpa) 4E production (eq. Pt oz) 800 Platreef Phase 1 (4 Mtpa) 600 400 200 - Impal
Slide 9: Platreef debt financing site visit
July 2017 – A site visit by German, Swedish and Canadian government institutions appointed to arrange debt financing for Platreef. Expressions of interest received for approximately US$900 million of a US$1 billion finance package.
Slide 10: Ivanhoe announces start of surface construction for Shaft 2
April 2017: Ivanhoe announces start of surface construction for Shaft 2, which will be Platreef's main production shaft with a hoisting capacity of six million tonnes a year. Illustration shows two perspectives of Shaft 2’s 103-metre-tall concrete headgear and internal permanent hoisting facilities.
Slide 11: Ivanhoe’s Shaft 2 vs. Impala’s Shaft 16
Ivanhoe’s Shaft 2 vs. Impala’s Shaft 16 Conceptual Purpose Production shaft Production shaft Northern Limb of Bushveld Western Limb of Bushveld Location Complex Complex Total depth Approx. 1,100 metres 1,657 metres Diameter 10 metres 10 metres Hoisting capacity 6 million tonnes/year 2.7 million tonn
Slide 12: Platreef’s B-BBEE deal is a top performer
Platreef’s B-BBEE deal is a top performer in South Africa’s platinum sector BEE partner’s 26% ownership stake in Platreef Project is one of the broadest empowerment transactions ever done in South African mining. • 20% held by a trust to benefit 20 local host communities, with estimated combined pop
Slide 13: Sinking platform in operation in Shaft 1
Sinking platform in operation in Shaft 1 Shaft 1 is expected to reach its projected, final depth of 980 metres below surface in 2019
Slide 14: Removal of broken rock from shaft-sinking development
Removal of broken rock from shaft-sinking development
Slide 15: Remote-operated cactus grab used to remove broken rock
The remote-operated cactus grab used to remove broken rock from shaft-sinking development
Slide 16: Strong and supportive strategic partners
Strong and supportive strategic partners ITOCHU Corporation; Japan Oil, Gas and Metals National Corporation; and Japan Gas Corporation acquired 10% for approx. US$300 million. Potential Japanese government-supported project financing and off-take agreements. Itochu team site visit.
Slide 17: Flatreef mining method: long-hole stoping
Flatreef mining method: long-hole stoping Highly mechanized Safe working mining conditions Blast-hole drifts 5m 5m The Flatreef Deposit average thickness of 24 metres = 8 storeys Mucking drifts Highly skilled operators
Slide 18: The future of underground mining is automation
The future of underground mining is automation Ivanhoe’s Platreef Platinum Project in South Africa is ideally suited for mechanized, autonomous mining. Source: ASI Robots Illustration source: ABB Mining. Source: MINEX Forum
Slide 19: The looming platinum “supply cliff”
The looming platinum “supply cliff” for Southern Africa’s existing producing mines (’000 oz.) Southern Africa’s projected platinum production plunge PwC, Sept. 2016 Existing shafts alone will barely maintain current production to 2021. Then, closures of mined-out shafts will help trigger a long
Slide 20: New production likely to provide only short-lived lift in platinum output
Even new production now under development likely to provide only short-lived lift in platinum output (’000 oz.) Southern Africa’s projected platinum production plunge 2022: EXPECTED START OF INITIAL PRODUCTION FROM IVANHOE’S PLATREEF PROJECT PwC Ivanhoe’s Platreef is among new projects whose ramp-
Slide 21: Kamoa Mine Development & Kakula Discovery
Kamoa Mine Development & Kakula Discovery Democratic Republic of Congo
Slide 22: Congo produces more copper than Canada!
Congo produces more copper than Canada! DRC: 1,090,000 tonnes Canada: 720,000 tonnes Sources: Wood Mackenzie, Bernstein Research, Reuters, Natural Resources Canada, USGS
Slide 23: Kamoa, Kakula and Kakula West Indicated and Inferred Mineral Resource areas
Kamoa, Kakula and Kakula West Indicated and Inferred Mineral Resource areas, with existing power and rail infrastructure
Slide 24: Kamoa-Kakula among the world’s top 10 copper deposits
February 2018: A new resource estimate establishes Kamoa-Kakula as the world’s fourth largest copper discovery. Copper grades at the two adjacent deposits are the highest, by a wide margin, of the world’s top 10 copper deposits
Slide 25: Indicated Mineral Resources, Kamoa-Kakula Project, February 2018
Indicated Mineral Resources, Kamoa-Kakula Project, February 2018 Cut-off Contained Contained Tonnes Area Copper Category Grade Copper Copper (millions) (Sq. km) Grade (Cu%) (kTonnes) (billion lbs) Indicated 3.0 396 33.2 4.79% 19,000 41.8 Indicated 2.5 535 44.0 4.25% 22,800 50.2 Indicated 2.0 780 53.
Slide 26: Kamoa-Kakula has the highest copper grades among the largest deposits
Among the world’s largest copper deposits, Kamoa-Kakula also has the highest copper grades Measured & Indicated Resource and Grade Inferred Resource and Grade 150 3.0% Contained Copper (Mt) 125 2.5% Copper Grade (%) 100 2.0% 75 1.5% 50 1.0% 25 0.5% - - Source: Wood Mackenzie *Note: Selected based on
Slide 27: Kamoa-Kakula is the largest undeveloped copper deposit
Kamoa-Kakula is the largest undeveloped copper deposit in the world Measured & Indicated Resource and Grade Inferred Resource and Grade 45 3.0% 40 Contained Copper (Mt) 2.5% Copper Grade (%) 35 30 2.0% 25 1.5% 20 15 1.0% 10 0.5% 5 - - Source: Wood Mackenzie *Note: Contained copper in undeveloped dep
Slide 28: Kamoa-Kakula is the largest high-grade copper deposit
Kamoa-Kakula is the largest high-grade copper deposit in the world 45 Measured & Indicated Resource Inferred Resource 40 5.9 Contained Copper (Mt) 35 30 25 11.7 20 36.6 15 6.4 10 16.9 4.8 0.0 0.4 5 10.2 0.4 0.1 0.0 0.0 0.3 4.6 1.4 0.9 0.7 0.5 0.3 0.4 0.3 - Source: Wood Mackenzie *Note: Contained cop
Slide 29: Largest copper discovery ever made on the African continent
Kamoa-Kakula is the largest copper discovery ever made on the African continent Measured & Indicated Resource Inferred Resource Historical Production 45 40 Contained Copper (Mt) 35 30 25 20 15 10 5 - Source: Wood Mackenzie and USGS
Slide 30: Extent of Kakula / Kakula West Discovery
Extent of Kakula / Kakula West Discovery Kakula West discovery extends known mineralization to more than 13 km, and remains open.
Slide 31: Kakula and Kakula West grades at 3% copper cut-off
Kakula and Kakula West discovery areas showing grades of Indicated and Inferred Mineral Resource blocks at a 3% copper cut-off
Slide 32: Kakula and Kakula West grades at 1% copper cut-off
Kakula and Kakula West discovery areas showing grade of Indicated and Inferred Mineral Resource blocks at a 1% copper cut-off
Slide 33: Kakula and Kakula West thickness at 1% copper cut-off
Kakula and Kakula West discovery areas showing the thickness of Indicated and Inferred Mineral Resource blocks at a 1% copper cut-off
Slide 34: Expansion of Mineral Resources since May 2017
Kakula and Kakula West discovery areas showing expansion of Indicated and Inferred Mineral Resources since May 2017
Slide 35: Kakula development options: up to six-million-tonne-per-year mines
Development options: Up to six-million- tonne-per-year mines! That’s 18 million tonnes per year! 1. Kakula Mine − being fast tracked to production with capacity of 6 Mtpa. 2. Kansoko Mine − development ready, also with capacity of 6 Mtpa. Kakula’s 3. Kakula West and Kamoa underground North – potenti
Slide 36: Underground development advanced declines more than 200 metres
Underground development has advanced each of the service and conveyor declines more than 200 metres toward the mineralized zone
Slide 37: Kamoa-Kakula PEA long-term development plan
Kamoa-Kakula PEA long-term development plan Source: OreWin 2017
Slide 38: 2025 Top producing mines by paid copper production
2025 Top 20 producing mines by paid copper production Note: Kamoa-Kakula production based on projected peak copper production (which occurs in year nine) of the 12 Mtpa development plan for the Kamoa-Kakula Project as detailed in the Kakula 2017 PEA. Source: Wood Mackenzie (based on public disclosur
Slide 39: Top largest new greenfield projects
Top 10 largest new greenfield projects (Nominal production and head grade) First ten years average grade 400 7.0% 350 6.0% 300 5.0% 250 4.0% 200 3.0% 150 100 2.0% 50 1.0% -- -- Nominal Production (kt/a) Copper Resource Grade (%Cu) Note: Top 10 largest new greenfield copper projects defined as the 10
Slide 40: Drilling at the Kakula West Copper Discovery
Drilling at the Kakula West Copper Discovery
Slide 41: Excellent visual drill intercepts continue at Kakula West
Excellent visual drill intercepts continue to be returned at Kakula West
Slide 42: First delivery of copper ore from Kansoko Mine stockpiled
July 21, 2017 – The first delivery of copper ore from the Kansoko Mine is stockpiled on surface
Slide 43: Zijin Mining acquired a 9.9% stake in Ivanhoe Mines
April 2015: Zijin Mining acquired a 9.9% stake in Ivanhoe Mines Zijin invested approx. C$105 million to help advance Ivanhoe’s three principal projects through a private placement at a price of C$1.36 per share. “Zijin will establish a close and strategic partnership with Ivanhoe through which w
Slide 44: Zijin Mining acquired 49.5% stake in Kamoa Project
December 8, 2015: Zijin Mining acquired 49.5% stake in Kamoa Project for US$412 million Zijin has committed to use its best efforts to arrange or procure project financing for 65% of the capital required to develop the first phase of the Kamoa Project, to be detailed in the ongoing feasibility stu
Slide 45: Mwadingusha hydroelectric power station
Mwadingusha hydroelectric power station Mwadingusha is the first of three hydroelectric power plants in the DRC that Ivanhoe and Zijin will upgrade to secure a supply of clean, sustainable electricity for the development of Kamoa-Kakula. Mwadingusha is now supplying 32 megawatts (MW) of electric
Slide 46: 120kV power line at the Kamoa Project
120kV power line at the Kamoa Project
Slide 47: Kipushi Mine Exploration and Upgrading
Kipushi Mine Exploration and Upgrading Democratic Republic of Congo
Slide 48: Ivanhoe signed an MOU with SNCC railway company
October 30, 2017: D.R. CONGO Ivanhoe signed an MOU with DRC’s state-owned KIPUSHI MINE railway company, Société Nationale ZAMBIA des Chemins de Fer du Congo (SNCC) Kipushi to Munama National to rebuild the Kipushi- 34 km spur line railway Munama spur line, (SNCC) which has been inactive since 2011.
Slide 49: Kipushi Fault Zone and Big Zinc
Kipushi Fault Zone was mined 1924-1993 to approx. 1,150-metre level. Big Zinc discovered prior to 1993 closure; never mined.
Slide 50: Planned and existing development at Kipushi
Planned and existing development at Kipushi
Slide 51: Think Zinc. Demand growing in farming & food.
Think Zinc. Demand growing in farming & food. Zinc aids plant growth, increases food-crop production and quality. More than 50% of all soils in India and China are said to be zinc-deficient. 0 lb Zn 5 lb Zn/acre 10 lb Zn 15 lb Zn/acre 20 lb Zn Demonstration of zinc fertilizers at work in Louisiana
Slide 52: Some human health benefits from zinc
Some human health benefits from zinc Zinc stopped cancer-cell growth in tests; research pursuing potential to block esophageal tumour cells. Oct. 3, 2017 Zinc lozenges may help colds go away 3 times faster. May 16, 2017 Shortage of zinc in the body can affect cardiovascular health. April 18, 2017
Slide 53: Capital intensity for zinc projects
Capital intensity for zinc projects Source: Wood Mackenzie, December 2017. Note: All comparable “probable” and “base case” projects as identified by Wood Mackenzie. Source: Wood Mackenzie (based on public disclosure and information gathered in the process of routine research. The Kipushi 2017 PFS ha
Slide 54: Upgraded supports for Shaft 5 pump columns
Upgraded supports for Shaft 5 pump columns at the 1,200-metre-level pump station
Slide 55: Upgraded 1,150-metre-level ore conveyor belt
Upgraded 1,150-metre-level ore conveyor belt at the historic, high-grade Kipushi zinc-copper- lead-germanium mine
Slide 56: New lighting installed at 1,200-metre level
New lighting installed at 1,200-metre level 56
Slide 57: Shaft 5 main pumping station at the 1,200-metre level
Shaft 5 main pumping station at the 1,200-metre level
Slide 58: Control room operator at Kipushi’s Shaft 5
Control room operator at Kipushi’s Shaft 5
Slide 59: Y-junction on the underground mine’s 1,200-metre level
Y-junction on the underground mine’s 1,200-metre level
Slide 60: Scooptram loader and haul truck in new underground fleet
A scooptram loader and haul truck, part of the fleet of new underground mining equipment
Slide 61: Know for Sure health initiative
Sponsored by Ivanhoe Mines and Zijin Mining, in collaboration with Fio Corporation, of Toronto, and the DRC Ministry of Health, Know for Sure has equipped 252 health facilities with Deki Readers and trained more than 600 healthcare workers to effectively utilize the technology
Slide 62: Putting people first
Putting people first A representative of the Know for Sure initiative, holding a Deki Reader used to conduct rapid diagnostic testing for malaria, explains to children how to get access to testing for themselves and their parents.
Slide 63: Members of Kipushi’s geology team
Members of Kipushi’s geology team at the drill core shed
Slide 64: Thank you.
Thank you. NEW HORIZONS
Ivanhoe Mines — Investor Presentation (February 2018) on 6ix