Ms. Marna Cloete reports

IVANHOE MINES ISSUES 2023 FIRST QUARTER FINANCIAL RESULTS, AND OVERVIEW OF CONSTRUCTION AND EXPLORATION ACTIVITIES

Ivanhoe Mines Ltd. has released its financial results for the three months ended March 31, 2023. Ivanhoe Mines is a leading Canadian mining company that is advancing its four principal mining and exploration projects in Southern Africa: the phase 3 expansion of the Kamoa-Kakula copper complex in the Democratic Republic of the Congo (DRC) that commenced commercial operations in July, 2021; the construction of the Platreef palladium, nickel, platinum, rhodium, copper and gold project in South Africa, scheduled for first production in the third quarter of 2024; the restart of the historic Kipushi zinc-copper-lead-germanium mine in the DRC, also scheduled for first production in the third quarter of 2024; and the exploration for new copper discoveries on Ivanhoe's 2,407-square-kilometre Western Foreland exploration project, which is adjacent to Kamoa-Kakula. All figures are in U.S. dollars unless otherwise stated.

Financial highlights:

• Ivanhoe Mines recorded a profit of $82-million for Q1 2023, compared with a profit of $22-million for the same period in 2022. The profit in the quarter is net of a $31-million non-cash loss on the fair value adjustment of the embedded derivative financial liability of the convertible bond, resulting predominantly from a 14-per-cent increase in the share price from $10.70 (Canadian) per share to $12.21 (Canadian) per share at quarter-end. The profit includes Ivanhoe Mines' share of profit and finance income from the Kamoa-Kakula joint venture of $130-million for Q1 2023.
• Adjusted Q1 2023 EBITDA (earnings before interest, taxes, depreciation and amortization) for the Ivanhoe Mines group of $168-million, compared with $145-million for the same period in 2022, and $162-million for Q4 2022, which includes an attributable share of EBITDA from Kamoa-Kakula.
• During Q1 2023, Kamoa-Kakula sold 86,777 tonnes of payable copper and recognized record revenue of $689-million, with an operating profit of $416-million and record quarterly EBITDA of $452-million.
• Kamoa-Kakula's cost of sales per pound (lb) of payable copper sold was $1.25/lb for Q1 2023 compared with $1.08/lb and $1.08/lb in Q4 2022 and Q1 2022, respectively. Cash costs (C1) per pound of payable copper produced in Q1 2023 totalled $1.42/lb, compared with $1.42/lb and $1.21/lb in Q4 2022 and Q1 2022, respectively.
• Ivanhoe Mines has a strong balance sheet with cash and cash equivalents of $497-million on hand as at March 31, 2023, and expects Kamoa-Kakula's phase 1 and phase 2 cash flow to be sufficient to finance the phase 3 expansion capital cost requirements at current copper prices.
• Offtake and financing terms agreed with Gecamines and Glencore to return Ivanhoe's ultrahigh-grade Kipushi mine to production in Q3 2024; offtake term sheet for 100 per cent of Kipushi's zinc concentrate, together with a $250-million facility to finance construction.

Operational highlights:

• Kamoa-Kakula produced 93,603 tonnes of copper in Q1 2023, including a record 34,915 tonnes of copper in March, 2023, following the completion of the debottlenecking program in late February, 2023, ahead of schedule and on budget.
• Kamoa-Kakula's phase 1 and 2 concentrators have continued to perform strongly, achieving a daily mill throughput record of over 29,000 tonnes, and also achieving recoveries in excess of 88 per cent during March and April, significantly higher than the design rate of 86 per cent.
• Construction for Platreef's phase 1 concentrator is advancing well and is on track for first production in Q3 2024. The Shaft 2 headgear concrete structure is complete to a height of approximately 79 metres. Shaft 2's overall height will be approximately 100 metres above ground, including the steel structure housing the main winders.
• Ivanhoe initiated an optimization study at Platreef to potentially accelerate production from the phase 2 expansion. The study will consider the implications of converting the 5.1-metre-diameter ventilation shaft (Shaft 3), which is under construction, to a production shaft with the capability to hoist.
• Surface construction activities and underground development of the Big Zinc orebody at Kipushi are advancing ahead of schedule, with first concentrate production expected in Q3 2024.
• Ivanhoe continues its expansive copper exploration program on its Western Foreland licences that cover approximately 2,407 square kilometres adjacent to Kamoa-Kakula. Diamond drilling commenced in early January with a single contractor rig, which was increased to three rigs by the end of March, together with an Ivanhoe Land Cruiser mounted diamond drill rig. A total of 4,883 metres of diamond core were drilled during the quarter, which was wet season.
• Ivanhoe Mines published its sixth annual sustainability report, underscoring the company's continuing commitment to mining with a greater purpose and its pursuit to be a global leader in responsible mining. Please visit the Ivanhoe Mines website to view the report.

Q1 2023 conference call for investors

Ivanhoe Mines will hold an investor conference call to discuss its Q1 2023 financial results at 10:30 a.m. Eastern Time/7:30 a.m. Pacific Time on Wednesday, May 3. The conference call will conclude with a question-and-answer (Q&A) session. Media are invited to attend on a listen-only basis.

Analysts are invited to join by phone for the Q&A.

An audio webcast recording of the conference call, together with supporting presentation slides, will be available on Ivanhoe Mines' website.

After issuance, the financial statements and management's discussion and analysis will be available on the Ivanhoe Mines website and on SEDAR.

Safety and sustainability

Kamoa-Kakula recorded one lost-time injury during Q1 2023 with a total recordable injury frequency rate (TRIFR) (total injuries recorded per one million hours worked) of 1.01. The Platreef project recorded zero lost-time injuries in the quarter and reached 1,049,350 hours worked free of a lost-time injury with a TRIFR of 1.56, and the Kipushi project also recorded zero lost-time injuries in the quarter and reached 1,469,552 hours worked free of a lost-time injury with a TRIFR of 1.20.

Ivanhoe Mines published its sixth annual sustainability report on April 13, 2023, summarizing the company's sustainability activities, performance and results for 2022 and underscoring its continuing commitment to mining with a greater purpose and its pursuit to be a global leader of sustainable mining.

Ivanhoe Mines has published its first quarter 2023 sustainability update on the company's website.

Ivanhoe invites its investors and stakeholders to learn more about its exceptional sustainability efforts by reading and experiencing the 2022 sustainability report on the Ivanhoe Mines website.

Selected quarterly financial information

The attached table summarizes selected financial information for the prior eight quarters. Ivanhoe had no operating revenue in any financial reporting period. All operating revenue from commercial production at Kamoa-Kakula is recognized within the Kamoa Holding joint venture. Ivanhoe did not declare or pay any dividend or distribution in any financial reporting period.

Discussion of operating results

Review of the three months ended March 31, 2023, versus March 31, 2022

The company recorded a profit for Q1 2023 of $82-million compared with a profit of $22-million for the same period in 2022. The total comprehensive income for Q1 2023 was $69-million compared with $43-million for Q1 2022.

The Kamoa-Kakula copper complex sold 86,777 tonnes of payable copper in Q1 2023, realizing revenue of $689-million for the Kamoa Holding joint venture, compared with 51,919 tonnes of payable copper sold for revenue of $520-million for the same period in 2022. The company recognized income in aggregate of $130-million from the joint venture in Q1 2023.

The company's share of profit from the Kamoa Holding joint venture was $4-million less in Q1 2023 compared with the same period in 2022.

Of the $89-million (Q1 2022: $55-million) finance costs recognized in the Kamoa Holding joint venture for Q1 2023, $74-million (Q1 2022: $48-million) relates to shareholder loans where each shareholder financed Kamoa Holding in an amount equivalent to their proportionate shareholding interest before generating sufficient operational cash flow. Of the remaining finance costs, $12-million (Q1 2022: $5-million) relates to the provisional payment facility available under Kamoa-Kakula's offtake agreements, while $2-million (Q1 2022: $2-million) relates to the equipment financing facilities.

Exploration and project evaluation expenditure amounted to $3-million in Q1 2023 and $12-million for the same period in 2022. Exploration and project evaluation expenditure for Q1 2023 related to exploration at Ivanhoe's Western Foreland exploration licences, while Q1 2022 also included amounts spent at the Kipushi project, for which expenditure was capitalized in Q1 2023 due to the recommencement of the development of the project.

Finance income for Q1 2023 amounted to $58-million and was $26-million more than for the same period in 2022 ($32-million). Included in finance income is the interest earned on loans to the Kamoa Holding joint venture to finance past development, which amounted to $48-million for Q1 2023 and $28-million for the same period in 2022, and increased due to the higher LIBOR (London interbank offered rate) rates and higher accumulated loan balance.

The company recognized a loss on the fair valuation of the embedded derivative financial liability of $31-million for Q1 2023, compared with a loss on the fair valuation of the embedded derivative financial liability of $66-million for Q1 2023, which is further explained in the "accounting for the convertible notes" section in the company's MD&A for the three months ended March 31, 2023.

Financial position as at March 31, 2023, versus Dec. 31, 2022

The company's total assets increased by $94-million, from $3,969-million as at Dec. 31, 2022, to $4,063-million as at March 31, 2023. The main reason for the increase in total assets was attributable to the increase in the company's investment in the Kamoa Holding joint venture by $130-million and the increase in property, plant and equipment of $50-million as project development continued at the Platreef and Kipushi projects, which was partly offset by the decrease in cash and cash equivalents.

The company's investment in the Kamoa Holding joint venture increased by $130-million from $2,047-million as at Dec. 31, 2022, to $2,177-million as at March 31, 2023.

Before commencing commercial production in July, 2021, the Kamoa Holding joint venture principally used loans advanced to it by its shareholders to advance the Kamoa-Kakula copper complex through investing in development costs and other property, plant and equipment. No additional shareholder loans were advanced in 2022 or 2023 with joint venture cash flow financing its operations and expansions. The joint venture had a healthy cash position as at March 31, 2023, with cash and cash equivalents of $390-million on hand.

Kamoa-Kakula's phase 1 and 2 operations are anticipated to generate significant operating cash flow to finance phase 3 capital cost requirements at current copper prices and the joint venture is arranging short-term financing facilities should a shortfall occur due to a significant decrease in copper prices.

Ivanhoe's cash and cash equivalents decreased by $100-million, from $597-million as at Dec. 31, 2022, to $497-million as at March 31, 2023. The company spent $70-million on project development and acquiring other property, plant and equipment and used $24-million in its operating activities.

The net increase in property, plant and equipment amounted to $50-million, with additions of $74-million to project development and other property, plant and equipment. Of this total, $45-million pertained to development costs and other acquisitions of property, plant and equipment at the Platreef project, while $28-million pertained to development costs and other acquisitions of property, plant and equipment at the Kipushi project.

The main components of the additions to property, plant and equipment -- including capitalized development costs -- at the Platreef and Kipushi projects for the three months ended March 31, 2023, and for the same period in 2022, are set out in the attached table.

The company's total liabilities increased by $18-million to $1,146-million as at March 31, 2023, from $1,128-million as at Dec. 31, 2022, with the increase mainly due to the loss on the fair valuation of the embedded derivative liability of $31-million.

Liquidity and capital resources

The company had $497-million in cash and cash equivalents as at March 31, 2023. At this date, the company had consolidated working capital of approximately $514-million, compared with $595-million at Dec. 31, 2022.

The company's planned capital expenditure for 2023 and 2024 can be summarized as noted herein.

As documented in the Kamoa-Kakula 2023 integrated development plan (IDP 2023) announced on Jan. 30, 2023, the remaining capital cost for the total phase 3 expansion is estimated at $3-billion, including the mine, concentrator, smelter, infrastructure and investment in off-site hydropower infrastructure. The phase 1 and 2 operations are anticipated to generate significant operating cash flow in 2023 and 2024 and are expected to finance capital cost requirements at current copper prices. The joint venture had cash and cash equivalents of $390-million on hand at the end of March, 2023.

Construction for Platreef's phase 1 mine is under way, with the first production on track for Q3 2024. The planned phase 2 capital expenditure at Platreef represents mainly the continuation of sinking Shaft 2 and the construction of the Shaft 2 headframe, as well as the initial optimization study at Platreef to potentially accelerate production from the phase 2 expansion, which is currently under consideration.

Construction of the Kipushi mine is also under way, with the processing plant scheduled for completion by Q3 2024. Long-lead equipment items have been ordered and manufacturing is under way, and earthworks and civil construction activities are taking place on the surface. A tri-partite offtake and financing term sheet between Kipushi Corp. SA, Gecamines and Glencore has been signed to return the historic Kipushi zinc-copper-lead-germanium mine to production. The $250-million term financing facility will be split into two tranches and drawn down quarterly, subject to conditions precedent. The facility will bear an annual interest rate of SOFR (secured overnight financing rate) plus 7 per cent and shall be repaid, following a 24-month grace period from signing, in quarterly instalments over 36 months. The offtake and financing term sheet is subject to the execution of final, binding agreements, which are expected to be concluded in conjunction with the new Kipushi joint venture.

Exploration activities at the Western Foreland exploration project in the DRC, the Mokopane Feeder exploration project in South Africa and other targets will continue in 2023, with an initial budget of $31-million.

This news release should be read in conjunction with Ivanhoe Mines' unaudited 2022 financial statements and management's discussion and analysis report available on the Ivanhoe Mines website and on SEDAR.

Disclosure of technical information

Disclosures of a scientific or technical nature in this news release regarding the Kamoa-Kakula copper complex (other than stockpiles estimation), the Platreef project and the Kipushi project have been reviewed and approved by Steve Amos, who is considered, by virtue of his education, experience and professional association, a qualified person under the terms of National Instrument 43-101. Mr. Amos is not considered independent under NI 43-101 as he is the executive vice-president, projects, at Ivanhoe Mines. Mr. Amos has verified the technical data related to the foregoing disclosed in this news release.

Disclosures of a scientific or technical nature regarding the Kamoa-Kakula stockpiles in this news release have been reviewed and approved by George Gilchrist, who is considered, by virtue of his education, experience and professional association, a qualified person under the terms of NI 43-101. Mr. Gilchrist is not considered independent under NI 43- 101 as he is the vice-president, resources, at Ivanhoe Mines. Mr. Gilchrist has verified the technical data regarding the Kamoa-Kakula stockpiles disclosed in this news release.

Disclosures of a scientific or technical nature regarding the Western Foreland project in this news release have been reviewed and approved by Stephen Torr, who is considered, by virtue of his education, experience and professional association, a qualified person under the terms of NI 43-101. Mr. Torr is not considered independent under NI 43-101 as he is the vice-president, geosciences, at Ivanhoe Mines. Mr. Torr has verified the technical data regarding the Western Foreland project disclosed in this news release.

Ivanhoe has prepared an independent, NI 43-101 compliant technical report for the Kamoa-Kakula project, the Platreef project and the Kipushi project, each of which is available on the company's website and under the company's SEDAR profile.

These technical reports include relevant information regarding the effective dates and the assumptions, parameters and methods of the mineral resource estimates on the Platreef project, the Kipushi project and the Kamoa-Kakula copper complex cited in this news release, as well as information regarding data verification, exploration procedures and other matters relevant to the scientific and technical disclosure contained in this news release in respect of the Platreef project, Kipushi project and Kamoa-Kakula copper complex.

The Kamoa-Kakula 2023 prefeasibility study and Kamoa-Kakula 2023 preliminary economic assessment were independently prepared by OreWin Pty. Ltd. of Adelaide, Australia; China Nerin Engineering Co. Ltd. of Jiangxi, China; DRA Global of Johannesburg, South Africa; Epoch Resources of Johannesburg, South Africa; Golder Associates Africa of Midrand, South Africa; Metso-Outotec Oyj of Helsinki, Finland; Paterson and Cooke of Cape Town, South Africa; SRK Consulting Inc. of Johannesburg, South Africa; and MSA Group of Johannesburg, South Africa.

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