Kamoa Copper Achieves Record Monthly Copper Production of 29,800 Tonnes

Kamoa-Kakula’s Phase 2 concentrator ramps up to steady state ahead of schedule

Kamoa Copper milled record 660,000 tonnes of ore in May, for a run rate of 8 million tonnes per year

Phase 3 box cut nears completion at the Kamoa 1 and
Kamoa 2 mines

Long-lead time items secured for Inga II hydroelectric upgrade; construction to commence in July

Kolwezi, Democratic Republic of Congo–(Newsfile Corp. – June 6, 2022) – Ivanhoe Mines (TSX: IVN) (OTCQX: IVPAF) Co-Chairs Robert Friedland and Yufeng “Miles” Sun are pleased to announce today that the Kamoa-Kakula Mining Complex in the Democratic Republic of Congo has set a new monthly production record in May, with 29,800 tonnes of copper in concentrate produced.

Kamoa Copper’s record monthly production was achieved despite planned interruptions during the month. These planned interruptions involved scheduled maintenance for two days on the Phase 1 plant, including relining of the primary ball mill; and the successful commissioning of the third Larox filter press from Metso Outotec of Espoo, Finland, on May 9, which allows Kamoa Copper to leverage the enhanced ore throughput rates at the front-end of the Phase 1 and Phase 2 plants.

Kamoa-Kakula milled 660,000 tonnes of ore during the month at an average feed grade of 5.5% copper, currently positioning the Phase 1 and Phase 2 concentrator plants at a combined annualized processing rate of approximately 8 million tonnes. Average feed grades are expected to trend toward long-term projections as Phase 2 establishes steady-state design capacity. Over the last seven months, the Phase 1, 3.8-million-tonne-per-annum concentrator plant has consistently exceeded design ore throughput by approximately 10% to 15%.

The Kamoa-Kakula Phase 2, 3.8 million-tonne-per-annum concentrator plant successfully declared commercial production on April 7, 2022. First ore was introduced into the Phase 2 milling circuit on March 21, 2022, and first copper concentrate was produced approximately four months ahead of the originally announced development schedule. The Phase 2 plant now is consistently operating at comparable throughputs and recoveries to the Phase 1 plant.

Kamoa Copper management anticipates that the accelerated ramp-up of the Phase 2 concentrator plant will enable Kamoa-Kakula to deliver in the upper end of its 2022 copper production guidance of 290,000 to 340,000 tonnes.

The existing Phase 1 and 2 concentrators also will be de-bottlenecked and are expected to be operating at a combined throughput of 9.2 million tonnes of ore per year by the second quarter of 2023, which will increase Kamoa-Kakula’s annual copper production to more than 450,000 tonnes. This production rate will rank Kamoa Copper as the world’s fourth-largest copper producer.

Kamoa-Kakula’s Phase 1 and Phase 2 plants milled a record 660,000 tonnes of ore in May for an annualized run rate of approximately 8 million tonnes per year.

Watch a June video highlighting Kamoa-Kakula’s operations and phased expansion: https://vimeo.com/717343101/2c3ff0216f

“Kamoa-Kakula continues to be an industry-leading example of responsible, world-scale development delivered on budget, and ahead of schedule, a unique accomplishment for major mining projects,” Mr. Friedland said. “The Kamoa Copper management team has smashed another milestone with the rapid ramp-up of the Phase 2 plant. We expect the lessons learned to serve us well as we continue to expand Kamoa-Kakula into one of the world’s largest copper mining complexes, while providing exceptional returns for our shareholders.

“Together with our joint-venture partner, Zijin Mining, and alongside the Congolese nation, we have resolved to fast-track expansions at the Kamoa-Kakula Mining Complex to meet a rising world-wide demand for responsibly-produced copper metal. Kamoa Copper’s accomplishments also demonstrate the great potential and strategic importance of the Democratic Republic of Congo as we electrify the world economy, which will require an historic quantity of copper and many other vital metals. Kamoa Copper is proof that the country’s vast mineral and hydropower potential can be realized to provide long-lasting economic and social benefits for the Congolese people.”

Figure 1: Monthly Kakula cumulative copper production – total production of approximately 220,000 tonnes copper from May 2021 to May 31, 2022.

Excavation for expanded concentrate thickener capacity; part of the ongoing de-bottlenecking program that will increase Kamoa-Kakula’s total throughput to approximately 9.2 million tonnes of ore per annum by Q2 2023.

Kamoa Copper well on track to reach upper end of 2022 copper production guidance with record performance in May

The successful early commissioning and accelerated ramp-up of the Phase 2 concentrator plant positions Kamoa-Kakula to deliver the upper-end of its 2022 production guidance, with approximately 112,570 tonnes of copper in concentrate produced year to date, and 218,433 tonnes of copper in concentrate produced from May 2021 through May 31, 2022.

In May, Kamoa-Kakula’s record monthly production of 29,800 tonnes of copper in concentrate produced was achieved despite planned interruptions during the month. These planned interruptions involved scheduled maintenance for two days on the Phase 1 plant, including relining of the primary ball mill; and the successful commissioning of the third Larox filter press from Metso Outotec of Espoo, Finland, on May 9, which allows Kamoa Copper to leverage the enhanced ore throughput rates at the front-end of the Phase 1 and Phase 2 plants.

The monthly throughput rate of 660,000 tonnes of ore positions Kamoa Copper at a current annualized processing rate of approximately eight million tonnes per annum, or approximately 9% above nameplate capacity for the Phase 1 and Phase 2 concentrator plants.

The Phase 1, steady-state-design copper recovery is approximately 86%, depending on ore feed grade. Phase 2 recovery continues to trend upward, and currently averages approximately 83%.

Kamoa Copper anticipates the upward trend in production to continue over the near-term, as Phase 2 drives a production increase to an expected rate of more than 400,000 tonnes copper per year.

A de-bottlenecking program is underway at Kamoa-Kakula to expand the design processing capacity of the Phase 1 and Phase 2 concentrators by 21%, to a combined 9.2 million tonnes of ore per year. Copper production from Kamoa Copper’s first two phases is on track to exceed 450,000 tonnes per year by the second quarter of 2023.

Bovic Kilambe, Drill Rig Supervisor; Sun Mingyang, Welder; and Polite Mnyokemi, Instrument Technician, underground at Kakula South near the southwest pumping station and water dam.

The Phase 1 concentrator plant (left), steady-state-design copper recovery is approximately 86%, depending on ore feed grade, with Phase 2 now demonstrating comparable recovery rates.

Kamoa Copper’s Projects Construction team celebrates commissioning of Kamoa-Kakula’s third Larox concentrate filter press.

Construction on Phase 3 box cut nearing completion at the Kamoa 1 and Kamoa 2 mines

Engineering and construction work for the Phase 3 expansion, including a new box cut and twin declines to access new mining areas, are progressing quickly. Kamoa-Kakula’s Phase 3 will consist of two new underground mines known as Kamoa 1 and Kamoa 2, as well as the initial decline development at Kakula West.

Construction on the new box cut is nearing completion at the Kamoa 1 and Kamoa 2 mines, with decline development well underway to provide access to the main Phase 3 mining areas.

The pre-feasibility study for the Phase 3 expansion is well advanced and expected to be released in the second half of 2022.

A new, 5-million-tonne-per-annum concentrator plant will be constructed adjacent to the two new mines at Kamoa. Upon commencement of Phase 3 production, Kamoa Copper will have a total ore processing capacity greater than 14 million tonnes per annum.

The larger Phase 3 plant is based on the design principles and successful implementation of Kamoa-Kakula’s Phase 1 and Phase 2 plants. Phase 3 also will be similarly constructed with the sizing of the front end of the plant (crushing and screening) designed to accommodate double its initial milling capacity.

Phase 3 is expected to increase copper production capacity to approximately 600,000 tonnes per year by the fourth quarter of 2024, which will position Kamoa Copper as the world’s third-largest copper mining complex, and the largest copper mining complex on the African continent.

Construction progress on the new box cut and twin declines is nearing completion at the Phase 3 Kamoa 1 and Kamoa 2 mines.

The Kamoa 1 and Kamoa 2 underground mines will supply ore for the Phase 3 expansion, which is expected to boost total annual copper production to 600,000 tonne. A 5-million-tonnes-per-annum plant will be constructed adjacent.

Bulk earthworks progressing for Kamoa-Kakula’s direct-to-blister flash smelter, with first on-site copper metal production scheduled for Q4 2024

Earthworks and engineering for Kamoa-Kakula’s direct-to-blister flash smelter, adjacent to the Phase 1 and Phase 2 concentrator plants, are well underway.

The smelter uses technology supplied by Metso Outotec of Espoo, Finland, and has been sized to process the bulk of the copper concentrate forecast to be produced by the Phase 1, 2 and 3 concentrator plants, with a production capacity of 500,000 tonnes per annum of approximately 99%-pure blister copper.

The smelter, once in operation, will enable Kamoa-Kakula to reduce its C1 cash costs per pound of payable copper produced by approximately 10% to 20%, driven by significantly reduced transportation costs, decreasing overall volumes shipped by approximately half.

China Nerin Engineering Company Co., Ltd. has been appointed to carry out the basic engineering design and develop a control budget estimate for the smelter with some early works engineering and procurement activities running in parallel. Work is progressing well and tenders for all long lead item have been issued to the market.

Earthworks and site preparation are well underway for Kamoa-Kakula’s direct-to-blister flash smelter, which will be adjacent to the Phase 1 and Phase 2 plants.

Long-lead time items ordered for Inga II hydroelectric refurbishment, with main construction works scheduled to begin in July

In May 2022, Ivanhoe Mines Energy DRC, a sister company of Kamoa Copper tasked with delivering reliable, clean, renewable hydropower to the Kamoa-Kakula Copper Mining Complex, placed initial orders for long-lead time items related to the refurbishment of Turbine #5 at the Inga II hydroelectric complex in the Democratic Republic of Congo. Site mobilization and main construction works on the project are scheduled to commence in July, with commissioning expected by the fourth quarter of 2024.

In July 2021, Ivanhoe Mines Energy DRC signed an addendum of the financing agreement under a public-private partnership with the Democratic Republic of Congo’s state-owned power company, La Société Nationale d’Electricité (SNEL), to upgrade Turbine #5 in the existing Inga II hydropower facility on the Congo River.

This partnership successfully refurbished and modernized the Mwadingusha hydropower plant in 2021, which now provides 78 megawatts (MW) to the national grid.

The Inga II project is expected to produce an additional 178 MW of renewable hydropower, providing the Kamoa-Kakula Copper Complex with sustainable electricity for Phase 3 and future expansions, while also benefitting local communities.

The Inga II hydropower facility was originally equipped between 1977 and 1982, and has eight 178-MW turbine and generator units. Turbine #5 is pictured below.

At Turbine #5, work will involve upgrading and replacing all equipment, including water intake, turbine, speed governor, alternator, voltage regulator and transformers (water to wire). In addition, the process of upgrading the transmission infrastructure from Inga to the Kamoa-Kakula Mining Complex is underway.

The Inga II Turbine #5 project is expected to have significantly lower unitary cost per megawatt produced ($0.58 million/MW) compared to the completed Mwadingusha project ($1.45 million/MW).

The engineering, procurement, and construction (EPC) contract for the upgrading of Turbine #5 was signed in Heidenheim, Germany, on April 26, 2022, by SNEL and Voith Hydro, a leading German hydropower company.

Ivanhoe Mines Energy DRC is working with SNEL to upgrade Turbine #5 at the Inga II hydropower facility on the Congo River to provide 178-MW of clean electricity.