To our shareholders,

The past year has been a great challenge for us all. It has also brought momentous achievements for Ivanhoe Mines and its partners.

Together, we have faced the global impact of the COVID-19 pandemic, including unprecedented investment and business conditions, as well as historic humanitarian and social crises around the world.

Despite these extraordinary challenges, our company is poised to be an overnight success after 28 years of incredibly hard work in Southern Africa by thousands of people across the organization. We are on the verge of becoming a long-life, responsible producer of critical green metals, which the world needs desperately for global decarbonization and the electrification of its economy.

The accomplishments from the Kamoa Copper SA joint-venture team have been immense. Led by Chief Executive Officer, Mark Farren, Kamoa Copper’s development and construction teams have consistently smashed guidance while adeptly managing the many challenges posed by COVID-19, putting us well on track to first copper production by June 2021.

Kamoa-Kakula has already exceeded the three million tonnes of high-grade and medium-grade stockpiled ore, holding more than 140,000 tonnes of contained copper, that the 2020 prefeasibility study projected would be stockpiled at the start of production.

In Q3 2022, the project’s output is expected to increase to approximately 400,000 tonnes of copper per year; and we are also exploring opportunities to expedite future expansions to realize the full potential of the world’s next tier-one copper mine.

Ivanhoe’s share performance from May 3, 2020, has reflected this growing success story, with total shareholder returns of more than 230% year-on-year.

Investor confidence in the Democratic Republic of Congo, and awareness of the country’s investment potential, are increasing in incredibly positive ways.

Ivanhoe Mines has announced approximately US$1 billion in funding arrangements from international capital markets, at very favourable terms, over the past six months. This has comprised US$420 million in project-level credit facilities, including a EUR 176 million (US$211 million) covered equipment financing facility from leading Swedish manufacturers Sandvik AB and Epiroc AB, and Finnish manufacturer Normet Oy; and a US$200 million line of credit from Zijin Mining, as well as a US$575 million senior notes offering. This follows historic investment from our financial partners at CITIC Metal.

The Democratic Republic of Congo hosts tier-one geology and a population of approximately 90 million, including many young, professional people eager to uplift their lives and build a career in mining, geology, or mining engineering. We are enormously proud that of the current 6,500 employees and contractors building Kamoa-Kakula, more than 90% are Congolese nationals.

Even before Environmental, Social, and Corporate Governance (ESG) metrics went mainstream, Ivanhoe was committed to being a modern leader in sustainability, environmental stewardship, and responsible mineral production.

The Kamoa-Kakula Sustainable Livelihoods Program, founded in 2010, continues to be a great success in strengthening food security and farming capacity in our host communities by establishing an agricultural training garden, and support for farmers at the community level. Today, 467 community farmers are benefiting from the program, producing high-quality chicken, fish, eggs, vegetables, fruit, and honey for their families, and selling the surplus for additional income.

Together with our partners, we are building Kamoa-Kakula to be the world’s “greenest” copper mine, and our team is confident that global capital is recognizing Ivanhoe as a leading ESG investment – with key exposure to commodities that are crucial components in the clean-energy transition.

Ivanhoe has also assembled an unrivaled copper exploration land package over the past two years at its 90% – 100% owned Western Foreland Exploration Project, adjacent to Kamoa-Kakula. The 2,550-km2 project shares the same geology to Kamoa-Kakula, and potential to host the Democratic Republic of Congo’s next world-scale copper deposit. Our team has just scratched the surface of the discovery upside in the Katanga Region, and we expanded the 2021 exploration program at Western Foreland to US$21 million.

Given our growth profile, discovery potential, and position at the bottom of the world’s production cost curve for copper; we believe Ivanhoe is both a growth company and a deep-value investment.

Kamoa-Kakula and Western Foreland have naturally dominated the headlines this year with first copper production imminent, but we are extremely excited with the progress at our Platreef palladium, platinum, rhodium, nickel, copper, and gold project in South Africa; and our Kipushi zinc joint venture, also in the Democratic Republic of Congo.

Platinum group metals (PGMs), nickel and zinc have joined copper and aluminum in the ongoing rally among electric metals. The world is increasingly aware that these commodities will be critical ingredients in “green” government stimulus plans involving decarbonization and the electrification of the world economy, as well as the infrastructure-driven recovery more broadly.

Palladium, rhodium and platinum have been stand-out performers in the past year; with palladium and rhodium hitting all-time highs at US$3,017 per ounce and US$29,800 per ounce, respectively, and platinum rallying 63% year-on-year to US$1,268 per ounce at the time of writing.

PGMs have benefitted from supply constraints, stricter air-quality rules boosting demand for the metals used in vehicle-pollution-control devices, and global policymakers embracing the potential of hydrogen fuel cells and the hydrogen economy.

We are now 25 years into discovering and developing the Platreef discovery, which has an unparalleled endowment of palladium, platinum, rhodium, and gold; as well as large quantities of nickel and copper. And it still has tremendous potential for significant resource expansion.

In late 2020, we announced the powerful results of new economic studies at Platreef, including an updated feasibility study and a preliminary economic assessment for the phased development plan to expedite production, with much lower initial capital, using Shaft 1 for the mine’s initial five years of production.

These results led to our subsidiary, Ivanplats, arranging project-level financing of up to US$420 million to advance Platreef’s development.

This discretionary, staged development is an exciting opportunity to establish a strategic production foothold on the prolific Northern Limb of South Africa’s Bushveld PGM Complex. We look forward to advancing Platreef to production alongside our local stakeholders and our Japanese partners, which include ITOCHU Corporation; Japan Oil, Gas and Metals National Corporation; and Japan Gas Corporation.

Meanwhile, the Kipushi Project’s draft feasibility study, and development and financing plan are being reviewed together with our joint-venture partner and state-owned mining company, Gécamines. We continue our discussions with Gécamines to advance a new era of production at Kipushi and anticipate the finalization of the feasibility study and the agreement on the development and financing plan later this year.

The timing really could not be better for Ivanhoe to emerge as a modern, major mining company with leading ESG credentials, and a diversified portfolio of metals that are vital for green infrastructure and energy.

We have seen government officials across the world declaring “critical mineral” strategies and criticizing gaps in their key raw material supply chains. Europe and the U.S. are dedicated to unprecedented “green” stimulus measures amounting to trillions of dollars, which will demand an extraordinary amount of the metals we produce. Meanwhile, China’s success in fighting COVID-19 has led to a strong economic recovery, while its commitment to a carbon-neutral future will further boost the demand and consumption of green metals, including copper.

What happens when an irresistible force meets an immovable object? In this case, the irresistible force is the demand from humanity to protect the environment and not risk further damage to our planet Earth. The demand for that change has become irresistible. But the immovable object remains: Where is the commodity supply going to come from to help facilitate the transformation?

Ivanhoe is proud to be a significant part of the answer to that question. The world’s epic energy transformation absolutely requires us to succeed, and we invite everybody to join us on our journey.

Finally, to all our African brothers and sisters, we are excited to share with you the fruits of our incredibly intensive efforts over the past 28 years. We have overcome many challenges together, to initially discover, extensively expand, and now develop the Kamoa-Kakula and Platreef resource bases with massive drilling, engineering, and construction efforts. The future is bright, and the best is yet to come.

On behalf of our entire board of directors, thank you for being a shareholder and joining us on this exciting journey.

Aerial view of the Mwadingusha dam, upstream from the Mwadingusha hydro-power plant in the DRC. The upgrading program is restoring the plant to its installed output capacity of approximately 72 megawatts of clean, sustainable electricity.