Ivanhoe Mines Ltd.

Good day and welcome to the Ivanhoe Mines Q4 2021 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to the Vice President, Investor Relations, Mr. Bill Treneman. Please go ahead, sir. The floor is yours.

Thank you, Operator, and hello, everyone. It is my pleasure to welcome you to Ivanhoe Mines Q4 year-end 2021 Financial Results Conference Call. Please note that we will finish today's event with a question and answer session. You can submit a question using the Q&A area on the webcast page, as well as through the conference operator via your phone line. Given our time constraints, it is unlikely that we will be able to answer every question today. Our apologies if we run low on time, but our IR team will endeavor to collect all questions for follow-up. Before we begin, I'd like to remind everyone that today's event will contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Details of the forward-looking statements is contained in our news release issued earlier today. It is now my pleasure to present the first segment of today's call, a brief introductory message from our co-chairman, and founder, Mr. Robert Friedland. Robert, over to you, please.

Thank you very much to all of you that are participating today on International Women's Day on our quarterly and year-end financials. I have to take pains to note that it's rather bittersweet that women rarely start wars but are suffering from one tonight. Of course, the The conflict that's going on in Ukraine is causing a lot of human rights violations and massive volatility in the markets. So it's difficult to set that aside in one's minds when we talk to you about our 25- or 30-year journey to get to these excellent results as we are continuing to build the largest, highest-grade, most rapidly growing copper mine in our industry, as well as other significant projects in platinum, palladium, nickel, and zinc. I'd like to keep my opening remarks very short and go directly into the highlights and then see if there's anything I can contribute when we get to the question and answers. So with that, I'd like to turn this over to Marna Flote, our president.

Marna?

Thank you, Robert.

I had the privilege of spending a significant amount of time with Robert this past week. And I must say he has the uncoming ability to see the world from a million miles away as a pale blue dot and predict how our actions today may influence our world a number of years in the future. And that is usually why his followers take a long position when investing in his ventures. In my mind, there is no copper mine with the potential of Kamau Kapula in the world today. and let's not start speculating on the potential success of Ivano's true passion, adding value through the draw bit. Alex will touch on our exploration efforts later in this presentation. Today we proudly present our fourth quarter results and I'm always fortunate to present the executive summary as a bit of a spoiler alert on what is to come during the rest of the presentation. Kamoa Kukula produced a total of 106,000 tonnes of copper and concentrate in 2021, significantly exceeding our initial 2021 production guidance range of 80,000 to 90,000 tonnes, as well as the increased guidance of 92,500 to 100,000 tonnes for 2021. We promise to hone our forecasting ability as the project matures and operational parameters become more predictable. In addition, Kamauakakula's Phase II concentrator plant is on track to begin operations in April of this year, which will see a doubling of Kamauakakula's nine-plate milling capacity throughput to 7.6 million tons of ore per annum. We also have a de-bottlenecking program underway to expand processing capacity of our Phase I and Phase II concentrators by 21%, to a combined total of 9.2 million tons of ore per year. The deep bottlenecking program is projected to boost copper production from Kamau Kakula's first two phases to more than 450,000 tons per year by the second quarter of 2023. This will position Kamau Kakula as the world's fourth largest copper producer. It is remarkable considering

we only started producing mid last year.

But before we dive into our quarterly financials, I would like to briefly remind you about our ESG credentials. And just before this call, I received an email from one of our valued investors saying that our safety statistics featured on this slide is actually one of the most impressive statistics of today. And I tend to agree with him. Across all our projects, our operational teams have put in a tremendous effort to enhance our culture of safety, and you can see this in the slide in front of you. Our stats is a testimony to that. We are currently rated Level A by the MSCI, and we are cognizant of the numerous ESG indices and their potential impact on our reputation, and we are actively working towards improved ratings. Ivano Mines is a firm believer in stakeholder capitalism, and our partnership with our local stakeholders is a testimony to that. From our community and entrepreneurial development programs we run at Crossroads, throughout to our government and community shareholder structures, we believe that all stakeholders should benefit from our mining activities. We have demonstrated this commitment early on, even whilst we were still in exploration at our projects. Our carbon agenda is of the utmost importance and at Kamauka Kula we are aiming to become the first net zero emitter carbon emitter among top tier copper mines. The DRC is blessed with an abundance of water and all phases of our mine, including our smelter, will be powered by hydroelectric power. At our Platte Reef project in South Africa, we are very excited to imminently receive our electric fleet. I think all our mining executives have driven to Platte Reef already to wait for the delivery. And none of our achievements would be possible without our people. And we commend the resounding efforts of our diverse workforce who work tirelessly behind the scenes to advance our vision. I will now hand over to David van Heerden, our Chief Financial Officer, to take you through our quarterly financials.

Thank you, Mara, and good day to everyone joining the call today. With Q4 2021 being only the second quarter of commercial production at the Kamaakukula mining complex, I will focus on the results achieved in the quarter and compare that to Q3 2021. as opposed to comparing it to the fourth quarter of 2020. The comparisons of the three and 12 months ending December 31, 2021 to the same period in 2020 is of course elaborated on in our MD&A. The highlight of the fourth quarter is undoubtedly the exceptional production results achieved at Kamaukukula. The over 53,000 tons of payable copper sold during Q4 was 28% up from the 41,490 tons of payable copper sold during Q3 2021. The increase in tons sold together with higher average prices in Q4 and the re-measurement of contract receivables as at December 31 all contributed to the 43% increase in revenue to $489 million for the fourth quarter. C1 cash cost was $1.28 per pound of payable copper delivered to China for the fourth quarter, but more on cash cost on a later slide. Kemal Kukula's EBITDA for the fourth quarter was $358 million, an increase by a massive 53% due to the increase in revenue and a decrease in cost per pound. This slide illustrates how the just mentioned highlights combined for the Kamoa Holding Joint Ventures profit and how it ultimately translates to Ivano's share of the profit attributable to the joint venture partners. The revenue of $489 million in Q4 2021 includes the re-measurement of contract receivables of $30 million at the end of December, which represents the effective mark-to-market at a copper price of $4.40 per pound. Kumuakukula's cost of sales for Q4 in 2021 was $131 million in total and $1.12 per pound of payable copper sold, while C1 cash cost per pound of payable copper produced totaled $1.28 per pound. After deducting general administrative expenditure, the operating profit For only the second quarter of commercial production was $348 million, and EBITDA, $358 million. Kamau Holding recorded finance cost of $56 million in the fourth quarter, which is principally the interest on share of the loan from Ivan and Jishin, as well as the interest on Kamau Kukula's equipment finance facility and the short-term facilities available under the off-take agreements. Of the $93 million tax expense, $5 million represents minimum income taxes payable equal to 1% of revenue, while the remaining $88 million is deferred tax and does not represent a cash outflow. This is due to the fact that development and exploration expenditure incurred from inception is available for the offset against taxable income and Camaro can amortize these tax for tax purposes over the first two years following commercial production. The non-controlling interest of $40 million represents the profit attributable to the DRC government's 20% interest in the Kamauka Kula mining complex, leaving profit of $158 million attributable to the joint venture partners, Iverno's share of which equals $78 million for the fourth quarter. If we turn to Iverno's consolidated results for Q4, The chart on the slide deck starts where the last slide ended with Ivano's share of profit from the Kamoa joint venture of $48 million or $78 million for the quarter. Additionally, Ivano earned interest income of $26 million from Kamoa holding in the fourth quarter of 2021 for the shareholder loans advanced to the joint venture. During the quarter, The company spent $10 million on the Kapushi project, $6 million on Western Foreign Loans exploration, and $11 million on general and administrative expenditure. Costs incurred at the Platriff project are necessary to bring the project to commercial production and are therefore capitalized as development costs in property, plant, and equipment. Ivano recognized finance costs of $11 million in Q4, relating to the interest on the convertible notes at the effective interest rate. The $89 million loss on the fair valuation of the financial liability in the fourth quarter represents the change in the deemed fair value of the conversion feature attached to the $575 million convertible notes, which Ivano closed in March 2021. The conversion feature is an embedded derivative financial liability, and the fair value changes principally due to the fluctuations on our share price, and the loss is therefore resulting from the increase in Ivano share price from end September 2021 to the end of December. With completion of the stream facilities in December, with a large portion of the Platte Reef project's Phase 1 capital costs now being fully funded, as well as the excellent results from the Platte Reef feasibility study, it is now deemed probable that future taxable profit will be available from the Platte Reef project against which the unused tax credits can be utilized. As a result, Ivano-Mines recognized the previously unrecognized deferred tax asset in the fourth quarter, resulting in deferred tax income of $74 million in the period. The aforementioned items ultimately builds up to Ivano's profit for the three months ending December 2021. Of $48 million, with a total profit before the loss of the fair value of the financial liability and the deferred tax income being $63 million for Q4 2021. The cash cost per pound of payable copper produced for delivery to China was $1.28 per pound for commercial production and down from $1.37 per pound in Q3 2021. The decrease mainly resulted from the mine's fixed operating cost being spread over increased copper production with Phase 1 production exceeding steady-state design throughput. Most notably was the decrease in cost of mining per pound as well as support services and G&A. Our cash cost guidance for 2022 is between $1.20 per pound and $1.40 per pound of payable copper. will continue with the addition of increased copper production from Phase II concentrator, expected to further lower the cash cost per pound. Longer term, we are still looking at projects like the smelter, which may improve cash costs by up to 15%. C1 cash cost is, of course, a non-GAAP measure, and the reconciliation from cost of sales to cash cost is provided on page 42 of our MD&A. We have a strong balance sheet and are well positioned for further development of our project with $608 million in cash and cash equivalents on hand and consolidated working capital of $655 million at the end of December. This was up from the end of September due to the receipt of the first prepayment of the streams of $75 million. Our debt of $841 million relates mainly to the 2.5% convertible notes, with these only due in 2026 with a possible earlier redemption. Our forecast spend for 2022 is $315 million on Platte Reef, Kapushi, continued exploration on the western forelands and over-eats. We also expect to receive the second prepayment of the streams of $225 million later this year. The planned capital expenditure for 2022 at the Kamaukukula mining complex, which will be funded from the cash flows from the joint venture, caters for the acceleration of Phase 2 and also includes $52 million for the de-bottlenecking program Marna mentioned earlier, which will expand the processing capacity of Phase 1 and Phase 2 concentrators by approximately 21%. Other expansion, group of phase two, also caters for sizing up certain infrastructure and faster underground development to ensure we optimize for phase three. We have also included direct early works expenditure on phase three and the planned smelter that will be updated on completion of the pre-feasibility study. The planned capital expenditure for 2022 at the Platte Reef project will enable the continued development of the project towards completion of its first phase, currently scheduled in the third quarter of 2024, as well as the continuation of the construction of the shaft two head frame to allow optionality for the possibility to bring phase two forward. With the finalization of the Cappucci feasibility study and the development plan agreed, we expect to proceed with ordering long lead items and other construction activities once the revised joint venture agreement is signed and financing agreements are in place. It's also noteworthy that loans Ivanhoe has advanced through the Capuche project amounted to $528 million at the end of December and then also at Platte Reef Ivanhoe had has funded $655 million to Platte Reef, repayable to Ivano, as well as $277 million vendor loans to our PE partners. I now hand over to Alex Pickard, our Vice President, Corporate Development, and Marna to provide a brief update on the developments in our projects.

Thanks.

Thank you, David, and good day to everybody on the line. Looking first at Kamoa Kikula phase one and phase two, our phase one mine and processing plant continued to deliver exceptional results through the quarter and in the first months of 2022. As Marna mentioned, we exceeded our production guidance, which was lifted twice in the quarter, producing over 105,000 tons of copper in the first seven months alone, an incredible achievement by the Kamoa team. The processing plant has recently been operating at a capacity of over 18,500 tons of copper per month. And we are also pleased to see copper recoveries are above design at around 87% to 88%. We are looking forward to seeing first production from phase two approximately one month from today. And we also anticipate a smooth ramp up for phase two, making use of lessons learned from phase one. As a result of the performance of the crushing and grinding circuits in particular during phase one, we identified a $50 million deep bottlenecking campaign over the next 12 months, which will further increase the combined phase one and two production to over 450,000 tons before phase three ends production shortly thereafter.

Moving on to phase three, the expansion is now well underway.

and we are opening up the mining access to the Kamoa ore bodies that will be ramped up to feed the phase three expansion. We are expecting to commission a significantly larger concentrator located close to the existing Kansoco mine by the end of 2024. This will come in tandem with a 500,000 ton per annum direct to blister smelter, which will be the largest in Africa. As David mentioned, we expect that the smelter project will further improve the cash costs across the Kamoa Kukula operation. All of this, of course, relies on power, and we are now mobilized and working towards the refurbishment of Turbine 5 at Inga 2 Dam, which will occur in line with the commissioning of the plant. This will provide enough power for Phase 3 and beyond. We will be providing the market with a comprehensive update on the development plan at Kamoaka Kula with an updated PFS expected in the third quarter. Now looking at the Western Foreland, we are incredibly excited about the opportunity that we have on our 2,500 square kilometer land package, which is 100% owned by Ivanhoe Mines. This is around seven times larger than the land package that contains all the resources of Kamoa Kukula that we have today. During 2021, we laid the groundwork with road and infrastructure building and running geophysics and geochemical analysis across the expanded license package. For 2022, we have a $25 million initial budget This includes a targeted drill campaign, which will start in full in the dry season, which should occur next month, with over 90,000 meters of drilling planned across the western fallen licenses through the year. But this budget is always subject to expansion.

I will now hand back to Marna for an update on Platte Reef. Oops. Thank you, Alex.

So we've had quite a busy quarter, publishing two feasibility studies in one quarter. So our technical team is quite exhausted. But in South Africa, we have been tenaciously chipping away at making our dreams a reality at our world-class flat-reef project. We announced the phenomenal results of this independent feasibility study in February. And our first phase mine is scheduled for first production in the third quarter of 2024. But we have much higher aspirations. And we will simultaneously continue with the development of shaft two for commissioning in 2027 to accelerate the phase two expansion to 5.2 million tons per annum in conjunction with bringing phase one into production. We've also secured a stream, as David mentioned, of 300 million dollars and we are in the process of negotiating a senior debt facility that could be further extended to cover the development beyond phase one. With that as an introduction, I will just ask Alex to take us through the project economics.

Thanks, Mana.

Just before I begin, I should mention the full results of our 2022 feasibility study are available in our press release, which was last Monday, and will soon be published in the technical reports on CDAR and on the Ivanhoe Mines website. As Mona mentioned, the initial phase of production at the Platte Reef Mine is now funded and under construction, which includes a 700,000 tonne per annum mining concentrator producing around 110,000 ounces of PGMs in concentrate, which is only the first step of this great mine. At the same time, we are also focused on advancing the phase two expansion of PlatReef as fast as possible through shaft two, at which point PlatReef will become among the world's largest PGM operations, producing close to 600,000 ounces of PGMs, as well as being a world-class producer of sulfide nickel and copper. The FlatReef is an exceptionally large, thick ore body, which can be mined using highly productive and highly safe methods. As a result of this, as well as the base metal endowment that we have, we expect PlatReef to be one of the lowest cost producers in the world at around $500 an ounce, which compares to today's basket price in excess of $2,500 an ounce. In terms of the overall economics, we think that PlatReef demonstrates exceptional returns for what is a multi-generation mine of its incredible size and cost profile. Plat Reef is a unique mineral endowment with a huge amount of scalability beyond the feasibility study, and we believe that in today's commodity price environment, it is greatly undervalued within Ivanhoe Mines' portfolio, as demonstrated by the NPVs and IRRs that we show here at spot prices. I'll pass back to Mona to take you through the update at Kipushi.

Thanks, Alex. While our team were focusing on bringing Kamau Kakula into production over the past two years, the rest of us who were based elsewhere didn't sit by idly. And we've spent a lot of time in Congo working with our partners, Jekamins, to carve out a unique partnership agreement to bring Kapushi back into production. And we were very excited to release the results of that term sheet that we've reached or the agreement that we've reached with Sheckamins. And the stage is now set for us to bring this mine back into production within 24 months from the construction decision. Currently, our joint venture team is actively working on financing alternatives for the development of the projects, and the team on the ground has already started with some early works. With zinc trading near record highs and inventory at historic lows, The Kapushi project has the potential to be restored to its former glory, just wearing a new coat made of zinc instead of copper. So with that as an introduction, can I ask Alex to please also take us through the project economics for Kapushi that we recently published.

Thanks, Alex. Thanks, Marna.

Again, the full results of our 2022 feasibility study for Kipushi were just published a few days ago on our website and on CDAR. Kipushi is a relatively simple project compared to Platte Reef and Kamoa Kukula, which really requires restarting the underground mining infrastructure that we have and constructing a small 800,000 ton per annum processing plant on surface. As Marna mentioned, this can be achieved in under two years from the construction decision. But despite this small scale, we mine exceptionally high grades at Kipushi, around 35% zinc in situ. And as a result, we will still be one of the biggest producers of zinc in the world at over 240,000 tons per annum. Another benefit of the incredible grades that we have is low cash costs. And at $0.65, Kipushi will be in the first quartile of the industry. And as well as this, the capital cost is exceptionally low for a mine of this scale because we have the benefit of a huge amount of existing underground infrastructure, which has been newly refurbished by the KIKO team. As a result, I think it's quite clear that Kipushi has exceptional economics at consensus prices and even more so at current prices where we see an NPV of close to $3 billion and an IRR after tax of over 80%. So we are very excited. to move this project forward as fast as possible. I will pass back to Manu for her closing remarks.

Thank you.

Thank you, Alex. So we commonly get the question, so what's next for Ivano Mines? You have a lot on your plate. I think there were doubts whether we could do it. When we attend conferences nowadays, we walk around very proudly because of what we achieved at Kamauakakula. I think we now have the credibility under the belt, and we are very, very excited about what our team is going to achieve at Blattreef and Kapushi next. Our exploration geologists are in a league of their own. It's the same set of geologists that we used at Kamaukakula. And I think Ivano Mines, not I think, I know, Ivano Mines will be the world's next diversified major miner with a difference. We are responsible miners who care about the communities adjacent to us, who work with our partners. We are excited about the change we bring in the jurisdictions where we operate, and it's easy to do so with the type of ore bodies that we are developing. Very excited about our fourth quarter results, almost going into our first quarter results for this year. thanks for joining today I will now hand back to the operator to open the line for live Q&A.

Thank you.

Okay, well, we wait for the operator to allow incoming phone questions. It's Bill Treneman here, and I will ask some of the questions that have come in via the webcast. And, Robert, I think this one is probably best answered by you. We've got a lot of questions regarding Western Foreland, and the kind of summary would be, Do you think Western Foreland will progress as a joint venture or a stand-alone Ivanhoe basis?

It's just after midnight here in Singapore and a subject Western Forelands. The Western Forelands could have a week of discussion, but at the moment I think it's better for us to say less and see what we can find. It's fair to say that we've been approached by a number of major industry participants and sovereign wealth funds very interested in joining us in the development of the Western Forelands as it's been apparent that from an ESG perspective, the logical place to be mining copper on this planet is the Democratic Republic of the Congo. It's very important for the average observer to understand that the geology of the copper that we've discovered in the Western Forelands is more similar to an oil field than it is to a porphyry copper. The world's largest mineral discovery was the discovery of the Guar oil field in the eastern forelands of Saudi Arabia. And actually, the geology that we're looking at in the western forelands of the Congo is remarkably similar to the setting of a major sedimentary oil field. So this is a basinal-level event. There are essentially four critical components that have to coalesce to create a Kukula ore body. If three of those components out of the four come together, you get something more similar to a Kamau ore body. The very scale of this project requires a lot of infrastructure development, and at the moment, we're carrying this project completely as an Ivano Mines-led initiative. Obviously, we don't negotiate in public. It is very possible that we'll bring a partner on for the development of this project at any point, but at the moment, while we do the fundamental work and continue to consider increasing our land holdings in certain areas we're doing this entirely on our own I hope that answers your question Bill thanks Robert operator can we now turn it over I believe we have some incoming phone questions from analysts thank you

Thank you so much, sir. If you would like to ask a question, please signal by pressing star 1 on your phone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We will take the first question from Lawson Wender from Bank of America Securities. Your line is open. Please go ahead.

Yes. Good morning, afternoon, good evening. Thank you for the update and congratulations on our remarkable first year at Kamal Gakula. I would like to ask about the cash cost guidance. So it is noted in the release through 2022, C1 cash costs are expected to decline from the Q4 2021 level of $1.28. And I mean, that stands out as remarkable to me as it implies you're already expecting cash costs to be at the lower half of the 2022 guidance of $1.20 to $1.40. And so I just appreciate to get your thoughts on the extent to which Kamoa Kukula is experiencing any cost inflation and whether beating the low end of the 2022 cash cost guidance is within the realm of possibility at this point.

Thanks very much. Hi, Larsen. This is David van Yerden.

So I definitely think The lower end of the cash cost range is within the realm of possibilities. We are very hopeful that we'll achieve that and very confident we'll be very close to it later in the year. Thinking of cost inflation, we have experienced some matters of cost inflation. That is included in the thinking on our guidance range. I wouldn't say it's material, definitely not material for Kamaoka Kula. Having said that, the recent increase in fuel prices, et cetera, we do foresee that impacting on Kamaoka Kula, but still confident of getting very close to the bottom end of the range.

Okay, that's excellent. Given the time constraints, I will just leave it at that. Thank you very much.

We will take the next question from Andrew Mikichuk from BMO Capital Markets. Your line is open. Please go ahead.

Thank you very much for hosting the call, and congratulations on a strong close to 2021. My question, I think, will go towards David and the finance team. I think you already mentioned that you're expecting cash flows at Kukula, Kamoa to cover costs, both expansion and sustaining at that mine. For the other two principal assets, Flat Reef and Kipushi, what portion of those costs should we expect are going to be covered by the financing that's already been announced or being pursued when we look at kind of the 2022 total guidance for those numbers.

Hi, Andrew.

So for Platte Reef, the funds we expect to receive from the stream would we expect to exceed the expenditure for the year? So some of that would obviously be available for the 2023 spend. We are working on securing funding for the remainder of the phase one capital, as well as continue to work with senior lenders on the phase two expenditure. For Kapushi, we are working on funding solutions for that as well. We do expect to spend quite a bit of this year's expenditure ourselves, but as I mentioned earlier, those funds will effectively be funded by either as a loan to Kapushi And so we will fund 100%, but fund that to Kapushi at a loan of liable plus, with an interest rate of liable plus 6%. And hopefully able to secure funding in time for Kapushi to be funded from a financing facility from next year onwards.

Maybe just as a quick follow-up, David, so it's fair to say that there'd be a modest draw on the cash balance at the corporate level between the issues we talked about and other corporate costs, but probably not a significant one. Is that a fair characterization?

Yeah, that's fair, Andrew. We expect our cash balance to exceed $500 million at the end of this year. and that's even without factoring in any funds received from Kemal Kukula, so probably be higher.

Great. I'll let other people follow up with questions.

Again, congratulations, and thank you very much.

The next question is from Oris Welkedal from Scotiabank. Your line is open. Please go ahead.

Hi, good morning, and I guess good evening overseas. The question about the de-bottlenecking program at Kamoa Kukula, your release talks about increasing the throughput for Phase 1 and Phase 2 to 9.2, and I'm wondering how we should think about the ultimate throughput now when you start including Phase 3. Do you see the combined throughput reaching north of 19 million? or I'm just wondering what the actual final number might look like when we incorporate phase three here.

Perhaps I can take that one. It's Alex here, and thanks for the question. No, so look, you raise a good point, and this will be addressed to some extent in the Q3 PFS, which will really outline the big-picture development plan for Kamoa-Kakula. I mean, in terms of the phases... Beyond phase one and phase two, as you say, we'll get up to 9.2 million tons per annum. We've said that phase three will be bigger than each of those phase one and phase two sizings. But we will come back to you in terms of how much bigger that will be. In terms of the big picture, another factor that we have to take into consideration here is the copper price. I think when we put together our 19 million ton per annum plan, we were looking at a $3 copper world. And today we're looking at a significantly more bullish copper price environment. From our point of view, we would like to continue expanding Kukula bigger and faster. And if you look at your reserves and resources from a $4.50, $5 copper point of view, it obviously increases very, very significantly. So you have more than enough resources within the Kamoa-Kukula joint venture to feed a bigger concentrator facility. But I think we will still maintain our approach, which is to do it in bite-sized chunks on a modular basis, focusing on opening up new mining areas in order of the best grade and bringing on stream concentrators that effectively use the same technology and the same process flow sheets as phase one and phase two, but perhaps in slightly bigger sizes.

Thanks, Alex. Does that imply then we should anticipate beyond Phase 3 we're going to hear about Phase 4, Phase 5 down the road?

Yeah, that will be captured within this PFS, so it won't just stop at Phase 3, but obviously Phase 3 will be what we have kind of committed to today. Those other phases may be bigger in future, kind of like The decision we made going from phase two to phase three, you know, that didn't necessarily reflect what we had in our last PEA, but we made the decision based on the market conditions that we see today.

Thank you very much. That's perfect.

We'll take the next question from Greg Barnes, DD Securities. Your line is open. Please go ahead.

Yes, thank you. A question for Alex as well. Just on the Western Forelands exploration, project this year. Maybe you mentioned it, Alex, but I didn't hear a number in terms of meterage planned and drilling and where you think that could go going into 2023 even.

Yeah, so I did mention there's 90,000 meters of drilling overall, Greg. About 50,000 of those meters are shallow drilling, so sub-150 meters. So that's really drilling out targets that we've, or the highest priority targets, I should say, that we've identified through the geophysics and the geochem work that we did in 2021. And then there is a further 40,000 meters of more stratigraphic drilling, which is sort of testing the furthermost reaches of the Western Fallen license in terms of the underlying stratigraphy, looking for those key ingredients to find a Kamoa or a Kukula.

Are there specific targets? that you're focusing on, Alex, one, two, three, or are there numerous targets beyond four or five?

No, I mean, there are always numerous targets. And, you know, there are priority rankings in terms of what we're most excited about. But the good news now is that before, you know, before last year, our targeting was always limited by the fact that we didn't have the infrastructure in to necessarily reach the most interesting places. based on the geological data, whereas now we have that spine road that crosses the entire license package. It makes it much easier to get drill rigs in and test some of the higher priority areas.

Okay. Thank you.

Next question from Delton Barreto from Canaccord. Your line is open. Please go ahead.

Great. Thank you, guys. And maybe this question is for Robert. There's been some noise recently around Tenki Fungurumi and a dispute between Giacomines and China Mali. And I'm just wondering, how much of this is an asset-specific issue versus kind of a more broad-based issue? And then, B, this recent deal for Cappucci, that stage transfer of ownership to Giacomines, To what extent does that insulate Kamoa Kukula from any disputes with the state?

Thank you.

Well, to begin with, we don't have any disputes with the state. And we make our own reality. Because we are the absolute leader in the Democratic Republic of the Congo in treating our local and national stakeholders with the greatest of respect, and because we employ women and young people and empower them. And because we scored so highly on ESG characteristics, we do not have any disputes with the state. We'd expect that to remain. In fact, we're very happy with the support we've had with the governor of Lululava Province, the new prime minister in the country, Prime Minister Sama, the support of the president's office, right through the government, top to bottom. I'd remind you that the Kamo Kukula license is held by Ivan of Mines. We are the landlord. We acquired that land under the 1905 mining law. We staked it and acquired it. We do not have a landlord. The issues around Tenge Fukurumi are not for me to comment on other than to point out the obvious, that Tenge Fukurumi has a landlord. That landlord is Jekamines, and it's not uncommon for landlords and the people that rent from them to have their disputes, but It's certainly not a national issue. There have been a number of changes politically in the country, all for the better. We've seen the passage or the consolidation of Felix Gissikati's visionary approach towards the gradual but very real elimination of corruption and bureaucracy in the government. And looking historically, having been there since 1996, There's just been an enormous amount of progress in the business climate in the Congo, and that's represented by everybody on the planet wanting to be there. Historical disputes about what agreements were reached in the past are not unknown resources. Go back to the colonial era. Assets like Tenge Fukurumi have been around for 100 years, and there's some less than transparent history about what transpired or plenty of room for argument, but Kamaukakula was just a clean sheet of paper. We entered the country with 50,000 square kilometers of exploration ground. It had never been touched. That ground was covered with 20 or 30 meters of Aeolian sand that blew in from the Kalahari Desert. It took a 20-year exploration effort to find this deposit or system of deposits, which actually is the largest deposit and the highest grade copper bearing system in the entire copper belt, which also goes into Zambia. So I think it's well understood that our deep and long-standing commitment going back decades, which resulted in this discovery and then this remarkable sort of clean sheet design of a mine stands as sort of the beacon for foreign investment in the country and has attracted interest from virtually everybody. It would be hard for you not to think or not to be able to name one of the major mining companies that has called us with congratulations and amazement at how fast this mine was brought on and how well it was brought on. It was only a little over five years ago that we discovered Kukula. And so we never would have been able to do that without a supportive government, believe me. you'll see other mines in Chile, for example, that are five or ten years behind schedule and have had massive cost overruns. You've seen that same phenomenon in Mongolia, just ridiculous cost overruns and delays by comparison. And so I think the last thing you need to worry about are the Congolese people. And certainly any disputes that are involved with other operations are completely irrelevant. I might add that Barrick sort of bet their future on the development of a magnificent gold asset in the Northeast, and there again, Mark Bristow's team has made their own reality. They've gone into a very remote location and built a spectacular mine. So I think you make your own reality in the developing world, and what distinguishes Ivano Mines is its genuine as opposed to optical commitment to the ESG characteristics that become so fundamental to all of the investors. So there's nothing with our history that bears any relation whatsoever to any issues.

Thank you for grooming.

Thanks, Robert.

We've got a number of questions, inbound questions on the webcast with questions. With respect to a supplemental or additional listing for Ivanhoe Mines, given the extremely strong share price performance over the past year, I'm not sure if you want to handle this, Robert, or Marna, or Alex. Can you give some color as to what Ivanhoe's plans are going forward?

I don't think we really want to publicly speculate about where we will list or when or why. Of course, there are means of possibility. The previous Ivano Mines, which went into Mongolia, was listed on the New York Stock Exchange. That's certainly a possibility in the future, but I don't think it's appropriate to have a selective disclosure on that subject. For the moment, Americans can easily buy our shares on a secondary listing in the United States, and we have shareholders from all over the world. Liquidity is building in the shares as the market capitalization increases, but it is certainly possible that we will seek additional listings.

Great, thanks. Maybe a question for either Alex or David. Can you please provide a estimate of the timing and dollar amount of possible shareholder loan repayments we expect from Kamoa Kukula in 2022?

I'm happy to take this one, Bill, but I don't think we should necessarily be providing an estimate in terms of a dollar amount. I mean, it's obviously subject to a great deal to the copper price. I mean, what I will say is that there will be no repayments at least until we get Phase 2 up and running at full capacity. And then I think you can obviously see that Phase 1 right now is doing a run rate of, call it, $360 million of EBITDA. There's potential to double that with Phase 2 And you contrast that to what our capital commitments are, and you realize that there should hopefully be a surplus. But it will only come after Phase 2 is in production, and we can't really give an indication of how much that will be today.

Great. Thanks, Alex. I think we have time for one or two more questions before we wrap up. So we've got a couple questions of a similar vein here. On the Platte Reef, and given the extreme movement in copper and other commodities that the Platte Reef will be producing, is there any chance to fast-track Platte Reef's production to capture some of these incredible commodity prices we're seeing right now?

We are fast-tracking Platte Reef. We've been moving as fast as possible for the last 25 years, discovering and developing the largest precious metals development in the world. It always sort of amuses me to get these kinds of questions. It's really important to actually physically go there and get the idea of the scale of what we're talking about. If you can picture going down an elevator shaft... that's going to be 10 meters in diameter, and going down to a reef that's as thick as an eight-story building and watching that reef go for mile after mile after mile and seeing that fully mechanized, where nobody's going to be lifting anything heavier than a pencil in an air-conditioned cab with a hanging wall that's rock-solid and very safe, basically a rock factory. This takes a lot of work, a lot of development work. So the beauty of phasing these projects... is that we're really engaged in uplifting our labor force and training them to a very high level. They're becoming at least dental technicians, if not dentists. So you start by training people on the baby mind, just like you had training wheels on your bike. And once you get stable, you go bigger. We've announced our intention today to accelerate CHEF 2. But, of course, the nickel price went hyperbolic. I think that's sort of a one- or two-day phenomenon today. But nickel is a very, very important metal for the future, as are platinum and palladium. So the longer we have sustained high metals prices, the greater the menu of options we have to further accelerate the project. I'd like everyone on this call to understand that the Flat Reef goes basically forever. There's about 150 million ounces of metal drilled up in various categories, but it's still open in every direction. And there are numerous other nickeliferous metals mineralized bodies that are much closer to surface. So if the nickel price remains very sustained, we think probably we have the largest nickel endowment on a planetary basis at the northern limb of the Bushveld around our holdings. We actually have work that's been done by our geological team contrasting the nickel endowment in an area being greater than Norilsk. So it's always possible to sink more shafts. if a sovereign wealth fund wants to get involved, if unconventional investors come forward, we could sink a number of shafts. But right now, we like working in a steady, modular fashion. A fast track on phase one, get everybody underground and show them that we're in production, and then develop the first super large mine. And we have to do this in the context of the continuous expansions at Kumo Kakula and the putting in the production of Kapushi. Obviously, if you start modeling this, there are massive cash flows that are potentially available in the future to grow Ivanhoe Mines into a world-class major mining company. Right now, we're either the world's largest junior mining company or we're the world's smallest major mining company. We prefer the latter, and we'd invite everybody to pay attention to Platte Reef. It's very unusual to have a polymetallic ore body because as you well know, all metals don't move in tandem. Recently, palladium has gone crazy, north of $3,000 an ounce. Or nickel has gone crazy, and maybe the platinum is relatively quiet. In the future, it may be platinum that catches up, or maybe the gold in the deposit, or the copper in the deposit. Basically, you have a self-hedged portfolio of metals in the plat reef. Many people ask me what's my favorite discovery or favorite project. Unequivocally, the world's largest precious metal system, Flat Reef, is the best project I've ever seen. It just takes more capital and takes more time to get a 100-year Tier 1 mine up and running, but once it gets started, it'll be a mine for our children and our grandchildren. We urge all of you to come take a look at it. We're going to be speaking at INDAVA, which I believe is in May this year. And shortly after that, we will select a few institutional investors to come and take a look at PlatReef and Komoka Kula. So if you're interested, I'm Robert at Ivano.net, or you can contact Bill Treneman, and we'll see what we can do to show you what the scale of these operations really are, and then you'll understand why good things take a little bit of time.

Thank you, Robert.

I thought that was a perfect way to end today's call, and I would like to thank all the shareholders and analysts and investors who joined our call today, and we look forward to providing you with frequent updates as we continue the growth into what Robert described as the next world-scale diversified mining company. And thank you. I'm BillTR at IvanCorp.net. Please feel free to reach out to me by email or by phone call, and we'll answer any questions that we did not have a chance to get to today. So thank you, and I wish everyone either good morning, good afternoon, or good evening.

This concludes today's call. Thank you for your participation. You may now disconnect.

You may now disconnect.