Ivanhoe Mines : Management’s Discussion and Analysis for the period ended June 30, 2023

INTRODUCTION

This management's discussion and analysis (MD&A) should be read in conjunction with the unaudited condensed consolidated interim financial statements of Ivanhoe Mines Ltd. ("Ivanhoe", "Ivanhoe Mines" or the "Company"), for the three and six months ended June 30, 2023, which have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting (IAS

1. and the audited consolidated financial statements of Ivanhoe for the years ended December 31, 2022 and 2021, which have been prepared in accordance with International Financial Reporting Standards (IFRS). All dollar figures stated herein are in U.S. dollars, unless otherwise specified.
   References to "C$" mean Canadian dollars and references to "R" mean South African Rands.

The effective date of this MD&A is August 2, 2023. Additional information relating to the Company is available on SEDAR+ at www.sedarplus.ca.Certain statements contained in the MD&A are forward- looking statements that involve risks and uncertainties. See "Forward-Looking Statements" and "Risk Factors".

This MD&A includes references to earnings before interest, tax, depreciation and amortization (EBITDA), Adjusted EBITDA, EBITDA margin, normalized profit, and "Cash costs (C1) per pound" which are non-GAAP financial performance measures. For a detailed description of each of the non- GAAP financial performance measures used in this MD&A, and a detailed reconciliation to the most directly comparable measure under IFRS, please refer to the non-GAAP Financial Performance Measures section of this MD&A starting on page 45. The non-GAAP financial performance measures set out in this MD&A are intended to provide additional information to investors and do not have any standardized meaning under IFRS, and therefore may not be comparable to other issuers, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

SECOND QUARTER HIGHLIGHTS

• Record quarterly production of 103,786 tonnes of copper in concentrate was achieved at the Kamoa-Kakula Copper Complex ("Kamoa-Kakula") for Q2 2023, compared to 93,603 tonnes in Q1
  2023 and 87,314 tonnes in Q2 2022.
• Kamoa-Kakulasold 101,526 tonnes of payable copper during Q2 2023, recognizing a record revenue of $702 million, an operating profit of $394 million and quarterly EBITDA of $457 million.
• Kamoa-Kakula'scost of sales per pound (lb.) of payable copper sold was $1.24/lb. for Q2 2023 compared with $1.25/lb. and $1.15/lb. in Q1 2023 and Q2 2022 respectively. Cash costs (C1) per pound of payable copper produced in Q2 2023 totalled $1.41/lb., compared to $1.42/lb. and $1.42/lb. in Q1 2023 and Q2 2022 respectively.
• Ivanhoe Mines recorded a profit of $87 million for Q2 2023, net of a $27 million non-cash loss on the $575 million convertible bond fair valuation, compared with a profit of $82 million for Q1 2023.
  The profit in the quarter includes Ivanhoe Mines' share of profit and finance income from the Kamoa- Kakula joint venture of $123 million for Q2 2023.
• Ivanhoe Mines Adjusted EBITDA was $172 million for Q2 2023, compared with $101 million for the same period in 2022, and $172 million for Q1 2023, which includes an attributable share of EBITDA from Kamoa-Kakula.
• Ivanhoe Mines has a strong balance sheet with cash and cash equivalents of $393 million on hand as at June 30, 2023, and expects Kamoa-Kakula's Phase 1 and Phase 2 cash flow to be sufficient to fund the Phase 3 expansion capital cost requirements at current copper prices.
• Kamoa-Kakula'sfull year cash cost (C1) guidance is unchanged at $1.40 - $1.50 per pound and full year production guidance also unchanged at 390,000 to 430,000 tonnes of copper in concentrate.

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KAMOA-KAKULA COPPER COMPLEX

The Kamoa-Kakula Copper Complex is approximately 25 kilometres southwest of the town of Kolwezi and about 270 kilometres west of Lubumbashi in the DRC Copperbelt. Kamoa-Kakula's Phase 1 concentrator began producing copper in May 2021 and achieved commercial production on July 1, 2021. The Phase 2 concentrator, which doubled nameplate production capacity, was commissioned in April 2022. Kamoa-Kakula is independently ranked by international mining consultant Wood Mackenzie to become the world's third-largest copper mining operation in 2027, following the completion of the ongoing Phase 3 expansion. Kamoa-Kakula's employee workforce is currently 97% Congolese.

The Kamoa-Kakula Copper Complex is operated as the Kamoa Holding joint venture between Ivanhoe Mines and Zijin Mining. Ivanhoe sold a 49.5% share interest in Kamoa Holding Limited (Kamoa Holding) to Zijin Mining and a 1% share interest in Kamoa Holding to privately owned Crystal River in December 2015. Kamoa Holding holds an 80% interest in the project. Ivanhoe and Zijin Mining each hold an indirect 39.6% interest in Kamoa-Kakula, Crystal River holds an indirect 0.8% interest, and the DRC government holds a direct 20% interest.

Photo: Construction of the off-gas handling structure and the adjoining furnace building at Kamoa-Kakula'sdirect-to-blister copper smelter.

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Kamoa-Kakula summary of operating and financial data
	Q2 2023	Q1 2023	Q4 2022	Q3 2022	Q2 2022
Ore tonnes milled (000's tonnes)	2,244	1,930	2,006	2,082	1,950
Copper ore grade processed (%)	5.21%	5.42%	5.40%	5.60%	5.44%
Copper recovery (%)	87.2%	87.1%	86.1%	85.9%	84.0%
Copper in concentrate produced	103,786	93,603	92,761	97,820	87,314
(tonnes)
Payable copper sold (tonnes)	101,526	86,777	92,208	93,812	85,794
Cost of sales per pound ($ per lb.)	1.24	1.25	1.08	1.05	1.15
Cash cost (C1) ($ per lb.)	1.41	1.42	1.42	1.43	1.42
Realized copper price ($ per lb.)	3.79	4.04	3.54	3.50	4.34
Sales revenue before remeasurement	729,924	659,529	619,997	570,504	699,381
($'000)
Remeasurement of contract	(27,542)	29,594	53,473	(110,031)	(205,248)
receivables ($'000)
Sales revenue after remeasurement	702,382	689,123	673,470	460,473	494,133
($'000)
EBITDA ($'000)(1)	456,628	457,311	452,089	251,086	285,477
EBITDA margin (% of sales revenue)	65%	66%	67%	55%	58%

All figures in the above tables are on a 100%-project basis. Metal reported in concentrate is before refining losses or deductions associated with smelter terms. This MD&A includes "EBITDA", "Adjusted EBITDA", "EBITDA margin", normalized profit and "Cash costs (C1)" which are non-GAAP financial performance measures. For a detailed description of each of the non-GAAP financial performance measures used herein and a detailed reconciliation to the most directly comparable measure under IFRS, please refer to the non-GAAP Financial Performance Measures section of this MD&A starting on page 45.

1. Unrealized foreign exchange losses have been excluded from EBITDA in the current and prior periods presented, as the Company believes that including the unrealized foreign exchange gains and losses does not give a valuable indication of the mine's ability to generate liquidity by producing operating cash flow to fund its working capital needs, service debt obligations, fund capital expenditures and distribute cash to its shareholders.

C1 cash cost per pound of payable copper produced can be further broken down as follows:

		Q2 2023	Q1 2023	Q4 2022	Q3 2022	Q2 2022
Mining	($ per lb.)	0.39	0.41	0.40	0.41	0.39
Processing	($ per lb.)	0.19	0.19	0.16	0.12	0.14
Logistics charges (delivered to China)	($ per lb.)	0.45	0.46	0.50	0.56	0.51
Treatment, refining and smelter charges	($ per lb.)	0.25	0.23	0.23	0.21	0.21
General and administrative expenditure	($ per lb.)	0.13	0.13	0.13	0.13	0.17
C1 cash cost per pound of payable	($ per lb.)	1.41	1.42	1.42	1.43	1.42
copper produced

C1 cash costs are prepared on a basis consistent with the industry standard definitions by Wood Mackenzie cost guidelines but are not measures recognized under IFRS. In calculating the C1 cash cost, the costs are measured on the same basis as the Company's share of profit from the Kamoa Holding joint venture that is contained in the financial statements. C1 cash costs are used by management to evaluate operating performance and include all direct mining, processing, and general

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and administrative costs. Smelter charges and freight deductions on sales to the final port of destination, which are recognized as a component of sales revenues, are added to C1 cash cost to arrive at an approximate cost of delivered, finished metal. C1 cash costs exclude royalties and production taxes and non-routine charges as they are not direct production costs.

All figures are on a 100% project basis and metal reported in concentrate is before refining losses or deductions associated with smelter terms.

Photo: (L-R) Guelord Ilunga, control room overseer; Derick Yav Tshang, control room overseer; Carine Ndala, control room overseer; Jean-Saint Kabange, plant metallurgist; Dan Mutamba, senior control room officer; and Chris Tshibanda, control room overseer, stand in the Kamoa- Kakula concentrator plant control room.

Kamoa-Kakula produced a record 103,786 tonnes of copper in Q2 2023, including a monthly record of 35,856 tonnes for May 2023

Kamoa-Kakula's Phase 1 and 2 concentrators are now regularly operating at the increased processing rate of 9.2 million tonnes per annum (Mtpa), following the completion of the debottlenecking program. The $50-million Phase 1 and 2 concentrator debottlenecking program was completed on budget and ahead of schedule in late February 2023, increasing production capacity up to 450,000 tonnes of copper in concentrate per annum.

The Kamoa-Kakula Phase 1 and Phase 2 concentrators continued to perform strongly in the second quarter, breaking several records including the quarterly production of 103,786 tonnes of copper in concentrate, a quarter-on-quarter increase of 11%. In addition, a monthly record was achieved in May 2023 with 35,856 tonnes of copper in concentrate produced. Also, during the quarter, a weekly production record of 9,710 tonnes of copper in concentrate was achieved in late April. Shortly after quarter-end, on July 2, 2023, a record daily milling rate of 29,968 dry metric tonnes was achieved, which is equivalent to an annual milling rate of 10 million tonnes per annum (after accounting for availability).

Kamoa-Kakula's Phase 1 and 2 concentrators milled a record 2.2 million tonnes of ore during the second

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