Ivanhoe Mines : Management’s Discussion and Analysis for the period ended March 31, 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 months ended March 31, 2023, which have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting (IAS 34) 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 May 2, 2023. Additional information relating to the Company is available on SEDAR at www.sedar.com.Certain statements contained in the MD&A are forward- looking statements that involve risks and uncertainties. See "Forward-LookingStatements" and "Risk Factors".

This MD&A includes references to earnings before interest, tax, depreciation and amortization (EBITDA), 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 40. 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.

FIRST QUARTER HIGHLIGHTS

• Production at the Kamoa-Kakula Copper Complex ("Kamoa-Kakula") for the first quarter of 2023 was 93,603 tonnes of copper in concentrate, compared to 92,761 tonnes in Q4 2022 and 55,602 tonnes in Q1 2022.
• 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'scost 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 to $1.42/lb. and $1.21/lb. in Q4 2022 and Q1 2022 respectively.
• Debottlenecking program of Kamoa-Kakula's Phase 1 and Phase 2 concentrators completed ahead of schedule, increasing nameplate processing capacity by 22% to a combined total of 9.2 million tonnes of ore per annum and copper production capacity to 450,000 tonnes per annum.
• Ivanhoe Mines recorded a profit of $82 million for Q1 2023, compared to a profit of $22 million for the same period in 2022. The profit in the quarter includes Ivanhoe Mines' share of profit and finance income from the Kamoa-Kakula joint venture of $130 million for Q1 2023.
• Adjusted EBITDA for the Ivanhoe Mines group of $168 million recorded for Q1 2023 compared to $145 million for the same period in 2022, and $162 million for Q4 2022, which includes an attributable share of EBITDA from Kamoa-Kakula.
• 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 fund the Phase 3 expansion capital cost requirements at current copper prices.

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• Ivanhoe continues its expansive copper exploration program on its Western Foreland licences that cover approximately 2,407 square kilometres adjacent to Kamoa-Kakula. The 2023 exploration program is budgeted at approximately $19 million and includes up to 70,000 metres of total drilling.

KAMOA-KAKULA COPPER COMPLEX

The Kamoa-Kakula Copper Complex operated as the Kamoa Holding joint venture between Ivanhoe Mines and Zijin Mining, has been independently ranked as the world's third-largest copper deposit by international mining consultant Wood Mackenzie in 2027. The project is approximately 25 kilometres southwest of the town of Kolwezi and about 270 kilometres west of Lubumbashi. Kamoa-Kakula Copper Complex'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.

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. Kamoa-Kakula's employee workforce is currently 97% Congolese.

Photo: Aerial view of Kamoa-Kakula's Copper Complex, which is now operating at a recently increased processing capacity of 9.2 million tonnes per annum, and production capacity of up to 450,000 tonnes of copper per annum.

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Kamoa-Kakula summary of operating and financial data
	Q1 2023	Q4 2022	Q3 2022	Q2 2022	Q1 2022
Ore tonnes milled (000's tonnes)	1,930	2,006	2,082	1,950	1,083
Copper ore grade processed (%)	5.42%	5.40%	5.60%	5.44%	5.91%
Copper recovery (%)	87.1%	86.1%	85.9%	84.0%	87.1%
Copper in concentrate produced	93,603	92,761	97,820	87,314	55,602
(tonnes)
Payable copper sold (tonnes)	86,777	92,208	93,812	85,794	51,919
Cost of sales per pound ($ per lb.)	1.25	1.08	1.05	1.15	1.08
Cash cost (C1) ($ per lb.)	1.42	1.42	1.43	1.42	1.21
Realized copper price ($ per lb.)	4.04	3.54	3.50	4.34	4.51
Sales revenue before remeasurement	659,529	619,997	570,504	699,381	467,453
($'000)
Remeasurement of contract	29,594	53,473	(110,031)	(205,248)	52,142
receivables ($'000)
Sales revenue after remeasurement	689,123	673,470	460,473	494,133	519,595
($'000)
EBITDA ($'000)	452,422	451,371	254,423	286,313	399,391
EBITDA margin (% of sales revenue)	66%	67%	55%	58%	77%

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" 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 40.

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

		Q1 2023	Q4 2022	Q3 2022	Q2 2022	Q1 2022
Mining	($ per lb.)	0.41	0.40	0.41	0.39	0.30
Processing	($ per lb.)	0.19	0.16	0.12	0.14	0.15
Logistics charges (delivered to China)	($ per lb.)	0.46	0.50	0.56	0.51	0.36
Treatment, refining and smelter charges	($ per lb.)	0.23	0.23	0.21	0.21	0.20
General and administrative expenditure	($ per lb.)	0.13	0.13	0.13	0.17	0.20
C1 cash cost per pound of payable	($ per lb.)	1.42	1.42	1.43	1.42	1.21
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 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.

Photo: John Katumbwe, Scooptram (LHD) driver, developing the twin decline to the new Kamoa 1 and Kamoa 2 underground mines, which will be the source of copper ore for Kamoa-Kakula's Phase 3 concentrator. Total copper production from Kamoa-Kakula is expected to increase to 600,000 tonnes per annum in Q4 2024.

Kamoa-Kakula produced 93,603 tonnes of copper in Q1 2023, including a record 34,915 tonnes of copper in March 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. All figures are on a 100% project basis and metal reported in concentrate is

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