Ivanhoe Mines : Material Change Report

FORM 51-102F3

MATERIAL CHANGE REPORT

Item 1

Name and Address of Company

Ivanhoe Mines Ltd. (the "Company", "Ivanhoe" or "Ivanhoe Mines") Suite 606, 999 Canada Place Vancouver, British Columbia Canada, V6C 3E1

Item 2	Date of Material Change
February 28, 2022
Item 3	News Release

A news release with respect to the material change referred to in this report was disseminated through the facilities of a recognized newswire service on February 28, 2022 and subsequently filed under the Company's profile on the System for Electronic Document Analysis and Retrieval (SEDAR). The statements in the February 28, 2022 news release under the heading "Cautionary statement on forward- looking information" are incorporated into this material change report.

Item 4

Summary of Material Change

On February 28, 2022, Ivanhoe announced the findings of an independent Platreef 2022 Feasibility Study (the "Platreef 2022 Feasibility Study") for the tier-one Platreef palladium, rhodium, nickel, platinum, copper and gold project in South Africa.

Item 5

Full Description of Material Change

On February 28, 2022, Ivanhoe announced the findings of an independent Platreef 2022 Feasibility Study for the tier-one Platreef palladium, rhodium, nickel, platinum, copper and gold project in South Africa.

Platreef Project

The Platreef Project, which includes an underground deposit of thick, high-gradePGE-nickel-copper-gold mineralization discovered by Ivanhoe's geologists, is in the northern limb of the Bushveld Complex approximately 11 kilometres from Mokopane, and 280 kilometres northeast of Johannesburg.

Figure: Map of South Africa's Bushveld Igneous Complex.

Source: SFA (Oxford).

PGE-nickel-copper-gold mineralization in the northern limb is primarily hosted within the Platreef, a mineralized sequence which is traced more than 30 kilometres along strike. The Platreef Project is situated in the southern sector of the Platreef on two contiguous properties, Turfspruit and Macalacaskop, which comprise, in aggregate, approximately 7,842 hectares. The northernmost property, Turfspruit, is contiguous with and along strike from Anglo Platinum Limited's Mogalakwena group of properties and mining operations.

The Flatreef Deposit lies entirely on the Turfspruit and Macalacaskop properties that form part of Ivanhoe's mining right. The thickness of the mineralized reef (T1 & T2 mineralized zones) intersected in Shaft 1 is 29 metres. This thickness is exceptional when compared to the typical, approximately one-metre-thick reefs being mined elsewhere on South Africa's Bushveld Complex.

In June 2020, Ivanplats completed the sinking of Platreef's initial shaft, Shaft 1, to its final depth of 996 metres below surface. Shaft 1 is located approximately 450 metres away from a high-grade area of the Flatreef orebody, which will provide initial mining areas for Phase 1 production in 2024.

The thick Flatreef orebody also is flat-lying, which is ideal for safe, bulk-scale, mechanized mining and processes optimized for maximum ore extraction. Flatreef is characterized by its high-grade mineralization and a palladium-to-platinum ratio of approximately 1:1, which is considerably higher than other PGMs discoveries on the Northern Limb of the Bushveld.

The Platreef 2022 Feasibility Study provides the blueprint for the ongoing development of Platreef and builds on the results of the preliminary economic assessment ("PEA") for a phased-development scenario to expedite production, announced in November 2020, alongside the 2020 Feasibility Study. The Platreef 2022 Feasibility Study is based on a steady state production rate of 5.2 million tonnes per annum ("Mtpa"), as well as an accelerated ramp up to steady state through the earlier development of Shaft 2. The Platreef 2022 Feasibility Study is based on the detailed design and engineering scenario first presented in the 2020 PEA, confirming the viability of a new phased development pathway to fast-track Platreef into production by Q3 2024.

The Platreef 2022 Feasibility Study first phase of production includes an initial 700,000 tonnes per annum (700 ktpa) underground mine and 770-ktpa-capacity concentrator, targeting high-grade mining areas close to the project's recently completed Shaft 1. Platreef's Phase 2, 5.2-Mtpa steady state production rate would

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rank it as the world's fifth largest primary platinum-group metals ("PGM") mine on a palladium equivalent basis, with annual forecast production of more than 590,000 ounces of palladium, platinum, rhodium and gold, plus more than 40 million pounds of nickel and copper. The Platreef 2022 Feasibility Study reflects the initial two phases of development for the Platreef Mine. Previous studies have demonstrated the resource base for future expansions up to 12 Mtpa, which would position Platreef among the very largest PGM producing mines in the world.

Summary of the Platreef 2022 Feasibility Study

• The Platreef 2022 Feasibility Study evaluates the phased development of Platreef, with an initial 700- ktpa underground mine and a 770-ktpa capacity concentrator, targeting high-grade mining areas close to Shaft 1, with an initial capital cost of US$488 million.
• First concentrate production for Phase 1 is planned for Q3 2024, with the Phase 2 expansion based on the commissioning of Shaft 2 in 2027, followed by the commissioning of two 2.2-Mtpa concentrators in 2028 and 2029. This would increase the steady-state production to 5.2 Mtpa by using Shaft 2 as the primary production shaft.
• Expansion capital cost for Phase 2 is estimated at US$1.5 billion, which may be partially funded by cash flows from Phase 1 and a project financing package.
• Ivanplats' dedicated engineering teams and leading consultants are evaluating optimizations to the sinking methodology for Shaft 2 to further accelerate the availability of the shaft for hoisting, which may accelerate the overall development timeline.
• Phase 1 average annual production of 113,000 ounces (oz.) of platinum, palladium, rhodium and gold (3PE+Au), plus 5 million pounds of nickel and 3 million pounds of copper.
• Phase 2 average annual production of 591,000 oz. of 3PE+Au, plus 26 million pounds of nickel and 16 million pounds of copper, which would rank Platreef as the fifth largest primary PGM producer on a palladium equivalent basis
• Life-of-minecash cost of US$514 per ounce of 3PE+Au, net of by-products, and including sustaining capital costs would rank Platreef as the lowest cost primary PGM producer
• After-taxnet present value at an 8% discount rate (NPV8%) of US$1.7 billion and an internal rate of return (IRR) of 18.5%, based on long-term consensus prices.
• At spot prices as at February 23, 2022, the after-tax NPV8% increases to US$4.1 billion and the IRR increases to 29.3%.
• Shaft 1 equipping and changeover to hoisting is nearing completion, expected by end of March 2022, together with the arrival of initial battery electric underground mining fleet.
• In parallel with the changeover of Shaft 1 for permanent hoisting, detailed engineering and certain optimization initiatives are underway on the mine design, 770-ktpa concentrator and associated infrastructure design, which also will include the dry stack tailings storage facility. In addition, amendments to the water use licence, waste licence and environmental impact assessment required for the phased development plan have been lodged.
• Following the completion of the changeover of Shaft 1, off-shaft development will start in April 2022 with the initial aim of enabling construction of the first ventilation raise.
• With the focus shifting to execution, appointment and onboarding of earthworks contractors is the next short-term milestone for surface work, while detailed design across the project ramps up.

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Figure: Plan of the Platreef 2022 Feasibility Study mine design, highlighting areas that are mined during Phase 1 (700-ktpa) and Phase 2 (5.2 Mtpa).

Figure by OreWin, 2022.

Table: Summary of key results of the Platreef 2022 Feasibility Study.

Item	Units	Total / Average Life of Mine
Mined and processed
Material Milled	Million tonnes	125
Platinum	g/t	1.94
Palladium	g/t	1.99
Gold	g/t	0.30
Rhodium	g/t	0.13
3PE+Au	g/t	4.37
Copper	%	0.16
Nickel	%	0.34
Peak Production (Year 8)
3PE+Au	koz	697
Nickel	kt	13
Copper	kt	8
Key financial results
Life of mine	Years	28.3
Initial capital	US$ million	488
Expansion capital	US$ million	1,480
Peak capital	US$ million	1,364
Mine-site cash cost	US$ per ounce 3PE+Au	429
Total cash cost after credits	US$ per ounce 3PE+Au	452
All-in cash cost after credits	US$ per ounce 3PE+Au	514
Mine-site operating costs	US$ per tonne milled	52
After-tax NPV8%	US$ million	1,690
After-tax IRR	%	18.5
Project payback period	years	7.9

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Notes:

1. 3PE+Au = platinum, palladium, rhodium and gold.
2. Long-termmetal price assumptions for economic analysis are as follows: US$1,100/oz. platinum, US$1,450/oz. palladium, US$1,600/oz. gold, US$5,000/oz. rhodium, US$8.00/lb nickel and US$3.50/lb copper.
3. All-incash costs include sustaining capital costs.

Table: Platreef 2022 Feasibility Study financial results at base case and spot prices.

	Discount Rate	Base Case Prices (1)	Spot Prices (2)
Net present value (NPV)	Undiscounted	8,543	17,130
(US$ million, after tax)	5.0%	3,098	6,815
	8.0%	1,690	4,116
	10.0%	1,104	2,979
	12.0%	692	2,169
Internal rate of return (IRR)		18.5%	29.3%
Project payback period	(Years)	7.9	6.4
Exchange rate	(ZAR: USD)	16:1

1. Base case metal price assumptions are as follows: US$1,100/oz. platinum, US$1,450/oz. palladium, US$1,600/oz. gold, US$5,000/oz. rhodium, US$8.00/lb nickel and US$3.50/lb copper.
2. Spot metal prices as at February 23, 2022 are as follows: US$1,095/oz. platinum, US$2,480/oz. palladium, US$1,909/oz. gold, US$18,750 /oz. rhodium, US$11.31/lb nickel and US$4.48/lb copper.

Table: Platreef 2022 Feasibility Study average mine production and processing statistics.

Item	Units	Phase 1 Average (1)	Phase 2 Average (2)	LOM Average
Production	Mtpa	0.7	4.9	4.4
Platinum	g/t	2.53	1.93	1.94
Palladium	g/t	2.54	1.98	1.99
Gold	g/t	0.38	0.30	0.30
Rhodium	g/t	0.17	0.13	0.13
3PE+Au(2)	g/t	5.63	4.34	4.37
Copper	%	0.19	0.16	0.16
Nickel	%	0.40	0.34	0.34
Recoveries
Platinum	%	90.4	87.2	87.2
Palladium	%	90.2	86.7	86.8
Gold	%	80.4	78.5	78.5
Rhodium	%	84.4	80.2	80.3
3PE+Au(2)	%	89.4	86.0	86.2
Copper	%	90.0	87.6	87.7
Nickel	%	77.5	71.4	71.6
Concentrate produced	kt/a (dry)	34.9	216.2	195.7
Platinum	g/t	38.1	38.2	38.2
Palladium	g/t	38.1	39.0	39.0
Gold	g/t	5.1	5.3	5.3
Rhodium	g/t	2.4	2.4	2.4
3PE + Au (3)	g/t	83.8	85.0	85.0
Copper	%	2.8	3.3	3.3
Nickel	%	5.1	5.4	5.4

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