Ivanhoe Mines Ltd. (IVN) Earnings Call Transcript & Summary

[Audio Gap] [Operator Instructions] This call is being recorded on Tuesday, September 8, 2026. I would now like to turn the call over to Tommy Horton, Vice President, Investor Relations and Corporate Development. Please go ahead.

Thank you, operator, and good morning, everyone. Yes, my name is Tommy Horton. I'm the Vice President of Investor Relations and Corporate Development at Ivanhoe Mines. And I'm delighted to welcome you to our Western Forelands Mineral Resource Update Conference Call. This call is being recorded on Tuesday, September 8, 2026. On the line with me today from Ivanhoe Mines, we have Founder and Co-Chairman, Robert Friedland -- Executive Co-Chairman, Robert Friedland; President and Chief Executive Officer, Marna Cloete; Executive Vice President for Corporate Development, Alex Pickard; Executive Vice President, Technical Services, Simon Bottoms; and our Vice President for Geosciences, Tim Williams. We'll finish today's event with a question-and-answer session. You can submit questions using the Q&A box on the webcast page as well as through the conference operator via the phone line. If we are unable to answer any questions today, then we will -- we do encourage participants to contact our Investor Relations team, and we'll endeavor to respond to any of your unanswered questions. 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 our forward-looking statements are contained in this morning's press release as well as on SEDAR+ and on our website at www.ivanhoemines.com. It is now my pleasure to hand over to Ivanhoe Mines Founder and Executive Co-Chairman, Robert Friedland for his opening remarks and our President and Chief Executive Officer, Marna Cloete Close, for their opening remarks, Robert and Marna, please go ahead.

Well, since I'm in transit, addressing all of you from New York, I have to fly to Washington, D.C. We're just beginning the period where you remember, September 11, 2001, was actually 25 years ago. And this image was taken in 2008. If I do my math, '26, this was 18 years ago, and in that orange shirt, I was standing there with Dave Brown and Dave Edwards at the very first drill hole for the discovery of sedimentary copper in the Western Forelands basin in the Demographic Republic of the Congo. And although that 18 years has gone very quickly, this is the kind of time frame it takes in the mining industry to do something new. And during that period, I would say Congo is probably #6 or #8 or #9 in the production of copper on the world ranking. And today, Congo has left leapfrogged up to #2, passing Peru as the largest producer of the metal. And that's through the discovery of this type of copper, which is completely different from the porphyry coppers, so many of which are slowly dying as their grades are declining in Latin America. So the sedimentary copper is like oilfield geology. It's completely different. And it's like finding a liquid that once you find it, it just keeps going in this basin which contains this copper is the richest source of copper metal on our planet. If we were coming from Mars and our flying saucers are made out of green cheese in our master's [indiscernible], we would have to go to the Democratic Republic of Congo to look for copper and incidentally, a lot of other critical metals that are necessary for our modern existence. But this was a test or a theory that the copper belt went further to the west and the geology was obscured by what geologists call Aeolian sand .Aeolian sand is fancy way of saying the sand blue in from the Kalahari Desert going to obscure the underlying geology. In Eastern Congo further to the east, there was so much copper in the soil, the trees couldn't grow. They call those copper clearings at a place like [indiscernible] the Belgians found the copper sticking out of the ground. But where the sand had blown in from the Kalahari desert, the geology was obscured, and we decided to go out there into Terra incognita, and there it is, whole #1. It's sort of a humble beginning. And Dave Edwards there on the right with the yellow half, he stayed there for 10 years and had his babies right there. He never went back to England. He just was so dedicated. And Dave Brandon came from the Colorado School of Mines. I knew his PhD Professor, [ Maria Hitman ] who ran the geology department there. And I don't know, we must have had 100 people from the Colorado School of Mines come with the Congo now. So that is the discovery of copper in the Western Forelands. And today, we're announcing that another discovery has occurred there on ground where that exists outside of our joint venture, Zijin Mining. It's ground held only by Ivanhoe Mines. It's an area about 6x larger than our joint venture area, and it's growing faster in high-grade copper than anywhere in the world. Now if you think of a basin is being shed like a bowl, the original discovery was 200, 300 meters deep, about as deep as the height of the Eiffel tower, for example if you just stand up and look at the Eiffel tower. But we've now found the edge of the basin. So the lip of the bowl is coming up to the surface and the same style of mineralization is not only open pittable, but we'll constitute some of the world's, if not the world's highest grade open pit mines for copper. And that's extremely significant to the growth of Ivanhoe mines because we own all of this resource. We don't share at 50-50 with any other partner. And while there's no shortage of people that are interested in joining our efforts in the Western Forelands, this is the world's single best location to find high-grade copper, and we don't even count the copper if it's less than 1%, even if it's open pitable, and so our cutoff grade is much higher in grade than the largest copper mines in the world in Latin America. And applying open-pit mining to these grades is going to propel a very rapid additional period of growth in the company. And that's why I'm so happy to announce this today. And amazingly enough, we're making this announcement on a day that copper is trading at the highest nominal price in the history of our species. And we'll be talking about it in Washington, D.C. later today and later this month. And with that, I've made my opening remarks, and I'll try to say for 10 or 15 more minutes, but I'm in transit, and this will be turned over to Marna and the very capable hands of our technical people. Thank you very much, Marna. Go right ahead.

Thank you, Robert, and I can mainly echo some of the comments you made. Of course, we timed it to make this announcement on the day that copper is at an all-time high. Very excited to show that we've grown our resource that we announced or that we updated last year -- the team has been working all out on the Western Forelands. And it's important to note for everybody listening, that the Western Forelands is a multitude of licenses. We basically own 35 different licenses on that land package, Kamoa-Kakula is a portion of that. The announcement today pertains to 3 different licenses. And it's like Robert always says an ocean of copper out there, there's still many unexplored licenses that we are still getting access to. So this is really just a start. And if we think about reading shareholder value, adding copper, more copper to our portfolio. You can't find it cheaper in the world. We pay less than $0.01 or pound of copper discovered. And this is the way that Ivanhoe has made its name and no intends to grow over the next couple of years. So I'm not going to bore you with more details. I'm going to ask our team to take you through our exploration agenda also talk you through the resource update, and we'll start with Alex, who will give you a bit of an overview about today's announcement. Over to you, Alex.

Thank you, Marna, and thank you, Robert, for the opening remarks. It's Alex Pickard, first to try and set the scene, although I think the scene has been very well set there by both of you. So I'm sure I'll be recapping to some extent. You can go to the next slide, please, Tommy. So this map is really just showing the scale of the Western Forelands licenses. As Marna mentioned, this is a district. It's a collection of more than 30 licenses, spanning 2,500 square kilometers, so 6x the size of the Kamoa-Kakula mining complex, which is one of the largest copper discoveries in history, which is highlighted in the red. And if you look at it sort of laterally, it's 120 kilometers from tip to tip southwest to northeast. So it's a very, very large portfolio of exploration properties that we've been systematically exploring. The focus today is on the mineral resource update in the Makoko district. So a very small part of the overall picture. You can see that the mineral resource outlined in red. And Makoko district is a cluster of deposits that have now been joined together into one sort of complete picture. That's Makoko, Makoko West and Kitoko. And just recapping on something that Robert mentioned. What is very important is that Ivanhoe Mines controls this district up to a maximum 80% shareholding as stipulated by the DRC mining code, where the government will have a 10% interest and 10% will be for the benefit of Congolese nationals. So that leaves a lot of flexibility in terms of how we think about the Western Forelands going forward. We love this chart because I think it really puts into perspective the scale and the quality of what Ivanhoe Mines has achieved at Kamoa-Kakula and then more recently in the Western Forelands over the last 20 or 30 years that Robert was referring to. So this is by far and away the largest copper discovery or copper system discovered for many decades. We are now over 55 million tonnes of contained copper and accounting. So that's more than 2x the global annual mine supply in terms of the discovered copper in this region. And as Robert mentioned, 30 years ago, it was thought to be completely unprospective. Tim Williams will give you a great overview of the exploration journey. We've been through in the Western Forelands. And then what sets the district part and has always set us apart is the grade that we've managed to continue through our exploration in the sedimentary basin. So roughly in the range of 2% to 2.5% copper. The Westin Forelands is a very similar resource grade on the whole to Kamoa-Kakula and that is an order of magnitude greater than the global average of 0.62% although as we see copper grades continue to decline and mines get older and older, as many operations substantially below 0.5% even below 0.3% or 0.2% is not uncommon these days. And then even more important, I think, in the context that we're now thinking about open pit mining, which is something that Simon Bottoms will touch on later on. Yes, next slide, please, Tommy. This slide is also just highlighting some of the key differentiating factors why we firmly believe this is the best copper hunting ground in the world. I mentioned it before, but we show it again, the grade is the major differentiator 1.8% to 2.7%. Copper is the range of the indicated and inferred resource grade. And that has huge implications from an operating cost and from a capital cost point of view. Looking at the exploration costs. This is also a statistic that we like very much. Basically, we're looking at the total cost of exploration, including all of the setup costs, including all of the drilling and dividing that by the denominator, which is the amount of copper that we've discovered. And we get to a cost of actually below $10 per tonne of copper discovered. I think Marna and Robert both mentioned but today, we sit with copper breaking $14,800 per tonne as compared to less than $10 per tonne discovery cost. And it's difficult to find benchmarks across the industry, but we did find numbers in the range of $200 per tonne. So we are a fraction of that. which really speaks to the return on investment that we get from our drilling. In terms of development time lines and CapEx intensity, these are not really estimates. These are actually proven from what we've done at Kamoa-Kakula. We developed Kamoa-Kakula from drill hole to production in a 5-year or 6-year time line. That's the benefit of being shallow and being high grade. And the CapEx intensity, a similar story. We were well below $10,000 per tonne at Kamoa-Kakula and expect that Western Forelands will be in that region. And I think we've spoken enough about the land package, but we really have the dominant position in this style of geology and in this basin. And my final slide here just to set the scene is that as despite copper trading at close to $15,000 per tonne the industry success rates at discovering new deposits is pitifully low and that's not really for any lack of training or any lack of expenditure. You can see that really, we are in a a declining environment when it comes to copper discoveries, especially in the last 10 years. And I think Ivanhoe Mines has been responsible for much more than its fair share of or those discoveries. So with that as a lead-in, I will hand over to Tim Williams, our VP of Geosciences, who will bring you up to speed on the developments from the Western Forelands.

Thank you very much, Alex, and good morning to everybody. I think it's going to be hard to add or beat on what Robert and Marna have mentioned, but what I'd like to do is just take you through a little bit of a voyage of discovery in terms of the discovery history of Makoko and how it actually ties into the Western Forelands picture. Just looking at the graphic in front of you. That's just a number of members of our team and over 250,000 meters of core that we've amounted drilling on the Western Forelands in the last 8 or 9 years. So next slide, please, Tommy. So I think just looking at this from a geological perspective and zooming into the the western side of the DRC cope Bolt in the center of the picture on your right-hand side is Kolwezi, which is really the locus of the the copper cobalt deposits that make up the vast majority of the mines the previously identified in the DRC copper belt. When we take a look at the background to the Western Forelands discoveries, starting with Kamoa in 2008. There was very little confidence in the -- this area known as the Western Forelands shelf as being prospective and it really took the discovery of Kamoa and Kakula another 8 years after 2008 to actually turn that story around and turn the Western Forelands Chaffin to a very exciting and highly prospective area for these high-grade high tonnage sediment-hosted copper deposits. What sets these deposits apart from the DRC copestyle mineralization is everything to the east of Kolwezi and including the Kolwezi area itself or copper cobalt dominated on a line, which is roughly demarcated by that black full plan is copper dominated. When we look at the Western Forelands shelf style of mineralization, we see that this copper mineralization is largely sediment hosted. It is, to a large extent, unfaulted, which is not what we see in the Kolwezi area and the Tenke Fungurume area. And it is hosted higher up in the stratigraphic sequence, which is really the reason that it was never discovered in the past. And it really just talks to the original strategy, which was really go beyond the areas that have been looked at before, step out into the unknown, embrace uncertainty and test new geological ideas. And these ideas really work was coming out of the Marna Cloete's work that was carried out by the Colorado School of Mines that Robert mentioned earlier on in the piece, starting in about the early 2000s. So we can go to the next slide, please, Tommy. Just looking at this in terms of the discovery of Makoko, so the Makoko was discovered 2 years after the discovery of Kakula. There was an element of projection and trendology, and the first hole was effectively drilled directly east of Kakula on trend. And the discovery hole was drilled in 2018, picking up mineralization at depth of 302 to 400 meters below surface. From 2018 through to the announcement of the Maiden resource, which came out in September of 2023. There was 61,000 meters of diamond drilling completed on very wide spaced holes initially, you can see the fence lines of haul space, roughly a kilometer apart from the top northeastern corner down to the Southwest. And those fence lines picked up 2 broad trends. And ultimately, led to the definition of just short of 5 million tonnes of contained copper and roughly at 280 million tonnes of resource. If we go to the next slide, and this is really now talking to the rapid discovery of additional resources. You can see the significant growth, not only in the meters completed. So between 2023, the maiden resource in the 2025 disclosure update, 86,000 meters of drilling was completed. And that drilling largely focused on extension of the resource to the Southwest into the Makoko West area and it included the discovery of Kitoko of Makoko West. Those holes were all still very widely spaced. And it is this wide space drilling and the lateral continuity of the segment hosted copper style mineralization that allows the the discovery of copper at the rate that was mentioned earlier. So for every 1,000 meters of drilling, we are discovering in the region of about 45,000 tonnes of copper. If we go to the next slide, this really now talks to the current estimate and disclosure. So from the end of 2024, which was the data cut for the 2025 resource estimate to March of this year, we completed another 64,000 meters of diamond drilling. And this program of drilling has really extended the mineralization from roughly 13 kilometers along strike in the 2025 update to 16 kilometers along strike. You can also see that quite a number of the gaps that we indicated on the previous slide have now been closed off. And we've also started to tighten up the drilling -- infill drilling in certain areas of the resource, certainly where there was indications of higher grade. So the message that I'd like to leave you with is that the successive updates of this resource have seen anywhere from a 30% update or increase in resource tonnage as we see from '25 to '26 to as much as a 50% -- well, in fact, sorry, a lot more close to 90% increase from '23 to '25. So the story is not finished. And we certainly believe that the mineralization is open ended, both along strike. If you look at the far eastern side of the graphic, we have started a very wide space drilling there at roughly 800-meter centers. And the intention is that progressively as we go forward, we will continue to tighten up on the drilling and bring those resources, which are currently in the exploration resource category into the inferred and progressively into the indicated category. We are currently sitting at a 12 million tonne contained copper resource. Simon will speak a little bit more about the definition of that resource. But I think just to -- if we go to the next slide, Tommy, if we can just state that the story is not completed. There are certainly -- there's a significant amount of drilling still to come, not only in this year through to the end of December, but also planned into 2027 and 2028. So the 3 main areas that we are looking at growth in the Makoko area or the Makoko district. If we look at it in green, #1 there, we are testing a thick zone of plus 3% copper, which is down depot Makoko West. That is certainly an area that we would like to bring into the pre-feasibility study going forward. Just to the northeast of that, we have the second zone there, which is really testing an undraw zone northeast of Kitoko, a connection between Makoko West and Makoko. And then on the far right or eastern side of the resource, we mentioned we have already embarked on a very wide-spaced drilling program. We will be coming in with time to drilling, which will then bring that resource area into the indicated inferred and indicated category. So the story here is that we continue to add to the resource. We anticipate that the infill drilling will uplift the resource from largely inferred resource to a significant proportion, 30% to 40% being brought into the indicated category. And that indicated category will be to a large extent, the 0 to 400-meter depth Echelon. Go to the next slide, please. This really talks to the continued commitment of Ivanhoe drilling on the Western Forelands, particularly in the West, in the Makoko area. One can see the progressively increasing expenditures on exploration and 2027 is going to be no different current year 2026, we anticipate spending $40 million on exploration on the Western Forelands, and we anticipate the number for 2027 to be upwards or around about the 32 50% increase on that number. Go to the next slide, please. This is the final slide in my section. I think this really just talks to our exploration strategy within the Central African copper bolts. If we take a look at on the far northern part of this graphic, that is really the focus around Kolwezi and the Kamoa-Kakula and Makoko, Western Forelands area. And that's really been the first part of the strategy. Back in 2023, we acquired a very large land package in Angola, which is the step up in the far southwestern area and then last year, we picked up 7,700 square kilometers in Zambia. And these domains have been picked up primarily because of the potential of the Western Forelands style of mineralization, but also because they are largely sand covered and to Robert's point earlier, covered under a blanket of Aeolian Kalahari Sands. This is both a challenge, but also an opportunity, and the opportunities that nobody else has been able to look through these. We are making use of a number of sophisticated geophysical techniques for mapping and followed up with diamond drilling and [indiscernible] drilling. So we hope to be able to add to this Western Forelands success story progressively as we come to grips with our exploration targets in both Zambia and Angola. Thank you very much. With that, I'll hand over to Simon.

Thanks, Tim. So if we turn to the next slide, this time. So as Tim has already alluded to earlier, with only 150 kilometers of additional drilling over the last 2.5 years since the original maiden resource. Our estimates of the copper endowment within the Western Forelands have grown by almost 250%. And and so with this, we are very confident that this growth will continue as we incorporate the additional 60 kilometers of drilling, which has not yet been captured by this mineral resource estimate. And during the same period, as highlighted by Robert and Marna and Alex, we've seen significant growth in the copper price, which not only underpins the potential value of the Western Forelands, but also is a clear indication of the scarcity of such a high-quality undeveloped copper asset within the current global setting. So turning to the next slide. To put the significance of the Western Forelands deposit into context. Here, we tried to benchmark the updated 2026 mineral resource against other major copper discoveries of the past decade. This clearly shows the standout of both scale and grade of the Western Forelands deposits. For us, we feel it's clear that the Western Forelands fits within a district scale copper system with both the size and quality to compare favorably to some of the most important discoveries and geological belt elsewhere in the world. The ranking of the Western Forelands should be viewed in context of of the global setting. And it's -- as I will talk to you shortly about its nearby access to existing infrastructure. The important point here is since the '23 maiden resource, not only is the copper price significantly increased, but so has our mineral resources. And again, now as we move to the next phases of development in the project, we expect not only to continue to grow the resource but to step into a new phase of project scoping and development. So now turning to the next slide. Here, we illustrate the various phases of infill drilling, which we're currently planning to execute over approximately the next 28 months, where we intend to convert prospectivity into minable confidence. So commencing later this year, we're planning 2 complementary drilling programs. Firstly, a shallow drilling to test the large-scale open pit opportunities alongside some deeper drilling to define high-grade mineralization potentially suitable for underground -- shallow underground mining. This will then be followed with a substantial preproduction infill program that will position the open pit targets to be potentially shovel ready by the end of 2028. So turning to the next slide. The shallow gently dipping subcropping mineralization in the Western Forelands will potentially support a series of open pits, which could be mined at a low cost with a relatively low strip ratio whilst alongside higher-grade underground accesses can be developed kind of currently. This concept is key for potentially lower capital start-up to the Western Forelands with initial underground production, focusing on shallow high-grade resources for a rapid and simple development time line with quick payback of the initial project capital. And concurrent production from both open pit and underground operations not only generate significantly significant operational flexibility but also supports substantial potential multi-decade production profiles. In the top right-hand corner of this slide, we show a conceptual cross section of an open pit to demonstrate how these shallow dipping high-grade and subcropping mineral resources potentially lend themselves very well to shallow open pit mining methods. So now turning to the next slide. This gives us a snapshot of our expected time line for the initial infill drill programs alongside the progression of other project activities, including perimeter fencing, construction of the initial project and operations camp alongside environmental and social studies completed in line with international ICMM and IFC standards. We expect that the drilling in 2027 will provide the key framework to be able to define the development pathway as part of the project scoping work. Alongside this, concurrent infill drilling will provide the higher confidence conversion for the commencement of pre-feasibility studies later on in the year. So then turning over the slide. Looking to Kamoa-Kakula, we feel this provides a highly relevant operating template where we can draw synergies from in both the successful development and operation of new potential mines within the district. As highlighted on this slide, this includes geological knowledge, reliable power, transport, processing and regional smelting capacity as well as strong relationships with host communities and governments. Not to mention the Western Forelands with the potential benefit to the immediate proximity to the Lobito corridor, allowing significant synergies for offtake. Just as importantly, Ivanhoe has almost 3 decades of experience working in the BRT. So then turning to the final slide. Here [Technical Difficulty] Kamoa-Kakula provides a proxy of what can be achieved in a geological setting, where our initial production started under 6 years from the initial discovery. Not to mention the exceptional capital intensity of these ore bodies, which clearly stands out relative to other industry benchmarks. We feel this is a clear analogy of how these [indiscernible] sedimentary posted copper projects in [Technical Difficulty] can be developed to to produce really significant mines through a phase development within an area with significant existing region infrastructure. This is [Technical Difficulty] context for what we feel can be achieved at the Western Forelands. In a [Technical Difficulty], we are having full-time record demand for copper at a quick metal, as already mentioned by Robert and Marna and Alex on [Technical Difficulty] presentation. So with that, I'll hand you back over to Tommy for questions.

Thanks, Simon. [Operator Instructions]. So operator, let's start by [Technical Difficulty]

[Operator Instructions] [Technical Difficulty] question on the line from Andrew Mikitchook with BMO Capital.

Congratulations to the Ivanhoe team on this really, really quick success in the scale, how long it usually takes people to advance these things. If we have come back online and just give us some sense of the concept of the Eastern extension -- from Makoko or from the resources published this morning for Makoko West and how the prospectivity in that direction looks like from the [Technical Difficulty] linear trend connecting those 2, but is there any geological insight that we should be considering when we [Technical Difficulty] geology as from where we are.

Thanks, Andrew. Tommy, if you can just speak to Slide 13, that's probably a good one to talk. So Andy, in terms of the connection with -- or between Makoko and Kakula West, there's probably a good 8 kilometers between the 2. And the direction of travel, if you look at the high grades, there is more Northeast Southwest than it is directly east. But the drilling that we've carried out there does indicate that the basin is actually getting deeper as we go to the Southeast. And that's probably the direction towards Kakula West it so. The area that we're more excited about is really where you see those orange circles that those are denoting holes that have been completed. And you can see the grade there is 2% to 3%. And it really shows the the strike of the higher-grade zone. So we will be -- the intention is to actually chase that out further to the east. And it's at a deepening resource. So we're probably looking in a range of about 600 meters below surface in that direction. What is also an area that we haven't tested and we're only just starting to complete the hole now. You can see this gap area where we have 2023 outline written in black text there. That area is now currently being drilled out, and that's a lot shallower than that Makoko East area. And we looking to close that area out in the coming 6 months or so. So if we look at that area of what I described earlier as exploration results. The intention is to convert that into the inferred category in this coming year. And we're probably looking at a similar uplift in metal from last year to this year to what we would see in in the coming period once we close that out. So easily another 30% on the resource just as we see it there. I don't know if that answers all of your questions.

No, no, that's perfect. Thank you very much for guiding our thoughts on that. Again, congratulations to the team. This is a very quick progress. And I'll put the microphone down, let others ask questions.

[Operator Instructions] As we are seeing no further questions on the phone. I'll turn the call back over to Tommy Horton.

Many thanks, operator. So we have a couple of questions through the webcast. So first one here is, what are our plans with respect to the next resource estimate there is clearly further copper to be included in the resource estimate. Do we have an idea on timing? And will this be before or after or during a PEA or scoping study?

I mean I think I can take that question as well. So in terms of the planned drilling that Simon alluded to, our first phase of infill will be completed by February of next year, that takes us down to 200-meter depth. The second phase takes us through to the end of May. And at that point, we will rerun the resource estimate. But from an expansion drilling point of view, the main expansion drilling really takes place from the end of May through to August next year. So if we're looking at adding additional resources rather than conversion of inferred to indicated. I would say that August of next year or beyond August of next year would probably be the appropriate timing. But I think it's actually quite important to indicate the conversion of resources from the inferred category to a much higher confidence level. And that's going to be a very broad Echelon. And I anticipate that the way that we've planned it out at this stage is we're likely to see anywhere from a 30% to 40% uplift from the inferred category into the indicated category.