Ivanhoe Mines Begins Construction of First Box Cut for Planned Underground Mine at the Kamoa Copper Discovery in the Democratic Republic of Congo

LUBUMBASHI, DEMOCRATIC REPUBLIC OF CONGO--(Marketwired - July 24, 2014) - Ivanhoe Mines (TSX:IVN) Executive Chairman Robert Friedland and Chief Executive Officer Lars-Eric Johansson today announced the start of construction on the box cut for the initial portal to planned decline ramps that will provide underground access to the proposed Kamoa copper mine in the Democratic Republic of Congo's Katanga province.

A contract for construction of the box cut was awarded to Lubumbashi-based Mining Company Katanga Sprl (MCK), which has extensive local experience in contract mining and earthworks and has worked on other significant Katanga copper mining projects, including Kinsevere, Kipoi and Kolwezi.

Construction of the box cut is expected take approximately five months, after which development of the first set of twin declines can commence. The declines have been designed to intersect the high-grade copper mineralization in Kansoko Sud area, approximately 150 metres below surface. Ivanhoe's drilling program in this area has defined a thick, near-surface zone of high-grade copper mineralization in Kansoko Sud, where a recent drill hole, for which assays were received in April 2014, intercepted 15.7 metres (true width) of 7.04% copper, at a 1.5% total copper cut-off.

"This first development step is an important milestone in Ivanhoe's schedule to begin realizing the tremendous potential of Kamoa's high-grade resource to deliver meaningful benefits to all of our stakeholders," said Mr. Friedland.

"Industry experts recognize that Kamoa is a world-class copper deposit, both in terms of size and grade. In our mine planning, Kamoa's tabular form and relatively undeformed geometry, allows utilization of simple and low-cost mining methods; no complex metallurgical processes are required and the inherent scalability of the deposit means that it can provide significant returns over a range of production scenarios."

Kamoa is the world's largest high-grade (>2.5% Cu) copper resource. As such, Ivanhoe's initial, independent preliminary economic assessment (PEA) was based on an initial mining rate of three million tonnes per annum (Mtpa), which could be scaled up in phases to a steady state rate of up to 15 Mtpa.

Mr. Johansson said it is important for Ivanhoe to strike the correct balance between capital efficiency and operational risk.

"This principle will be adopted during the project's first phase, which is being scoped to target several high-grade areas in Kansoko Sud in the initial build up. The approach is to target early cash-generation opportunities, while allowing organizational learning and operational refinements to be incorporated into the subsequent expansion phases," Mr. Johansson added.