Ivanhoe Mines Ltd. — Regulatory Filings 2021

Dec 17, 2021

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

December 8, 2021

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 December 8, 2021 and subsequently filed under the Company’s profile on the System for Electronic Document Analysis and Retrieval (SEDAR). The statements in the December 8, 2021 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 December 8, 2021, Ivanhoe announced that the Company’s South African subsidiary, Ivanplats, had concluded stream-financing agreements with Orion Mine Finance and Nomad Royalty Company for a US$200 million gold-streaming facility and a US$100 million palladium- and platinum-streaming facility for its world-scale Platreef palladium-rhodium-platinum-nickel-copper-gold project in Limpopo Province, South Africa. Ivanplats also announced that it had signed documents relating to offtake arrangements for 100% of Platreef’s Phase 1 platinum-group-metals (PGMs) concentrate production, which is expected to be more than 40,000 tonnes per year containing six payable metals, including palladium, rhodium, platinum, nickel, copper and gold. The proceeds will be used to advance the first phase of Platreef’s mine development, with commercial production expected in 2024.

Item 5
Full Description of Material Change

On December 8, 2021, Ivanhoe announced that Ivanplats had entered into a gold, palladium and platinum stream financing with Orion Mine Finance, a leading international provider of customized financing to mining companies, and Nomad Royalty Company, a precious metals royalty company, in which Orion Mine Finance is a significant shareholder (Orion Mine Finance and Nomad Royalty Company, together, the “Stream Purchasers”). The proceeds will be used to advance the first phase of Platreef’s mine development, with commercial production expected in 2024.

Under the stream agreements, Orion Mine Finance will provide a total of US$225 million in funding, and Nomad Royalty Company will provide US$75 million in funding. The stream facilities are a prepaid forward sale of refined metals, with prepayments totaling US$300 million, available in two tranches with the first prepayment of US$75 million to be paid following the closing of the transaction and US$225 million to be paid upon satisfaction of certain conditions precedent.

Under the terms of the US$200 million gold stream agreement, the Stream Purchasers will receive an aggregate total of 80% of contained gold in concentrate until 350,000 ounces have been delivered, after which the stream will be reduced to 64% of contained gold in concentrate for the remaining life of the facility. The expected life of this facility will extend from the effective date of the stream agreement until the date when 685,280 ounces of gold have been delivered to the Stream Purchasers. The Stream

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Purchasers will purchase each ounce of gold at a price equal to the lower of the market price of gold or US$100 per ounce.

Under the terms of the US$100 million palladium and platinum stream agreement, Orion Mine Finance will receive an aggregate total of 4.2% of contained palladium and platinum in concentrate until 350,000 ounces of platinum and palladium combined have been delivered, after which the stream will be reduced to 2.4% for the remaining life of the facility. The expected life of this facility will extend from the effective date of the stream agreement until the date when 485,115 ounces of palladium and platinum have been delivered to the purchaser, which will pay for each ounce at a price equal to 30% of the market price of palladium and platinum.

The conclusion of the stream agreements allows Ivanplats to focus efforts on finalizing the senior debt facility for up to US$120 million. Societe Generale and Nedbank were appointed as mandated lead arrangers for the project debt facility in early 2021. Both the gold stream facility, and palladium and platinum stream facility, will be subordinated to any senior secured financing.

The senior debt facility is anticipated to be used only after the stream facilities are fully drawn. Ivanplats remains flexible to raise additional debt or equity at a later date, and has pre-agreed with the Stream Purchasers the intercreditor arrangements for any future senior debt. While the stream facilities are guaranteed by Ivanplats and secured over the assets and Ivanhoe's shares of Platreef, there is no recourse to Ivanhoe Mines.

Ivanplats has also signed documents relating to offtake for 100% of Phase 1's PGM concentrate production of at least 40,000 tonnes per year, based on standard commercial terms for PGM mines in South Africa. This reinforces the high quality of Platreef's PGM concentrate, which contains six payable metals including palladium, rhodium, platinum, nickel, copper and gold.

Ivanplats has finalized a PGM concentrate sales agreement with Northam Platinum for 50% of concentrate production from Phase 1 at Platreef, which totals approximately 20,000 tonnes per year. The agreement is in place for a period of ten years, and Ivanplats retains the option to reduce the volume by 5,000 tonnes to an annual total of 15,000 tonnes.

Ivanplats also has signed a non-binding indicative term sheet with Heron Metals, a Trafigura joint venture, relating to the sale and purchase of 50% of the PGM concentrate production from Phase 1 at Platreef, which equals approximately 20,000 tonnes per year, and would also be in place for a period of ten years. Under the proposed terms, Ivanplats retains the option to reduce the volume by 5,000 tonnes to an annual total of 15,000 tonnes. Ivanplats may also elect to receive a provisional payment of 90%, five days after the month of delivery. The final terms of the offtake with Heron Metals remain subject to negotiation and execution of definitive documentation.

Qualified Persons and NI 43-101 Technical Report

In December 2020, Ivanhoe Mines filed a new National Instrument 43-101 (NI 43-101) technical report titled "Platreef Integrated Development Plan 2020" with an effective date of December 6, 2020 (Platreef IDP20).

The Platreef IDP20, which includes the Platreef 2020 FS and Platreef 2020 PEA, was independently prepared by OreWin Pty Ltd. of Adelaide, Australia; Wood plc (formerly Amec Foster Wheeler) of Vancouver, Canada; SRK Consulting Inc. of Johannesburg, South Africa; Stantec Consulting International LLC of Phoenix, USA; DRA Global of Johannesburg, South Africa; and Golder Associates Africa of Midrand, South Africa.

These technical reports include relevant information regarding the effective dates and the assumptions,

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parameters and methods of the mineral resource estimates on the Platreef Project cited in this material change report, as well as information regarding data verification, exploration procedures and other matters relevant to the scientific and technical disclosure contained in this material change report in respect of the Platreef Project.

Other scientific and technical information in this material change report has been reviewed and approved by Stephen Torr, P.Geo., Ivanhoe Mines' Vice President, Project Geology and Evaluation, a Qualified Person under the terms of NI 43-101. Mr. Torr is not considered independent under NI 43-101 as he is the Vice President, Project Geology and Evaluation of Ivanhoe Mines. Mr. Torr has verified the technical data disclosed in this material change report.

Item 6 Reliance on subsection 7.1(2) of National Instrument 51-102

Not applicable.

Item 7 Omitted Information

No confidential information has been omitted from this material change report.

Item 8 Executive Officer

For further information, please contact Mary Vincelli, Vice President, Compliance and Corporate Secretary of the Company, at +1 604 331 9882.

Item 9 Date of Report

December 17, 2021