Ivanhoe Mines : Consolidated Financial Statements as at June 30, 2022

Condensed consolidated interim financial statements of

Ivanhoe Mines Ltd.

June 30, 2022

(Stated in U.S. dollars) (Unaudited)

Ivanhoe Mines Ltd.

June 30, 2022

Table of contents

Condensed consolidated interim statements of financial position	3
Condensed consolidated interim statements of comprehensive income	4
Condensed consolidated interim statements of changes in equity	5
Condensed consolidated interim statements of cash flows	6
Notes to the condensed consolidated interim financial statements	7 - 46

Ivanhoe Mines Ltd.

Condensed consolidated interim statements of financial position as at June 30, 2022

(Stated in U.S. dollars) (Unaudited)

		June 30,	December 31,
	Notes	2022	2021
		$'000	$'000
ASSETS
Non-current assets		1,841,757
Investment in joint venture	4	1,641,795
Property, plant and equipment	5	502,040	468,272
Mineral properties	6	264,995	264,995
Deferred tax asset	7	200,574	73,162
Loans receivable	8	92,514	41,768
Promissory note receivable	9	26,738	26,717
Investments	10	14,496	1,799
Right-of-use asset	11	8,633	9,033
Other assets		4,222	3,925
Total non-current assets		2,955,969	2,531,466
Current assets		507,146
Cash and cash equivalents	12	608,176
Other receivables	13	22,690	10,695
Loans receivable	8	14,603	61,710
Prepaid expenses	14	8,233	4,948
Consumable stores		980	995
Current tax assets		366	216
Total current assets		554,018	686,740
Total assets		3,509,987	3,218,206
EQUITY AND LIABILITIES
Capital and reserves		2,326,697
Share capital	21	2,316,293
Share option reserve	21	146,270	141,099
Foreign currency translation reserve	22	(53,268)	(62,508)
Accumulated profit		441,573	98,937
Equity attributable to owners of the Company		2,861,272	2,493,821
Non-controlling interests	23	(85,187)	(116,824)
Total equity		2,776,085	2,376,997
Non-current liabilities		447,875
Convertible notes - host liability	15	434,381
Convertible notes - embedded derivative liability	15	127,000	244,200
Deferred revenue	16	72,357	69,562
Borrowings	17	39,176	38,342
Lease liability	11	10,850	11,241
Cash-settledshare-based payment liability	18	8,782	8,292
Advances payable	19	2,995	2,908
Rehabilitation provision		341	327
Total non-current liabilities		709,376	809,253
Current liabilities		20,213
Trade and other payables	20	26,799
Convertible notes - host liability	15	2,993	3,033
Lease liability	11	783	729
Cash-settledshare-based payment liability	18	537	1,395
Total current liabilities		24,526	31,956
Total liabilities		733,902	841,209
Total equity and liabilities		3,509,987	3,218,206
Continuing operations (Note 1)
Commitments and contingencies (Note 34)

(Signed) Peter Meredith

Peter Meredith, Director

(Signed) William Hayden

William Hayden, Director

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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Ivanhoe Mines Ltd.

Condensed consolidated interim statements of comprehensive income for the three and six months ended June 30, 2022

(Stated in U.S. dollars) (Unaudited)

		Three months ended		Six months ended
		June 30,		June 30,
	Notes	2022	2021	2022	2021
		$'000	$'000	$'000	$'000
Operating income (expenses)
Share of profit (loss) from joint venture net of tax	4	49,690	(9,960)	136,799	(14,053)
Reversal of VAT write-off		4,951	-	4,951	-
Exploration and project evaluation expenditure		(13,470)	(11,972)	(25,713)	(20,694)
Share-based payments	24	(4,637)	(4,068)	(12,026)	(7,395)
Salaries and benefits		(2,265)	(5,497)	(5,285)	(8,548)
Other expenditure		(2,185)	(2,461)	(4,129)	(4,741)
Foreign exchange (loss) gain		(2,067)	564	(688)	904
Travel costs		(1,720)	(1,664)	(3,625)	(3,633)
Professional fees		(389)	(2,048)	(797)	(2,546)
Legal fees		(331)	(2,059)	(671)	(2,520)
Profit (loss) from operating activities		27,577	(39,165)	88,816	(63,226)
Gain (loss) on fair valuation of embedded derivative liability	15	183,600	(85,700)	117,200	(60,100)
Finance income	26	38,596	25,095	70,101	47,875
Other income	27	519	918	955	2,281
Finance costs	25	(10,013)	(10,110)	(17,404)	(11,901)
(Loss) gain on fair valuation of financial asset		(2,942)	(629)	416	(397)
Transaction costs on convertible notes offering	15	-	-		-	(3,651)
Profit (loss) before income taxes		237,337	(109,591)	260,084	(89,119)
Income tax (expense) recovery
Current tax		(1)	-	139	(107)
Deferred tax		114,184	978	112,837	1,022
		114,183	978	112,976	915
Profit (loss) for the period		351,520	(108,613)	373,060	(88,204)
Profit (loss) attributable to:
Owners of the Company		316,242	(104,452)	342,636	(80,397)
Non-controlling interests		35,278	(4,161)	30,424	(7,807)
		351,520	(108,613)	373,060	(88,204)
Other comprehensive (loss) income
Items that may subsequently be reclassified to profit (loss):
Exchange (loss) gain on translation of foreign operations, net		(10,644)		10,453
of tax		12,919	8,747
Other comprehensive (loss) income for the period, net of tax		(10,644)	12,919	10,453	8,747
Total comprehensive income (loss) for the period		340,876	(95,694)	383,513	(79,457)
Total comprehensive income (loss) attributable to:
Owners of the Company		306,381	(92,793)	351,876	(72,454)
Non-controlling interests	23	34,495	(2,901)	31,637	(7,003)
		340,876	(95,694)	383,513	(79,457)
Basic profit (loss) per share	28	0.26	(0.09)	0.28	(0.07)
Diluted profit (loss) per share	28	0.26	(0.09)	0.28	(0.07)

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

Page 4

Ivanhoe Mines Ltd.

Condensed consolidated interim statements of changes in equity for the three and six months ended June 30, 2022

(Stated in U.S. dollars) (Unaudited)

				Foreign
	Share capital		currency		Equity	Non-
	Number		Share option	translation	Accumulated	attributable	controlling
	of shares	Amount	reserve	reserve	profit	to owners	interests	Total
		$'000	$'000	$'000	$'000	$'000	$'000	$'000
Balance at January 1, 2021	1,205,894,118	2,302,197	131,823	(37,056)	43,695	2,440,659	(104,176)	2,336,483
Net profit (loss) for the period	-	-	-	-	(80,397)	(80,397)	(7,807)	(88,204)
Other comprehensive income	-	-	-	7,943	-	7,943	804	8,747
Total comprehensive income (loss)	-	-	-	7,943	(80,397)	(72,454)	(7,003)	(79,457)
Transactions with owners
Share-based payments charged to operations
(Note 24)	-	-	5,625	-	-	5,625	-	5,625
Restricted share units vested (Note 21(c))	1,141,370	3,776	(3,776)	-	-	-	-	-
Options exercised (Note 21(b))	1,582,180	5,489	(1,814)	-	-	3,675	-	3,675
Balance at June 30, 2021	1,208,617,668	2,311,462	131,858	(29,113)	(36,702)	2,377,505	(111,179)	2,266,326
Balance at January 1, 2022	1,209,665,401	2,316,293	141,099	(62,508)	98,937	2,493,821	(116,824)	2,376,997
Net profit for the period	-	-	-	-	342,636	342,636	30,424	373,060
Other comprehensive income	-	-	-	9,240	-	9,240	1,213	10,453
Total comprehensive income	-	-	-	9,240	342,636	351,876	31,637	383,513
Transactions with owners
Share-based payments charged to operations
(Note 24)	-	-	12,394	-	-	12,394	-	12,394
Restricted share units vested (Note 21(c))	1,142,820	6,075	(6,075)	-	-	-	-	-
Options exercised (Note 21(b))	1,037,451	4,329	(1,148)	-	-	3,181	-	3,181
Balance at June 30, 2022	1,211,845,672	2,326,697	146,270	(53,268)	441,573	2,861,272	(85,187)	2,776,085

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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