Thursday 25th April 2019 Font size:

Turquoise Hill announces first quarter 2019 production and provides underground development update

Tuesday, April 16th, 2019

Turquoise Hill Resources today announced first quarter 2019 production for Oyu Tolgoi and provided an update on underground development.

Highlights

  • Copper production of 45,800 tonnes, up 18.2% on Q1’18
  • Gold production of 120,000 ounces, up 187.6% on Q1’18
  • On track to achieve 2019 copper and gold production guidance

Ulf Quellmann, Chief Executive Officer of Turquoise Hill, said, “The Oyu Tolgoi open pit delivered another strong operational performance in the first quarter of 2019. Mined material was higher than the same period last year, and we continued to benefit from processing high grade material from Phase 4A. Copper and gold grades are expected to decline over the remainder of the year as we process a higher proportion of Phase 6 ore, but we are well positioned to meet our 2019 copper and gold production guidance.

“Rio Tinto, as project manager, has advised that it has completed a review of the fit-out and commissioning issues at Shaft 2 and it now expects Shaft 2 to be completed by the end of October 2019. Turquoise Hill will review the cause and impact of this further delay to Shaft 2.”

As expected, mill throughput in Q1’19 decreased 3.2% over Q1’18 due to the concentrator processing harder Phase 4 ore and planned plant maintenance. This was offset by higher copper and gold mill head grades as mining advanced into the high-grade zone of Phase 4A, compared to Q1’18 when lower grade Phase 6 was processed. Recovery rates also benefited from the processing of higher-grade ore, with copper and gold recovery rates up 5.4% and 27.4% on Q1’18 respectively. Copper production increased 18.2% over Q1’18 due to increased head grade and recovery rate. Gold production increased 187.6% over Q1’18 primarily due to a 135.2% increase in head grade resulting from the increased contribution of Phase 4A.

Average gold mill head grades are expected to decline significantly over the remainder of 2019, particularly in the second half as softer, lower grade Phase 6 ore, and some material from mine stockpiles are processed. Average copper mill head grades are also expected to be lower over the remainder of the year.

Oyu Tolgoi is expected to produce 125,000 to 155,000 tonnes of copper and 180,000 to 220,000 ounces of gold in concentrates for 2019. Mill throughput for 2019 is expected to be approximately 40 million tonnes.

Underground development

Work continues on critical Shaft 2 equipping activities, central heating plant, mine infrastructure, underground materials handling systems and on priority underground development. Pre-sinking works for Shaft 3 and Shaft 4 have also commenced.

Rio Tinto, as project manager, has advised that the fit-out and commissioning work on Shaft 2 (the main production and services shaft) is now expected to be completed by the end of October 2019. As previously announced, more detailed geotechnical information and different ground conditions have required a review of the mine design and the development schedule. The impact of these changes, including the further delay to Shaft 2, will be included in the definitive estimate review, which is expected to be completed towards the end of the year. In parallel, Turquoise Hill will incorporate the impact of any further delay to sustainable first production beyond the end of Q3’21 in Turquoise Hill’s cash flows, liquidity and financing projections. Turquoise Hill will also explore potential mitigation options.

https://turquoisehill.com
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