Notice of Dispute Filed With the Government of Mongolia
VANCOUVER, BC--(Marketwired
- June 26, 2014) - Following receipt of an audit report from
the Mongolian Tax Authority claiming unpaid taxes, penalties and
disallowed entitlements associated with the initial development of
the Oyu Tolgoi mine, Turquoise Hill Resources today announced that
a notice of dispute with the Government of Mongolia has been
filed.
The Investment Agreement outlines the dispute resolution
process. The filing is the first step in that process and includes
a 60-day negotiation period. If the parties are unable to reach a
resolution during this period, the dispute can be referred to
international arbitration.
Turquoise Hill is of the firm view that Oyu Tolgoi LLC has paid
all taxes and charges as required under the Investment Agreement
and Mongolian law and strongly disagrees with the claims in the
audit report.
Outstanding shareholder issues, including tax claims, must be
resolved before further investment in the underground can proceed.
Consequently, distribution of the underground feasibility study
will be delayed.
About Turquoise Hill Resources Turquoise Hill Resources
(NYSE: TRQ) (NASDAQ: TRQ) (TSX:
TRQ) is an international mining company focused on copper,
gold and coal mines in the Asia Pacific region. The Company's
primary operation is its 66% interest in the Oyu Tolgoi
copper-gold-silver mine in southern Mongolia. Turquoise Hill also
holds a 56% interest in Mongolian coal miner SouthGobi Resources
(TSX: SGQ) (HKSE: 1878).
Follow us on Twitter @TurquoiseHillRe
Forward-looking
statements
Certain statements made herein, including statements relating to
matters that are not historical facts and statements of the
Company's beliefs, intentions and expectations about developments,
results and events which will or may occur in the future,
constitute "forward-looking information" within the meaning of
applicable Canadian securities legislation and "forward-looking
statements" within the meaning of the "safe harbor" provisions of
the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking information and statements relate to future events
or future performance, reflect current expectations or beliefs
regarding future events and are typically identified by words such
as "anticipate", "could", "should", "expect", "seek", "may",
"intend", "likely", "plan", "estimate", "will", "believe" and
similar expressions suggesting future outcomes or statements
regarding an outlook. These include, but are not limited to,
statements respecting anticipated business activities; planned
expenditures; corporate strategies; and other statements that are
not historical facts.
Forward-looking statements and information are made based upon
certain assumptions and other important factors that, if untrue,
could cause the actual results, performance or achievements of the
Company to be materially different from future results, performance
or achievements expressed or implied by such statements or
information. Such statements and information are based on numerous
assumptions regarding present and future business strategies and
the environment in which the Company will operate in the future,
including the price of copper, gold and silver, anticipated capital
and operating costs, anticipated future production and cash flows,
the ability to complete the disposition of certain of its non-core
assets, the ability and timing to complete project financing and/or
secure other financing on acceptable terms, and the evolution
of discussions with the Government of Mongolia on a range of issues
including the implementation of the Investment Agreement, project
development costs, operating budgets, the payment of taxes and
taxation matters, management fees and governance and the existence
or filing of legal proceedings against the Company and its officers
and directors. Certain important factors that could cause actual
results, performance or achievements to differ materially from
those in the forward-looking statements and information include,
among others, copper, gold and silver price volatility,
discrepancies between actual and estimated production, mineral
reserves and resources and metallurgical recoveries, mining
operational and development risks, litigation risks, regulatory
restrictions (including environmental regulatory restrictions and
liability), activities or assessments by governmental authorities,
currency fluctuations, the speculative nature of mineral
exploration, the global economic climate, dilution, share price
volatility, competition, loss of key employees, additional funding
requirements, capital and operating costs for the construction and
operation of the Oyu Tolgoi mine and defective title to mineral
claims or property. Although the Company has attempted to identify
important factors that could cause actual actions, events or
results to differ materially from those described in
forward-looking statements and information, there may be other
factors that cause actions, events or results not to be as
anticipated, estimated or intended. All such forward-looking
information and statements are based on certain assumptions and
analyses made by the Company's management in light of their
experience and perception of historical trends, current conditions
and expected future developments, as well as other factors
management believes are appropriate in the circumstances. These
statements, however, are subject to a variety of risks and
uncertainties and other factors that could cause actual events or
results to differ materially from those projected in the
forward-looking information or statements.
With respect to specific forward-looking information concerning
the construction and development of the Oyu Tolgoi mine, the
Company has based its assumptions and analyses on certain factors
which are inherently uncertain. Uncertainties and assumptions
include, among others: the timing and cost of the construction and
expansion of mining and processing facilities; the impact of the
decision announced by the Company to delay the funding and
development of the Oyu Tolgoi underground mine pending resolution
of outstanding issues with the Government of Mongolia associated
with the development and operation of the Oyu Tolgoi mine and to
satisfy all conditions precedent to the availability of Oyu Tolgoi
Project Financing; the time required to complete the underground
feasibility study for the Oyu Tolgoi Project and the approval of
such study by Oyu Tolgoi's shareholders, the impact of changes in,
changes in interpretation to or changes in enforcement of, laws,
regulations and government practices in Mongolia; the availability
and cost of skilled labour and transportation; the availability and
cost of appropriate smelting and refining arrangements; the
obtaining of (and the terms and timing of obtaining) necessary
environmental and other government approvals, consents and permits;
the availability of funding on reasonable terms; the timing and
availability of a long-term power source for the Oyu Tolgoi mine;
delays, and the costs which would result from delays, in the
development of the underground mine (which could significantly
exceed those projected in the 2013 Oyu Tolgoi Technical Report);
projected copper, gold and silver prices and demand; and production
estimates and the anticipated yearly production of copper, gold and
silver at the Oyu Tolgoi mine.
The cost, timing and complexities of mine construction and
development are increased by the remote location of a property such
as the Oyu Tolgoi mine. It is common in new mining operations and
in the development or expansion of existing facilities to
experience unexpected problems and delays during development,
construction and mine start-up. Additionally, although the Oyu
Tolgoi mine has achieved commercial production, there is no
assurance that future development activities will result in
profitable mining operations. In addition, funding and development
of the underground component of the Oyu Tolgoi mine have been
delayed until matters with the Government of Mongolian can be
resolved and a new timetable agreed. These delays can impact
project economics.
The Company's MD&A also contains references to estimates of
mineral reserves and mineral resources. The estimation of reserves
and resources is inherently uncertain and involves subjective
judgments about many relevant factors. The mineral resource
estimates contained therein are inclusive of mineral reserves.
Further, mineral resources that are not mineral reserves do not
have demonstrated economic viability. The accuracy of any such
estimates is a function of the quantity and quality of available
data, and of the assumptions made and judgments used in engineering
and geological interpretation (including future production from the
Oyu Tolgoi mine, the anticipated tonnages and grades that will be
achieved or the indicated level of recovery that will be realized),
which may prove to be unreliable. There can be no assurance that
these estimates will be accurate or that such mineral reserves and
mineral resources can be mined or processed profitably. See the
discussion under the headings "Language Regarding Reserves and
Resources" and "Note to United States Investors Concerning
Estimates of Measured, Indicated and Inferred Resources" in the
Company's MD&A filed on SEDAR and EDGAR.
Readers are cautioned not to place undue reliance on
forward-looking information or statements. By their nature,
forward-looking statements involve numerous assumptions, inherent
risks and uncertainties, both general and specific, which
contribute to the possibility that the predicted outcomes will not
occur. Events or circumstances could cause the Company's actual
results to differ materially from those estimated or projected and
expressed in, or implied by, these forward-looking statements.
Important factors that could cause actual results to differ from
these forward-looking statements are included in the "Risk Factors"
section in the Company's Annual Information Form dated as of March
26, 2014 in respect of the year ended December 31, 2013 (the
"AIF").
Readers are further cautioned that the list of factors
enumerated in the "Risk Factors" section of the AIF that may affect
future results is not exhaustive. When relying on the Company's
forward-looking information and statements to make decisions with
respect to the Company, investors and others should carefully
consider the foregoing factors and other uncertainties and
potential events. Furthermore, the forward-looking information and
statements herein are made as of the date hereof and Turquoise
Hill does not undertake any obligation to update or to revise any
of the included forward-looking information or statements, whether
as a result of new information, future events or otherwise, except
as required by applicable law. The forward-looking information and
statements contained herein are expressly qualified by the
cautionary statement.
Contacts Investors Jessica LargentOffice: +1 604 648
3957Email: jessica.largent@turquoisehill.comMediaTony
ShafferOffice: +1 604 648
3934Email: tony.shaffer@turquoisehill.com
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