VANCOUVER, Oct. 15, 2019 /PRNewswire/ - Turquoise Hill today
announced third quarter 2019 production for Oyu Tolgoi and provided
an update on underground development.
Highlights:
Q3's solid operational performance was impacted by a plant
shutdown brought forward from October to September, combined with
higher than planned feed from the harder Phase 4b ore.
- Copper production of 28,446 tonnes, a decrease of 27.8% vs Q3
2018
- Gold production of 25,607 ounces, a decrease of 66.8% vs Q3
2018
- Mill throughput increased 4% year over year and decreased 3.4%
sequentially
- On track to achieve 2019 copper and gold production
guidance
As anticipated, the transition from mining Phase 4A to lower
grade Phase 4B and stockpiles
resulted in:
- Lower copper head grade of .37 vs .46 Q2 2019
- Lower gold head grade of .14 vs .31 Q2 2019
- Concentrate production decreased 27.2% vs Q2 2019
- Copper production decreased 27.4% vs Q2 2019
- Gold production decreased 64.3% vs Q2 2019
Total copper and gold production year-to-date is 113,400 tonnes
and 217,500 ounces respectively, and we remain on track to achieve
our forecast target of 125,000 – 155,000 tonnes of copper and up to
230,000 ounces of gold. As we guided in both our Q1 and Q2 2019
production updates, the average copper and gold grades have
continued to decline in accordance with our mine plan. The Phase 4A
higher grade ore has been depleted and as planned the primary ore
source changed to Phase 4B and lower
grade stockpiles. In addition to mining lower grade ore, the
processed ore tonnage was lower than the previous quarter due to
lower mill availability resulting from a shift of planned
maintenance from October to September.
Underground Development
Shaft 2 continues to hold to
the October 2019 commissioning
schedule. Rope up is complete for both the service cage and the
production hoists. The service cage has completed load tests and
automatic test runs while the load testing of the production
buckets is on track for mid-October. Other key infrastructure
components completed during Q3 include the central heating plant,
the shaft 2 jaw crusher system and the shaft 2 surface discharge
conveyor.
Lateral underground development in Q3 has accelerated. Extensive
focus on productivity gains on the most critical development areas
over the past five months has reaped substantial improvements. In
September, the team achieved a record 1,385 equivalent metres of
lateral underground development.
As previously announced on July
15th, improved rock mass information and
geotechnical data modelling has confirmed that there are stability
risks associated with components of the Feasibility Study 2016 mine
design. To address these risks, a number of mine design options are
under consideration to complete the project.
Mine planning decisions regarding the first panel of mining,
Panel 0, the mid-access drives, productivity inputs and ore pass
locations continue and are expected to be completed by April 2020. The resulting Pre-Feasibility Study
designs being detailed to Feasibility Study level, then scheduled
and costed to form the Definitive Estimate, due in the second half
of 2020. In the interim, underground development continues and we
look forward to providing the market with any updates to the
schedule and development capital spend as and when appropriate.
"We continue to focus on the development of an ultimate mine
design that will deliver maximum value for Turquoise Hill
shareholders. The development of a world-class ore body such as Oyu
Tolgoi into a long life low cost tier 1 asset, requires a mine
design that ensures the safety of our workforce while providing a
foundation to mine this substantial ore body for decades to come.
We continue to see a clear pathway to sustainable first production
and will continue to work with Rio Tinto and the Government of
Mongolia to bring this underground
development project to a successful completion," said Ulf
Quellmann, Chief Executive Officer of Turquoise Hill.
Oyu Tolgoi Production Data
All data represents full
production and sales on a 100% basis
|
2Q
2018
|
3Q
2018
|
4Q
2018
|
1Q
2019
|
2Q
2019
|
3Q
2019
|
1H
2019
|
1H
2018
|
Full Year
2018
|
|
|
|
|
|
|
|
|
|
|
Open pit material
mined ('000 tonnes)
|
22,792
|
22,523
|
22,863
|
23,943
|
24,408
|
24,844
|
48,351
|
45,923
|
91,310
|
Ore treated ('000
tonnes)
|
10,164
|
9,652
|
9,361
|
9,255
|
10,394
|
10,040
|
19,649
|
19,725
|
38,738
|
Average mill head
grades:
|
|
|
|
|
|
|
|
|
|
Copper (%)
|
0.48
|
0.51
|
0.55
|
0.57
|
0.46
|
0.37
|
0.51
|
0.50
|
0.51
|
Gold (g/t)
|
0.26
|
0.38
|
0.56
|
0.58
|
0.31
|
0.14
|
0.44
|
0.25
|
0.36
|
Silver
(g/t)
|
1.17
|
1.19
|
1.22
|
1.25
|
1.20
|
1.03
|
1.23
|
1.24
|
1.22
|
Concentrates produced
('000 tonnes)
|
178.8
|
179.8
|
189.0
|
210.1
|
180.6
|
131.3
|
390.7
|
356.1
|
724.9
|
Average concentrate
grade (% Cu)
|
22.0
|
21.9
|
21.9
|
21.8
|
21.7
|
21.7
|
21.8
|
22.0
|
21.9
|
Production of metals
in concentrates:
|
|
|
|
|
|
|
|
|
|
Copper ('000
tonnes)
|
39.4
|
39.4
|
41.5
|
45.8
|
39.2
|
28.4
|
85.0
|
78.2
|
159.1
|
Gold ('000
ounces)
|
50
|
77
|
117
|
120
|
72
|
25.6
|
192
|
92
|
285
|
Silver ('000
ounces)
|
225
|
230
|
238
|
247
|
238
|
191
|
486
|
446
|
914
|
Concentrate sold
('000 tonnes)
|
220.0
|
171.9
|
191.4
|
184.9
|
225.3
|
157
|
410.3
|
383.1
|
746.4
|
Sales of metals in
concentrates:
|
|
|
|
|
|
|
|
|
|
Copper ('000
tonnes)
|
46.1
|
36.0
|
40.2
|
38.5
|
46.6
|
32.4
|
85.1
|
80.4
|
156.7
|
Gold ('000
ounces)
|
51
|
55
|
111
|
98
|
116
|
35.4
|
213
|
82
|
248
|
Silver ('000
ounces)
|
250
|
201
|
216
|
200
|
245
|
207
|
445
|
456
|
873
|
Metal recovery
(%)
|
|
|
|
|
|
|
|
|
|
Copper
|
79.7
|
80.9
|
84.8
|
83.8
|
80.2
|
75.1
|
82.2
|
79.6
|
81.4
|
Gold
|
59.8
|
64.7
|
71.7
|
70.1
|
63.6
|
54.7
|
68.2
|
57.6
|
65.2
|
Silver
|
58.4
|
62.8
|
67.1
|
63.2
|
59.2
|
56
|
61.2
|
56.4
|
60.9
|
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 United States Private
Securities Litigation Reform Act of 1995. Forward-looking
statements and information 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, information
regarding the timing and amount of production and potential
production delays, statements in respect of the impacts of any
delays on the Company's cash flows, expected copper and gold
grades, liquidity, funding requirements and planning, and
statements regarding timing and status of underground development,
the development options under consideration for the design of Panel
0 and the related cost and schedule implications, timing and status
of the Tavan Tolgoi-based power project, capital and operating cost
estimates, timing of completion of the definitive estimate review,
mill throughput, 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. There can be no assurance that such statements or
information will prove to be accurate. Such statements and
information are based on numerous assumptions regarding present and
future business strategies, local and global economic conditions,
and the environment in which the Company will operate in the
future, including the price of copper, gold and silver and
projected gold, copper and silver grades, anticipated capital and
operating costs, anticipated future production and cash flows, the
anticipated location of certain infrastructure and sequence of
mining in Panel 0 and the status of the Company's relationship and
interaction with the Government of Mongolia on the continued operation and
development of Oyu Tolgoi and Oyu Tolgoi LLC internal
governance.
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; development plans for processing
resources; the outcome of the definitive estimate review; matters
relating to proposed exploration or expansion; mining operational
and development risks, including geotechnical risks and ground
conditions; litigation risks; regulatory restrictions (including
environmental regulatory restrictions and liability); Oyu Tolgoi
LLC's ability to deliver a domestic power source for the Oyu Tolgoi
project within the required contractual time frame; communications
with local stakeholders and community relations; activities,
actions or assessments, including tax assessments, by governmental
authorities; events or circumstances (including strikes, blockages
or similar events outside of the Company's control) that may affect
the Company's ability to deliver its products in a timely manner;
currency fluctuations; the speculative nature of mineral
exploration; the global economic climate; dilution; share price
volatility; competition; loss of key employees; cyber security
incidents; additional funding requirements, including in respect of
the development or construction of a long-term domestic power
supply for the Oyu Tolgoi project; capital and operating costs,
including with respect to the development of additional deposits
and processing facilities; 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 statements and information 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 statements or
information.
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 13, 2019 in respect of the year
ended December 31, 2018 (the "AIF")
as supplemented by our Management's Discussion and Analysis of
Financial Condition and Results of Operations for the three and six
months ended June 30, 2019
(MD&A).
Readers are further cautioned that the list of factors
enumerated in the "Risk Factors" section of the AIF and in the
MD&A that may affect future results is not exhaustive. When
relying on the Company's forward-looking statements and information
to make decisions with respect to the Company, investors and others
should carefully consider the foregoing factors and other
uncertainties and potential events.
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SOURCE Turquoise Hill Resources Ltd.