MONTREAL, Jan. 16,
2020 /CNW/ - Turquoise Hill today announced fourth quarter
2019 production for Oyu Tolgoi as well as operational and financial
guidance for 2020.
Highlights:
- Full year copper production of 146,346 tonnes vs original
guidance range of 125,000 – 155,000 tonnes
- Full year gold production of 241,840 ounces vs original
guidance range of 180,000 – 220,000 ounces
- Another strong Safety performance at Oyu Tolgoi in 2019 with an
All Injury Frequency Rate of 0.16
- Full year mill throughput of 40,777,225 tonnes, an increase of
5% over 2018
Copper production in Q4'19 of 32,905 tonnes was lower compared
to Q4'18 due to decreased head grade driven by the transition from
Phase 4a and Phase 6a, to Phase 4b,
Phase 6b and lower grade stockpiles.
Equally, gold production in Q4'19 of 24,343 ounces was also lower
compared to Q4'18 due to the transition from Phase 4a to low grade
sources of Phase 4b and
stockpiles.
2020 Guidance
Oyu Tolgoi is expected to produce 140,000 to 170,000 tonnes of
copper and 120,000 to 150,000 ounces of gold in concentrates in
2020 from both the open pit and the beginning of the underground
development material being processed. Although the mid-point
copper production range guidance is higher in 2020 versus the 2019
guidance, a lower gold production year is expected for 2020.
This is due to the need to mine through lower grade material on the
periphery of the South West pit as Phase 4b sinks towards the highest gold and copper
grades in the bottom of the pit. It is anticipated that the higher
grade ore will be accessed in 2021, resulting in a significant
increase in gold production in 2021. Mill throughput for 2020 is
expected to be approximately 40 million tonnes.
Operating cash costs for 2020 are expected to be $800 million to $850
million.
Capital expenditure for 2020 on a cash-basis is expected to be
approximately $80 million to
$120 million for open-pit operations
and $1.2 billion to $1.3 billion for the underground development
exclusive of any expenditure on power.
Open-pit capital is mainly comprised of deferred stripping,
equipment purchases, tailings storage facility construction and
maintenance componentization. Underground development capital
includes both expansion capital and VAT.
C1 cash costs is expected to be in the range of $1.80 to $2.20 per
pound of copper produced, up from 2019 guidance largely reflecting
the reduced gold production estimate. Unit cost guidance assumes
the midpoint of expected 2020 copper and gold production ranges and
commodity assumptions of $2.71 per pound copper and $1,362 per ounce gold.
2021 Outlook
Production in 2021 is expected to increase to a range of 170,000
to 200,000 tonnes of copper, and 450,000 to 500,000 ounces of gold,
as we transition to the higher grade ore in the bottom of the pit
and continue to increase the amount of underground development
material processed.
Underground Development Update
Construction of shaft 2 was completed in October 2019 allowing for the movement of 300
people per cage cycle versus a maximum of 60 people per cage cycle
through shaft 1. Underground development material is also being
lifted to surface via the Shaft 2 production hoist.
Productivity improvements resulted in increased underground
lateral development rates during the fourth quarter, with an
average rate of 1,607 equivalent meters (eqm) compared to 1,214 eqm
in the third quarter, with December seeing a record 1,809 eqm.
Construction is progressing on shafts 3 and 4 with both collars
now installed. Final preparations are now underway to enable
commencement of main sinking operations for both shafts during the
second quarter of 2020
Detailed analysis work on the mine design is still anticipated
to be completed during the first half of 2020, and the Definitive
Estimate, which will include the estimate of cost and schedule for
the underground project based on the updated design of Panel 0, is
still expected to be delivered in the second half of 2020.
Oyu Tolgoi Production Data
All data
represents full production and sales on a 100% basis
|
|
|
3Q
2018
|
4Q 2018
|
1Q 2019
|
2Q 2019
|
3Q 2019
|
4Q 2019
|
1H 2019
|
1H 2018
|
Full Year 2018
|
Full Year
2019
|
Open pit material
mined ('000 tonnes)
|
22,523
|
22,863
|
23,943
|
24,408
|
24,844
|
28,122
|
48,351
|
45,923
|
91,310
|
101,316
|
Ore treated ('000
tonnes)
|
9,652
|
9,361
|
9,255
|
10,394
|
10,040
|
11,088
|
19,649
|
19,725
|
38,738
|
40,777
|
Average mill head
grades:
|
|
|
|
|
|
|
|
|
|
|
Copper (%)
|
0.51
|
0.55
|
0.57
|
0.46
|
0.37
|
0.42
|
0.51
|
0.50
|
0.51
|
0.45
|
Gold (g/t)
|
0.38
|
0.56
|
0.58
|
0.31
|
0.14
|
0.15
|
0.44
|
0.25
|
0.36
|
0.29
|
Silver
(g/t)
|
1.19
|
1.22
|
1.25
|
1.20
|
1.03
|
1.06
|
1.23
|
1.24
|
1.22
|
1.13
|
Concentrates produced
('000 tonnes)
|
179.8
|
189.0
|
210.1
|
180.6
|
131.3
|
152.6
|
390.7
|
356.1
|
724.9
|
674.6
|
Average concentrate
grade (% Cu)
|
21.9
|
21.9
|
21.8
|
21.7
|
21.7
|
21.6
|
21.8
|
22.0
|
21.9
|
21.7
|
Production of metals
in concentrates:
|
|
|
|
|
|
|
|
|
|
|
Copper ('000
tonnes)
|
39.4
|
41.5
|
45.8
|
39.2
|
28.4
|
32.9
|
85.0
|
78.2
|
159.1
|
146.3
|
Gold ('000
ounces)
|
77
|
117
|
120
|
72
|
25.6
|
24.3
|
192
|
92
|
285
|
241.8
|
Silver ('000
ounces)
|
230
|
238
|
247
|
238
|
191
|
190
|
486
|
446
|
914
|
866.6
|
Concentrate sold
('000 tonnes)
|
171.9
|
191.4
|
184.9
|
225.3
|
157
|
157.5
|
410.3
|
383.1
|
746.4
|
724.7
|
Sales of metals in
concentrates:
|
|
|
|
|
|
|
|
|
|
|
Copper ('000
tonnes)
|
36.0
|
40.2
|
38.5
|
46.6
|
32.4
|
32.3
|
85.1
|
80.4
|
156.7
|
149.9
|
Gold ('000
ounces)
|
55
|
111
|
98
|
116
|
35.4
|
24.7
|
213
|
82
|
248
|
273.6
|
Silver ('000
ounces)
|
201
|
216
|
200
|
245
|
207
|
243.6
|
445
|
456
|
873
|
895.9
|
Metal recovery
(%)
|
|
|
|
|
|
|
|
|
|
|
Copper
|
80.9
|
84.8
|
83.8
|
80.2
|
75.1
|
74.2
|
82.2
|
79.6
|
81.4
|
78.7
|
Gold
|
64.7
|
71.7
|
70.1
|
63.6
|
54.7
|
48.2
|
68.2
|
57.6
|
65.2
|
63.6
|
Silver
|
62.8
|
67.1
|
63.2
|
59.2
|
56
|
53.5
|
61.2
|
56.4
|
60.9
|
58.1
|
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, statements
regarding timing and status of underground development, the
development options under consideration for the design of the 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 the Oyu Tolgoi mine 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
nine months ended September 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
View original content to download
multimedia:http://www.prnewswire.com/news-releases/turquoise-hill-announces-fourth-quarter-2019-production-and-2020-operational-and-financial-guidance-300988537.html
SOURCE TURQUOISE HILL RESOURCES LTD