MONTREAL, Feb. 17, 2020 /CNW/ - Turquoise Hill Resources
today announced the submission of the Feasibility Study for the
Tavan Tolgoi Power Plant (TTPP) Project to the Government of
Mongolia by Oyu Tolgoi LLC.
Oyu Tolgoi LLC is obliged under the 2009 Oyu Tolgoi Investment
Agreement (Investment Agreement) to secure a long-term domestic
source of power for the Oyu Tolgoi mine. The Power Source Framework
Agreement (PSFA) entered into between Oyu Tolgoi LLC and the
Government of Mongolia on
December 31, 2018 provides a binding
framework and pathway for the construction of a Tavan Tolgoi-based
power solution for the Oyu Tolgoi mine by June 30, 2023. The power plant would be
majority-owned by Oyu Tolgoi LLC and situated close to the Tavan
Tolgoi coal mining district located approximately 150 kilometres
from the Oyu Tolgoi mine.
Oyu Tolgoi is currently sourcing power from China's Inner Mongolian Western Grid via
overhead power lines, via a back-to-back power purchase agreement
with National Power Transmission Grid JSC (NPTG), the power
importing entity, and the Inner Mongolian Power Company (IMPC).
The Tavan Tolgoi Power Plant (TTPP) Feasibility Study is based
on a 300 MW coal fired power plant to be located in Tsogttsetsii
soum of Umnugovi province, with a total project cost estimate of up
to $924 million, pending consideration of certain amounts yet
to be finalized such as government fees, licenses and certain
reimbursements per the Tavan Tolgoi Investment Agreement.
It is anticipated that back-up power requirements will be
provided by IMPC until such time as they can be provided within
Mongolia. The project aligns with
the Parliament Resolution No.73 (2018) and the government policies
to develop a power plant at the Tavan Tolgoi coal fields.
Oyu Tolgoi LLC has made significant progress to develop a cost
competitive and optimal solution for TTPP with a fully negotiated
EPC contract that is now ready for signature. The current schedule
targets two units of the TTPP to be operational by June 2024.
The existing PSFA specifies target dates for milestones to be
achieved through mutual cooperation between Oyu Tolgoi LLC and the
Government of Mongolia, several of
which have now passed. In accordance with the Contingency
Arrangements clause 7 4 a ii of the PSFA, Oyu Tolgoi LLC has given
notice and is currently seeking a mutually acceptable alternative
basis on which to proceed with securing long term domestic power
supply for Oyu Tolgoi.
"Certainty of safe, reliable and stable long term power supply
is fundamental to the development of an underground mining project
like Oyu Tolgoi," stated Ulf Quellmann, Chief Executive Officer of
Turquoise Hill, "We will continue to work with the Government of
Mongolia and Rio Tinto on behalf
of all stakeholders to determine the preferred power solution for
Oyu Tolgoi."
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,
statements and information regarding the construction and timing of
construction and operation of the Tavan Tolgoi Power Plant, the
expectations set out in the Tavan Tolgoi Power Plant Feasibility
Study, anticipated sources of power for the Oyu Tolgoi mine 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 the
availability and timing of required governmental and other
approvals for the construction of the Tavan Tolgoi Power Plant,
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
status of the Company's relationship and interaction with the
Government of Mongolia on the
continued operation, 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, the risk that certain commercial
uncertainties relating to the Tavan Tolgoi Power Plant may not be
resolved, including with the Government of Mongolia, with respect to land rights,
funding, back-up power, accession of Oyu Tolgoi to the TTPP
Investment Agreement and the extension of the existing Electricity
Purchase and Sale agreement between IMPC and NPTG; 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.
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SOURCE TURQUOISE HILL RESOURCES LTD