MONTREAL, March 30, 2021 /PRNewswire/ - Turquoise Hill
Resources Ltd. ("Turquoise Hill" of the "Company")
today announced that Oyu Tolgoi LLC ("Oyu Tolgoi") has declared
force majeure in connection with customer contracts for concentrate
as a result of Oyu Tolgoi shipments of concentrate to its Chinese
customers being suspended due to COVID-19 health and safety
precautions related to Chinese-Mongolian border crossings. Oyu
Tolgoi continues to support the Government of Mongolia's efforts to work with Chinese
officials to resume the shipments of copper concentrate to its
Chinese customers as soon as possible.
Also, Oyu Tolgoi confirmed two cases of COVID-19 at site which
were managed in compliance with public health guidelines and have
completed a total of 9,726 PCR (polymerase chain reaction) tests at
site that have all been confirmed negative. The open pit mine,
concentrator plant and bagging plant have continued to operate
uninterrupted, however, underground work was halted while testing
was underway to ensure the safety of employees on site.
Furthermore, ongoing travel restrictions have had implications
related to people movement from Ulaanbaatar to site and Oyu Tolgoi
is therefore developing contingency plans to mitigate any
associated risks. The Company will continue to monitor the
situation and assess any impact on Oyu Tolgoi's operations or
underground work, and update the market as appropriate.
Forward-looking statements and forward-looking
information
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: discussions with, and the
nature of the Company's relationship and interaction with, the
Government of Mongolia on the
continued operation and development of Oyu Tolgoi, including with
respect to the definitive estimate and the potential termination,
amendment or replacement of the Oyu Tolgoi Mine Development and
Financing Plan ("UDP"); the willingness and ability of the parties
to the UDP to amend or replace the UDP; the potential benefits,
impact, timing and outcome of the arbitration proceedings
(including any related interim relief) initiated with respect to
certain agreements with Rio Tinto; the expectations set out in the
2020 Oyu Tolgoi Technical Report ("OTTR20"); the timing and amount
of future 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; the merits of the class action
complaints filed against the Company in October 2020 and January
2021, respectively; liquidity, funding sources, funding
requirements and planning and the status and nature of the
Company's ongoing discussions with Rio Tinto and its subsidiaries
with respect to future funding plans and requirements (including as
contemplated by the Memorandum of Understanding dated September 9, 2020 (the "MOU"); the amount of any
funding gap to complete the Oyu Tolgoi Project; the amount and
potential sources of additional funding; the Company's ability to
re-profile its existing project debt in line with current cash flow
projections; the amount by which a successful re-profiling of the
Company's existing debt would reduce the Company's currently
projected funding requirements; the Company's and Rio Tinto's
understanding regarding the raising of supplemental senior debt and
the Company's ability to raise supplemental senior debt; the
Company's and Rio Tinto's understanding regarding the process for
identifying and considering other funding options; the Company's
and Rio Tinto's understanding regarding the scope and timing for an
equity offering by the Company to address any remaining funding
gap; the Company's intention to prioritise funding by way of debt
and/or hybrid financing over equity funding; the Company's
expectation of the anticipated funding gap; the timing of studies,
announcements and analyses; status of underground development; the
mine design for Panel 0 of Hugo North Lift 1 and the related cost
and production schedule implications; the re-design studies for
Panels 1 and 2 of Hugo North Lift 1 and the possible outcomes,
content and timing thereof; expectations regarding the possible
recovery of ore in the two structural pillars, to the north and
south of Panel 0; the possible progression of a state-owned power
plant ("SOPP") and related amendments to the Power Source Framework
Agreement ("PSFA") as well as power purchase agreements; the timing
of construction and commissioning of the potential SOPP; sources of
interim power; the potential impact of COVID-19, including any
restrictions imposed by health or governmental authorities relating
thereto on the Company's business, operations and financial
condition; capital and operating cost estimates; mill and
concentrator throughput; the outcome of formal international
arbitration proceedings; 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; projected
gold, copper and silver grades; anticipated capital and operating
costs; anticipated future production and cash flows; the
anticipated location of certain infrastructure in Hugo North Lift 1
and sequence of mining within and across panel boundaries; the
availability and timing of required governmental and other
approvals for the construction of the SOPP; the ability of the
Government of Mongolia to finance
and procure the SOPP within the timeframes anticipated in the PSFA,
as amended; the willingness of third parties to extend existing
power arrangements; the status and nature 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
(including the outcome of any such interactions or discussions);
the willingness and ability of the parties to the UDP to amend or
replace the UDP; the nature and quantum of the current and
projected economic benefits to Mongolia resulting from the continued
operation of Oyu Tolgoi;; the status and nature of the Company's
ongoing discussions with Rio Tinto and its subsidiaries with
respect to future funding plans and requirements (including as
contemplated by the MoU) as well as the potential benefits, impact,
timing and outcome of the arbitration proceedings (including any
related interim relief) with respect to certain agreements with Rio
Tinto.
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; public health crises such as COVID-19; matters relating
to proposed exploration or expansion; mining operational and
development risks, including geotechnical risks and ground
conditions; litigation risks, including the outcome of the class
action complaints filed against the Company; the outcome of the
arbitration proceedings, including any related interim relief;
regulatory restrictions (including environmental regulatory
restrictions and liability); Oyu Tolgoi LLC or the Government of
Mongolia'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 public health
crises, strikes, blockades 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; global climate change; 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; defective title to mineral claims or
property; and human rights requirements. 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 reasonable and 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.
With respect to specific forward-looking information concerning
the continued operation and development of Oyu Tolgoi, 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 timing and availability of a
long-term domestic power source (or the availability of financing
for the Company or the Government of Mongolia to construct such a source) for Oyu
Tolgoi; the ability to secure and draw down on the supplemental
debt under the Oyu Tolgoi project financing facility and the
availability of additional financing on terms reasonably acceptable
to Oyu Tolgoi LLC, Rio Tinto and the Company to further develop Oyu
Tolgoi as well as the status and nature of the Company's ongoing
discussions with Rio Tinto and its subsidiaries with respect to
future funding plans and requirements (including as contemplated by
the MOU) as well as the potential benefits, impact, timing and
outcome of the arbitration proceedings (including any related
interim relief), initiated with respect to certain agreements with
Rio Tinto; the status and nature 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
(including the outcome of any such interactions or discussions);
the willingness and ability of the parties to the UPD to amend or
replace the UPD; the nature and quantum of the current and
projected economic benefits to Mongolia resulting from the continued
operation of Oyu Tolgoi; the potential impact of COVID-19,
including any restrictions imposed by health or governmental
authorities relating thereto; 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 obtaining of (and the terms and
timing of obtaining) necessary environmental and other government
approvals, consents and permits; delays, and the costs which would
result from delays, in the development of the underground mine
(which could significantly exceed the costs projected in OTTR20);
projected copper, gold and silver prices and their market demand;
and production estimates and the anticipated yearly production of
copper, gold and silver at Oyu Tolgoi.
The cost, timing and complexities of mine construction and
development are increased by the remote location of a property such
as Oyu Tolgoi. It is common in 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 Oyu Tolgoi has achieved
commercial production, there is no assurance that future
development activities will result in profitable mining
operations.
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 for the year
ended December 31, 2020 ("AIF"), as
supplemented by the "Risks and Uncertainties" section of the
Company's management's discussion and analysis for the fourth
quarter and year ended December 31,
2020 ("MD&A").
Readers are further cautioned that the list of factors
enumerated in the "Risk Factors" section of the AIF and in the
"Risks and Uncertainties" section of 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. Furthermore, the forward-looking statements and
information contained herein are made as of the date of this
document and the Company does not undertake any obligation to
update or to revise any of the included forward-looking statements
or information, whether as a result of new information, future
events or otherwise, except as required by applicable law. The
forward-looking statements and information contained herein are
expressly qualified by this cautionary statement.
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SOURCE TURQUOISE HILL RESOURCES LTD