VANCOUVER, April 15, 2019 /CNW/ - Turquoise Hill Resources
(TSX: TRQ) today announced first quarter 2019 production for Oyu
Tolgoi and provided an update on underground development.
Highlights
- Copper production of 45,800 tonnes, up 18.2% on Q1'18
- Gold production of 120,000 ounces, up 187.6% on Q1'18
- On track to achieve 2019 copper and gold production
guidance
Ulf Quellmann, Chief Executive Officer of Turquoise Hill, said,
"The Oyu Tolgoi open pit delivered another strong operational
performance in the first quarter of 2019. Mined material was higher
than the same period last year, and we continued to benefit from
processing high grade material from Phase 4A. Copper and gold
grades are expected to decline over the remainder of the year as we
process a higher proportion of Phase 6 ore, but we are well
positioned to meet our 2019 copper and gold production
guidance.
"Rio Tinto, as project manager, has advised that it has
completed a review of the fit-out and commissioning issues at Shaft
2 and it now expects Shaft 2 to be completed by the end of
October 2019. Turquoise Hill will
review the cause and impact of this further delay to Shaft 2."
As expected, mill throughput in Q1'19 decreased 3.2% over Q1'18
due to the concentrator processing harder Phase 4 ore and planned
plant maintenance. This was offset by higher copper and gold mill
head grades as mining advanced into the high-grade zone of Phase
4A, compared to Q1'18 when lower grade Phase 6 was processed.
Recovery rates also benefited from the processing of higher-grade
ore, with copper and gold recovery rates up 5.4% and 27.4% on Q1'18
respectively. Copper production increased 18.2% over Q1'18 due to
increased head grade and recovery rate. Gold production increased
187.6% over Q1'18 primarily due to a 135.2% increase in head grade
resulting from the increased contribution of Phase 4A.
Average gold mill head grades are expected to decline
significantly over the remainder of 2019, particularly in the
second half as softer, lower grade Phase 6 ore, and some material
from mine stockpiles are processed. Average copper mill head grades
are also expected to be lower over the remainder of the year.
Oyu Tolgoi is expected to produce 125,000 to 155,000 tonnes of
copper and 180,000 to 220,000 ounces of gold in concentrates for
2019. Mill throughput for 2019 is expected to be approximately 40
million tonnes.
Underground development
Work continues on critical Shaft 2 equipping activities, central
heating plant, mine infrastructure, underground materials handling
systems and on priority underground development. Pre-sinking works
for Shaft 3 and Shaft 4 have also commenced.
Rio Tinto, as project manager, has advised that the fit-out and
commissioning work on Shaft 2 (the main production and services
shaft) is now expected to be completed by the end of October 2019. As previously announced, more
detailed geotechnical information and different ground conditions
have required a review of the mine design and the development
schedule. The impact of these changes, including the further delay
to Shaft 2, will be included in the definitive estimate review,
which is expected to be completed towards the end of the year. In
parallel, Turquoise Hill will incorporate the impact of any further
delay to sustainable first production beyond the end of Q3'21 in
Turquoise Hill's cash flows, liquidity and financing projections.
Turquoise Hill will also explore potential mitigation options.
Oyu Tolgoi Production Data
All data represents full
production and sales on a 100% basis
|
|
1Q 2018
|
2Q 2018
|
3Q 2018
|
4Q
2018
|
1Q
2019
|
Q1'19
vs. Q1'18
|
Full
Year 2018
|
Open pit material mined ('000 tonnes)
|
|
23,131
|
22,792
|
22,523
|
22,863
|
23,943
|
3.5%
|
91,309
|
Ore treated ('000
tonnes)
|
|
9,561
|
10,164
|
9,652
|
9,361
|
9,255
|
-3.2%
|
38,738
|
Average mill head
grades:
|
|
|
|
|
|
|
|
|
Copper (%)
|
|
0.51
|
0.48
|
0.51
|
0.55
|
0.57
|
12.0%
|
0.51
|
Gold (g/t)
|
|
0.25
|
0.26
|
0.38
|
0.56
|
0.58
|
135.2%
|
0.36
|
Silver
(g/t)
|
|
1.32
|
1.17
|
1.19
|
1.22
|
1.25
|
-4.9%
|
1.22
|
Concentrates produced
('000 tonnes)
|
|
177.3
|
178.8
|
179.8
|
189.0
|
210.1
|
18.5%
|
724.9
|
Average concentrate
grade (% Cu)
|
|
21.9
|
22.0
|
21.9
|
21.9
|
21.8
|
-0.3%
|
21.9
|
Production of metals
in concentrates:
|
|
|
|
|
|
|
|
|
Copper ('000
tonnes)
|
|
38.8
|
39.4
|
39.4
|
41.5
|
45.8
|
18.2%
|
159.1
|
Gold ('000
ounces)
|
|
42
|
50
|
77
|
117
|
120
|
187.6%
|
285
|
Silver ('000
ounces)
|
|
221
|
225
|
230
|
238
|
247
|
11.6%
|
914
|
Concentrate sold
('000 tonnes)
|
|
163.1
|
220.0
|
171.9
|
191.4
|
184.9
|
13.4%
|
746.4
|
Sales of metals in
concentrates:
|
|
|
|
|
|
|
|
|
Copper ('000
tonnes)
|
|
34.3
|
46.1
|
36.0
|
40.2
|
38.5
|
12.3%
|
156.7
|
Gold ('000
ounces)
|
|
31
|
51
|
55
|
111
|
98
|
215.9%
|
248
|
Silver ('000
ounces)
|
|
206
|
250
|
201
|
216
|
200
|
-2.9%
|
873
|
Metal recovery
(%)
|
|
|
|
|
|
|
|
|
Copper
|
|
79.5
|
79.7
|
80.9
|
84.8
|
83.8
|
5.4%
|
81.4
|
Gold
|
|
55.0
|
59.8
|
64.7
|
71.7
|
70.1
|
27.4%
|
65.2
|
Silver
|
|
54.6
|
58.4
|
62.8
|
67.1
|
63.2
|
15.7%
|
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, liquidity, funding requirements
and planning, statements regarding timing and status of underground
development, capital and operating cost estimates, mill
throughput, expected copper and gold mill head grades, anticipated
business activities, planned expenditures, corporate strategies,
timing of completion of the definitive estimate review 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, 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; 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.
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 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; 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 the 2016 Oyu Tolgoi Feasibility Study and the 2016 Oyu
Tolgoi Technical Report); 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 dated as of
March 13, 2019 in respect of the year
ended December 31, 2018 (the "AIF"),
as supplemented by the "Risks and Uncertainties" section in our
Management's Discussion and Analysis of Financial Condition and
Results of Operations for the year ended December 31, 2018 (the "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-first-quarter-2019-production-and-provides-underground-development-update-300832372.html
SOURCE TURQUOISE HILL RESOURCES LTD