Turquoise Hill Announces First Quarter 2014 Production and Provides
Update on Project Financing
VANCOUVER, BC--(Marketwired
- April 14, 2014) - Turquoise Hill Resources today announced
the first quarter 2014 production for Oyu Tolgoi and provided an
update on project financing.
Production at Oyu Tolgoi in Q1'14 was heavily impacted by post
commissioning issues, including rake blade failure in both of the
tailings thickeners, which caused the shutdown of one production
line for approximately seven weeks. Repairs to the rakes have been
completed and full production recommenced in late March. The
concentrator also completed a number of major planned shutdowns in
Q1'14, including ball mill relines and the first concave change in
the primary crusher.
Copper and gold head grades increased in Q1'14 as the mine
deepened. These higher grades combined with ongoing improvement
initiatives led to improved copper and gold recoveries during the
quarter. Also during March 2014, Oyu Tolgoi processed small volumes
of ore from the high grade areas of the gold core.
Concentrate sales continue to accelerate and are matching
current production. During the second half of 2014, Oyu Tolgoi is
expected to drawdown inventory. Oyu Tolgoi will monitor production
levels and if necessary, match them to meet customer requirements,
with the goal of returning to more normal levels of inventory by
the end of 2014.
Oyu Tolgoi expects to produce 135,000 to 160,000 tonnes of
copper and 600,000 to 700,000 ounces of gold in concentrates for
2014.
Update on Project Financing
All parties agreed to send requests to the project finance
lenders to extend the commitment letters for the financing of the
underground development at Oyu Tolgoi to September 30, 2014.
Kay Priestly, Turquoise Hill Chief Executive Officer, said, "All
parties remain committed to the underground development of Oyu
Tolgoi and to resolving the outstanding shareholder issues.
Constructive discussions between all parties have resulted in
significant progress being made in resolving the issues, and those
discussions are continuing."
Oyu Tolgoi Production Data All data represents full
production and sales on a 100% basis
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1H2013 |
3Q2013 |
4Q2013 |
1Q2014 |
Full Year2013 |
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|
|
|
|
Open pit material mined ('000 tonnes) |
37,925 |
12,151 |
21,956 |
21,621 |
72,032 |
Ore Treated ('000 tonnes) |
4,430 |
8,052 |
7,835 |
5,560 |
20,317 |
Average mill head grades: |
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Copper (%) |
0.42 |
0.47 |
0.49 |
0.52 |
0.47 |
|
Gold (g/t) |
0.27 |
0.36 |
0.41 |
0.49 |
0.36 |
|
Silver (g/t) |
1.31 |
1.39 |
1.44 |
1.52 |
1.39 |
Copper concentrates produced ('000 tonnes) |
50.2 |
110.3 |
129.5 |
102.9 |
290.0 |
|
Average concentrate grade (% Cu) |
26.1 |
27.7 |
25.4 |
24.6 |
26.4 |
Production of metals in concentrates: |
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Copper in concentrates ('000 tonnes) |
13.1 |
30.6 |
32.9 |
25.3 |
76.7 |
|
Gold in concentrates ('000 ounces) |
21 |
62 |
74 |
66 |
157 |
|
Silver in concentrates ('000 ounces) |
85 |
196 |
208 |
163 |
489 |
Sales of metals in concentrates: |
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|
|
|
|
|
Copper in concentrates ('000 tonnes) |
- |
- |
6.1 |
13.1 |
6.1 |
|
Gold in concentrates ('000 ounces) |
- |
- |
10 |
28 |
10 |
|
Silver in concentrates ('000 ounces) |
- |
- |
36 |
78 |
36 |
Metal recovery (%) |
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Copper |
73.2 |
81.7 |
86.4 |
87.9 |
81.6 |
|
Gold |
56.7 |
66.3 |
71.2 |
75.5 |
66.1 |
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Silver |
47.8 |
54.9 |
57.2 |
59.3 |
54.2 |
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About Turquoise Hill Resources
Turquoise Hill Resources (NYSE:
TRQ) (NASDAQ:
TRQ) (TSX: TRQ) is an
international mining company focused on copper, gold and coal mines
in the Asia Pacific region. The Company's primary operation is its
66% interest in the Oyu Tolgoi copper-gold-silver mine in southern
Mongolia. Turquoise Hill also holds a 56% interest in Mongolian
coal miner SouthGobi Resources (TSX:
SGQ) (HKSE: 1878).
Follow us on Twitter @TurquoiseHillRe.
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 U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking information and statements 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 respecting 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. Such statements and information are based on numerous
assumptions regarding present and future business strategies and
the environment in which the Company will operate in the future,
including the price of copper, gold and silver, anticipated capital
and operating costs, anticipated future production and cash flows,
the ability to complete the disposition of certain of its non-core
assets, the ability and timing to complete project financing and/or
secure other financing on acceptable terms, and the evolution
of discussions with the Government of Mongolia on a range of issues
including the implementation of the Investment Agreement, project
development costs, operating budgets, management fees and
governance and the existence or filing of legal proceedings against
the Company and its officers and directors. 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, mining operational and development risks, litigation
risks, regulatory restrictions (including environmental regulatory
restrictions and liability), activities by governmental
authorities, currency fluctuations, the speculative nature of
mineral exploration, the global economic climate, dilution, share
price volatility, competition, loss of key employees, additional
funding requirements, capital and operating costs for the
construction and operation of the Oyu Tolgoi mine 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
information and statements 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 information or statements.
With respect to specific forward-looking information concerning
the construction and development of the Oyu Tolgoi mine, 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 impact of the
decision announced by the Company to delay the funding and
development of the Oyu Tolgoi underground mine pending resolution
of outstanding issues with the Government of Mongolia associated
with the development and operation of the Oyu Tolgoi mine and to
satisfy all conditions precedent to the availability of Oyu Tolgoi
Project Financing; 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 availability and cost of
appropriate smelting and refining arrangements; the obtaining of
(and the terms and timing of obtaining) necessary environmental and
other government approvals, consents and permits; the availability
of funding on reasonable terms; the timing and availability of a
long-term power source for the Oyu Tolgoi mine; delays, and the
costs which would result from delays, in the development of the
underground mine (which could significantly exceed those projected
in the 2013 Oyu Tolgoi Technical Report); projected copper, gold
and silver prices and demand; and production estimates and the
anticipated yearly production of copper, gold and silver at the Oyu
Tolgoi mine.
The cost, timing and complexities of mine construction and
development are increased by the remote location of a property such
as the Oyu Tolgoi mine. It is common in new 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 the Oyu
Tolgoi mine has achieved commercial production, there is no
assurance that future development activities will result in
profitable mining operations. In addition, funding and development
of the underground component of the Oyu Tolgoi mine have been
delayed until matters with the Government of Mongolian can be
resolved and a new timetable agreed. These delays can impact
project economics.
The Company's MD&A also contains references to estimates of
mineral reserves and mineral resources. The estimation of reserves
and resources is inherently uncertain and involves subjective
judgments about many relevant factors. The mineral resource
estimates contained therein are inclusive of mineral reserves.
Further, mineral resources that are not mineral reserves do not
have demonstrated economic viability. The accuracy of any such
estimates is a function of the quantity and quality of available
data, and of the assumptions made and judgments used in engineering
and geological interpretation (including future production from the
Oyu Tolgoi mine, the anticipated tonnages and grades that will be
achieved or the indicated level of recovery that will be realized),
which may prove to be unreliable. There can be no assurance that
these estimates will be accurate or that such mineral reserves and
mineral resources can be mined or processed profitably. See the
discussion under the headings "Language Regarding Reserves and
Resources" and "Note to United States Investors Concerning
Estimates of Measured, Indicated and Inferred Resources" in the
Company's MD&A filed on SEDAR and EDGAR.
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
26, 2014 in respect of the year ended December 31, 2013 (the
"AIF").
Readers are further cautioned that the list of factors
enumerated in the "Risk Factors" section of the AIF that may affect
future results is not exhaustive. When relying on the Company's
forward-looking information and statements 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 information and
statements herein are made as of the date hereof and Turquoise
Hill does not undertake any obligation to update or to revise any
of the included forward-looking information or statements, whether
as a result of new information, future events or otherwise, except
as required by applicable law. The forward-looking information and
statements contained herein are expressly qualified by the
cautionary statement.
Turquoise Hill Resources Ltd.Jessica LargentInvestorsOffice: +1
604 648 3957Email: jessica.largent@turquoisehill.comTurquoise Hill
Resources Ltd.Tony ShafferMediaOffice: +1 604 648 3934Email:
tony.shaffer@turquoisehill.com
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