Ulaanbaatar /MONTSAME/ On April 16, Turquoise Hill Resources Ltd announced first quarter 2020 production for Oyu Tolgoi and provided an update on underground development, COVID-19 and power.

Highlights

Q1 production was another strong performance given the mining position within the open pit sequence with results exceeding expectations despite quarterly copper and gold production being lower than the same quarter of the previous year. This is due to decreased head grade driven by the continued planned transition from Phase 4a and Phase 6a to Phase 4b, Phase 6b and lower grade stockpiles resulting in:

• Copper production of 35,203 tonnes, a decrease of 23% vs Q1 2019
• Gold production of 26,154 ounces, a decrease of 78% vs Q1 2019
• Mill throughput increased 17% vs Q1 2019 due to lower overall feed hardness as well as good availability and effective utilization performance
• On track to achieve 2020 copper and gold production guidance

“The first quarter of 2020 was another notable effort from the Oyu Tolgoi team as we continue to mine through the lower grade material on the periphery of the South West pit. As we progress through 2020, Phase 4b will sink towards the higher gold and copper grades which is expected to result in a significant increase in gold production in 2021,” stated Ulf Quellmann, Chief Executive Officer of Turquoise Hill, “Oyu Tolgoi is adapting to the challenges posed by the COVID-19 pandemic on both the open pit and underground operations, with the open-pit continuing to operate without interruption, while the underground development is experiencing a slow-down. We will continue to update the market as the impact of COVID-19 becomes clearer.”

Underground Development, COVID-19 and Power Updates

• As announced on March 16, 2020, work on the Oyu Tolgoi underground continues, and we are achieving strong productivity in underground advancement (1,939eqm in March, average monthly 1,815eqm for the quarter).
• Despite these gains, the unprecedented circumstances of COVID-19 have had an impact on the underground development by restricting access for teams from Oyu Tolgoi, Rio Tinto and our construction partners, and although the open pit has continued to operate uninterrupted, COVID19 restrictions have challenged our supply logistics.
• Based on current information, the underground project remains within the range announced in July 2019 of a 16 to 30-month delay in schedule, and an increase of $1.2 to $1.9 billion in development capital, with indications of the preferred technical solution falling in the upper half of the schedule delay range and the development capital overrun trending away from the lower end of the range.
• Although sales in January and February were impacted by curtailed operations in China during peak COVID-19 restrictions, strong collections occurred in March and sales exceeded expectations at the end of the quarter. Concentrate transportation remains a challenge in the current environment and engagement with both the Mongolian and the Chinese governments continues in an effort to minimize the impact on future sales.

source: Turquoise Hill