Friday, February 14, 2014

Turquoise Hill warns of further Oyu Tolgoi delays but eyes potential restart

Turquoise Hill Resources (TRQ -7.6%) says FY 2013 gross revenue for its Oyu Tolgoi gold and copper project in Mongolia totaled $55M, falling short of initial projections, with some sales expected to be deferred into Q2 and Q3 2014.

TRQ says an option to restart underground development of Oyu Tolgoi has been proposed even as negotiations with the Mongolian government continue to resolve outstanding issues that led to the project's suspension last July.

Further delays in the project may occur if outstanding shareholder issues are not resolved before the expiration of lender commitments on existing project finance arrangements.

Production rates recently were hurt by various post-commissioning issues which will result in the shutdown of one line for up to eight weeks, but TRQ continues to project 2014 output of 150K-175K metric tons of copper in concentrates and 700K-750K oz. of gold in concentrates.

Rio Tinto (RIO) holds a 50.8% controlling interest in TRQ.

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