Turquoise Hill Resources Announces Fourth Quarter 2013 Production
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 01/15/14 --
Turquoise Hill Resources (NYSE: TRQ)(NASDAQ: TRQ)(TSX: TRQ) today
announced the fourth quarter 2013 production for Oyu Tolgoi.
Kay Priestly, Turquoise Hill Chief Executive Officer, said, "Production at Oyu Tolgoi continues to progress. The team at Oyu Tolgoi accomplished a great deal in their first year of operations, which included meeting production guidance and achieving a strong safety performance. The concentrator performed well during the quarter and copper and gold recoveries continue to improve."
Oyu Tolgoi produced 76,700 tonnes of copper in concentrates in 2013, and copper and gold in concentrates were 8% and 18% respectively higher in the fourth quarter compared to the third quarter. Concentrator throughput in December 2013 was above target.
Customers began to collect product during the fourth quarter and by December 31, 2013, they had picked up 26,400 tonnes of concentrate. Daily rates for shipments of concentrate are not yet aligned with production rates as two of Oyu Tolgoi's receiving smelters have experienced technical difficulties and consistent customer delivery schedules have not yet been embedded. Some sales volumes have been deferred into the second and third quarters of 2014 and inventories are expected to build during the first quarter of 2014.
For 2014, Turquoise Hill expects Oyu Tolgoi to produce 150,000 to 175,000 tonnes of copper in concentrates and 700,000 to 750,000 ounces of gold in concentrates. Oyu Tolgoi is expected to return to more normal inventory levels by the end of the year.
Oyu Tolgoi has signed contracts for 2014 delivery for the majority of the inventory on hand at the end of 2013.
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)(HK: 1878).
Forward-looking statements
Certain statements 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 Project 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 Project, 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 Project 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 Project; 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 Project.
The cost, timing and complexities of mine construction and development are increased by the remote location of a property such as the Oyu Tolgoi Project. 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 Project 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 Project will be delayed until matters with the Mongolian government can be resolved and a new timetable has been established. These delays can impact project economics.
The Company's MD&A also contain 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 in the prospectus, including the documents incorporated by reference 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 Project, 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. In addition, see "Cautionary Note to United States Investors" in the prospectus. Such estimates and statements are, in large part, based on the following:
Readers are 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 our 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 contained in the MD&A for the Company's third quarter results are made as of the date of such document and the Company 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 in the MD&A are expressly qualified by this cautionary statement.
Contacts:
Turquoise Hill Resources Ltd.
Jessica Largent
Investors
+1 604 648 3957
jessica.largent@turquoisehill.com
Turquoise Hill Resources Ltd.
Tony Shaffer
Media
+1 604 648 3934
tony.shaffer@turquoisehill.com
www.turquoisehill.com
Kay Priestly, Turquoise Hill Chief Executive Officer, said, "Production at Oyu Tolgoi continues to progress. The team at Oyu Tolgoi accomplished a great deal in their first year of operations, which included meeting production guidance and achieving a strong safety performance. The concentrator performed well during the quarter and copper and gold recoveries continue to improve."
Oyu Tolgoi produced 76,700 tonnes of copper in concentrates in 2013, and copper and gold in concentrates were 8% and 18% respectively higher in the fourth quarter compared to the third quarter. Concentrator throughput in December 2013 was above target.
Customers began to collect product during the fourth quarter and by December 31, 2013, they had picked up 26,400 tonnes of concentrate. Daily rates for shipments of concentrate are not yet aligned with production rates as two of Oyu Tolgoi's receiving smelters have experienced technical difficulties and consistent customer delivery schedules have not yet been embedded. Some sales volumes have been deferred into the second and third quarters of 2014 and inventories are expected to build during the first quarter of 2014.
For 2014, Turquoise Hill expects Oyu Tolgoi to produce 150,000 to 175,000 tonnes of copper in concentrates and 700,000 to 750,000 ounces of gold in concentrates. Oyu Tolgoi is expected to return to more normal inventory levels by the end of the year.
Oyu Tolgoi has signed contracts for 2014 delivery for the majority of the inventory on hand at the end of 2013.
Turquoise Hill Production Data
All data represents full production and sales on a 100% basis
1H 3Q 4Q 12 Months
2013 2013 2013 2013
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Oyu Tolgoi
Open pit material mined ('000 tonnes) 37,925 12,151 21,956 72,032
Ore Treated ('000 tonnes) 4,430 8,052 7,835 20,317
Average mill head grades:
Copper (%) 0.42 0.47 0.49 0.47
Gold (g/t) 0.27 0.36 0.41 0.36
Silver (g/t) 1.31 1.39 1.44 1.39
Copper concentrates produced ('000
tonnes) 50.2 110.3 129.5 290.0
Average concentrate grade (% Cu) 26.1 27.7 25.4 26.4
Production of metals in concentrates:
Copper in concentrates ('000 tonnes) 13.1 30.6 32.9 76.7
Gold in concentrates ('000 ounces) 21 62 74 157
Silver in concentrates ('000 ounces) 85 196 208 489
Sales of metals in concentrates:
Copper in concentrates ('000 tonnes) - - 6.1 6.1
Gold in concentrates ('000 ounces) - - 10 10
Silver in concentrates ('000 ounces) - - 36 36
Metal recovery (%)
Copper 73.2 81.7 86.4 81.6
Gold 56.7 66.3 71.2 66.1
Silver 47.8 54.9 57.2 54.2
About Turquoise Hill ResourcesTurquoise 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)(HK: 1878).
Forward-looking statements
Certain statements 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 Project 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 Project, 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 Project 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 Project; 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 Project.
The cost, timing and complexities of mine construction and development are increased by the remote location of a property such as the Oyu Tolgoi Project. 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 Project 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 Project will be delayed until matters with the Mongolian government can be resolved and a new timetable has been established. These delays can impact project economics.
The Company's MD&A also contain 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 in the prospectus, including the documents incorporated by reference 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 Project, 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. In addition, see "Cautionary Note to United States Investors" in the prospectus. Such estimates and statements are, in large part, based on the following:
-- Interpretations of geological data obtained from drill holes and other
sampling techniques. Large scale continuity and character of the
deposits will only be determined once significant additional drilling
and sampling has been completed and analyzed. Actual mineralization or
formations may be different from those predicted. It may also take many
years from the initial phase of drilling before production is possible,
and during that time the economic feasibility of exploiting a deposit
may change. Reserve and resource estimates are materially dependent on
prevailing metal prices and the cost of recovering and processing
minerals at the individual mine sites. Market fluctuations in the price
of metals or increases in the costs to recover metals from the Company's
mining projects may render mining of ore reserves uneconomic and affect
the Company's operations in a materially adverse manner. Moreover,
various short-term operating factors may cause a mining operation to be
unprofitable in any particular accounting period;
-- Assumptions relating to commodity prices and exchange rates during the
expected life of production, mineralization of the area to be mined, the
projected cost of mining, and the results of additional planned
development work. Actual future production rates and amounts, revenues,
taxes, operating expenses, environmental and regulatory compliance
expenditures, development expenditures, and recovery rates may vary
substantially from those assumed in the estimates. Any significant
change in these assumptions, including changes that result from
variances between projected and actual results, could result in material
downward revision to current estimates;
-- Assumptions relating to projected future metal prices. The prices used
reflect organizational consensus pricing views and opinions in the
financial modeling for the Oyu Tolgoi Project and are subjective in
nature. It should be expected that actual prices will be different than
the prices used for such modeling (either higher or lower), and the
differences could be significant; and
-- Assumptions relating to the costs and availability of treatment and
refining services for the metals mined from the Oyu Tolgoi Project,
which require arrangements with third parties and involve the potential
for fluctuating costs to transport the metals and fluctuating costs and
availability of refining services. These costs can be significantly
impacted by a variety of industry specific and also regional and global
economic factors (including, among others, those which affect commodity
prices). Many of these factors are beyond the Company's control.
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 our 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 25, 2013 in respect of the year ended December 31,
2012 (the "AIF").Readers are 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 our 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 contained in the MD&A for the Company's third quarter results are made as of the date of such document and the Company 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 in the MD&A are expressly qualified by this cautionary statement.
Contacts:
Turquoise Hill Resources Ltd.
Jessica Largent
Investors
+1 604 648 3957
jessica.largent@turquoisehill.com
Turquoise Hill Resources Ltd.
Tony Shaffer
Media
+1 604 648 3934
tony.shaffer@turquoisehill.com
www.turquoisehill.com
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