Millions in funding announced for renewable energy project in Mongolia www.cnbc.com

The Asian Development Bank (ADB) and Mongolian government have signed loan and grant agreements relating to renewable energy and the improvement of tax administration and public investment management. The total cost for both the projects amounts to $85.6 million.

Draft resolution of Mongolia’s international security and nuclear-weapon-free status approved www.montsame.mn

Ulaanbaatar /MONTSAME/ On November 1, the First Committee (Disarmament and International Security) of the United Nations General Assembly approved a draft resolution of Mongolia’s international security and nuclear-weapon-free status.

Turquoise Hill announces financial results and review of operations for the third quarter of 2018 www.turquoisehill.com

Turquoise Hill Resources today announced its financial results for the quarter ended September 30, 2018. All figures are
in U.S. dollars unless otherwise stated.
“During the third quarter, we delivered strong operational results in the open-pit mine, continued to progress underground
construction while achieving industry-leading safety performance,” said Ulf Quellmann, Chief Executive Officer. “The high
quality of our mining assets, as well as the strength of our management team, were instrumental in our ability to
successfully deliver such results. We are focused on demonstrating the value of Turquoise Hill to our shareholders and
the broader market.
“In our open-pit mine, we generated increases of nearly 150% in gold production and nearly 7% in copper production
resulting in lower unit production costs compared with the third quarter of 2017. The higher volumes, which offset the
impact of lower copper and gold prices, allowed us to maintain stable revenue in the third quarter of 2018 compared with
a year earlier.
“Underground, we continued to move forward with the construction of critical infrastructure to transform Oyu Tolgoi into a
true Tier One asset with the potential to operate for approximately 100 years. Underground development will deliver one
of the largest copper mines globally, with cash costs at the bottom of the cost curve.”
HIGHLIGHTS
 Oyu Tolgoi achieved a strong All Injury Frequency Rate of 0.19 per 200,000 hours worked for the nine months ended
September 30, 2018.
 Copper production of 39,400 tonnes during Q3’18 increased 6.8% versus Q3’17 as higher grades and recoveries were
partially offset by lower throughput.
 Gold production of 77,000 ounces during Q3’18 increased 148.4% over Q3’17 due to higher grades and recoveries.
 Mill throughput in Q3’18 decreased 9.1% over Q3’17 due to increased processing of harder Phase 4 ore as well as a
planned maintenance shutdown during the quarter.
 Revenue of $246.5 million in Q3’18 maintained at Q3’17 levels by virtue of higher gold sales volumes offsetting lower
copper and gold prices.
 For Q3’18, Oyu Tolgoi’s cost of sales was generally lower than in Q3’17 at $2.28 per pound of copper sold (down 6.2%
from $2.43: Q3’17), C1 cash costs of $1.65 per pound of copper produced (down 9.8% from $1.83: Q3’17) and all-in
sustaining costs of $2.29 per pound of copper produced (down 17.0% from $2.76: Q3’17)1

Total operating cash costs2 of $196.4 million in Q3’18 increased 21.3% over Q3’17 mainly due to increased open-pit
and concentrator costs resulting from higher maintenance costs, higher input costs as well as lower capitalization of
production phase stripping costs.
 Turquoise Hill has updated its guidance for 2018 operating cash costs2
from approximately $700 million to approximately
$800 million due to higher freight and royalty costs associated with increased sales revenue, a reduction to deferred
stripping costs capitalized as well as higher input prices, maintenance and power study costs.
 Turquoise Hill has also updated its guidance for 2018 open-pit capital expenditure from approximately $150 million to
approximately $120 million due to lower capitalized deferred stripping and deferral of projects from 2018 into 2019.
 During Q3’18, underground lateral development progressed 3.0 equivalent kilometres for a cumulative total of 15.7
equivalent kilometres since project restart.
 Pre-sinking activities for Shafts 3 and 4 progressed during Q3’18, including a box cut, and sinking for both shafts is
expected to commence mid-2019.
 Underground expansion capital for the nine months ended September 30, 2018 was $866.5 million, resulting in total
project spend since January 1, 2016 of $1.9 billion.

FINANCIAL RESULTS
Income in Q3’18 was $15.2 million compared with $47.7 million in Q3’17. The decrease is primarily due to $86.0 million
of additional deferred tax assets recognized in Q3’17 compared to Q3’18, partially offset by a reduction to finance costs in
Q3’18 compared to Q3’17, due to increased amounts capitalized to property, plant and equipment. Cash generated from
operating activities in Q3’18 was $76.2 million compared to $109.1 million in Q3’17. This decrease was due primarily to
the impact of higher vendor payments in Q3’18 compared to Q3’17 as a result of higher operating cash costs incurred in
Q2’18 compared to Q2’17. Capital expenditure on property, plant and equipment was $328.8 million on a cash basis in
Q3’18 compared with $234.0 million in Q3’17, attributed principally to underground ($304.8 million) with the remainder
related to open-pit capital activities.
Turquoise Hill’s cash and cash equivalents at September 30, 2018 were approximately $1.5 billion.
OYU TOLGOI
The Oyu Tolgoi mine is approximately 550 kilometres south of Ulaanbaatar, Mongolia’s capital city, and 80 kilometres
north of the Mongolia-China border. Mineralization on the property consists of porphyry-style copper, gold, silver and
molybdenum contained in a linear structural trend (the Oyu Tolgoi Trend) of deposits throughout this trend. They include,
from south to north, the Heruga Deposit, the Oyut deposit and the Hugo Dummett deposits (Hugo South, Hugo North and
Hugo North Extension).
The Oyu Tolgoi mine was initially developed as an open-pit operation. The copper concentrator plant, with related facilities
and necessary infrastructure, was originally designed to process approximately 100,000 tonnes of ore per day from the
Oyut open pit. However, since 2014, the concentrator has improved operating practices and gained experience, which has
helped achieve a consistent throughput of over 105,000 tonnes per day. Concentrator throughput for 2018 with harder ore
is now expected to be 38 million to 39 million tonnes compared to previous expectations of approximately 40 million tonnes.
In August 2013, development of the underground mine was suspended pending resolution of matters with the Government
of Mongolia. Following signing of the Oyu Tolgoi Underground Mine Development and Financing Plan (Underground Plan)
in May 2015 and the signing of a $4.4 billion project finance facility in December 2015, Oyu Tolgoi received formal notice
to proceed approval by the boards of Turquoise Hill, Rio Tinto and Oyu Tolgoi LLC in May 2016, which was the final
requirement for the re-start of underground development. Underground construction recommenced in May 2016.

Fingers in the till? Mongolian Minister resigns www.news.mn

B.Batzorig, Food, Agriculture and Light Industry Minister of Mongolia announced his resignation on Wednesday because of financial irregularities. The resignation was demanded by the ruling Mongolian People’s Party Group in parliament.

Deaths of four Mongolian journalists are suspicious www.news.mn

‘In recent years, a total of four Mongolian journalists have died, furthermore, their deaths are suspicious’ said Kh.Naranjargal, head of the Globe International NGO at a press conference. The Press Council of Mongolia has been conducting a survey on regulations for ensuring journalists’ safety and implementing these regulations in cooperation with the Mongolian Bar Association and Globe International.

Mongolia’s gold purchases increase by 34 percent www.news.mn

The Central Bank of Mongolia (Mongol Bank) purchased 3.4 tonnes of gold from legal entities and individuals in October; an increase of 34 percent on the same month in 2017. Furthermore, the total gold purchase reached 17.7 percent in the first ten months of 2018; an increased of three percent on last year. As of mid-October, the Central Bank of Mongolia was purchasing gram a of gold for MNT 99,911.55.

IMF: Authorities should improve public financial management www.zgm.mn

The International Monetary Fund (IMF) has announced the completion of the fifth review of the Extended Fund Facility (EFF) and recommended Mongolia to further improve public financial management as Parliament is currently discussing the pre-election year budget. This enables Mongolia to draw 26.2088 million Special Drawing Rights (SDR) equivalent of about USD 36.22 million, bringing total disbursements under the arrangement to SDR 157.2 million (about USD 217.33 million). The fund highlighted, “The combination of strong policy implementation and a supportive external environment has helped the authorities meet all end-September 2018 quantitative targets under the program, with significant over-performance on fiscal targets. Progress has also been made on structural reforms, albeit with some delays.” Following the Executive Board’s discussion of the review, Mr. Mitsuhiro Furusawa, Acting Chair and Deputy Managing Director, said, "The fiscal accounts have posted a primary surplus, reflecting both a sharp increase in revenues and continued expenditure restraint.

Ruling party sends 2019 Monetary Policy Guidelines for final discussion www.zgm.mn

Parliament’s plenary session began with a protest of the Democratic Party (DP) faction yesterday. The DP members hung up banners, declaring not to attend plenary sessions and standing committee meetings until the MPs involved in SME Development Fund scandal are ousted and left the session. Without the DP faction, the remaining Parliament members held the first discussion on 2019 Monetary Policy Guidelines, during which the Governor of Bank of Mongolia (BoM) Bayartsaikhan Nadmid informed that the bank has injected USD 720 million into the foreign exchange (FX) market so far this year and is planning USD 1 billion currency intervention before the end of 2018. This is expected to reduce the weakening MNT rate at about 5 percent fluctuation. “The Law on Currency Regulation, which is currently under discussion by the Parliament, includes an article that states transactions of Oyu Tolgoi and other private entities that has stability agreement with the Government shall be made through BoM accounts. The approval of the bill will help grow FX reserves,” addressed Mr. Bayartsaikhan.

Investment opportunities presented to Australian investors www.montsame.mn

Ulaanbaatar /MONTSAME/. Delegates lead by the Minister of Mining and Heavy Industry D.Sumiyabazar and MP A.Undraa are currently participating in the International Mining and Resources Conference (IMARC-2018), which is taking place in Melbourne, Australia. Minister D.Sumiyabazar hold a meeting with Australian investors today.

Infrastructure construction of oil refinery running at over 30 percent www.montsame.mn

Dornogobi /MONTSAME/ An infrastructure construction of the oil refinery to be built in Altanshiree soum of Dornogobi aimag is running at over 30 percent.