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Turquoise Hill announces first quarter 2021 production and Oyu Tolgoi mine update www.turquoisehill.com
Turquoise Hill Resources Ltd. (“Turquoise Hill” or the “Company”) today announced first quarter
2021 production for Oyu Tolgoi LLC (“Oyu Tolgoi”) and provided an update on the Oyu Tolgoi mine.
Q1 2021 highlights
In Q1 2021, the mining of Phase 4b and Phase 6b moved deeper into the higher grade ore
zone, resulting in a planned increase in head grades:
o Copper production of 45,449 tonnes, an increase of 29% vs Q1 2020 and of 9% vs
Q4 2020; and
o Gold production of 145,656 ounces, an increase of 457% vs Q1 2020 and of 66% vs
Q4 2020
Q1 2021 mill throughput of 9.81 million tonnes was 10% lower vs Q1 2020 due to overall
harder ore. Mill throughput was 2% higher than Q4 2020 due to the impact of scheduled mill
maintenance in Q4 2020.
Access to higher copper and gold grades in Q1 2021 is expected to continue through the
remainder of the year.
Force Majeure
On March 30, 2021, Oyu Tolgoi declared force majeure in connection with customer contracts for
concentrate. Shipments of concentrate to its Chinese customers were suspended due to COVID-19
health and safety precautions related to Chinese-Mongolian border crossings. Oyu Tolgoi partially
resumed its cross-border concentrate shipments into China on April 15, 2021, and is evaluating
multiple contingencies to address the force majeure situation, including an alternative shipping route
via Ulaanbaatar.
COVID-19 Update
Following the previously announced two confirmed cases of COVID-19 at site and a corresponding
halt to underground work in March 2021, Oyu Tolgoi has carefully managed the situation, including
through widespread testing and implementation of a quarantine period.
Accordingly, underground work has progressively resumed and continued to ramp-up as personnel
return to site following the quarantine period and resumption of flights to site.
The COVID-19 situation in Mongolia remains fragile and subject to rapid change. Oyu Tolgoi is
constantly adapting to the changing circumstances to prioritize the health and safety of its
employees. The Company continues to work with Oyu Tolgoi and Rio Tinto to monitor closely any
impacts of this ever-changing situation on current operations and the underground development.
Negotiations with the Government of Mongolia
Turquoise Hill and Rio Tinto have been in Ulaanbaatar since March to discuss with the Government
of Mongolia a path forward to address outstanding issues that the Government of Mongolia has with
respect to the Oyu Tolgoi underground development project including in relation to Parliamentary
Resolution 92. Turquoise Hill remains committed to its presence in Mongolia and, in all discussions
with Rio Tinto and the Government of Mongolia, is focused on maximizing value for all stakeholders
including finding solutions that benefit the people of Mongolia in a meaningful way.
Underground Development
Oyu Tolgoi is progressing as planned in relation to the technical criteria for commencement of the
undercut. Regulatory approvals by the Government of Mongolia are still pending and are critical
elements to proceed with the decision to commence the undercut. The Company will update the
market on the status of the regulatory approvals and the undercut decision in the coming weeks.
Oyu Tolgoi Tax Assessment
In February 2021, Oyu Tolgoi received notices of payment totalling $230 million relating to amounts
disputed under an audit on taxes imposed and paid by Oyu Tolgoi between 2016 and 2018.
In March 2021, Oyu Tolgoi received notices of payment totalling $126 million relating to amounts
disputed under an audit on taxes imposed and paid by Oyu Tolgoi between 2013 and 2015.
Under the applicable Mongolian tax law, the amounts were due and paid by Oyu Tolgoi.
Notwithstanding, Oyu Tolgoi continues to dispute the amounts through a formal international
arbitration proceeding and the Company remains of the opinion that Oyu Tolgoi has paid all taxes
and charges required.
Published Date:2021-04-20
