Oyu Tolgoi gold production up 148.4% in Q3

Open-pit gold production at Oyu Tolgoi in the third quarter was at 77,000 ounces, up 148.4 percent compared to the third quarter of 2017, Turquoise Hill Resources announced in its financial results for the third quarter (Q3). Copper production was up slightly with a 6.8 percent increase, while revenue of 245.6 million USD remained at comparable levels as Q3 2017.

Open-pit gold production at Oyu Tolgoi in the third quarter was at 77,000 ounces, up 148.4 percent compared to the third quarter of 2017, Turquoise Hill Resources announced in its financial results for the third quarter (Q3). Copper production was up slightly with a 6.8 percent increase while revenue of 245.6 million USD remained at comparable levels as Q3 2017.

“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. 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,” said CEO of Turquoise Hill Ulf Quellmann.

“In our open-pit mine, we generated increases of nearly 150 percent in gold production and nearly seven percent 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,” he added.

In Q3, underground lateral development at Oyu Tolgoi progressed three kilometers for a cumulative total of 15.7 equivalent kilometers since project restart in 2016.

The increase in gold and copper production were due to higher grades and recoveries. Turquoise underlined that higher gold production and sales volumes helped offset lower copper and gold prices. Overall, mill throughput decrease 9.1 percent compared to the third quarter last year due to processing of harder Phase 4 ore as well as a planned maintenance shutdown during the quarter.

Operating costs in Q3 were up 21.3 percent to 196.4 million USD 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 has updated its for 2018 operating cash costs from approximately 700 million USD to approximately 800 million USD 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. Meanwhile, open-pit capital expenditure was lowered from 150 million USD to 120 million USD. Turquoise Hill’s cash and cash equivalents at September 30, 2018 were approximately 1.5 billion USD.

Turquoise Hill has updated Oyu Tolgoi’s expected copper production for 2018 from between 125,000 and 155,000 tons of copper to between 140,000 and 155,000 tons of copper in concentrates. The company said that it continues to expect production of gold in concentrates from between 240,000 and 280,000 ounces for 2018.