Turquoise Hill expects to have sufficient funds through 2nd quarter of 2022
The Oyu Tolgoi open pit continued to operate uninterrupted and produced 36,286 tons of copper and 36,743 ounces of gold in the third quarter of 2020, reported Turquoise Hill Resources on November 13.
All surface infrastructure required for first sustainable production is complete and the team is focused on the safe and efficient delivery of the critical underground Material Handling System 1. Underground lateral development has now reached 48,604 equivalent meters, and progress continues broadly in line with expectations set forth in the Oyu Tolgoi Technical Report.
“Despite ongoing challenges related to the COVID-19 pandemic, Oyu Tolgoi posted another excellent quarter from a safety, productivity and underground development perspective. The open pit continued to operate uninterrupted, and first sustainable production is now trending towards the earlier months of the previously guided range of October 2022 to June 2023, with a revised base case of October 2022. Our thanks also go to the Government of Mongolia for its continued support and cooperation in helping Oyu Tolgoi remobilize the required specialist resources back into the country,” CEO of Turquoise Ulf Hill Quellmann said in the report.
He added that the Oyu Tolgoi Technical Report issued in late August provided further evidence of Oyu Tolgoi's progress towards becoming a “Tier 1 asset” that is on track to become one of the largest copper mines in the world with first quartile cash costs.
The report highlighted that copper production remains on track to achieve guidance of 140,000 to 170,000 tons, while forecast 2020 gold production is trending towards the higher end of the previously announced 155,000 to 180,000 ounce range. Mill throughput was 0.3 percent higher compared to 2019 third quarter due to slightly higher mill availability.
The company’s revenue reached 264.4 million USD in the reference period, up by 26.4 percent from 209.2 million in 2019 third quarter. Particularly, copper revenue rose thanks to 29.5 percent higher sales volume and a 12.5 percent increase in average copper price. Gold revenue increased by 16.6 percent driven by a 29.7 percent increase in average gold price, partly offset by lower volumes of gold in concentrate sold.
Total operating cash costs rose 3.6 percent year-on-year to 181.4 million USD in the third quarter of 2020 principally due to higher royalty costs resulting from higher sales revenue, partially offset by lower milling costs. During the reporting period, underground development expenditure amounted to 242.1 million USD, resulting in total project spend since January 1, 2016 of approximately 4.2 billion USD.
As of September 30, Turquoise Hill has 1.3 billion USD in available liquidity, which under current projections is expected to be sufficient to meet the requirements of the company, including its operations and underground development, into the second quarter of 2022.
The company says it is actively engaging with market participants to source attractive and executable financing options designed to be in the best interests of Oyu Tolgoi and shareholders.