Turquoise Hill Announces First Quarter 2022 Production and Oyu Tolgoi Mine and Corporate Update
Q1 2022 Highlights
-
As planned, Q1 2022 copper and gold production from the open pit and underground was lower vs Q1 2021 due to lower copper and gold head grade.
- Copper production of 30.3 thousand tonnes of copper in concentrate, a decrease of 33% vs Q1 2021 and a decrease of 22% vs Q4 2021
- Gold production of 59 thousand ounces of gold in concentrate, a decrease of 60% vs Q1 2021 and a decrease of 25% vs Q4 2021
- Copper production guidance for 2022 remains within the range of 110,000 to 150,000 tonnes. Gold production guidance has been revised from a range of 115,000 – 165,000 ounces to 135,000 – 165,000 ounces and is trending toward the higher end of the range.
-
Expenditures on property, plant and equipment for 2022 are now expected to be approximately
$155 million to$185 million for open-pit operations due to schedule changes impacting the timing of spend. This is compared to the Company’s original guidance of$170 million to$200 million . - Mill throughput of 9.58 million tonnes in Q1 2022 was 9% lower than Q4 2021 and 2% lower than Q1 2021 in line with expectations due to planned maintenance.
COVID-19
Safety continues to be the Company’s top priority and controls remain in place at site to protect our people.
During Q1 2022, COVID-19 cases identified at Oyu Tolgoi have trended downward. Consequently, onsite workforce numbers over the quarter increased to approximately 90% of plan with mobilisation of personnel across multiple work-fronts. COVID-19 related restrictions for international arrivals to
The total cumulative increase to the Definitive Estimate underground development capital cost due to the impacts of COVID-19 through the end of Q1 2022 increased by
Open Pit Operations and
During Q1 2022, the combined open pit and underground operations produced 30.3 thousand tonnes of copper in concentrate and 59 thousand ounces of gold in concentrate. This was a planned reduction from Q4 2021 due to lower throughput and a reduction in both copper and gold head grades.
The mill feed for Q1 2022 included approximately 262 thousand tonnes @ 0.52% Cu and 0.25g/t Au of underground development material. The remaining 9.32 million tonnes of mill feed was sourced from open pit low grade stockpiles and supplemented with higher grade material from Phase 4B and Phase 5. Mining in Phase 4B was completed in
As previously disclosed, the open pit optimisation opportunities to reduce the impact of the previously forecast metal deferral are improving in definition. Related work is still expected to be incorporated into an updated mine plan in Q3 2022.
During Q1 2022, the underground project achieved several significant milestones including the commencement of the undercut and commissioning of both the Material Handling System 1 and the first on-footprint truck chute. Despite the commencement of the undercut a month later than expected, the timing of first drawbell remains aligned with the previously disclosed timing in Q3 2022. Undercut blasting and on footprint construction work, including roadways and steel set construction, continues to progress well ahead of the first drawbell blast. Infrastructure to support production ramp up also progressed during the quarter, including completion of the conveyor to surface decline mining and transfer chamber mass excavation. Shaft 3 headframe was commissioned and sinking commenced on
Force Majeure
Oyu Tolgoi concentrate shipment volumes to customers continued to steadily improve with on-site concentrate inventory levels reducing by 30% over the quarter. Above target inventory levels remained at the end of Q1 2022, and management continues to focus on returning them to target levels. The challenges relating to the continued COVID-19 related
Oyu Tolgoi Production Data | ||||||||||||
All data represents full production and sales on a 100% basis | ||||||||||||
1Q | 2Q | 3Q | 4Q | 1Q | Full Year | |||||||
2021 |
2021 |
2021 |
2021 |
2022 |
2021 |
|||||||
Open pit material mined (‘000 tonnes) |
22,588 |
15,829 |
22,588 |
23,979 |
24,386 |
84,983 |
||||||
Ore treated (‘000 tonnes) |
9,813 |
9,401 |
9,336 |
10,573 |
9,581 |
39,124 |
||||||
Average mill head grades: | ||||||||||||
Copper (%) |
0.56 |
0.47 |
0.53 |
0.46 |
0.40 |
0.50 |
||||||
Gold (g/t) |
0.68 |
0.50 |
0.63 |
0.38 |
0.32 |
0.54 |
||||||
Silver (g/t) |
1.29 |
1.19 |
1.29 |
1.27 |
1.25 |
1.26 |
||||||
Concentrates produced (‘000 tonnes) |
201.9 |
173.2 |
191.9 |
182.7 |
144.3 |
749.6 |
||||||
Average concentrate grade (% Cu) |
22.5 |
21.2 |
21.9 |
21.3 |
21.0 |
21.7 |
||||||
Production of metals in concentrates: | ||||||||||||
Copper (‘000 tonnes) |
45.4 |
36.7 |
41.9 |
38.9 |
30.3 |
163.0 |
||||||
Gold (‘000 ounces) |
146 |
113 |
131 |
79 |
59 |
468 |
||||||
Silver (‘000 ounces) |
255 |
235 |
249 |
238 |
211 |
977 |
||||||
Concentrate sold (‘000 tonnes) |
186.3 |
92.6 |
224.4 |
165.9 |
148.3 |
669.2 |
||||||
Sales of metals in concentrates: | ||||||||||||
Copper (‘000 tonnes) |
39.0 |
19.6 |
46.4 |
34.4 |
29.9 |
139.4 |
||||||
Gold (‘000 ounces) |
111 |
73 |
149 |
102 |
57 |
435 |
||||||
Silver (‘000 ounces) |
207 |
106 |
278 |
192 |
179 |
783 |
||||||
Metal recovery* (%) | ||||||||||||
Copper |
86.3 |
79.7 |
83.9 |
80.1 |
78.1 |
82.8 |
||||||
Gold |
72.2 |
69.3 |
68.7 |
59.3 |
59.0 |
68.4 |
||||||
Silver |
65.3 |
62.5 |
64.1 |
55.1 |
54.3 |
61.6 |
||||||
*Metal recovery is a function of head grade and reflects grades delivered in the quarter. |
Technical Information included in this Press Release
Disclosure of information of a scientific or technical nature in this press release in respect of the Oyu Tolgoi mine was approved by
Forward-looking statements and forward-looking information
Certain statements made 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 harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements and information relate to future events or future performance, reflect current expectations or beliefs regarding future events and are typically identified by words such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “likely”, “may”, “plan”, “seek”, “should”, “will” and similar expressions suggesting future outcomes or statements regarding an outlook. These include, but are not limited to, statements and information regarding: the nature of the Company’s ongoing relationship and interaction with the Government of
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. There can be no assurance that such statements or information will prove to be accurate. Such statements and information are based on numerous assumptions regarding present and future business strategies, local and global economic conditions, and the environment in which the Company will operate in the future, including: the price of copper, gold and silver; projected gold, copper and silver grades; anticipated capital and operating costs; anticipated future production and cash flows; the anticipated location of certain infrastructure in Hugo North Lift 1 and sequence of mining within and across panel boundaries; the nature of the Company’s ongoing relationship and interaction with the Government of
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; development plans for processing resources; public health crises such as COVID-19; matters relating to proposed exploration or expansion; mining operational and development risks, including geotechnical risks and ground conditions; litigation risks, including the outcome of the class action complaints filed against the Company; the outcome of the international arbitration proceedings, including the likelihood of the parties being able to amicably resolve the ongoing tax issues; regulatory restrictions (including environmental regulatory restrictions and liability);
With respect to specific forward-looking information concerning the continued operation 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 nature of the Company’s ongoing relationship and interaction with the Government of
The cost, timing and complexities of mine construction and development are increased by the remote location of a property such as Oyu Tolgoi. It is common in 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 Oyu Tolgoi has achieved commercial production, there is no assurance that future development activities will result in profitable mining operations.
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 the Company’s 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 for the year ended
Readers are further 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 the Company’s forward-looking statements and information 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 statements and information contained herein are made as of the date of this document and the Company does not undertake any obligation to update or to revise any of the included forward-looking statements or information, whether as a result of new information, future events or otherwise, except as required by applicable law. The forward-looking statements and information contained herein are expressly qualified by this cautionary statement.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220419006043/en/
Investors and Media
roy.mcdowall@turquoisehill.com
Follow us on Twitter@TurquoiseHillRe
Source: