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TURQUOISE HILL CUTS OYU TOLGOI 2014 GOLD, COPPER OUTPUT FORECAST

Turquoise Hill Resources Ltd. on Tuesday reduced its 2014 forecasts for gold and copper production at the massive Oyu Tolgoi copper-gold mine in Mongolia because of delays in mine development in the third quarter.
The miner, which owns some 66 percent of Oyu Tolgoi, said it now expects the mine to produce between 550,000 and 600,000 ounces of gold in concentrates this year, down from the 600,000 to 700,000 ounces it had forecast in August. It also reduced its expectation for copper concentrate output to between 135,000 tons and 150,000 tons this year, down from a range of 135,000 tons to 160,000 tons before.
It said Oyu Tolgoi produced 36,600 tons of copper and 132,000 ounces of gold in concentrates in the third quarter, in line with the second quarter as higher copper grades offset lower throughput. Throughput fell due to the failure of rake arms in one of the mine's two tailings thickeners, as previously announced.
Operating cash costs are expected to fall by about USD 130 million this year from a total of USD 1 billion, Turquoise Hill said, as Oyu Tolgoi, like other miners, focuses on cutting costs at a time of lower metal prices. Turquoise Hill said it has also reduced expected capital expenditure for the year to about USD 110 million from USD 160 million before.
In a separate statement, Oyu Tolgoi reported that in September, concentrate production was impacted by operational damage to the rake arms of one of Oyu Tolgoi’s two tailings thickeners. The concentrator operated at approximately 60 per cent throughput during the repairs. Despite reduced throughput, the third quarter 2014 metal production was in-line with the previous quarter due to higher head grades.
“Our workforce coordinated an impressive effort across the business to safely and quickly repair the thickener rake arms while limiting the overall impact on production,” said Oyu Tolgoi Chief Financial Officer, Steve Duggan. “We continue to make good progress in moving from the post-commissioning phase of the business into steady-state operations.”

Source: Reuters, Oyu Tolgoi LLC