Turquoise Hill Resources yesterday announced its first quarter 2019 production for Oyu Tolgoi and provided an update on underground development.
- Copper production of 45 800 t, up 18.2% on 1Q18.
- Gold production of 120 000 oz, up 187.6% on 1Q18.
- On track to achieve 2019 copper and gold production guidance.
Ulf Quellmann, CEO of Turquoise Hill, said, "The Oyu Tolgoi open pit delivered another strong operational performance in the first quarter of 2019. Mined material was higher than the same period last year, and we continued to benefit from processing high grade material from Phase 4A. Copper and gold grades are expected to decline over the remainder of the year as we process a higher proportion of Phase 6 ore, but we are well positioned to meet our 2019 copper and gold production guidance.
"Rio Tinto, as project manager, has advised that it has completed a review of the fit-out and commissioning issues at Shaft 2 and it now expects Shaft 2 to be completed by the end of October 2019. Turquoise Hill will review the cause and impact of this further delay to Shaft 2."
As expected, mill throughput in 1Q19 decreased 3.2% over 1Q18 due to the concentrator processing harder Phase 4 ore and planned plant maintenance. This was offset by higher copper and gold mill head grades as mining advanced into the high-grade zone of Phase 4A, compared to 1Q18 when lower grade Phase 6 was processed. Recovery rates also benefited from the processing of higher-grade ore, with copper and gold recovery rates up 5.4% and 27.4% on 1Q18 respectively. Copper production increased 18.2% over 1Q18 due to increased head grade and recovery rate. Gold production increased 187.6% over 1Q18 primarily due to a 135.2% increase in head grade resulting from the increased contribution of Phase 4A.
Average gold mill head grades are expected to decline significantly over the remainder of 2019, particularly in the second half as softer, lower grade Phase 6 ore, and some material from mine stockpiles are processed. Average copper mill head grades are also expected to be lower over the remainder of the year.
Oyu Tolgoi is expected to produce 125 000 – 155 000 t of copper and 180 000 - 220 000 oz of gold in concentrates for 2019. Mill throughput for 2019 is expected to be approximately 40 million t.
Work continues on critical Shaft 2 equipping activities, central heating plant, mine infrastructure, underground materials handling systems and on priority underground development. Pre-sinking works for Shaft 3 and Shaft 4 have also commenced.
Rio Tinto, as project manager, has advised that the fit-out and commissioning work on Shaft 2 (the main production and services shaft) is now expected to be completed by the end of October 2019. As previously announced, more detailed geotechnical information and different ground conditions have required a review of the mine design and the development schedule. The impact of these changes, including the further delay to Shaft 2, will be included in the definitive estimate review, which is expected to be completed towards the end of the year. In parallel, Turquoise Hill will incorporate the impact of any further delay to sustainable first production beyond the end of 3Q21 in Turquoise Hill's cash flows, liquidity and financing projections. Turquoise Hill will also explore potential mitigation options.
Read the article online at: https://www.globalminingreview.com/finance-business/16042019/turquoise-hill-shares-1q19-production-figures/
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