The Oyu Tolgoi Copper-Gold Project in southern Mongolia set new records for concentrate production and throughput during the second quarter of 2015. Copper and gold in concentrates increased 64.6% and 176.7% respectively from the previous quarter.

Turquoise Hill Resources, which is majority owned by Rio Tinto, said the open pit operation began accessing higher-grade material during the second quarter with mining and processing of higher-grade ore expected to continue into the second half of 2015.

On July 9, 2015, Oyu Tolgoi marked the second anniversary of its first shipment of concentrate and Turquoise Hill expects the mine to produce 175,000 to 195,000 tonnes of copper and 600,000 to 700,000 ounces of gold in concentrates in 2015.

Oyu Tolgoi recorded revenue of $421.3 million in the June quarter on sales of 189,800 tonnes of concentrate, a 1.2% reduction over the first quarter reflecting lower gold prices partially offset by higher concentrate sales. Turquoise Hill generated operating cash flow of $239.2 million during the quarter.

The operation achieved a solid safety performance with an All Injury Frequency Rate of 0.22 per 200,000 hours worked for the first half of 2015.

The Oyu Tolgoi mine is about 550km south of Ulaanbaatar and 80km north of the Mongolia-China border. Mineralization consists of porphyry-style copper, gold, silver and molybdenum contained in a linear structural trend (the Oyu Tolgoi Trend) that has a strike length extending more than 26km.

Mineral resources have been identified in a series of deposits throughout this trend, including from south to north, the Heruga Deposit, the Southern Oyu deposits (Southwest Oyu, South Oyu, Wedge and Central Oyu) and the Hugo Dummett deposits (Hugo South, Hugo North and Hugo North Extension). Mining of ore commenced in May 2012 and first concentrate was produced in January 2013.

Oyu Tolgoi has initially been developed as an open-pit operation. A copper concentrator plant, with related facilities and necessary infrastructure to support a nominal throughput of 100,000 tonnes of ore per day, has been constructed to process ore mined from the Southern Oyu open pit. Long-term development plans are based on a 95,000-tonne-per-day underground block-cave mine. In August 2013, development of the underground mine was delayed pending resolution of matters with the Government of Mongolia, which was reached on May 18, 2015.

Following signing of the Oyu Tolgoi Underground Mine Development and Financing Plan with the Government in May, Turquoise Hill and Rio Tinto are advancing the approximate US$4.0 billion in project financing and updating the underground feasibility study. Turquoise Hill continues to expect signing of financing by the end of 2015.

The 2015 Oyu Tolgoi Feasibility Study, which was submitted to the Mongolian Minerals Council (MMC) in March 2015, has been tentatively accepted pending an update of schedules and alignment with the Underground Plan. This update is due to be resubmitted to the MMC in September 2015.

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