Mine production during the September quarter at Turquoise Hill Resources Oyu Tolgoi Copper-Gold Project in southern Mongolia was at record levels while concentrate produced and contained copper were on par with the previous quarter despite a shutdown of the concentrator in July.

Gold production decreased during the quarter as a result of lower grades but is expected to increase during the December quarter, according to the company’s CEO Jeff Tygesen.

Mined production increased 8.5% over the June quarter due to shorter hauling routes and ongoing productivity initiatives. Copper in concentrates increased 1.3% due to higher head grades. Gold in concentrates for the quarter decreased 48.5% due to slower than anticipated access to gold-rich ore.

Jeff Tygesen says increased copper and gold production is expected in the current quarter as higher-grade ore is accessed in the open pit.

There were almost 24 million tonnes of material mined from the open pit and 8.632 million tonnes of ore treated at average head grades of 0.75% copper, 0.56 grams/tonne gold and 1.9 grams/tonne silver. This resulted in production of 210,300 tonnes of concentrate, compared to the 215,500 tonnes produced in the previous quarter. This included 56,000 tonnes of copper, 123,000 ounces of gold and 388,000 ounces of silver. There were 226,000 tonnes of concentrate sold during the quarter.

Turquoise Hill continues to expect Oyu Tolgoi to produce 175,000 to 195,000 tonnes of copper and 600,000 to 700,000 ounces of gold in concentrates in 2015. The company expects copper production to be at the top of the range while gold production is expected to be in the middle of the range.

Following the filing of revised schedules for the 2015 Oyu Tolgoi Feasibility Study with the Mongolian Minerals Council in August, pre-start activities are under way in parallel with an update to the capital estimate, which is expected to be completed in the first quarter of 2016.

Pre-start activities include ramp-up of the owners and EPCM team, re-estimate activities, detailed engineering and early procurement for equipment and materials required for necessary critical works that are key enablers for recommencement of underground lateral development mining activity.

The company continues to expect signing of project financing by the end of 2015 and the decision for underground construction early in the second quarter of 2016.


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