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Turquoise Hill lifts FY'18 Oyu Tolgoi forecast on higher Q3 copper output YOY


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Turquoise Hill lifts FY'18 Oyu Tolgoi forecast on higher Q3 copper output YOY

Turquoise Hill Resources Ltd. lifted Oyu Tolgoi's full-year production forecast for copper in concentrate to between 140,000 and 155,000 tonnes, from between 125,000 and 155,000 tonnes.

The company, meanwhile, maintained production guidance for gold in concentrates at between 240,000 and 280,000 ounces in 2018.

In the third quarter, production from Oyu Tolgoi climbed to 39,400 tonnes of copper and 77,000 ounces of gold, as compared to 36,900 tonnes of copper and 31,000 ounces of gold a year ago. Silver output, meanwhile, declined to 230,000 ounces from 239,000 ounces last year.

Copper sales in the period slipped to 36,000 tonnes from 36,900 tonnes a year earlier. Gold sales increased to 55,000 ounces from 29,000 ounces, while silver sales dropped to 201,000 ounces from 229,000 ounces on a yearly basis.

Turquoise Hill said Oct. 15 that Rio Tinto notified the company of a delay in achieving sustainable first production at the Oyu Tolgoi copper mine in Mongolia.

The first sustainable output is now expected in late third quarter of 2021 instead of the first quarter of that year.

The delay comes on the back of the shaft 2 construction, which includes over four months of schedule contingency, as well as challenging ground conditions. First draw bell, meanwhile, remains on track for mid-2020, partly due to a change in the draw bell sequencing strategy.

Turquoise Hill kicked off a review into the cost and schedule re-forecast, and impact on the company's cash flows and liquidity.

Rio Tinto and Turquoise Hill will also undertake a definitive estimate review in the fourth quarter, which is expected to conclude in the third quarter of 2019.

The Australian Financial Review reported that Rio Tinto and the Mongolian government were close to settling a number of disputes, including outstanding tax bills and alternative power supply for Oyu Tolgoi.

Rio Tinto said in its Oct. 16 operational results that Oyu Tolgoi is progressing studies and preparations for suitable power solutions and continues to discuss the matter of domestic power supply with the Mongolian government.

Additionally, the company noted that a loader caught fire while operating at the Oyu Tolgoi underground mine on Oct. 15. All employees working underground at the time were evacuated safely.