OverviewOyu Tolgoi Project website
Oyu Tolgoi is one of the world's largest new copper-gold mines and is located in the South Gobi region of Mongolia, approximately 550 km south of the capital, Ulaanbaatar, and 80 km north of the Mongolia-China border.
The comprehensive Oyu Tolgoi Investment Agreement took effect March 31, 2010, following confirmation by the Government of Mongolia that procedural and administrative conditions contained in the Investment Agreement had been satisfied within the allocated six-month period that has followed the agreement's official signing in October 2009. The comprehensive Investment Agreement now has taken full legal effect.
On October 6, 2009, Turquoise Hill Resources and Rio Tinto signed a long-term, comprehensive Investment Agreement with the Government of Mongolia for the construction and operation of the Oyu Tolgoi copper-gold mining complex. The agreement creates a partnership between the Mongolian Government -- which acquired a 34% interest in the project -- and Turquoise Hill Resources, which retained a controlling 66% interest in Oyu Tolgoi. Global miner Rio Tinto, which joined Turquoise Hill Resources as a strategic partner in October 2006, is managing the development of Oyu Tolgoi.
Oyu Tolgoi has been producing and exporting copper and gold concentrate since 2013.
Major highlights for the second quarter of 2016 include the following:
• Oyu Tolgoi achieved an excellent safety performance with an All Injury Frequency Rate of 0.13 per 200,000 hours worked for the six months ended June 30, 2016.
• On May 5, 2016, Oyu Tolgoi received the formal notice to proceed for underground development by the boards of Turquoise Hill, Rio Tinto and Oyu Tolgoi LLC.
• As part of the notice to proceed process, the 2016 Oyu Tolgoi Feasibility Study was approved.
• In June 2016, Oyu Tolgoi signed a critical contract with Jacobs Engineering Group to provide engineering, procurement and construction management services for underground development.
• Major contractor mobilization for the sinking of Shafts #2 and #5, underground development, critical construction works and maintenance are all progressing.
• As of June 30, 2016, Oyu Tolgoi had drawn down approximately $4.3 billion of the project finance facility and used all net proceeds to pay down shareholder loans payable to Turquoise Hill.
• Turquoise Hill deposited net project finance funds of approximately $4.2 billion with Rio Tinto in Q2'16.
• Oyu Tolgoi recorded revenue of $329.7 million in Q2'16, a decrease of 22.0% over Q1'16, reflecting mainly lower gold sales volumes.
• Turquoise Hill generated operating cash flow before interest and taxes of $161.6 million during Q2'16.
• For Q2'16, Turquoise Hill reported income from continuing operations attributable to shareholders of $29.8 million.
• In Q2'16, concentrator throughput was broadly consistent with Q1'16; resulting in average throughput of approximately 105,000 tonnes per day for the quarter.
• Copper production in Q2'16 declined 10.3% over Q1'16 reflecting lower grades from reduced mining in Phase 2 and relative lower recovery from Phase 6 ore.
• As expected, gold production in Q2'16 declined approximately 52% over Q1'16, due to lower grades from reduced mining in Phase 2.
• Concentrate volumes sold in Q2'16 increased 6.7% over Q1'16.
• For Q2'16, Oyu Tolgoi's C1 costs were $1.12 per pound of copper and all-in sustaining costs were $1.55 per pound of copper.
• Sales contracts have been signed for essentially all of Oyu Tolgoi's expected 2016 concentrate production.
• Open pit, cash-basis capital expenditure for 2016 (excluding underground expenditure) is now expected to be approximately $200 million.
• Operating cash costs for 2016 are now expected to be $840 million.
• Turquoise Hill's cash and cash equivalents at June 30, 2016 were approximately $1.5 billion.
Cautionary Note to U.S. Investors
The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms on this website such as "measured," "indicated," and "inferred" "resources," which the SEC guidelines generally prohibit U.S. registered companies from including in their filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 40-F which may be secured from us, or from the SEC's website at www.sec.gov/edgar.shtml.