MONTREAL, March 2, 2022 /PRNewswire/ - Turquoise Hill Resources (the Company) today announced its financial results for the year ended December 31, 2021. All figures are in U.S. dollars unless otherwise stated.

"2021 was a year of significant accomplishments for Turquoise Hill and its shareholders. We achieved a safety All Injury Frequency Rate (AIFR) of 0.14 per 200,000 hours worked, the best full-year AIFR in the site's history, and an outstanding accomplishment for the OT team." stated Steve Thibeault, Turquoise Hill's Interim Chief Executive Officer. "We also took critical steps towards bringing the Oyu Tolgoi high grade underground mine into production, making Turquoise Hill one of the fastest growing major copper producers in the world."

"In addition, we reset and renewed our partnership with the Government of Mongolia which allowed us to proceed with the development of the underground mine. The Company also reached an amended funding agreement with Rio Tinto that provides a clear path to meeting the Company's estimated funding requirements. The underground mine remains on-track to reach sustainable production in H1 2023. These are remarkable outcomes considering the challenges posed by the COVID -19 pandemic, which resulted in our workforce being below normal staffing levels for much of the year."

FINANCIAL AND OPERATIONAL HIGHLIGHTS FOR 2021

Subsequent to December 31, 2021

Turquoise Hill successfully reached a mutual understanding for a renewed partnership with the Government of Mongolia and the board of directors of Oyu Tolgoi LLC (OT LLC) unanimously approved commencement of the undercut. On January 25, 2022, a ceremony was held at the mine site to celebrate the commencement of blasting the undercut that started the Oyu Tolgoi Hugo North underground mine production.
Turquoise Hill and Rio Tinto agreed to a comprehensive and binding, amended funding agreement that provides a pathway forward to address the Company's estimated funding requirements. See the section "Funding of OT LLC by Turquoise Hill" in this press release.
OT LLC signed an Electricity Supply Agreement (ESA) to provide Oyu Tolgoi with a long-term source of power from the Mongolian grid on terms fully agreed with the Government of Mongolia. Power will be delivered pursuant to the ESA once certain technical conditions are satisfied.
Full Year 2021

Oyu Tolgoi open-pit and underground workforce posted an AIFR of 0.14 per 200,000 hours worked, the best full-year AIFR the site has achieved.
As at December 31, 2021, Turquoise Hill had $0.7 billion of available liquidity in the form of cash and cash equivalents.
Turquoise Hill currently estimates a base case incremental funding requirement of $3.4 billion, compared to $3.6 billion estimated in the Company's Q3'21 earnings release.
Full year copper production of 163 thousand tonnes was within the Company's revised guidance of 150 – 180 thousand tonnes.
Full year gold production of 468 thousand ounces was within the Company's revised guidance of 400 – 480 thousand ounces.
Full year mill throughput of 39.1 million tonnes included over 1 million tonnes of underground development material.
Revenue of $1,971.0 million in 2021 increased 82.8% versus 2020. Copper and gold volumes increased by 9.0% and 157.1%, respectively. This was driven by the scheduled move to the higher grade areas of Phase 4B. Average prices were 53.4% higher for copper and 2.4% higher for gold.
Income in 2021 was $681.1 million versus $494.6 million in 2020 due primarily to $0.9 billion higher revenue offset by $0.6 billion additional tax charges in 2021 versus 2020. 2021 reflects a $277.8 million deferred tax asset expense (2020: recognition of $346.6 million), which resulted mainly from the utilisation of prior year tax losses against current year taxable income and from previously disclosed underground delays, which have contributed to a reduction in the loss carry-forwards anticipated to be utilised in future periods. Income attributable to owners of Turquoise Hill was $524.9 million ($2.61 per share) in 2021 compared with $406.3 million ($2.02 per share) in 2020.
Cost of sales in 2021 was $2.02 per pound of copper sold1 and C1 cash costs were $0.22 per pound of copper produced2, slightly higher than the Company's revised guidance of negative $0.20 per pound of copper to positive $0.20 per pound of copper produced. All-in sustaining costs were $0.87 per pound of copper produced2.
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1 Cost of sales per pound of copper sold is a supplementary financial measure. Please refer to Section "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

2 C1 cash costs per pound of copper produced and all-in sustaining costs per pound of copper produced are non-GAAP ratios. Please refer to Section – "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

Total operating cash costs3 in 2021 of $874.8 million, which increased 17.0% from $747.9 million in 2020, were slightly higher than the 2021 guidance range of $800 million to $850 million. The increase from the prior year was primarily driven by the impact of higher prices and volumes on royalties, together with additional COVID-19 related costs, higher consumable costs from processing harder Phase 4B ore and higher fuel prices, partially offset by lower power study costs.
Expenditures on property, plant and equipment in 2021 were $996.9 million, which included capital expenditures of $913.3 million on the underground project. The capital expenditure on the underground project, which is inclusive of $232.4 million of underground sustaining capital, was marginally higher than the revised 2021 guidance range of $0.8 billion to $0.9 billion. At December 31, 2021, total underground spend since January 1, 2016 was approximately $5.4 billion, including $0.3 billion of underground sustaining capital.
Cash generated from operating activities before interest and tax was $1,210.8 million in 2021 versus $371.2 million in 2020, driven mainly by $892.8 million higher revenue.
Breakthrough of the conveyor and service declines was achieved in H2'21.
Underground progress continues with Shaft 4 sinking and commencement of no-load Material Handling System 1 (MHS1), including Primary Crusher 1, commissioned in October 2021.
Fourth Quarter 2021

In Q4'21, Oyu Tolgoi produced 38.9 thousand tonnes of copper and 78.6 thousand ounces of gold which is lower than Q4'20 production of 41.6 thousand tonnes of copper and 87.8 thousand ounces of gold due to the processing of comparatively lower grade ore.
Mill throughput of 10.6 million tonnes in Q4'21 was higher than Q4'20 of 9.6 million tonnes primarily due to softer ore in the mill feed in the quarter.
Revenue of $503.9 million in Q4'21 increased 24.4% from $405.1 million in Q4'20 due to 35.8% higher average copper prices and 54.5% higher gold sales volumes. Q4'21 production volumes of copper and gold decreased by 6.5% and 10.2%, respectively, as a higher proportion of mill feed came from lower grade sources.
Income for the period was $207.3 million in Q4'21 versus $241.6 million in Q4'20, reflecting higher tax charges and total operating cash costs3 offset with $98.8 million higher revenue. The increase in revenues reflects higher copper prices and gold volumes. There was a $19.7 million de-recognition of deferred tax assets in Q4'21 (Q4'20: recognition of $86.1 million). The de-recognition in Q4'21 was due to the partial utilisation of 2016 losses against Q4'21 income, offset by an increase in temporary differences that relates primarily to tax depreciation on property, plant and equipment. Income attributable to owners of Turquoise Hill in Q4'21 was $156.4 million ($0.78 per share) versus $159.9 million ($0.79 per share) in Q4'20.
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3 Total operating cash costs is a non-GAAP financial measure. Please refer to Section – "Non-GAAP and Other Financial Measures"– on page 25 of this press release for further information.

Cost of sales in Q4'21 was $2.39 per pound of copper sold4 and C1 cash costs were $0.73 per pound of copper produced5. All-in sustaining costs were $1.66 per pound of copper produced5.
Total operating cash costs6 of $246.9 million in Q4'21 increased 24.9% from $197.7 million in Q4'20, primarily due to additional COVID-19 related costs, higher processing costs due to the harder ore being mined in Phase 4B and higher fuel prices.
Expenditures on property, plant and equipment in Q4'21 were $299.5 million, which included $259.2 million of capital expenditures on the underground project. The capital expenditure on the underground project included $57.8 million of underground sustaining capital expenditure. At December 31, 2021, total underground capital expenditure since January 1, 2016 was $5.4 billion, including $0.3 billion of underground sustaining capital.
Net cash generated from operating activities in Q4'21 was $149.4 million versus $69.5 million in Q4'20, reflecting a $70.0 million improvement in cash generated from operating activities before interest and tax due to a $91.0 million increase in gross margin from increased sales revenue, offset by $ 10.6 million higher operating expenses associated with the implementation of COVID-19 controls.
Oyu Tolgoi concentrate shipment volumes to customers remained challenged during the quarter and above target inventory levels remained at the end of Q4'21. The challenges were mainly a continuation of the COVID-19 related Mongolia / Chinese border restrictions that resulted in force majeure being declared from March 30, 2021. OT LLC continues to work closely with Mongolian and Chinese authorities to manage any supply chain disruptions.
Shaft 4 sinking activities re-commenced in October 2021 with advancement at 148 metres below ground level at December 31, 2021. Shaft 3 readiness works continued with sinking commencement expected by the end of Q1'22.
Beyond the incurred impact of delayed undercut commencement, Panels 1 and 2 are expected to be delayed due to COVID-19 related work restrictions impacting both Shafts 3 and 4 and underground development progress as well as changes to mining scope. Efforts to minimise the delays to Panel 1 and Panel 2 due to ventilation constraints ahead of Shaft 3 and 4 commissioning continue. See the section "Oyut Open-Pit Operations and Hugo North Underground" of this press release.
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4 Cost of sales per pound of copper sold is a supplementary financial measure. Please refer to Section "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

5 C1 cash costs per pound of copper produced and all-in sustaining costs per pound of copper produced are non-GAAP ratios. Please refer to Section – "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

6 Total operating cash costs is a non-GAAP financial measure. Please refer to Section – "Non-GAAP and Other Financial Measures"– on page 25 of this press release for further information.

OPERATIONAL OUTLOOK FOR 2022

Oyu Tolgoi is expected to produce 110 to 150 thousand tonnes of copper and 115 to 165 thousand ounces of gold in concentrates in 2022 from processing of open-pit and underground development material as well as stockpiles. Gold and copper production is forecast to be lower in 2022 vs 2021 due to stripping of the next cutback and processing lower grade stockpile material.

Total operating cash costs7 for 2022 are expected to be $800 million to $875 million.

Expenditures on property, plant and equipment for 2022 are expected to be approximately $170 million to $200 million for open-pit operations and $1.2 billion to $1.4 billion for the underground.

Open-pit capital is mainly comprised of deferred stripping, equipment purchases, tailings storage facility construction and maintenance componentisation. Underground capital is inclusive of VAT.

2022 C1 cash costs are expected to be in the range of positive $1.95 to positive $2.35 per pound of copper produced8, which is higher than 2021 due to lower gold production in 2022, as mining transitions to the next phase of open-pit development. Unit cost guidance assumes the midpoint of the expected 2022 copper and gold production ranges and a gold commodity price assumption of $1,801 per ounce.

Estimates of future production, expenditures on property, plant and equipment, total operating cash costs9 and C1 cash costs per pound of copper produced8 presented in this press release are based on mine plans that reflect the expected method by which the Company will mine reserves at Oyu Tolgoi. Actual gold and copper production and associated costs may vary from these estimates due to a number of operational and non-operational risk factors (see the section "Forward-Looking Statements and Forward-Looking Information" of this press release for a description of certain risk factors that could cause actual results to differ materially from these estimates).

OUR BUSINESS

Turquoise Hill is an international mining company focused on the operation and continued development of the Oyu Tolgoi copper-gold mine in Mongolia, which is the Company's principal and only material mineral resource property. The Company's ownership of the Oyu Tolgoi mine is held through a 66% interest in OT LLC; the remaining 34% interest is held by Erdenes Oyu Tolgoi LLC (Erdenes or EOT), a Mongolian state-owned entity.

The Oyu Tolgoi property is located approximately 550 kilometres south of Ulaanbaatar, Mongolia's capital city, and 80 kilometres north of the Mongolia-China border. The property is cut by the Oyu Tolgoi trend, a 12 kilometres north-south orientated corridor which is host to the known deposits, Hugo North, Hugo South, Oyut and Heruga. Open-pit mining operations commenced at Oyut in 2013. The Hugo North deposit (Lift 1) is currently being developed as an underground operation.

The copper concentrator plant, with related facilities and necessary infrastructure, was originally designed to process approximately 100,000 tonnes of ore per day from the Oyut open-pit. However, since 2014, the concentrator has consistently achieved a throughput of over 105,000 tonnes per day due to improvements in operating practices. Concentrator throughput for 2022 is targeted at over 110,000 tonnes per day and expected to be approximately 40 million tonnes for the year due to improvements in concentrator performance and more favourable ore characteristics.

At December 31, 2021, Oyu Tolgoi had a total workforce (employees and contractors), including for underground project construction, of approximately 14,400 workers, of which over 96% were Mongolian.

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7 Total operating cash costs is a non-GAAP measure that is forward-looking information. Please refer to Section – Non-GAAP and Other Financial Measures – on page 25 of this press release for further information.

8 C1 cash costs per pound of copper produced is a non-GAAP ratio. Please refer to Section – "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

9 Total operating cash costs is a non-GAAP financial measure. Please refer to Section – "Non-GAAP and Other Financial Measures"– on page 25 of this press release for further information.

SELECTED ANNUAL FINANCIAL INFORMATION

($ in millions, except per share information)


Year Ended December 31. 2021 2020 2019
Revenue $ 1,971.0 $ 1,078.2 $ 1,166.0

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Full Year 2021 vs 2020

Revenue of $1,971.0 million in 2021 increased 82.8% compared to $1,078.2 million in 2020. Copper and gold volumes increased by 9.0% and 157.1% respectively. This was driven by the scheduled move to the higher grade areas of Phase 4B. Average prices were 53.4% higher for copper and 2.4% higher for gold.
Income in 2021 was $681.1 million versus $494.6 million in 2020 due primarily to $0.9 billion higher revenue offset by $0.6 billion additional tax charges in 2021 versus 2020. 2021 reflects a $277.8 million deferred tax expense (2020: recognition of $346.6 million), which resulted mainly from the utilisation of prior year tax losses against current year taxable income and from previously announced underground delays, which contributed to a reduction in the loss carry-forwards anticipated to be utilised in future periods. Income attributable to owners of Turquoise Hill was $524.9 million ($2.61 per share) in 2021 compared with $406.3 million ($2.02 per share) in 2020.
Cost of sales in 2021 was $622.3 million versus $669.4 million in 2020, as the transition to higher grade ore in Phase 4B provided an opportunity to deliver increased concentrate volumes despite lower milling rates and reduced material mined.
Expenditures on property, plant and equipment for 2021 were $996.9 million compared to $1,080.5 million in 2020, comprising $913.3 million (2020 - $1,021.1 million) of underground capital expenditure, which included $232.4 million (2020 - $94.4 million) in underground sustaining capital expenditure, as well as open-pit expenditure of $83.6 million (2020 - $59.4 million). 2021 open-pit capital expenditure includes deferred stripping of $26.8 million and tailings storage facility spend of $26.2 million.
Total operating cash costs10 in 2021 of $874.8 million increased 17.0% from $747.9 million in 2020. The increase from the prior year was primarily driven by the impact of higher prices and volumes on royalties, together with additional COVID-19 related costs, higher consumable costs from processing harder Phase 4B ore and higher fuel prices, partially offset by lower power study costs.
Cost of sales in 2021 was $2.02 per pound of copper sold11 in 2021, compared to $2.20 per pound of copper sold in 2020, reflecting a lower unit cost from fixed costs efficiencies due to higher concentrate production as well as the impact of higher volumes of metals in concentrate sold.
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10 Total operating cash costs is a non-GAAP financial measure. Please refer to Section – "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

11 Cost of sale per pound of copper sold is a supplementary financial measure. Please refer to Section – "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

C1 cash costs in 2021 were $0.22 per pound of copper produced12, decreasing from $1.45 per pound of copper produced in 2020. The decrease was primarily driven by the impact of higher gold credits due to the higher gold revenue in 2021.
All-in sustaining costs in 2021 were $0.87 per pound of copper produced12 versus $1.94 per pound of copper produced in 2020. All-in sustaining costs were impacted by the same factors that impacted C1 cash costs offset by the impact of a $24.2 million increase in open-pit sustaining capital expenditure compared to 2020. Deferred stripping was $21.7 million higher in 2021 due to higher waste mined ahead of the transition of mining to Phase 5.
Mining costs in 2021 were $2.24 per tonne of material mined13 versus $1.80 per tonne of material mined in 2020. The increase was mainly due to lower material mined, which resulted from changes in mine design and a reduction in open-pit workforce levels to manage COVID-19, as well as higher mining costs. The increase in mine operating cost was mainly from COVID-19 related costs and higher consumables prices as well as higher fuel and tire consumption rates due to higher cycle times related to the current mining strategy.
Milling costs in 2021 were $7.13 per tonne of ore treated13 versus $6.35 per tonne of ore treated in 2020. The increase was from higher milling costs and 2.7% lower milled ore. The higher milling costs mainly resulted from bringing forward a maintenance shutdown from 2022 and processing harder ore compared to 2020.
G&A costs in 2021 were $3.99 per tonne of ore treated14 versus $3.11 per tonne of ore treated in 2020. The increase was mainly due to higher insurance, higher COVID-19 related costs and higher support costs in preparation for the undercut.
Net cash generated from operating activities was $576.1 million in 2021 versus $40.9 million during 2020. This was primarily due to $0.9 billion higher revenue and lower interest paid as a result of a lower average LIBOR rate, partially offset by the impact of $17.7 million lower interest received on bank deposits and money market funds and $327.2 million higher taxes paid, which was driven by $356 million in payments made to the Government of Mongolia relating to the 2013 to 2015 and 2016 to 2018 tax assessments subject to international tax arbitration proceedings.
Q4'21 vs Q4'20

Revenue of $503.9 million in Q4'21 increased 24.4% from $405.1 million in Q4'20. Revenue increased due to 35.8% higher average copper prices and 54.5% higher gold sales volumes. Q4'21 production volumes of copper and gold decreased by 6.5% and 10.2% respectively, as a higher proportion of mill feed came from lower grade sources.
Income for the period was $207.3 million in Q4'21 versus $241.6 million in Q4'20, reflecting higher tax charges and total operating cash costs15 offset by $98.8 million higher revenue. The increase in revenues reflects higher copper prices and gold volumes. There was a $19.7 million de-recognition of deferred tax assets in Q4'21 due to the utilisation of prior year tax losses (Q4'20: recognition of $86.1 million). The de-recognition in Q4'21 was due to the partial utilisation of 2016 losses against Q4'21 income, offset by an increase in temporary differences that relates primarily to tax depreciation on property, plant and equipment Income attributable to owners of Turquoise Hill in Q4'21 was $156.4 million ($0.78 per share) versus $159.9 million ($0.79 per share) in Q4'20.
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12 C1 cash costs per pound of copper produced and all-in sustaining costs per pound of copper produced are non-GAAP ratios. Please refer to Section – "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

13 Mining costs per tonne of material mined and milling costs per tonne of ore treated are non-GAAP ratios. Please refer to Section – "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

14 G&A costs per tonne of ore treated is a supplementary financial measure. Please refer to Section – "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

15 Total operating cash costs is a non-GAAP financial measure. Please refer to Section – "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

Cost of sales of $181.4 million in Q4'21 increased 4.5% from $173.6 million in Q4'20, primarily driven by higher labour costs due to COVID-19 restrictions, higher prices for fuel and explosives and timing differences on maintenance activities.
Expenditures on property, plant and equipment were $299.5 million in Q4'21 versus $263.0 million in Q4'20, comprised of $259.2 million (Q4'20: $237.5 million) in underground capital expenditure, including $57.8 million (Q4'20: $44.5 million) in underground sustaining capital expenditure as well as $40.3 million (Q4'20: $25.5 million) in open-pit sustaining capital expenditure.
Total operating cash costs16 of $246.9 million in Q4'21 increased 24.9% from $197.7 million in Q4'20, primarily due to additional COVID-19 related costs, higher processing costs due to the harder ore being mined in Phase 4B and higher fuel prices.
Unit cost of sales of $2.39 per pound of copper sold17 in Q4'21 increased 14.9% from $2.08 per pound of copper sold in Q4'20, reflecting an increase in unit fixed costs from lower metal production.
Oyu Tolgoi's C1 cash costs of $0.73 per pound of copper produced18 in Q4'21 decreased from $0.76 per pound of copper produced in Q4'20, primarily reflecting the impact of a $58.2 million increase in gold revenue.
All-in sustaining costs of $1.66 per pound of copper produced18 in Q4'21 increased from $1.45 per pound of copper produced in Q4'20, driven by a $14.8 million increase in open-pit sustaining capital expenditure offset by the impact of the higher gold revenue.
Mining costs of $2.36 per tonne of material mined18 in Q4'21 increased 27.4% from $1.85 per tonne of material mined in Q4'20. The increase was mainly driven by timing differences on maintenance activity, higher labour costs due to COVID-19 restrictions, and higher fuel and blast costs due to market price increases.
Milling costs of $7.19 per tonne of ore treated18 in Q4'21 decreased 1.3% from $7.29 per tonne of ore treated in Q4'20. The decrease is due to higher milled ore partially offset by the impact of additional maintenance costs due to bringing forward a maintenance shutdown from 2022, higher labour costs due to COVID-19 restrictions, and higher fuel and explosive costs due to market price increases.
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16 Total operating cash costs is a non-GAAP financial measure. Please refer to Section – "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

17 Cost of sales per pound of copper sold is a supplementary financial measure. Please refer to Section – "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

18 C1 cash costs per pound of copper produced, all-in sustaining costs per pound of copper produced, mining costs per tonne of material mined and milling costs per tonne of ore treated are non-GAAP ratios. Please refer to Section – "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

G&A costs of $3.90 per tonne of ore treated19 in Q4'21 increased 19.0% from $3.28 per tonne of ore treated in Q4'20. The increase was mainly due to higher COVID-19 related costs and higher support costs associated with preparation for the undercut.
Net cash generated from operating activities was $149.4 million in Q4'21 versus $69.5 million in Q4'20, reflecting a $70.0 million improvement in cash generated from operating activities before interest and tax, which resulted from a $91.0 million increase in gross margin from increased sales revenue offset by $10.6 million higher operating expenses associated with the implementation of COVID-19 controls.
OYU TOLGOI

Operations, Safety Performance and COVID-19 Update

The Oyu Tolgoi open-pit and underground workforce posted an AIFR of 0.14 per 200,000 hours worked for the period ending December 31, 2021, the lowest full-year AIFR achieved to date.

During Q4'21, Mongolia continued to experience the impact of the ongoing COVID-19 pandemic. COVID-19 restrictions in Q4'21 adversely impacted both open-pit operations and underground development, and Oyu Tolgoi's ability to maintain normal roster changes for workers remained challenged. This resulted in a further $35 million increase in estimated underground development capital since September 30, 2021. The total cumulative increase to the Definitive Estimate (the confirmatory analysis of the underground project costs and schedule contained in MSS20) underground development capital cost due to the impacts of COVID-19 through the end of Q4'21 was $175 million. This increase includes the currently known, incremental, time-related costs of COVID-19 restrictions; however, it does not include any impacts arising from associated schedule delays or delayed commitments caused by the delays to approval of the full budget uplift which has now been approved by the OT LLC board of directors (OT LLC Board). A reforecast of cost and schedule for the remaining project scope is now expected in Q2'22. The Company continues to monitor COVID-19 related impacts and will update the market as appropriate.

Oyu Tolgoi continues to implement multiple COVID-19 controls at site, including maintaining 1.5 metres social distancing, always wearing masks, regular hand washing, sanitisation, and personnel temperature checks at all high traffic areas. The Oyu Tolgoi site maintains a 5-day mandatory isolation for workers prior to entering the mine site. In Ulaanbaatar, office-based employees are working under flexible work arrangements.

With the arrival of the Omicron variant of COVID-19, cases increased at site during early 2022, however shorter quarantine periods have been maintained and cases are being managed well. Some interruption to work progress is expected in Q1'22 as a result and the Company continues to monitor the situation.

Oyu Tolgoi concentrate shipment volumes to customers remained challenged during the quarter and above target inventory levels remained at the end of Q4'21. The challenges were mainly a continuation of the COVID-19 related Mongolia / Chinese border restrictions that resulted in force majeure being declared from March 30, 2021. Shipments to Chinese customers recommenced on April 15, 2021, and Oyu Tolgoi continues to work closely with Mongolian and Chinese authorities to manage any supply chain disruptions. The force majeure will remain in place until there are sufficiently sustained volumes of convoys crossing the border to ensure OT LLC's ability to meet its on-going commitments to customers and to return onsite concentrate inventory to target levels.

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19 G&A costs per tonne of ore treated is a supplementary financial measure. Please refer to Section – "Non-GAAP and Other Financial Measures" – on page 25 of this press release for further information.

Selected Operational Metrics

Oyu Tolgoi Production Data

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