MONTREAL--(BUSINESS WIRE)-- Turquoise Hill Resources Ltd. (TSX: TRQ) (NYSE: TRQ) (“Turquoise Hill” or the “Company”) today announced third quarter 2022 production and provided an Oyu Tolgoi mine and funding update.
Q3 2022 Highlights
Q3’22 Copper production of 36.3 thousand tonnes of copper in concentrate, a decrease of 13% vs Q3’21 and an increase of 19% vs Q2’22
Q3’22 Gold production of 42.7 thousand ounces of gold in concentrate, a decrease of 67% vs Q3’21 and a decrease of 10% vs Q2’22
Copper production guidance for 2022 remains within the range of 110,000 to 150,000 tonnes
Gold production guidance for 2022 has been revised from a range of 150,000 – 170,000 ounces to 165,000 – 185,000 ounces. The higher gold guidance reflects more reliable grade performance from mining of Phase 5 during Q3’22 with correlating higher recoveries. This builds on the higher gold production from completion of Phase 4B in H1’22.
Expenditures on property, plant and equipment for 2022 remains within the guidance range of $140 million to $170 million for surface operations.
Capital expenditures on the underground project1 are now expected to be $1.0 billion to $1.1 billion for 2022 compared to previous guidance of $1.1 billion to $1.3 billion as a result of improvements to construction productivity and the slower ramp-up of on-site construction resources that continued during Q3’22.
Total Operating Cash Costs2 for 2022 are now expected to be in the range of $855 million to $910 million compared to previous guidance of $850 million to $925 million, which is largely due to deferral of non-critical activities to contain inflationary pressures for key inputs, including fuel and ammonium nitrate.
Mill throughput of 10.68 million tonnes in Q3’22 was 14% higher than Q3’21 and 10% higher than Q2’22, which is in line with expectations due to higher mill availability.
Continued good progress in underground on-footprint construction and blasting saw firing of the 7th drawbell during Q3’23 and commencement of commissioning of the second truck chute.
Open Pit Operations, Underground Project and Operations
During Q3’22, the combined open pit and underground operations produced 36.3 thousand tonnes of copper in concentrate and 42.7 thousand ounces of gold in concentrate. Consistent with expectations, copper production was higher and gold production was lower compared with Q2’22. Mill feed for Q3’22 included approximately 543 thousand tonnes @ 0.82% Cu and 0.23g/t Au of underground development material. The remaining 10.1 million tonnes of mill feed was sourced from Phase 5, Phase 6 and open pit stockpiles. Mill head grades will remain low through to the end of the year as direct mill feed will continue to be supplemented by low grade stockpiles.
Shaft 3 and Shaft 4 cumulative sinking level were at 2883 metres and 4103 metres, respectively, below ground level. The rate of progress in shafts improved during Q3’22 due to an optimisation program, which commenced in Q1’22, and continued progress on these initiatives is necessary to continue to be aligned with the 2022 schedule update. Shaft 3 and 4 commissioning is expected in mid-2024, remaining aligned with the Company’s previous disclosure. Construction of the final major stage of materials handling infrastructure continues, including civil and underground works for the conveyor to surface. Undercut blasting and on-footprint construction work continued to progress. Commissioning of the second truck chute has commenced, and the 8th drawbell was fired on 13 October 2022, both ahead of schedule. Sustainable production, which is anticipated once between 16 to 21 drawbells have been blasted, is now anticipated in Q1’23.
Study work for Panels 1 and 2, which are required to support the ramp-up to 95,000 tonnes of ore per day, remains on track from completion in H1’23.
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1
Capital expenditures on the underground project is a supplementary financial measure. Refer to the section “Non-GAAP Financial Measures and Other Financial Measures” of this press release.
2
Total operating cash costs is a non-GAAP financial measure and is not a standardized financial measure. It is not intended to replace measures prepared in accordance with IFRS and might not be comparable to similar financial measures disclosed by other issuers. Refer to the section “Non-GAAP Financial Measures and Other Financial Measures” of this press release.
3
As at September 25, 2022
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