Turquoise Hill Resources Ltd. (“Turquoise Hill” or the “Company”) today announced its financial results for the period ended March 31, 2020. All figures are in U.S. dollars unless otherwise stated.
“Our first quarter of 2020 delivered strong operational results in the open-pit mine, whilst importantly achieving an excellent safety record that the Oyu Tolgoi team has continued to maintain.
The COVID-19 pandemic has, provided unprecedented challenges, yet the Oyu Tolgoi open pit has continued to operate without interruptions, and the underground development, although experiencing delays with the construction of some underground infrastructure, has continued to progress. We are seeing the benefits of a highly skilled local workforce being able to adapt to the challenges presented by the restrictions imposed due to the COVID-19 pandemic.
In addition to presenting another solid quarter, we are announcing that the updated Panel 0 mine design is complete. This is an important milestone and is the basis of the Definitive Estimate due in the second half of 2020.
The block cave design anticipates a delay to OTFS16 key project milestones of sustainable production by 25 months (with a range of 21 to 29 months) and an increase in development capital cost of $1.5 billion (with a range of $1.3 to $1.8 billion). The preferred block cave design is a more resilient mine plan that provides the best opportunity for success based on an extensive trade-off analysis taking into account the reserve recovery, geotechnical, constructability, operability, schedule, cost and value risks. Given the importance of the Panel 0 mine design, Turquoise Hill engaged subject matter experts to undertake an external and independent assurance process that focused on the technical review of the proposed mine re-design options, and a review of the schedule and estimating process.

As at March 31, 2020, Turquoise Hill has $1.8 billion of available liquidity, which is sufficient to fund operations, underground and power development into Q3 2021. The Company is well progressed in its discussions with Rio Tinto regarding its proposal for sourcing incremental interim funding to provide flexibility to explore and evaluate long term financing options.” stated Ulf Quellmann, Chief Executive Officer of Turquoise Hill.

HIGHLIGHTS
• Safety is a top priority and is critical to our continued success. Oyu Tolgoi achieved another strong AIFR of 0.20 per 200,000 hours worked for the three months ended March 31, 2020.
• In Q1’20, Oyu Tolgoi produced 35,203 tonnes of copper and 26,154 ounces of gold and is on track to achieve 2020 copper and gold production guidance.
• Mill throughput was 10,889,000 tonnes and increased 17% versus Q1’19 due to lower ore hardness as well as high mill availability and effective utilisation performance.
• Our Oyu Tolgoi team has continued to maximise the production from the open pit and is expected to produce 140,000 to 170,000 tonnes of copper and 120,000 to 150,000 ounces of gold in concentrates in 2020 from both the open pit and the beginning of the underground development material being processed. Initiatives have been implemented by Oyu Tolgoi to bring forward the higher gold bearing ore into 2020; consequently, if these initiatives are successful, we anticipate gold production will be at the upper end of the guidance range.
• As anticipated, a design change for Panel 0 has been approved, which is supported by extensive geotechnical modelling and a thorough technical assurance program including independent third parties. The caving method of mining remains valid and many fundamentals of the mine design have remained unchanged. The approved design that now progresses to execution-level planning is based on a block cave approach, which leaves two pillars to the north and south of Panel 0. This design change results in a more resilient mine plan able to effectively operate with the Panel 0 geotechnical conditions as now understood. The Definitive Estimate of project cost and schedule currently remains on track for the second half of 2020, subject to any delays due to the impacts of the COVID-19 pandemic.
• The block cave design anticipates a delay to OTFS16 key project milestones of sustainable production of 25 months (with a range of 21 to 29 months) inclusive of an allowance for schedule contingency, and an increase in development capital cost of $1.5 billon (with a range of $1.3 to $1.8 billion), subject to any additional scheduling delays or increases in capital costs arising from the impacts of the COVID-19 pandemic, which may also reduce the available contingency in these estimates. These schedule and cost delays are within the estimates previously disclosed to the market and will undergo a period of further detailed design, engineering and optimisation to support the Definitive Estimate.
• Revenue of $130.7 million in Q1’20 decreased 62.9% from $352.7 million in Q1’19, primarily due to both a 78.2% decrease in gold production and a 23.1% decrease in copper production, reflecting the planned transition from mining Phase 4A and Phase 6A to lower grade Phase 4B, Phase 6B and stockpiles. Further, the average price of copper fell by 9.1% from Q1’19 to Q1’20, primarily due to the impact of the COVID-19 pandemic on global copper demand.
• Income for the period was $19.0 million compared with income of $105.2 million in Q1’19. This was primarily due to $198.8 million lower gross margin driven by the reduced revenue, partly offset by a higher deferred tax recovery of $107.7 million resulting from higher deferred tax assets recognised in Q1’20 compared to Q1’19. Income attributable to owners of Turquoise Hill in Q1’20 was $55.4 million or $0.03 per share, compared with income of $111.2 million or $0.06 per share in Q1’19.

• Cash generated from operating activities before interest and taxes was $1.5 million, a decrease from $49.8 million generated in Q1’19, primarily reflecting the impact of reduced revenue partly offset with favourable movements in working capital.
• Cost of sales was $2.57 per pound of copper sold, C1 cash costs1 were $2.07 per pound of copper produced, and all-in sustaining costs1 were $2.39 per pound of copper produced.
• Total operating cash costs1 of $188.1 million in Q1’20 decreased 5.1% from $198.1 million in Q1’19. This was principally due to lower milling and mining costs, lower maintenance costs, and lower fuel costs. Additionally, royalty costs were lower as a result of the lower sales revenue.
• During Q1’20 underground development spend was $291.5 million, resulting in total project spend since January 1, 2016 of approximately $3.8 billion.
• At the end of March 2020, Turquoise Hill had approximately $1.8 billion of available liquidity, split between remaining project finance proceeds of $0.2 billion and $1.6 billion of cash and cash equivalents. We currently expect to have enough liquidity to fund our operations and underground development into Q3 2021.
• Productivity improvements resulted in increased underground lateral development rates during Q1’20, with an average monthly rate of 1,822 equivalent metres (eqm) compared to 1,607 eqm in Q4’19, with March 2020 seeing a record 1,939 eqm. Despite the challenges of personnel movements posed by COVID-19, underground development performance continues as expected.
• Despite these gains, the unprecedented circumstances of the ongoing COVID-19 pandemic have had an impact on some aspects of the underground development, as local governments have restricted access to the mine for teams from Oyu Tolgoi, Rio Tinto and our construction partners, and although the open pit has continued to operate uninterrupted, COVID-19 restrictions have challenged our supply logistics.
• Shafts 3 and 4 have been placed into care and maintenance until expert service providers can complete technical commissioning of specialised equipment and commence sinking activities. The possibility of specialised support via remote means is being explored to minimise the impact of travel restrictions currently in place due to the COVID-19 pandemic on development progress, but delays are still anticipated. Work has also slowed on some critical underground material handling infrastructure, in particular the construction of primary crusher one, which has currently been reduced to day shift activity only from late March. The opportunity to return to a double shift pattern is currently being assessed.
• Ordinary course elongation of newly commissioned ropes may impact Shaft 2 ore hoisting. Payload and speed have been reduced to prolong the ability to use the hoist until specialised personnel are able to reach the site to perform the necessary adjustments. These mitigations allow development to proceed unimpeded and management is discussing the potential for remote support to rectify the situation whilst travel restrictions remain in place. People and materials movement via the service hoist continue to operate normally.
• The Company recognises the unprecedented situation surrounding the ongoing COVID-19 pandemic. Turquoise Hill has established a business resiliency team and is closely monitoring the effect of the COVID-19 pandemic on its business and operations and will continue to update the market on the impacts to the Company’s business and operations in relation to these extraordinary circumstances. See the “RISKS AND UNCERTAINTIES” section of the Company’s management discussion and analysis of financial condition and results of operations for the three months ended March 31, 2020 (the Q1 2020 MD&A).


1 Please refer to Section – NON-GAAP MEASURES – on page 19 of this press release for further information

OPERATIONAL OUTLOOK FOR 2020
Oyu Tolgoi is expected to produce 140,000 to 170,000 tonnes of copper and 120,000 to 150,000 ounces of gold in concentrates in 2020 from both the open pit and the beginning of the underground development material being processed. Although the mid-point copper production range guidance is higher in 2020 versus the 2019 guidance, a lower gold production year is expected for 2020. This is due to the need to mine through lower grade material on the periphery of the South West pit as Phase 4B sinks towards the highest gold and copper grades lower in the pit. It is anticipated that the higher grade ore will be accessed in 2021, resulting in a significant increase in gold production in 2021. Initiatives have been implemented by Oyu Tolgoi to bring forward some of the higher gold bearing ore into 2020; consequently, if these initiatives are successful, we anticipate gold production will be at the upper end of the guidance range. Mill throughput for 2020 is expected to be approximately 40 million tonnes.
Operating cash costs2 for 2020 are expected to be $800 million to $850 million.
Capital expenditure for 2020 on a cash-basis is expected to be approximately $80 million to $100 million for open-pit operations and $1.0 billion to $1.1 billion for the underground development, exclusive of any expenditure on power. The upper end of the open-pit operations guidance range was reduced from $120 million due to lower capitalised deferred stripping costs and lower estimated spend as a result of COVID-19. The underground development guidance was reduced from the original range of $1.2 billion to $1.3 billion as a result of the estimated impact of COVID-19, which has restricted access to the mine for teams from Oyu Tolgoi, Rio Tinto and our construction partners.
Open-pit capital is mainly comprised of deferred stripping, equipment purchases, tailings storage facility construction and maintenance componentization. Underground development capital includes both expansion capital and VAT.

C1 cash costs2 are expected to be in the range of $1.80 to $2.20 per pound of copper produced, up from 2019 guidance largely reflecting the reduced gold production estimate. Unit cost guidance assumes the midpoint of expected 2020 copper and gold production ranges and commodity price assumptions of $2.39 per pound copper and $1,513 per ounce gold.
2021 OUTLOOK
Production in 2021 is expected to increase to a range of 170,000 to 200,000 tonnes of copper, and 450,000 to 500,000 ounces of gold, as we transition to the higher grade ore in the lower benches of the pit and continue to increase the amount of underground development material processed.


2 Please refer to Section – NON-GAAP MEASURES – on page 19 of this press release for further information

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 Oyu Tolgoi LLC; the remaining 34% interest is held by Erdenes Oyu Tolgoi LLC (Erdenes), 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 2020 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 the end of Q1’20, Oyu Tolgoi had a total workforce (employees and contractors), including underground project construction, of approximately 13,600, of which 94% were Mongolians.

SELECTED FINANCIAL METRICS (1)
(1) Any financial information in this press release should be reviewed in conjunction with the Company‘s consolidated financial statements or condensed interim consolidated financial statements for the reporting periods indicated.
(2) Open-pit capital expenditure includes both sustaining and non-underground development activities.
(3) Please refer to NON-GAAP MEASURES – on page 19 of this press release for further information.
Q1’20 vs Q1’19
• Revenue of $130.7 million in Q1’20 decreased 62.9% from $352.7 million in Q1’19, primarily due to both a 78.2% decrease in gold production and a 23.1% decrease in copper production, reflecting the planned transition from mining Phase 4A and Phase 6A to lower grade Phase 4B, Phase 6B and stockpiles.
1Q1QChange12 months20202019%2019Revenue 130.7 352.7 (62.9%) 1,166.0 Income for the period 19.0 105.2 -- (476.9)Income attributable to owners of Turquoise Hill 55.4 111.2 -- (150.5)Basic and diluted income per share attributable to owners of Turquoise Hill 0.03 0.06 -- (0.07)Revenue by metals in concentrates Copper 96.9 223.9 (56.7%) 787.8 Gold 31.6 125.7 (74.9%) 365.0 Silver 2.2 3.1 (29.0%) 13.2 Cost of sales 145.9 169.1 (13.7%) 743.0 Production and delivery costs 104.7 126.0 (16.9%) 559.1 Depreciation and depletion 35.0 44.6 (21.5%) 183.9 Capital expenditure on cash basis 301.1 325.3 (7.4%) 1,308.1 Underground 291.5 296.4 (1.7%) 1,174.9 Open pit (2) 9.6 28.9 (66.8%) 133.2 Royalties 10.2 19.7 (48.2%) 64.0 Operating cash costs (3) 188.1 198.1 (5.1%) 774.5 Unit costs ($) Cost of sales (per pound of copper sold) 2.57 1.99 29.1% 2.25 C1 (per pound of copper produced) (3) 2.07 0.77 168.8% 1.37 All-in sustaining (per pound of copper produced) (3) 2.39 1.45 64.8% 2.08 Mining costs (per tonne of material mined) (3) 1.73 2.10 (17.5%) 1.88 Milling costs (per tonne of ore treated) (3) 5.58 8.06 (30.7%) 6.48 G&A costs (per tonne of ore treated) 2.95 3.65 (19.3%) 3.30 Cash used in operating activities (24.4) (5.7)328.1% (11.7)Cash generated from operating activities before interest and tax 1.5 49.8 (97.0%) 341.7 Interest paid 26.8 78.6 (65.9%) 427.5 Total assets 12,915 13,437 (3.9%) 12,822 Total non-current financial liabilities 4,384 4,389 (0.1%) 4,371

Further, the average price of copper fell by 9.1% from Q1’19 to Q1’20 primarily due to the impact of COVID-19 on global copper demand.
• Income for the period was $19.0 million compared with income of $105.2 million in Q1’19. This was primarily due to $198.8 million lower gross margin driven by the reduced revenue partly offset by a higher deferred tax recovery of $107.7 million resulting from higher deferred tax assets recognised in Q1’20 compared to Q1’19. Income attributable to owners of Turquoise Hill in Q1’20 was $55.4 million or $0.03 per share, compared with income of $111.2 million or $0.06 per share in Q1’19.
• Cost of sales of $145.9 million decreased 13.7% from $169.1 million in Q1’19 reflecting 31.9% lower volumes of concentrates sold partly offset by the impact of increased unit cost of sales per pound of copper sold due to decreased head grades of the material mined in the period.
• Unit cost of sales of $2.57 per pound of copper sold increased 29.1% from $1.99 reflecting lower average mill head grades and recoveries reflecting the transition from mining Phase 4A and Phase 6A to lower grade Phase 4B, Phase 6B and stockpiles.
• Capital expenditure on a cash basis of $301.1 million compared to $325.3 million in Q1’19, comprised of $291.5 million attributed to the underground project and $9.6 million to open-pit activities.
• Total operating cash costs3 of $188.1 million in Q1’20 decreased 5.1% from $198.1 million in Q1’19. This was principally due to lower milling and mining costs due to lower maintenance costs and lower fuel costs. Additionally, royalty costs were lower as a result of lower sales revenue.
• Oyu Tolgoi’s C1 cash costs3 of $2.07 per pound of copper produced increased from $0.77, primarily reflecting the impact of the 74.9% lower gold sales revenue credits in Q1’20 compared to Q1’19.
• All-in sustaining costs3 of $2.39 increased 64.8% from $1.45 in Q1’19. Similar to the C1 cash costs, the increase was primarily due to a reduction in gold revenue credits, partly offset by lower royalty costs resulting from the lower sales revenue in Q1’20 compared to Q1’19.
• Mining costs3 of $1.73 per tonne of material mined decreased 17.5% from $2.10 in Q1’19. The decrease was due to lower fuel and maintenance costs coupled with higher material mined benefitting from lower cycle times as mining in Q1’20 was focused on higher benches of the open pit compared with Q1’19.
• Milling costs3 of $5.58 per tonne of ore treated decreased 30.7% from $8.06 of ore treated in Q1’19, mainly due to higher milled ore resulting from the deferral of major plant shutdowns together with lower maintenance service costs.
• G&A costs per tonne of ore treated of $2.49 in Q1’19 decreased 19.3% from $3.65 per tonne of ore treated in Q1’19, mainly due to the impact of higher milled ore in the period.
• Cash used in operating activities of $24.4 million in Q1’20 was higher than the $5.7 million used in Q1’19. This was principally due to 62.9% decrease in sales revenue partly offset with $51.7 million lower interest paid in Q1’20 compared to Q1’19, resulting mainly from the difference in timing of payment of the completion support fee.


3 Please refer to Section – NON-GAAP MEASURES – on page 19 of this press release for further information

OYU TOLGOI
Safety performance and COVID-19 Response
The Oyu Tolgoi mine recorded another strong AIFR of 0.20 per 200,000 hours worked for the three months ended March 31, 2020. In addition to the continued commitment to reducing health and safety risk and injury at the Oyu Tolgoi mine site, the prevention of the spread of COVID-19 is a key priority for all Oyu Tolgoi and Turquoise Hill employees. To assist in curtailing the spread of COVID-19, the Company has instituted temperature and health screenings at the mine and a dedicated hotline is available for employees who are on or off site, which they can call for advice or information sharing.
The Company continues to closely monitor the impact of the COVID-19 pandemic on its business and operations. As disclosed on March 16, 2020, the Company established the Oyu Tolgoi Business Resilience Team, which meets on a daily basis and takes a considered and risk-based approach to managing our response and actions for the prevention of COVID-19. To assist with the battle against COVID-19, Oyu Tolgoi LLC has also donated MNT100 million to the Government of Mongolia, and through the Oyu Tolgoi-sponsored Gobi Oyu Development Support Fund, the Company further committed MNT200 million to the Umnugobi emergency committee, and MNT10 million to the Khanbogd Emergency Commission for prevention support. We are also sharing the prevention and hygiene controls we have in place with local companies.
The Company has been and will continue to engage with both the Mongolian and Chinese governments in an effort to minimise the impacts of restrictive actions taken in response to the COVID-19 pandemic on future sales. Oyu Tolgoi has notified its project lenders that the COVID-19 pandemic constitutes a force majeure event under its project finance facilities, which will have the effect of extending the June 30, 2028 project longstop date under those facilities for the duration of the force majeure. Certain suppliers of Oyu Tolgoi have declared force majeure on their contracts as a result of the COVID-19 pandemic; this has not had a material adverse impact on the business to date.
While the open pit at Oyu Tolgoi has continued to operate to plan despite COVID-19, the unprecedented impact of this pandemic has seen restrictions imposed by the Government of Mongolia on travel and movement of goods and people both across and within its borders, and has made it difficult for teams from Oyu Tolgoi, Rio Tinto and our construction partners to access the site. While some aspects of underground infrastructure, such as Shafts 3 and 4 have been impacted, underground development currently continues as per expectations. The Company is assessing the possibility of providing specialised support via remote means as a way of minimizing the impact of the access restrictions currently in place. While mine management believes the situation remains manageable, underground development progress could be impacted if experts continue to be unable to access the site by the end of Q2’20. See the “RISKS AND UNCERTAINTIES” section of the Company’s Q1 2020 MD&A.

Key operational metrics for Q1’20 are as follows:
Oyu Tolgoi Production Data
All data represents full production and sales on a 100% basis
1Q 2Q 3Q 4Q 1Q Full Year 2019 2019 2019 2019 2020 2019
Open pit material mined (‘000 tonnes) 23,943 24,408 24,844 28,122 26,834 101,316
Ore treated (‘000 tonnes) 9,255 10,394 10,040 11,088 10,889 40,777
Average mill head grades:
Copper (%) 0.57 0.46 0.37 0.42 0.42 0.45
Gold (g/t) 0.58 0.31 0.14 0.15 0.15 0.29
Silver (g/t) 1.25 1.20 1.03 1.06 1.14 1.13
Concentrates produced (‘000 tonnes) 210.1 180.6 131.3 152.6 164.5 674.6
Average concentrate grade (% Cu) 21.8 21.7 21.7 21.6 21.4 21.7
Production of metals in concentrates:
Copper (‘000 tonnes) 45.8 39.2 28.4 32.9 35.2 146.3
Gold (‘000 ounces) 120.1 71.8 25.6 24.3 26.2 241.8
Silver (‘000 ounces) 247 238 191 190 214 867
Concentrate sold (‘000 tonnes) 184.9 225.3 157.0 157.5 125.9 724.7
Sales of metals in concentrates:
Copper (‘000 tonnes) 38.5 46.6 32.4 32.3 25.8 149.9
Gold (‘000 ounces) 97.9 115.6 35.4 24.7 19.7 273.6
Silver (‘000 ounces) 200 245 207 244 146 896
Metal recovery (%)
Copper 83.8 80.2 75.1 74.2 74.3 78.7
Gold 70.1 63.6 54.7 48.2 46.0 63.6
Silver 63.2 59.2 56.0 53.5 51.5 58.1
Copper production in Q1’20 decreased 23% compared to Q1’19 due primarily to decreased head grade reflecting the planned transition from mining Phase 4A and Phase 6A to lower grade Phase 4B, Phase 6B and stockpiles.
Gold Production in Q1’20 decreased 78% over Q1’19 due primarily to decreased head grade, which also reflects the planned transition from mining Phase 4A and Phase 6A to lower grade Phase 4B, Phase 6B and stockpiles.
Mill throughput in Q1’20 was higher than the same quarter of 2019 due to lower ore hardness as well as good availability and effective utilisation in Q1’20.

Underground development
The 2016 Feasibility Study design calls for the development of three panels; Panel 0 followed by Panel 1 and Panel 2. As announced on July 15, 2019, stability risks had been identified with some components of the mine design.
As anticipated, a design change for Panel 0 has been approved, which is supported by extensive geotechnical modelling and a thorough technical assurance program including independent third parties. The caving method of mining remains valid and many fundamentals of the mine design have remained unchanged. The approved design is based on a block cave and includes two pillars; one to the north and one to the south of Panel 0. Study work is ongoing to assess the recoverability of the pillars.
The next phase of mine design studies will include design optimisation for Panel 0, and a review of mine design options for Panel 1 and Panel 2 to utilise the learnings from the Panel 0 work. The Panel 1 and Panel 2 studies, expected to be finalised as early as possible in 2021, will be informed by additional data collected from an underground drilling program which is in progress.
The block cave design for Panel 0 was selected based on an extensive trade-off analysis taking into account risks related to recovery, geotechnical, constructability, operability, schedule, cost and value risks. The change in design provides a more resilient mine design that is able to effectively operate with the Panel 0 geotechnical conditions as now understood.
The block cave design varies from the 2016 feasibility design through:
• Incorporation of structural pillars, located immediately north and south of the current Panel 0 boundaries;
• Relocation of ore handling infrastructure to the pillars;
• Initiation via a single undercut face (instead of two); and
• Initiation of panels 1 and 2 as independent panels or blocks.
The block cave design anticipates a delay to OTFS16 key project milestones of sustainable production of 25 months (with a range of 21 to 29 months) inclusive of an allowance for schedule contingency, and an increase in development capital cost of $1.5 billon (with a range of $1.3 to $1.8 billion), subject to any additional scheduling delays or increases in capital costs arising from the impacts of the COVID-19 pandemic, which impacts may also reduce the available contingency in these estimates. These schedule and cost delays are within the estimates previously disclosed to the market and will undergo a period of further detailed design, engineering and optimisation to support the Definitive Estimate due in the second half of 2020, again subject to any delays due to the impacts of the COVID-19 pandemic.
Preparations to put Shaft 3 and 4 into care and maintenance started in March as a result of travel restrictions affecting specialist expatriate personnel and equipment providers. Prior to this, Shaft 3 construction works progressed on sinking ventilation, compressor building, pump house and local mine dry. Shaft 4 compressor building, pump house, pumping system and mine dry were completed and the galloway and headframe work progressed towards being ready for sinking to start. The possibility of specialised support via remote means is being explored to minimise the impact of travel restrictions on development progress by allowing commissioning work to continue at Shaft 4.

Civil works continued in the primary crusher one chamber with mass pour number 10 completed in March. Work has slowed on some critical underground material handling infrastructure, in particular the construction of primary crusher one, which has currently been reduced to day shift activity only from late March. The opportunity to return to a double shift pattern is currently being assessed. The changes to Shaft 3 and 4 progress, as well as primary crusher one construction, has resulted in a reduction of approximately 1,400 people onsite.
Ordinary course elongation of newly commissioned ropes may impact Shaft 2 ore hoisting. Payload and speed have been reduced to prolong the ability to use the hoist until specialised personnel are able to reach the site to perform the necessary adjustments. These mitigations allow development to proceed unimpeded and management is discussing the potential for remote support to rectify the situation whilst travel restrictions remain in place. People and materials movement via the service hoist continue to operate normally.
Good underground development progress has continued in Q1’20. Focus on productivity gains on the most critical development areas over the past seven months has reaped substantial improvements. Underground development progressed 5.5 total equivalent kilometres and completed 3.2 cubic kilometres of mass excavation during the quarter. Since the restart of underground development, 38.4 total equivalent kilometres and 158.5 cubic kilometres of mass excavation have been completed. The following table provides a breakdown of the various components of completed development (excluding conveyor declines) since project restart:
Oyu Tolgoi Underground Project Development Progress Excluding Conveyor Declines
Year
Total Equivalent Development (Km) Lateral Development (Km) Mass Excavation ('000’ m3)
2016 1.6 1.5 3.0
Q1'17 1.0 0.8 5.2 Q2'17 1.4 0.9 9.2 Q3'17 1.4 1.2 8.3 Q4'17 2.2 1.9 8.9 2017 6.1 4.8 31.6
Q1'18 2.6 2.1 11.6 Q2'18 2.4 2.1 8.6 Q3'18 3.0 2.1* 23.3* Q4'18 2.3 1.6 16.0 2018 10.3 7.9 59.5
Q1'19 3.2 2.3 21.4 Q2'19 3.2 2.4 19.3 Q3'19 3.6 3.2 11.4 Q4'19 4.8 4.5 9.0 2019 14.9 12.4 61.1
Q1’20 5.5 5.3 3.2 2020 5.5 5.3 3.2
Total 38.4 32.0 158.5
Notes:
Totals may not match due to rounding.
*Lateral development and mass excavation amount for Q3’18 have been updated to reflect revised results.
see & read more on
https://www.turquoisehill.com/site/assets/files/5124/2020-05-13-trq-nr.pdf

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