Turquoise Hill Resources Ltd. (“Turquoise Hill” or the “Company”) today announced increased 2021 gold production outlook, and filed an updated technical report for the Oyu Tolgoi Project (the “Project”) prepared in accordance with the requirements of National Instrument 43-101 – Standards of Disclosure of Mineral Projects (“NI 43-101”) and CIM definition standards for Mineral Resources and Mineral Reserves (2014). Prepared with the assistance of AMC Consultants Pty Ltd, the 2020 Oyu Tolgoi Technical Report (the “2020 OTTR”), updates the Oyu Tolgoi Technical Report dated October 14, 2016. On July 2, 2020, Turquoise Hill announced that the 2020 Oyu Tolgoi Feasibility Study (the “Feasibility Study”) had been completed, incorporating the new mine design for Hugo North Lift 1 Panel 0 and that this new design reduced the mineral reserve estimates for the Hugo North underground mine due to the inclusion of two structural pillars, to the north and south of Panel 0, to protect ore handling infrastructure.

Gold production outlook for 2021 has increased to a range of 500,000 – 550,000 ounces from 450,000 – 500,000 ounces. This increase in the gold production outlook is the result of initiatives implemented by Oyu Tolgoi that have brought the higher grade gold bearing ore from the South West pit forward into 2020 and 2021.
Highlights of the 2020 OTTR as the underground mine ramps up include:
• Lowest quartile C1 cash costs estimated between 2021 - 20301
• Expected copper production growth of 315% from 2022 – 2028
• Expected gold production growth of 140% from 2022 – 2028
• Net cash flow after tax of $12.7 billion between 2024 – 20302
1 Based on Wood Mackenzie’s 2025 C1 Cash Cost curve (composite) for copper mines, using the annual average C1 cash cost of $0.65/lb for Oyu Tolgoi between 2021-2030. C1 cash costs is a non-GAAP (Generally Accepted Accounting Principles) measure. Non-GAAP measures have a non-standardized meaning under International Financial Reporting Standards (“IFRS”) and may not be comparable to similar measures used by other issuers. These measures are presented in order to provide investors and other stakeholders with additional understanding of performance and operations at the Oyu Tolgoi mine and are not intended to be used in isolation from, or as a replacement for, measures prepared in accordance with IFRS. Refer to Section – “Non-GAAP Measures” – of the Company’s management’s discussion and analysis for the three and six months ended June 30, 2020 (“Q2 2020 MD&A”).
2 Net cash flow after tax is presented on a 100% project and pre-finance basis, exclusive of any expenses related to financing. Refer to Table 22.5 – “Statement of Cash Flows” – in Chapter 22 of the 2020 OTTR for supporting information. The Company’s disclosed incremental funding requirement of $3.6 billion incorporates principal repayments of $1.9 billion and interest and similar charges of $1.1 billion. Refer to the Company’s July 16, 2020 press release.

The 2020 OTTR does not reflect the impacts of the COVID-19 pandemic, which continue to be assessed. A number of work fronts have been directly impacted by the pandemic, including but not limited to Shafts 3 and 4, which have been placed into care and maintenance since April 2020. These two Shafts will provide ventilation to support the ongoing development associated with production ramp up for Panels 1 and 2; they do not directly impact the production ramp up for Panel 0. At this stage it remains uncertain when Shafts 3 and 4 sinking works, which are dependent on specialist personnel returning to site, can be reasonably expected to resume. Work on primary crusher 1 and the materials handling system continues, but productivity has been significantly impacted by the reduction in specialist personnel on site as well as by the cap on site workforce numbers associated with COVID-19 precautions. In an attempt to mitigate the impact of these Covid-related effects, lateral development personnel are being strategically redeployed to support the work on critical path infrastructure components including primary crusher 1 and the materials handling system. A further update quantifying the impact of COVID-19 on costs and schedule is expected in Q4 2020.
Detailed study, design, engineering and optimisation work is ongoing to support the definitive estimate, which remains due in the fourth quarter of 2020.
The 2020 OTTR updates the Project’s mineral resources and mineral reserves and is now available under Turquoise Hill’s profile on SEDAR at www.sedar.com.
Disclosure of a scientific or technical nature in this news release was approved by Jo-Anne Dudley (FAusIMM(CP)), Chief Operating Officer of the Company, who is a “qualified person” as set forth in NI 43-101.
The Company will host a conference call and webcast to discuss OTTR 20 on Wednesday, September 2, 2020 at 8am EST / 5am PDT. The conference call can be accessed through the following dial-in details:
North America: +1 888 390 0546
United Kingdom: + 0 800 652 2435
Australia: +1 800 076 068
The conference call will also be simultaneously webcast on Turquoise Hill’s website at www.turquoisehill.com. An archived playback of the call will be available on the Company’s website.