Turquoise Hill announced earlier this week the third quarter 2019 production for Oyu Tolgoi and provided an update on its underground development.
The company claimed to have been on track to achieve its forecast target of 125,000 to 155,000 tons of copper and up to 230,000 ounces of gold. However, production numbers had plunged as the company moved to the planned plant shutdown from September to October in addition to lower grades.
According to the report, Turquoise Hill produced 28,446 tons of copper, down by 27.8 percent compared to the third quarter of 2018. Gold production also declined 66.8 percent year-over-year to stand at 25,607 ounces.
On the other hand, mill throughput increased by four percent year-over-year and decreased 3.4 percent sequentially
“We continue to focus on the development of an ultimate mine design that will deliver maximum value for Turquoise Hill shareholders. The development of a world-class ore body such as Oyu Tolgoi into a long life low cost tier 1 asset requires a mine design that ensures the safety of our workforce while providing a foundation to mine this substantial ore body for decades to come. We continue to see a clear pathway to sustainable first production and will continue to work with Rio Tinto and the government of Mongolia to bring this underground development project to a successful completion,” said Ulf Quellmann, chief executive officer of Turquoise Hill.
He added, “The average copper and gold grades have continued to decline in accordance with our mine plan. The Phase 4A higher grade ore has been depleted and as planned the primary ore source changed to Phase 4B and lower grade stockpiles. In addition to mining lower grade ore, the processed ore tonnage was lower than the previous quarter due to lower mill availability resulting from a shift of planned maintenance from October to September.”
As anticipated, the transition from mining Phase 4A to lower grade Phase 4B and stockpiles resulted in:
Lower copper head grade of .37 vs .46 Q2 2019
Lower gold head grade of .14 vs .31 Q2 2019
Concentrate production decreased 27.2 percent vs Q2 2019
Copper production decreased 27.4 percent vs Q2 2019
Gold production decreased 64.3 percent vs Q2 2019
Underground Development
Shaft 2 continues to hold to the October 2019 commissioning schedule, according to Turquoise Hill. Rope up is complete for both the service cage and the production hoists. The service cage has completed load tests and automatic test runs while the load testing of the production buckets is on track for mid-October. Other key infrastructure components completed during the last quarter include the central heating plant, the Shaft 2 jaw crusher system and the Shaft 2 surface discharge conveyor.
Lateral underground development in the third quarter has reportedly accelerated. Extensive focus on productivity gains on the most critical development areas over the past five months has reaped substantial improvements. In September, the team achieved a record 1,385 equivalent meters of lateral underground development.
Turquoise Hill says a number of mine design options are under consideration to complete the project to address the confirmed stability risks associated with components of the feasibility study 2016 mine design.
Mine planning decisions regarding the first panel of mining, Panel 0, the mid-access drives, productivity inputs, and ore pass locations continue and are expected to be completed by April 2020. The resulting pre-feasibility study designs are being detailed to feasibility study level, before being scheduled and costed to form the definitive estimate, due in the second half of 2020.
