Turquoise Hill Resources said it expects the Oyu Tolgoi mine in Mongolia to produce 125,000 metric tons (mt) to 155,000 mt of copper and 240,000 ounces (oz) to 280,000 oz of gold in concentrates for 2018. Open-pit operations are expected to mine in Phase 6 in early 2018 and Phase 4 throughout the year. In addition, stockpiled ore will be processed during 2018. The increased gold production relative to the 2016 technical report is due to splitting Phase 4 into two parts (4A and 4B) and bringing production forward from future years.
Operating cash costs for 2018 are expected to be approximately $700 million. The reduction compared to expected 2017 operating cash costs reflects lower concentrator and logistics costs. Capital expenditures for 2018 on a cash-basis are expected to be approximately $150 million for open-pit operations and $1.1 billion to $1.2 billion for underground development.
Open-pit capital is mainly comprised of deferred stripping, equipment purchases, tailings storage facility construction and maintenance componentization. The main drivers of the 2018 estimate increase compared to the forecast for 2017 are equipment purchases and maintenance componentization.
Underground development capital includes both expansion capital and VAT. Based on the 2016 Oyu Tolgoi Technical Report, lateral development is expected to advance approximately 10 kilometers (km) during 2018. Turquoise Hill continues to expect the first draw bell in mid-2020 and sustainable first production in 2021.
