Oyu Tolgoi mine operator Turquoise Hill Resources, its parent Rio Tinto and the government of Mongolia reportedly are working together to resolve unsettled shareholder matters and finalize project finance to develop the underground mine at the copper-gold project. TurquoiseHill and Rio Tinto issued a statementsaying they have made an offer to thegovernment to resolve these matters in a manner the company believes "is beneficial to all stakeholders."
Upon successful resolution of shareholder matters, Turquoise Hill and Rio Tinto intend to formalize the agreement between the parties to enable underground development to commence.
Underground development is subjectto resolution of remaining shareholdermatters, agreement of a comprehensive funding plan including project finance, approval of the feasibility study by shareholders and acceptance by the Mongolian Minerals Council and receipt of necessary permits.
In its third quarter earnings update, Oyu Tolgoi's project production statistics showed that metals production was in line with the previous quarter. Production for the quarter was 36,600 metric tons (mt) of copper and 132,000 oz of gold in concentrates. Higher copper grades offset lower throughput due to a rake failure on one of Oyu Tolgoi's two thickeners.
Material mined of approximately 19.5 million metric tons was higher than Q2 but was impacted by lower equipment availability. The high-grade zone of the open pit was progressively accessed during Q3 with consistent mining of the high-grade zone starting in September. As a result, gold grades improved during Q3 and are expected to increase during Q4.
As a result of the delayed mine advancement in Q3, Turquoise Hill expects Oyu Tolgoi to produce between 550,000 and 600,000 oz of gold-in-concentrates for 2014. Previously anticipated Q4 gold-in-concentrates production is expected to shift to Q1 2015.