Turquoise Hill Resources reported in September the completion of a feasibility study for underground mine development at the Oyu Tolgoi copper-gold-silver mine in southern Mongolia. The statement noted that underground mine development at Oyu Tolgoi has been delayed since August 2013 to allow resolution of shareholder issues with the government of Mongolia. Further underground development remains subject to resolution of those issues; as well as approval of the feasibility study by Oyu Tolgoi's shareholders and the Mongolian Minerals Council; agreement on a comprehensive funding plan, including project finance; and receipt of all necessary permits.

Oyu Tolgoi is owned 66% by Turquoise Hill Resources and 34% by the government of Mongolia. Rio Tinto owns a 51% share of Turquoise Hill Resources and manages the project.

The Oyu Tolgoi underground feasibility study includes analysis of two production cases, the 2014 Reserve Case and the 2014 Life of Mine (LOM) Case.

The 2014 Reserve Case includes mineral reserves from the Southern Oyu Tolgoi open pit and the Hugo North Lift 1 block cave. The LOM Case reflects development flexibility that exists with respect to later phases of the Oyu Tolgoi deposits-Heruga, Hugo South, and the second lift of Hugo North-which will require separate development decisions in the future.

Accordingly, the 2014 LOM Case is effectively a preliminary economic assessment under NI 43-101 standards of disclosure and does not have as high a level of certainty as the 2014 Reserve Case.

The 2014 Reserve Case assumes processing of 1.5 billion mt of mineral reserves grading 0.85% copper, 0.32 g/mt gold, and 1.94 g/mt silver. Recoverable metal would total 24.9 billion lb of copper, 11.9 million oz of gold, and 78 million oz of silver over a mine life of 41 years. Capital investment requirements are estimated at $4.9 billion, with a payback period of nine years.

On the same day that Turquoise Hill reported completion of the Oyu Tolgoi underground feasibility study, it also reported that it had completed a detailed review of a tax ruling issued on September 10 by the Tax Dispute Resolution Council of the Mongolian General Taxation Department. The ruling reduced the amount of disputed tax, interest, and penalties claimed against Oyu Tolgoi by the government from approximately $127 million to approximately $30 million.

"While this significant reduction is welcome, there are aspects of the ruling that require further clarification," the Turquoise Hill statement said. "Oyu Tolgoi LLC will continue to work with the Mongolian Tax Authority to obtain further clarity on some of the findings in the ruling."

Turquoise Hill, Rio Tinto, and the government are also continuing discussions to resolve outstanding shareholder issues.

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