{"id":1184680,"date":"2020-05-15T06:07:04","date_gmt":"2020-05-15T11:07:04","guid":{"rendered":"https:\/\/www.mining.com\/?p=1024001"},"modified":"2020-05-15T06:07:04","modified_gmt":"2020-05-15T11:07:04","slug":"turquoise-hill-expects-oyu-tolgoi-blowout-to-top-1-8bn","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1184680","title":{"rendered":"Turquoise Hill expects Oyu Tolgoi blowout to top $1.8bn"},"content":{"rendered":"<p>Canada\u2019s Turquoise Hill Resources (TSX, NYSE: TRQ) <a href=\"https:\/\/www.turquoisehill.com\/site\/assets\/files\/5124\/q120_financialresultpressrelease_final_-_clean.pdf\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">said this week<\/a> that an ongoing expansion of the giant Oyu Tolgoi copper-gold-silver mine in Mongolia is expected to cost as much as an additional $1.8 billion.<\/p>\n<div class='ad-slot' id='div-gpt-ad-1561499308230-0'><script>googletag.cmd.push(function() {    googletag.display('div-gpt-ad-1561499308230-0');    googletag.pubads().addEventListener('slotRenderEnded', function (event) {        if (event.isEmpty) {            var id = event.slot.getSlotElementId();            var x = document.getElementById(id);            if(x == null) return;            if (x.parentElement.classList.contains('ad-slot')) {                x.parentElement.style.display = 'none';            }\t\t\t\t        }    });});<\/script><\/div>\n<p>The Rio Tinto-controlled company and mine operator had <a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.mining.com\/rio-tinto-goes-ahead-with-5-3-billion-expansion-of-oyu-tolgoi\/\" >expected the underground expansion to cost $5.3 billion<\/a> when it was approved in 2015. Last year, however, Turquoise Hill flagged stability risks associated with the original project design, adding that amendments to it could <a href=\"https:\/\/www.mining.com\/rio-tinto-faces-1-9bn-cost-blowout-further-delays-at-oyu-tolgoi-copper-gold-mine\/6263\/\"  rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">increase cost by as much as an additional $1.9 billion<\/a>.<\/p>\n<p>The Vancouver-based miner also warned at the time of\u00a0<a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.mining.com\/rio-tinto-delays-start-oyu-tolgoi-expansion-due-technical-issues\/\" >further delays of up to two and a half years<\/a>, noting it wouldn\u2019t know the exact scale of schedule and costs blowouts until mid-2020.<\/p>\n<figure class=\"wp-block-pullquote alignright\">\n<blockquote>\n<p>It also narrowed the estimated 16-30 months delay in the completion of the mine&#8217;s underground expansion to a 21-29-months range.<\/p>\n<\/blockquote>\n<\/figure>\n<p>Oyu Tolgoi\u2019s operator now says the<br \/>\nexpansion will need an extra $1.5 billion, with a range of $1.3bn to $1.8bn.<br \/>\nThis, however, may change due to any additional scheduling delays or increases<br \/>\nin capital costs arising from the impacts of the covid-19 pandemic, it said.<\/p>\n<p>In terms of project completion, Turquoise<br \/>\nanticipates it would take two extra years than originally planned for the<br \/>\nproject to begin production, with a 21 to 29 months range.<\/p>\n<p>\u201cIt is still a range. It is still<br \/>\nfairly broad, but it is narrower (than the 2019 estimates), and importantly, it<br \/>\nstayed within the range we have given,\u201d chief executive officer, Ulf Quellmann,&nbsp;said.<\/p>\n<h2><strong>Block caving<\/strong><\/h2>\n<p>Turquoise\u2019 boss noted the company had selected block caving for the mine design, as it considers it a \u201cmore resilient mine plan that provides the best opportunity for success.\u201d<\/p>\n<p>Quellmann also&nbsp;said that the decision<br \/>\nwas based on an extensive trade-off analysis taking into account the reserve<br \/>\nrecovery, geotechnical, constructability, operability, schedule, as well as cost<br \/>\nand value risks.<\/p>\n<p>Turquoise Hill has $1.8 billion,<br \/>\nwhich Quellmann says is sufficient to fund operations, underground and power<br \/>\ndevelopment into the third quarter of 2021.<\/p>\n<p>He also said that a definitive<br \/>\nestimate will be published in the second half of the year.<\/p>\n<p>Turquoise Hill is currently in<br \/>\ndiscussions with Oyu Tolgoi\u2019s 50.8%-owner, Rio Tinto (ASX, LON, NYSE: RIO), regarding<br \/>\na proposal for an interim $4 billion funding over and above the liquidity<br \/>\ncurrently available.<\/p>\n<p>The massive deposit&nbsp;was<br \/>\ndiscovered in Mongolia\u2019s south Gobi&nbsp;Desert in 2001. Rio Tinto gained<br \/>\ncontrol of it in 2012, with the government of Mongolia retaining a one-third ownership<br \/>\nof the asset.<\/p>\n<p>The ongoing expansion is expected<br \/>\nto lift production from 125,000\u2013150,000 tonnes in 2019 to 560,000 tonnes at<br \/>\npeak output, targeted for 2025. This would make it the biggest new copper mine<br \/>\nto come on stream in several years.<\/p>\n<p>Oyu Tolgoi produced 35,203 tonnes<br \/>\nof copper and 26,154 ounces of gold in the first three month of this year,<br \/>\nwhich puts it on track to achieve 2020 production guidance.&nbsp; <\/p>\n<p>One of Rio Tinto\u2019s top investors,<br \/>\nUS hedge fund Pentwater Capital, said in April it&nbsp;<a href=\"https:\/\/www.mining.com\/rio-tinto-grapples-with-fresh-investor-revolt-over-mongolia-mine\/\"  rel=\"noreferrer noopener\">would push for a management shakeup<\/a>&nbsp;at the operation,<br \/>\ndue to what it calls \u201ca massive devaluation\u201d of the asset. <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Oyu Tolgoi&#8217;s operator also narrowed the estimated 16-30 months delay in the completion of the underground expansion to a 21-29-months range.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[2849,949,369,4],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1184680"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1184680"}],"version-history":[{"count":7,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1184680\/revisions"}],"predecessor-version":[{"id":1184722,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1184680\/revisions\/1184722"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1184680"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1184680"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1184680"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}