Oyu Tolgoi 2015 production forecast cut
Rio Tinto-controlled Turquoise Hill Resources (TSE:TRQ) on Friday announced that despite a concentrator fire at its massive Oyu Tolgoi mine in Mongolia earlier in December, the copper-gold operation was on track to meet its expected full-year output.
Turquoise Hill owns 66% of Oyu Tolgoi with the remainder held by the government of the Asian nation, expects the mine to produce between 550,000oz – 600,000oz of gold this year and 135,000t – 150,000t copper in concentrates this year, forecasts it adjusted downwards in October.
The Vancouver-based company lowered its production estimates for 2015 to 600,000oz – 700,000oz of gold and 175,000t to 195,000t of copper in concentrates. Turquoise Hill said the variance in volume, when compared with the 2014 Oyu Tolgoi Technical Report, "was driven by minor differences in the mine schedule and design as a result of timing."
Operating cash costs were expected to be about $900 million and capital expenditures were expected to be $230 million, of which roughly $185 million related to sustaining capital.
Rio Tinto, which owns just over half of Turquoise Hill, has been in talks with the Mongolian government for a $5.4 billion expansion of Oyu Tolgoi for nearly two years, but no deal has been reached due to disagreements over funding of the underground project.