Turquoise Hill Resources (NYSE: TRQ) reported on Thursday that Oyu Tolgoi mine Q1 gold production plunged 78% year-over-year to 26,154 ounces, and that copper output slid 23% to 35,203 tonnes.
The Rio Tinto-controlled company that operates the mine in Mongolia reported that sales in January and February were impacted by curtailed operations in China during peak covid-19 restrictions, but strong collections occurred in March and sales exceeded expectations at the end of the quarter.
“Concentrate transportation remains a challenge in the current environment and engagement with both the Mongolian and the Chinese governments continues in an effort to minimize the impact on future sales,” Turquoise Hill said in a media release.
“Oyu Tolgoi is adapting to the challenges posed by the covid-19 pandemic on both the open pit and underground operations, with the open-pit continuing to operate without interruption, while the underground development is experiencing a slow-down,” CEO Ulf Quellmann said.
Based on current information, the underground project remains within the range of a 16- to 30-month delay in schedule and an increase of $1.2-$1.9 billion in development capital.
Rio Tinto is facing a new setback at the giant copper project with a large investor, US hedge fund Pentwater Capital, demanding a shakeup at the Oyu Tolgoi operation over what it claims is “a massive devaluation” of the asset.
Turquoise Hill’s stock traded up 7% on Thursday on the NYSE. The company’s market value is $1 billion.