OT underground development expenses to total USD USD 1.3 billion
2 долоо хоног, 1 өдөр өмнө
- Shaft II, III development may slow down due to the virus preventing restrictions
- Total operating cash costs USD 744.5 million, deteriorated by 5.2 percent compared with the same period of the previous year. This decrease was due to lower freight and royalty costs
Turquoise Hill Resources (TRQ) announced its financial result of 2019 last week. The company informed that the underground mining development plan has been changed in line with government measurements related to COVID-2019. In addition, TRQ noted that there would be a slowdown on the underground project, the full impact of which is unknown at this time. Also, the company assumes Shaft II and III development may go downwards due to the restrictions. Even though Oyu Tolgoi (OT) copper concentrate export has been continuing normally despite the border bans, the volume may be reduced due to disinfection and sanitizing activities. In 2019, copper production of the company reached 146,346 tons and gold production stood at 241,840 ounces. OT’s revenue has decreased by 1.2 percent to USD 1.2 billion in the same period. Total operating cash costs USD 744.5 million, deteriorated by 5.2 percent compared with the same period of the previous year. This decrease was mainly due to lower freight and royalty costs driven by lower volumes of concentrate sold and lower sales revenue respectively, and lower milling costs due to lower maintenance costs. Underground expansion capital for 2019 was USD 1.2 billion. TRQ reported, remaining project finance proceeds of USD 0.5 billion and USD 1.7 billion of cash and cash equivalents at the end of December 2019. TRQ presumes that completion of shaft construction was the most significant activity in 2019. Oyu Tolgoi is expected to produce 140,000 to 170,000 tonnes of copper and 120,000 to 150,000 ounces of gold in concentrates in 2020. Moreover, OT estimates its capital expenditure for 2020 on a cashbasis to be approximately USD 80 million to USD 120 million for open-pit operations and USD1.2 billion to USD1.3 billion for underground development. In February 2020, Oyu Tolgoi LLC submitted the Tavan Tolgoi Power Plant (TTPP) feasibility study to the Government of Mongolia. The project cost estimate of around USD 924 million. Therefore, underground mining development is likely to require extra funds between USD 1.2 billion to USD 1.9 billion regarding mining conditions.