OYU TOLGOI TRANSFERS MAJOR POWER LINE ASSET TO GOVERNMENT

Ulaanbaatar /MONTSAME/ Oyu Tolgoi LLC signed Monday two major agreements with the National Power Transmission Grid state-owned company to transfer and maintain the 96km power line, built and owned by the company and running between the Oyu Tolgoi site in the Umnugobi region and the Mongolia-China border, reports the “ot.mn”.

Present at the ceremony were the State Secretary for Ministry of Energy D.Delgertsogt, Erdenes MGL CEO B.Byambasaikhan, senior government representatives, also Rio Tinto Country-Director S.Munkhsukh, and Oyu Tolgoi Chief Financial Officer Steve Duggan.

DDelgertsogt said, “This is an important day for the energy sector of Mongolia. Our national power grid now connects to our two neighbours with reliable, high-quality infrastructure, helping Mongolia’s energy security in the near term, and in the long term, supporting our transition from an energy importing nation to an exporter.

“This also supports our strategy, under the Power Sector Cooperation Agreement signed with Oyu Tolgoi, to enhance access to reliable power in the Umnugobi region to support population centres and the growth of industry.”

In is turn, Steve Duggan said,“We are proud to deliver on our commitment in transferring this high-quality asset to the Government of Mongolia. This is a noteworthy example of Oyu Tolgoi’s achieving goals together with our stakeholders. The power line is important not just for Oyu Tolgoi, but can be a catalyst for greater development in the region.”

The line was built in 2011 to allow for the import of electricity from China to support Oyu Tolgoi’s operations. The agreement completes the Company’s commitment of transferring ownership of the asset to the Government of Mongolia. The transfer also ties into the August 2014 “Power Sector Cooperation Agreement” between the Government of Mongolia and Oyu Tolgoi, which aims to work towards a power solution for the Umnugobi region, providing a pathway for strengthening the power supply network in Mongolia.

B.Amarsaikhan

OYU TOLGOI SHIPS 1.5 MILLION TON CONCENTRATE

Ulaanbaatar /MONTSAME/Oyu Tolgoi today announced an update on its production for the third quarter of 2015. Oyu Tolgoi has now crossed 1.5 million tonnes of concentrate shipments.

Andrew Woodley, President and Chief Executive Officer, said, “Oyu Tolgoi again achieved record production in the third quarter, building on our performance from the second quarter of 2015. We also crossed 1.5 million tonnes of concentrate shipments in September – continuing our momentum from reaching 1 million tonnes in only February this year.

“We have achieved this while maintaining an unrelenting focus on safety and, as a company delivering a higher level of productivity to ensure competitiveness and sustainability despite volatile market conditions. Our performance is clear evidence that we are headed, together, in the right direction, and that our strategy is delivering.”

During the third quarter, mined production increased 8.5 per cent over the previous one due to shorter hauling routes and ongoing productivity initiatives. Copper in concentrates for this quarter increased 1.3 per cent due to higher head grades.

Gold in concentrates for the quarter decreased 48.5 per cent over the second, due to slower than anticipated access to gold-rich ore. Increased copper and gold production is expected in the next quarter as higher-grade ore is accessed in the open pit.

Turquoise Hill continues to expect Oyu Tolgoi to produce 175,000 to 195,000 tonnes of copper and 600,000 to 700,000 ounces of gold in concentrates in 2015.

The Company expects copper production to be at the top of the range while gold production is expected to be in the middle of the range.

Following the filing of revised schedules for the 2015 Oyu Tolgoi Feasibility Study with the Mongolian Minerals Council in August, pre-start activities are underway in parallel with an update to the capital estimate, which is expected to be completed in the first quarter of 2016.

Pre-start activities include ramp-up of the owners and EPCM team, re-estimate activities, detailed engineering and early procurement for equipment and materials required for necessary critical works that are key enablers for recommencement of underground lateral development mining activity. The Company continues to expect signing of project financing by the end of 2015 and the decision for underground construction in the beginning of second quarter of 2016.

B.Amarsaikhan