Turquoise Hill announces third quarter 2016 production

Turquoise Hill Resources (NYSE: TRQ) (NASDAQ: TRQ) (TSX: TRQ) today announced third quarter 2016 production for Oyu Tolgoi.
Jeff Tygesen, Turquoise Hill Chief Executive Officer, said, “Oyu Tolgoi performed as expected during the third quarter as open-pit operations focused on Phases 3 and 6 after the high-gold Phase 2 was nearly complete in Q2’16. Despite the lower copper and gold production in the quarter, we are confident in our ability to achieve the higher end of our annual guidance.”
Oyu Tolgoi set an all-time high in Q3’16 for quarterly material mined of more than 25 million tonnes. This record includes stripping for Phase 4, which is the next area of high-grade ore. In Q3’16, concentrator throughput declined 4.0% over Q2’16 due to planned maintenance and conveyor belt repairs. Copper production in Q3’16 declined 9.9% over Q2’16, as a result of lower recovery from Phase 6 ore. As expected, gold production in Q3’16 declined 47.1% over Q2’16 due to lower grades from the completion of mining Phase 2.
The Company continues to expect Oyu Tolgoi to produce 175,000 to 195,000 tonnes of copper in concentrates and 255,000 to 285,000 ounces of gold in concentrates for 2016.
Underground development
Good progress continues with underground development. During Q3’16, work began for Shaft 5 sinking and the convey-to-surface box cut excavation while construction of critical on-site facilities continued. Oyu Tolgoi recently signed an additional underground mining and support services contract with Dayan Contract Mining, a joint venture between Hasu Megawatt and Redpath, for the sinking of Shafts 2 and 5. At the end of Q3’16, the underground workforce was approximately 1,600 people and is expected to reach 2,400 people by the end of 2016.
Recent press speculation has referenced a seven to nine year ramp up period needed for the Oyu Tolgoi underground mine to reach full production. Based on the 2014 Oyu Tolgoi Technical Report (2014 Technical Report) issued in October 2014, ramp up to full production is expected to take approximately seven years. It is expected that the underground production schedule in the Company’s upcoming 2016 Oyu Tolgoi Technical Report will be consistent with the 2014 Technical Report.
Additionally, the timing and amount of future dividend payments to Turquoise Hill shareholders will be based on a number of factors, including timing of underground production commencement, copper price and beginning of shareholder loan repayments, and determined at the sole discretion of the Turquoise Hill Board of Directors. The Board regularly reviews the Company’s dividend policy and any payment will be based on future economic conditions.

Oyu Tolgoi Production Data
All data represents full production and sales on a 100% basis
			3Q 2015		4Q 2015		1Q 2016		2Q 2016		3Q 2016		9 months 2015		9 months 2016		Full Year 2015
Open pit material mined (‘000 tonnes)			23,969		23,708		22,867		22,716		25,739		68,063		71,322		91,771
Ore treated (‘000 tonnes)			8,632		9,369		9,662		9,525		9,146		25,168		28,333		34,537
Average mill head grades:
	Copper (%)		0.75		0.69		0.70		0.64		0.66		0.66		0.67		0.67
	Gold (g/t)		0.56		0.92		0.63		0.33		0.21		0.73		0.39		0.78
	Silver (g/t)		1.90		1.67		1.92		1.92		1.99		1.52		1.95		1.56
Concentrates produced (‘000 tonnes)			210.3		231.8		229.5		207.1		203.2		556.7		639.8		788.5
	Average concentrate grade (% Cu)		26.6		24.7		25.1		24.9		22.9		26.0		24.4		25.6
Production of metals in concentrates:
	Copper (‘000 tonnes)		56.0		57.3		57.6		51.7		46.6		144.9		155.9		202.2
	Gold (‘000 ounces)		123		207		144		70		37		446		251		653
	Silver (‘000 ounces)		388		355		395		391		361		869		1,147		1,223
Concentrate sold (‘000 tonnes)			226.0		236.2		213.1		227.4		206.2		583.5		646.6		819.8
Sales of metals in concentrates:
	Copper (‘000 tonnes)		58.2		54.7		51.2		54.4		45.7		146.5		151.3		201.3
	Gold (‘000 ounces)		200		160		175		95		38		577		307		737
	Silver (‘000 ounces)		334		360		305		395		341		798		1,041		1,158
Metal recovery (%)
	Copper		86.4		88.4		85.6		83.3		78.0		87.3		82.4		87.6
	Gold		76.4		74.2		72.2		69.3		62.0		74.4		69.7		74.4
	Silver		73.0		70.8		66.4		65.9		61.7		69.6		64.7		69.9

About Turquoise Hill Resources
Turquoise Hill Resources is an international mining company whose primary operation is its 66% interest in the Oyu Tolgoi copper-gold-silver mine in southern Mongolia.
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