Highlights:
- Full year copper production of 146,346 tonnes vs original guidance range of 125,000 – 155,000 tonnes
- Full year gold production of 241,840 ounces vs original guidance range of 180,000 – 220,000 ounces
- Another strong Safety performance at Oyu Tolgoi in 2019 with an All Injury Frequency Rate of 0.16
- Full year mill throughput of 40,777,225 tonnes, an increase of 5% over 2018
Copper production in Q4'19 of 32,905 tonnes was lower compared to Q4'18 due to decreased head grade driven by the transition from Phase 4a and Phase 6a, to Phase 4b, Phase 6b and lower grade stockpiles. Equally, gold production in Q4'19 of 24,343 ounces was also lower compared to Q4'18 due to the transition from Phase 4a to low grade sources of Phase 4b and stockpiles.
2020 Guidance
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 from both the open pit and the beginning of the underground development material being processed. Although the mid-point copper production range guidance is higher in 2020 versus the 2019 guidance, a lower gold production year is expected for 2020. This is due to the need to mine through lower grade material on the periphery of the South West pit as Phase 4b sinks towards the highest gold and copper grades in the bottom of the pit. It is anticipated that the higher grade ore will be accessed in 2021, resulting in a significant increase in gold production in 2021. Mill throughput for 2020 is expected to be approximately 40 million tonnes.
Operating cash costs for 2020 are expected to be
Capital expenditure for 2020 on a cash-basis is expected to be approximately
Open-pit capital is mainly comprised of deferred stripping, equipment purchases, tailings storage facility construction and maintenance componentization. Underground development capital includes both expansion capital and VAT.
C1 cash costs is expected to be in the range of
2021 Outlook
Production in 2021 is expected to increase to a range of 170,000 to 200,000 tonnes of copper, and 450,000 to 500,000 ounces of gold, as we transition to the higher grade ore in the bottom of the pit and continue to increase the amount of underground development material processed.
Underground Development Update
Construction of shaft 2 was completed in
Productivity improvements resulted in increased underground lateral development rates during the fourth quarter, with an average rate of 1,607 equivalent meters (eqm) compared to 1,214 eqm in the third quarter, with December seeing a record 1,809 eqm.
Construction is progressing on shafts 3 and 4 with both collars now installed. Final preparations are now underway to enable commencement of main sinking operations for both shafts during the second quarter of 2020
Detailed analysis work on the mine design is still anticipated to be completed during the first half of 2020, and the Definitive Estimate, which will include the estimate of cost and schedule for the underground project based on the updated design of Panel 0, is still expected to be delivered in the second half of 2020.
Oyu Tolgoi Production Data
All data represents full production and sales on a 100% basis | ||||||||||
3Q | 4Q | 1Q | 2Q | 3Q | 4Q | 1H | 1H | Full Year | Full Year | |
Open pit material mined ('000 tonnes) |
22,523 |
22,863 |
23,943 |
24,408 |
24,844 |
28,122 |
48,351 |
45,923 |
91,310 |
101,316 |
Ore treated ('000 tonnes) | 9,652 | 9,361 | 9,255 | 10,394 | 10,040 | 11,088 | 19,649 | 19,725 | 38,738 | 40,777 |
Average mill head grades: | ||||||||||
Copper (%) | 0.51 | 0.55 | 0.57 | 0.46 | 0.37 | 0.42 | 0.51 | 0.50 | 0.51 | 0.45 |
Gold (g/t) | 0.38 | 0.56 | 0.58 | 0.31 | 0.14 | 0.15 | 0.44 | 0.25 | 0.36 | 0.29 |
Silver (g/t) | 1.19 | 1.22 | 1.25 | 1.20 | 1.03 | 1.06 | 1.23 | 1.24 | 1.22 | 1.13 |
Concentrates produced ('000 tonnes) | 179.8 | 189.0 | 210.1 | 180.6 | 131.3 | 152.6 | 390.7 | 356.1 | 724.9 | 674.6 |
Average concentrate grade (% Cu) | 21.9 | 21.9 | 21.8 | 21.7 | 21.7 | 21.6 | 21.8 | 22.0 | 21.9 | 21.7 |
Production of metals in concentrates: | ||||||||||
Copper ('000 tonnes) | 39.4 | 41.5 | 45.8 | 39.2 | 28.4 | 32.9 | 85.0 | 78.2 | 159.1 | 146.3 |
Gold ('000 ounces) | 77 | 117 | 120 | 72 | 25.6 | 24.3 | 192 | 92 | 285 | 241.8 |
Silver ('000 ounces) | 230 | 238 | 247 | 238 | 191 | 190 | 486 | 446 | 914 | 866.6 |
Concentrate sold ('000 tonnes) | 171.9 | 191.4 | 184.9 | 225.3 | 157 | 157.5 | 410.3 | 383.1 | 746.4 | 724.7 |
Sales of metals in concentrates: | ||||||||||
Copper ('000 tonnes) | 36.0 | 40.2 | 38.5 | 46.6 | 32.4 | 32.3 | 85.1 | 80.4 | 156.7 | 149.9 |
Gold ('000 ounces) | 55 | 111 | 98 | 116 | 35.4 | 24.7 | 213 | 82 | 248 | 273.6 |
Silver ('000 ounces) | 201 | 216 | 200 | 245 | 207 | 243.6 | 445 | 456 | 873 | 895.9 |
Metal recovery (%) | ||||||||||
Copper | 80.9 | 84.8 | 83.8 | 80.2 | 75.1 | 74.2 | 82.2 | 79.6 | 81.4 | 78.7 |
Gold | 64.7 | 71.7 | 70.1 | 63.6 | 54.7 | 48.2 | 68.2 | 57.6 | 65.2 | 63.6 |
Silver | 62.8 | 67.1 | 63.2 | 59.2 | 56 | 53.5 | 61.2 | 56.4 | 60.9 | 58.1 |
Forward-Looking Statements
Certain statements made herein, including statements relating to matters that are not historical facts and statements of the Company's beliefs, intentions and expectations about developments, results and events which will or may occur in the future, constitute "forward-looking information" within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements and information relate to future events or future performance, reflect current expectations or beliefs regarding future events and are typically identified by words such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "plan", "estimate", "will", "believe" and similar expressions suggesting future outcomes or statements regarding an outlook. These include, but are not limited to, information regarding the timing and amount of production and potential production delays, statements in respect of the impacts of any delays on the Company's cash flows, expected copper and gold grades, liquidity, funding requirements and planning, statements regarding timing and status of underground development, the development options under consideration for the design of the Panel 0 and the related cost and schedule implications, timing and status of the Tavan Tolgoi-based power project, capital and operating cost estimates, timing of completion of the definitive estimate review, mill throughput anticipated business activities, planned expenditures, corporate strategies, and other statements that are not historical facts.
Forward-looking statements and information are made based upon certain assumptions and other important factors that, if untrue, could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such statements or information. There can be no assurance that such statements or information will prove to be accurate. Such statements and information are based on numerous assumptions regarding present and future business strategies, local and global economic conditions, and the environment in which the Company will operate in the future, including the price of copper, gold and silver and projected gold, copper and silver grades, anticipated capital and operating costs, anticipated future production and cash flows, the anticipated location of certain infrastructure and sequence of mining in Panel 0 and the status of the Company's relationship and interaction with the Government of
Readers are cautioned not to place undue reliance on forward-looking information or statements. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, which contribute to the possibility that the predicted outcomes will not occur. Events or circumstances could cause the Company's actual results to differ materially from those estimated or projected and expressed in, or implied by, these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements are included in the "Risk Factors" section in the Company's Annual Information Form dated as of
Readers are further cautioned that the list of factors enumerated in the "Risk Factors" section of the AIF and in the MD&A that may affect future results is not exhaustive. When relying on the Company's forward-looking statements and information to make decisions with respect to the Company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events
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