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Oyu Tolgoi increases copper production 9% in 2021, gold output jumps 157%

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(Kitco News) - Turquoise Hill announced Monday that full year 2021 copper production from the Oyu Tolgoi mine in Mongolia was 163 thousand tonnes, in line with guidance range of 150 – 180 thousand tonnes, whereas gold production of 468 thousand ounces was also in line with guidance range of 400 – 480 thousand ounces.

The company said that copper production was 9% higher in 2021 vs 2020, due primarily to an increase in mine grades, despite the challenges to workforce levels relating to COVID-19, and that 2021 concentrator feed included over a million tonnes of underground development material.

Importantly, the company added that gold production at Oyu Tolgoi in 2021 increased 157% to 468 koz, while silver output of 977 koz was 12% higher than in 2020.

Oyu Tolgoi is expected to produce 110 to 150 thousand tonnes of copper and 115 to 165 thousand ounces of gold in concentrates in 2022 from processing of open pit and underground development material as well as stockpiles. Gold and copper production is forecast to be lower in 2022 vs 2021 due to stripping of the next cutback and processing lower grade stockpile material.

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The company also said that COVID-19 restrictions in Q4 2021 adversely impacted both open pit operations and underground development, resulting in a further $35 million increase in estimated underground development capital since September 30, 2021.

“The total cumulative increase to the Definitive Estimate underground development capital cost due to the impacts of COVID-19 through the end of Q4'21 was US$175 million. This increase includes the currently known, incremental, time-related costs of COVID-19 restrictions; however, it does not include any impacts arising from associated schedule delays or delayed commitments caused by the Definitive Estimate not yet having received the support of all the directors of the OT Board, as these are still under assessment,” the company said in a statement.

Oyu Tolgoi is one of the world’s largest new copper-gold mines and is located in the South Gobi region of Mongolia, approximately 550 km south of the capital, Ulaanbaatar, and 80 km north of the Mongolia-China border.

On October 6, 2009, Turquoise Hill Resources and Rio Tinto signed a long-term, comprehensive Investment Agreement with the Government of Mongolia for the construction and operation of the Oyu Tolgoi copper-gold mining complex. The agreement created a partnership between the Mongolian Government – which acquired a 34% interest in the project - and Turquoise Hill Resources, which retained a controlling 66% interest in Oyu Tolgoi. Global miner Rio Tinto, which joined Turquoise Hill Resources as a strategic partner in October 2006, began managing the development of Oyu Tolgoi in December 2010.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.