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Thursday, September 25, 2014

GoM Proposes Taking 20% Stake in Centerra's Gatsuurt Gold Project as Strategic Deposit

September 25 (Cover Mongolia) Cabinet meeting held today determined the government stake to take in Centerra Gold’s (TSX:CG) Gatsuurt gold deposit in making it a “strategic” deposit, and has decided to submit the bill to parliament.

The government will take a 20% stake in “Erdenes-Gatsuurt,” a joint venture company to be created to hold Gatsuurt deposit’s special permit. Erdenes MGL will contribute the government’s portion of $100,000 needed to establish such a foreign invested company or $20,000.

Erdenes-Gatsuurt LLC, becoming a “state-involved” company, will be mandated to resolve project financing issues on its own, without “overburdening the shareholders,” during the exploitation of the deposit, most likely meaning that the government will not be providing financing for the project, perhaps in a similar fashion as OT.

Gatsuurt deposit has a registered resource of 27.6Mts of ore, 75.9 thousands kilograms of gold.

Finance Ministry to Transfer SCHCD's Securities Clearing and Settlement Functions to MSE

September 25 (Cover Mongolia) Government of Mongolia issued a resolution during a cabinet meeting held on September 18 announcing the following decisions regarding Securities Clearing House and Central Depositary LLC:

  1. To appoint Ministry of Finance as the shareholder of Securities Clearing House and Central Depositary LLC (SCHCD).
  2. To transfer central depositary and share registry functions of SCHCD into a state-owned entity to be newly established.
  3. To assign the duty of establishing the entity in Clause 2 of this Resolution to Minister for Finance Ch. Ulaan.
  4. To assign the Ministry of Finance the duty of restructuring SCHCD with the roles of securities clearing and settlement functions.
  5. To transfer full ownership of the legal entity in charge of securities clearing and settlement to the Mongolian Stock Exchange.
  6. Clause 2-5 to take effect once the legal entity set out in Clause 3 is established by government decision.

Monday, September 22, 2014

[BREAKING: OT presents underground FS to board, to seek further clarification on $30m tax ruling]

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- BREAKING NEWS -

Monday, September 22, 2014

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Turquoise Hill Provides Update on Mongolian Tax Authority Ruling and Tailings Thickener Rake Repair

VANCOUVER, BC--(Marketwired - September 22, 2014) - Turquoise Hill Resources (NYSE:TRQ) (NASDAQ:TRQ) (TSX:TRQ) today announced that it has completed a detailed review of the tax ruling of the Tax Dispute Resolution Council of the Mongolian General Taxation Department issued on September 10, 2014. The ruling has reduced the amount of tax, interest and penalties claimed to be payable by Oyu Tolgoi LLC, from approximately USD $127 million to approximately USD $30 million.

While this significant reduction is welcome, there are aspects of the ruling that require further clarification. Oyu Tolgoi LLC will continue to work with the Mongolian Tax Authority to obtain further clarity on some of the findings in the ruling.

Turquoise Hill, Rio Tinto and the Government of Mongolia continue to engage in order to resolve outstanding shareholder issues.

Tailings Thickener Rake Repair

The repair of the rake and re-commissioning of the Oyu Tolgoi tailings thickener are progressing well with work scheduled to be complete by September 30, 2014. The investigation found that operational issues combined with fabrication-quality problems led to the failure of the rakes. Relevant operational controls and protections have been reviewed and changes implemented on both thickeners.

During the repair period, the concentrator has continued to run at approximately 60% throughput.

Link to release

 

Oyu Tolgoi Finalizes Underground Feasibility Study

VANCOUVER, BC--(Marketwired - September 22, 2014) - Turquoise Hill Resources (NYSE:TRQ) (NASDAQ:TRQ) (TSX:TRQ) today announced that the 2014 Oyu Tolgoi Feasibility Study (the "Feasibility Study") has been finalized and presented to the board of directors of Oyu Tolgoi LLC. The Feasibility Study includes analysis of two production cases - the 2014 Reserve Case and the 2014 Life of Mine (LOM) Case.

The 2014 Reserve Case includes mineral reserves from the Southern Oyu Tolgoi open pit and the Hugo North Lift 1 block cave. The LOM Case reflects the development flexibility that exists with respect to later phases of the Oyu Tolgoi deposits (Heruga, Hugo South, and the second lift of Hugo North), which will require separate development decisions in the future based on then prevailing conditions and the development experience obtained from developing and operating the initial phases of the Oyu Tolgoi Project (the "Project"). Accordingly, the 2014 LOM Case is effectively a preliminary economic assessment under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and therefore does not have as high a level of certainty as the 2014 Reserve Case. The 2014 LOM Case is preliminary in nature and includes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the 2014 LOM Case will be realized.

In August 2013, development of the underground mine was delayed to allow matters with the Government of Mongolia to be resolved. Further underground development is subject to resolution of shareholder issues, approval of the Feasibility Study by Oyu Tolgoi's shareholders and the Mongolian Minerals Council, agreement of a comprehensive funding plan including project finance, and receipt of all necessary permits.

An updated NI 43-101 compliant independent technical report relating to the Project, prepared by OreWin Pty Ltd, will be filed by Turquoise Hill within 45 days of this announcement. The technical report will update the Project's mineral resources and mineral reserves and will be available under Turquoise Hill's profile on SEDAR at www.sedar.com. Highlights of the technical report to be filed, based on data contained in the Feasibility Study, are as follows:

·         An updated mineral resource model and estimate for the Hugo North deposit. The updated mineral resource estimate is similar to and confirms the previous estimates contained in the Oyu Tolgoi Technical Report dated as of March 25, 2013 (the "2013 OT Technical Report"). Mineral resource models for the other Oyu Tolgoi deposits have remained the same.

·         Updated mineral reserve estimates are broadly in line with previous estimates. The open pit allows for depletion from 2013 and modified underground dilution and mining loss assumptions resulting in lower grades and mining recovery.

·         Underground ore handling will be conveyed to surface via decline, which opens the Project to additional production flexibility and future optionality. The new mine plan will make use of the existing shafts and the planned shafts that were defined in the 2013 OT Technical Report.

·         The reduced Project NPV was the result of delay (NPV8% US$0.8 billion) and a reduction due to more cautious cave performance assumptions, which led to a reduction in recovered metal and a slowing of ramp-up of the cave (NPV8% US$1.5 billion).

·         Underground block cave mine production remains at 95,000 tonnes per day.

·         The plant rate for both cases is the current nominal 100,000 tonnes per day.

·         Expansion capital of US$4.9 billion for the underground project, which is in line with the US$5.1 billion estimate contained in the 2013 OT Technical Report (excludes US$0.5 billion of capital spent in 2013 and 2014).

2014 Reserve Case Summary Production and Financial Results

Description

Units

2014 Reserve Case
Mineral Reserves

Total Processed

Bt

1.5

Cu Grade

%

0.85

Au Grade

g/t

0.32

Ag Grade

g/t

1.94

Copper Recoverable

Billion lb

24.9

Gold Recoverable

Moz

11.9

Silver Recoverable

Moz

78.0

Life

Years

41

Expansion Capital

US$B

4.9

NPV (8%) After Tax

US$B

7.43

IRR After Tax

%

29%

Payback Period

Years

9

Notes:

2014 LOM Case Summary Production and Financial Results

Description

Units

2014 LOM Case

Total Processed

Bt

3.5

Cu Grade

%

0.83

Au Grade

g/t

0.32

Ag Grade

g/t

2.08

Copper Recoverable

Billion lb

56.5

Gold Recoverable

Moz

27.9

Silver Recoverable

Moz

195.2

Life

Years

94

NPV (8%) After Tax

US$B

8.6

IRR After Tax

%

28%

Payback Period

Years

9

Notes:

2014 Mineral Reserves

Deposit

Ore
(Mt)

Cu
(%)

Au
(g/t)

Ag
(g/t)

Recovered Metal

Copper
(Mlb)

Gold
(koz)

Silver
(koz)

Southern Oyu Tolgoi

Proven

410

0.54

0.42

1.38

3,829

3,952

13,768

Probable

621

0.40

0.24

1.13

4,363

3,233

17,122

Mineral Reserve (Proven + Probable)

1,031

0.45

0.31

1.23

8,192

7,186

30,890

Hugo Dummett

Probable (Hugo North - OT LLC)

464

1.66

0.34

3.37

15,592

4,199

43,479

Probable (Hugo North - EJV Shivee Tolgoi)

35

1.59

0.55

3.72

1,121

519

3,591

Mineral Reserve (Probable) (All Hugo North)

499

1.66

0.35

3.40

16,713

4,717

47,070

Oyu Tolgoi Project Mineral Reserve

Proven

410

0.54

0.42

1.38

3,829

3,952

13,768

Probable

1,120

0.96

0.29

2.14

21,075

7,951

64,192

Mineral Reserve (Proven + Probable)

1,530

0.85

0.32

1.94

24,905

11,903

77,960

Notes:

Hugo North Mineral Reserve Comparison 2013/2014

Ore 
(Mt)

 

Cu 
(%)

 

Au 
(g/t)

 

Ag 
(g/t)

 

 Recovered Metal

 

 Copper (M lb)

 Gold (koz)

 Silver (koz)

2014 OTTR
 Probable

 

OT LLC

464

 

1.66

 

0.34

 

3.37

 

15,592

4,199

43,479


EJV Shivee Tolgoi

35

 

1.59

 

0.55

 

3.72

 

1,121

519

3,591

All Hugo North

499

 

1.66

 

0.35

 

3.40

 

16,713

4,717

47,070

2013   OTTR Probable 

 

OT LLC

460

 

1.80

 

0.37

 

3.74

 

16,759

4,602

47,647


EJV Shivee Tolgoi

31

 

1.73

 

0.62

 

3.74

 

1,090

521

3,229

All Hugo North

491

 

1.80

 

0.39

 

3.74

 

17,849

5,123

50,877

Difference

 

OT LLC

5

 

-0.14

 

-0.04

 

-0.36

 

-1,167

-404

-4,168

 

 


EJV Shivee Tolgoi

4

 

-0.14

 

-0.07

 

-0.02

 

31

-2

361

 

 

All Hugo North

8

 

-0.14

 

-0.04

 

-0.34

 

-1,136

-406

-3,807

% Difference

 

OT LLC

1.0%

 

-8.0%

 

-9.6%

 

-9.7%

 

-7.0%

-8.8%

-8.7%

 

 


EJV Shivee Tolgoi

11.7%

 

-8.1%

 

-11.3%

 

-0.6%

 

2.8%

-0.4%

11.2%

 

 

All Hugo North

1.7%

 

-8.0%

 

-9.4%

 

-9.1%

 

-6.4%

-7.9%

-7.5%

Notes:

Link to release

 

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