OYU TOLGOI RELEASES 2018 PERFORMANCE SCORECARD

22 January 2019

• Oyu Tolgoi remains one of the safest mines in the world
• Total in-country spend reaches US$8.7 billion, US$322 million taxes paid; US$439 million in national procurement in 2018
• Celebrated fifth anniversary of the first export shipment in July 2018
• Workforce of 17,000 – including contractors and employees
• Exceeds 2018 full-year production guidance for both copper and gold

Ulaanbaatar, Mongolia – Oyu Tolgoi LLC today released the latest edition of its scorecard updating on its performance for 2018.

In 2018 Oyu Tolgoi LLC delivered strong performance results and continued to progress the underground development. In the last month of the year, it has reached an agreement with the Government of Mongolia that sets out a pathway for Oyu Tolgoi to construct a power plant, which will secure a long-term domestic power solution for Oyu Tolgoi.

Oyu Tolgoi workforce has demonstrated a strong safety performance and as a result, the company has achieved an All Injury Frequency Rate (AIFR) of 0.16 per 200,000 hours worked.

As of the fourth quarter of 2018, 92.6 per cent of Oyu Tolgoi’s over 17,000 employees were Mongolian, 20.4 per cent of which were from the Umnugovi province. 58.1 per cent of the total workforce were underground workforce. Education and training are major focus areas for Oyu Tolgoi. Delivering the vision to create enduring value, knowledge and skills, Oyu Tolgoi provided 904,641 man hours of training to nearly 17 thousand employees and contractors in 2018.

Oyu Tolgoi accomplished significant milestones in partnership with the local community during the third year of the Cooperation Agreement between the company and its partner communities established in 2015. The milestones include the commissioning of Khanbogd School and Kindergarten complex which has capacity for 640 students and over 200 children, Inter-Soum Animal Healthcare Centre and Khanbogd-Oyu Tolgoi paved road.

Oyu Tolgoi paid US$2.3 billion in taxes, fees and other payments to the Government of Mongolia between 2010 and 2018, including, US$322 million in 2018.

Oyu Tolgoi also maintained its world-class environmental performance, with only 0.4 cubic metres of water per tonne of ore processed – three times less, compared to similar operations worldwide – and achieving an average water recycling rate of 88 per cent over the period. Oyu Tolgoi was named the Best Water Saving Mine in the VCP Water Stewardship Award by International Finance Corporation. For more information about water usage and resources click here.

Oyu Tolgoi collaborated with 898 suppliers in 2018, 618 of which are national businesses that account for 78 per cent of total operations procurement spent. Between 2010 and 2018, Oyu Tolgoi spent US$2.7 billion on national procurement, US$413 million of which was spent on procurement from Umnugobi suppliers.

The Oyu Tolgoi Performance Scorecard for Q4 2018 is available here.

Q4’18 Production report

Highlights:

• Exceeded full-year production guidance for both copper and gold by 2.6 per cent and 1.8 per cent respectively
• Full year copper production of 159,100 tonnes, up 1.1 per cent on 2017
• Full year gold production of 285,000 ounces, up 150.0 per cent on 2017

Gold production in Q4’18 increased 234.3 per cent over Q4’17 due to significant increases in both grades and recovery. Copper production in Q4’18 declined 8.4 per cent over Q4’17 due to lower throughput, which was partially offset by higher grades and recovery. As planned, mill throughput in Q4’18 decreased 13.6 per cent over Q4’17 due to the concentrator processing harder Phase 4 ore compared to the processing of predominately softer Phase 6 ore in Q4’17.

Oyu Tolgoi is expected to produce 125,000 to 155,000 tonnes of copper and 180,000 to 220,000 ounces of gold in concentrates for 2019. Open-pit operations are expected to mine Phase 4 throughout the year. Mill throughput for 2019 is expected to be approximately 40 million tonnes.

Underground lateral development is expected to advance 15 to 16 kilometers during 2019.

Oyu Tolgoi Production Data (as reported by Turquoise Hill)

All data represents full production and sales on a 100 per cent basis

Click here to see the full Turquoise Hill announcement.