Turquoise Hill Resources Ltd (TRQ) Reports Q1 Production

Turquoise Hill Resources (NYSE: TRQ) (NASDAQ: TRQ) today announced first quarter 2017 production for Oyu Tolgoi.

Jeff Tygesen, Chief Executive Officer of Turquoise Hill, said, "First quarter production was as expected with lower grades from Phases 6 and early 4A of the open pit as well as stockpile material. Oyu Tolgoi's concentrator performed very well with record throughput levels for the quarter. The concentrator continues to benefit from earlier productivity improvements.

"Underground development advanced during the first quarter and the workforce continues to grow. Several large contracts were awarded during the quarter, with the largest for the decline material handling system."

During Q1'17, open-pit operations focused mainly on Phase 6, which has higher copper grades but relatively low gold grades. Ore treated during Q1'17 increased 2.7% over Q4'16 and average daily throughput of 112,100 tonnes for Q1'17 increased 5.1% over Q4'16. Copper production for Q1'17 decreased 16.3% over Q4'16 and Q1'17 gold production decreased 49.0% over Q4'16 due to lower grade and recoveries at the lower end of the grade recovery curve.

Oyu Tolgoi is expected to produce 130,000 to 160,000 tonnes of copper and 100,000 to 140,000 ounces of gold in concentrates for 2017. Open-pit operations are expected to mine in Phases 4 and 6 during the year. In addition, stockpiled ore will be processed during the year. The lower production when compared to 2016 is primarily the result of approximately one-quarter less copper head grade and approximately one-half less gold head grade. During 2016, the mine plan for Phase 4 was divided into two stages, referred to as Phases 4A and 4B, in expectation of reaching the high-grade gold zone of Phase 4 around mid-2018. Accordingly, mine stripping for 2017 will focus on Phase 4A.

                                                                            

Oyu Tolgoi Production Data                                                  

All data represents full production and sales on a 100% basis               

                                                                            

                                                                        Full

                                  1Q      2Q      3Q      4Q      1Q    Year

                                2016    2016    2016    2016    2017    2016

----------------------------------------------------------------------------

                                                                            

Open pit material mined                                                     

 ('000 tonnes)                22,867  22,716  25,739  25,615  24,333  96,938

Ore treated ('000 tonnes)      9,662   9,525   9,146   9,819  10,087  38,152

Average mill head grades:                                                   

  Copper (%)                    0.70    0.64    0.66    0.61    0.51    0.65

  Gold (g/t)                    0.63    0.33    0.21    0.25    0.15    0.36

  Silver (g/t)                  1.92    1.92    1.99    1.50    1.30    1.83

Concentrates produced ('000                                                 

 tonnes)                       229.5   207.1   203.2   206.7   176.0   846.6

  Average concentrate grade                                                 

   (% Cu)                       25.1    24.9    22.9    22.0    21.6    23.8

Production of metals in                                                     

 concentrates:                                                              

  Copper ('000 tonnes)          57.6    51.7    46.6    45.5    38.1   201.3

  Gold ('000 ounces)             144      70      37      49      25     300

  Silver ('000 ounces)           395     391     361     273     215   1,420

Concentrate sold ('000                                                      

 tonnes)                       213.1   227.4   206.2   182.0   190.2   828.6

Sales of metals in                                                          

 concentrates:                                                              

  Copper ('000 tonnes)          51.2    54.4    45.7    37.6    39.5   188.9

  Gold ('000 ounces)             175      95      38      39      32     347

  Silver ('000 ounces)           305     395     341     239     205   1,280

Metal recovery (%)                                                          

  Copper                        85.6    83.3    78.0    76.6    74.9    81.0

  Gold                          72.2    69.3    62.0    63.4    48.8    68.5

  Silver                        66.4    65.9    61.7    57.2    51.8    63.1

                                                                            

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