- Strong safety and production performance
- US$126m taxes paid over the quarter
- US$136m in national procurement spend
Oyu Tolgoi LLC today announced its financial results for the quarter ended June 30, 2016, and released its latest Performance Scorecard.
- Oyu Tolgoi achieved an excellent safety performance with an All Injury Frequency Rate of 0.13 per 200,000 hours worked for the six months ended June 30, 2016.
- In June 2016, Oyu Tolgoi signed a critical contract with Jacobs Engineering Group to provide engineering, procurement and construction management services for underground development.
- Major contractor mobilisation for the sinking of Shafts #2 and #5, underground development, critical construction works and maintenance are all progressing.
- Oyu Tolgoi recorded revenue of $329.7 million in Q2’16, a decrease of 22.0 per cent over Q1’16, reflecting mainly lower gold sales.
- Concentrate volumes sold in Q2’16 increased 6.7 per cent over Q1’16.
- In Q2’16, concentrator throughput was broadly consistent with Q1’16; resulting in average throughput of approximately 105,000 tonnes per day for the quarter.
- Copper production in Q2’16 declined 10.3 per cent over Q1’16 reflecting lower grades from reduced mining in Phase 2 and relative lower recovery from Phase 6 ore.
- As expected, gold production in Q2’16 declined approximately 52 per cent over Q1’16, due to lower grades from reduced mining in Phase 2.
- Sales contracts have been signed for essentially all of Oyu Tolgoi’s expected 2016 concentrate production.
Oyu Tolgoi Chief Executive Officer, Andrew Woodley, said, “Q2 was another strong quarter across the business. Our safety performance continues to rank us among the leaders not only in Rio Tinto, but across our global peers. Our focus on productivity and cost, in what remains a challenging market environment for the sector, is delivering results and forms the foundation for the long term future of the business.”
Q2’16 Performance Scorecard
The company, in the first half of 2016, paid the Government of Mongolia US$126 million in taxes, fees and other payments, and spent US$136 million on national procurement, of which US$35 million was in the South Gobi.
The company, during the second quarter, invested approximately US$49,000 in training and education programmes, and US$5.9 million in various sustainable development projects in the South Gobi
Oyu Tolgoi is investing in infrastructure projects in the South Gobi under the commitments in its Cooperation Agreement with partner communities in the Umnugovi region, signed in 2015. These include a bulk water facility in Khanbogd, a health care centre in Bayan-Ovoo, and a Sports Hall in Manlai soum. These programmes underscore Oyu Tolgoi’s commitments to its partnership with the local communities and to the long-term sustainable development of Mongolia and, in particular, Umnugovi province.
In June 2016, Oyu Tolgoi signed a critical contract with Jacobs Engineering Group to provide EPCM services for underground development. Major contractor mobilization for the sinking for Shafts #2 and #5, underground development, critical construction works and maintenance are all progressing. A site infrastructure office has been established as well as project personnel being mobilized. In July 2016, Oyu Tolgoi signed a contract with mining services provider Thiess and Mongolian contractor Khishig Arvin for development of twin declines, incorporating both a service and a conveyor tunnel.
Sales contracts have been signed for essentially all of Oyu Tolgoi’s expected 2016 concentrate production.
Oyu Tolgoi Key Financial Metrics*
* Any financial information in this press release should be reviewed in consultation with the Company‘s unaudited condensed interim consolidated financial statements.
** Please refer to NON-GAAP MEASURES in this press release for reconciliation of these metrics, including total operating cash costs, to the financial statements.
*** Operating cash costs, C1 and all-in sustaining unit costs for the three months ended March 31, 2016 have been revised to correctly reflect the change in inventory as reported in the Company’s reconciliation of net income (loss) to net cash flow generated from operating activities.
About Oyu Tolgoi LLC (www.ot.mn)
Oyu Tolgoi LLC, Mongolia's largest copper and gold mining company, is a strategic partnership between the Government of Mongolia, Turquoise Hill Resources and Rio Tinto. Located in the South Gobi, Oyu Tolgoi commenced shipment of product to customers in July 2013. Oyu Tolgoi is managed by Rio Tinto, which is investing global expertise and cutting-edge technology to help develop Mongolia’s mining industry and ensure Oyu Tolgoi is one of the world’s most advanced mines. For Oyu Tolgoi, nothing matters more than safety. The business operates under the principle that if a job cannot be done safely, it will not be done at all.