Turquoise Hill Resources (NYSE:TRQ) (TSX:TRQ) today announced its
financial results for the quarter ended March 31, 2018. All figures
are in U.S. dollars unless otherwise stated.
HIGHLIGHTS
- Oyu Tolgoi achieved a strong All Injury Frequency Rate of 0.21
per 200,000 hours worked for the three months ended March 31,
2018.
- Underground development achieved record-level monthly progress
during Q1’18, with 2.6 equivalent kilometres completed during the
quarter.
- In March 2018, the underground team experienced their highest
development month to date.
- Since the restart of development, a total of 10.3 equivalent
kilometres of lateral development has been completed.
- Sinking of Shaft 2 was completed in January 2018 and sinking of
Shaft 5 was completed in March 2018.
- During Q1’18, underground expansion spend was $270.5 million,
resulting in total project spend since January 1, 2016 of
approximately $1.4 billion.
- Production from first draw bell remains planned for mid-2020
and sustainable first production in 2021.
- During Q1’18, Oyu Tolgoi produced 38,800 tonnes of copper and
42,000 ounces of gold.
- Revenue of $245.6 million in Q1’18 increased 3.4% over Q1’17
reflecting higher copper and gold prices partly offset by lower
concentrate sales volumes.
- For Q1’18, the Company recorded income of $79.7 million and net
income attributable to owners of Turquoise Hill of $85.7 million or
$0.04 per share.
- Turquoise Hill generated cash flow from operating activities
before interest and taxes of $14.7 million in Q1’18.
- For Q1’18, Oyu Tolgoi’s cost of sales was $2.23 per pound of
copper sold, C1 cash costs were $1.76 per pound of copper produced
and all-in sustaining costs were $2.07 per pound of copper
produced1.
- Operating cash costs1 of $176.6 million in Q1’18 increased 4.9%
over Q1’17 reflecting higher open pit and concentrator maintenance
costs.
1 Please refer to the NON-GAAP MEASURES section
of this press release for further information.
FINANCIAL RESULTS
Income in Q1’18 was $79.7 million compared with
$29.7 million in Q1’17. The increase mainly reflects the impact of
higher copper prices, reduced depreciation and depletion and lower
finance costs due to higher amounts of interest capitalized to
property, plant and equipment, partially offset by reduced sales
volumes. Cash generated from operating activities in Q1’18 was
$19.4 million compared with $86.3 million in Q1’17. This reduction
was primarily driven by significant movements in working capital,
partly offset by higher copper prices. Capital expenditure on
property, plant and equipment was $285.7 million on a cash basis in
Q1’18 compared to $147.9 million in Q1’17, attributed principally
to underground ($270.5 million) with the remainder related to
open-pit capital activities.
Turquoise Hill’s cash and cash equivalents at March
31, 2018 were approximately $1.5 billion. OYU
TOLGOI
The Oyu Tolgoi mine is approximately 550
kilometres south of Ulaanbaatar, Mongolia’s capital city, and 80
kilometres north of the Mongolia-China border. Mineralization on
the property consists of porphyry-style copper, gold, silver and
molybdenum contained in a linear structural trend (the Oyu Tolgoi
Trend) of deposits throughout this trend. They include, from south
to north, the Heruga Deposit, the Oyut deposit and the Hugo Dummett
deposits (Hugo South, Hugo North and Hugo North Extension).
The Oyu Tolgoi mine was initially developed as
an open-pit operation. The copper concentrator plant, with related
facilities and necessary infrastructure, was originally designed to
process approximately 100,000 tonnes of ore per day from the
Oyut open pit. However, since 2014, the concentrator has improved
operating practices and gained experience, which has helped achieve
a consistent throughput of over 110,000 tonnes per day. This
continued through 2017 with softer ores from the Central zone. Due
to increased processing of harder ore from Phase 4, concentrator
throughput for 2018 is expected to be approximately 102,000 tonnes
per day.
In August 2013, development of the underground
mine was suspended pending resolution of matters with the
Government of Mongolia. Following signing of the Oyu Tolgoi
Underground Mine Development and Financing Plan (Underground Plan)
in May 2015 and the signing of a $4.4 billion project finance
facility in December 2015, Oyu Tolgoi received formal notice to
proceed approval by the boards of Turquoise Hill, Rio Tinto and Oyu
Tolgoi LLC in May 2016, which was the final requirement for the
re-start of underground development. Underground construction
recommenced in May 2016.
Oyu Tolgoi is expected to be the world’s
third-largest copper mine at peak metal production in 2025. Copper
and gold production is expected to increase by more than 340% and
150% respectively between 2018 and 2025. Average copper and gold
production from 2025 to 2030 is expected to be more than 550,000
tonnes of copper and over 450,000 ounces of gold per year.
At the end of Q1’18, Oyu Tolgoi had a total
workforce, including underground project construction, of more than
14,000, of which 94% were Mongolian.
Underground development
progress
The main focus of underground development for
2018 will be underground lateral development, the fit out of Shaft
2, completion and commissioning of Shaft 5, support infrastructure
and the convey-to-surface decline. In January 2018, the Company
announced the sinking of Shaft 2 was complete. Additionally,
earthworks for Shafts 3 and 4 commenced during Q1’18 and the
sinking award package is expected to occur in Q2’18. The Company
continues to expect the first draw bell in mid-2020 and sustainable
first production in 2021.
During Q4’17, Rio Tinto undertook a schedule and
cost review. Rio Tinto has provided Turquoise Hill with a
high-level overview of the review’s outcomes, in which Rio Tinto
concluded there were no material changes in project scope, cost or
schedule.
Oyu Tolgoi spent $270.5 million on underground
expansion during Q1’18. Total underground project spend from
January 1, 2016 to March 31, 2018 was approximately $1.4 billion.
In addition, Oyu Tolgoi had further capital commitments2 of $1.2
billion as of March 31, 2018. At the end of Q1’18, the underground
project had committed 62% of direct project contracts and
procurement packages, of which 71% were to Mongolian companies.
Since the restart of project development, Oyu Tolgoi has committed
almost $1.6 billion to Mongolian vendors and contractors.
2 Please refer to the NON-GAAP MEASURES section
of this press release for further information.
Underground lateral development achieved
record-level monthly progress during Q1’18, with 2.6 equivalent
kilometres completed during the quarter. The underground team
experienced their highest development month to date in March. Since
the re-start of development, a total of 10.3 equivalent kilometres
of lateral development has been completed. During 2018, underground
development is expected to advance approximately 10.0 kilometres.
The following table provides a breakdown of the various components
of completed lateral development since project restart:
|
|
|
|
Year |
TotalEquivalentKilometres |
Lateral
Development(kilometres) |
Mass Excavation(’000
metres3) |
2016 |
1.6 |
1.5 |
3.0 |
Q1’17 |
1.0 |
0.8 |
5.2 |
Q2’17 |
1.4 |
0.9 |
9.2 |
Q3’17 |
1.4 |
1.2 |
8.3 |
Q4’17 |
2.2 |
1.9 |
8.9 |
2017 |
6.1 |
4.8 |
31.6 |
Q1’18 |
2.6 |
2.1 |
11.6 |
Total |
10.3 |
8.4 |
46.2 |
|
|
|
|
Shaft 2 sinking was completed in January 2018.
Structural steel installation commenced during Q1’18 at the 1,202
metre level and equipping of the shaft is ongoing. Fit out of Shaft
2 is expected to occur throughout 2018. Shaft 2 is a key part of
future increases in lateral development activity.
Sinking of Shaft 5 was completed in March 2018.
During Q1’18, installation of the shaft’s three exhaust fans was
mechanically complete and commissioning underway. Shaft 5 will be
dedicated to ventilation thereby increasing the capacity for
underground activities.
The following table outlines the status of
shafts for underground development as of March 31, 2018.
|
|
|
|
|
|
|
Shaft 1(early developmentand ventilation) |
Shaft 2(production and ventilation) |
Shaft 5(ventilation) |
Shaft 3(ventilation) |
Shaft 4(ventilation) |
Total Depth |
1,385 metres |
1,284 metres |
1,178 metres |
1,148 metres |
1,149 metres |
Diameter |
6.7 metres |
10 metres |
6.7 metres |
10 metres |
11 metres |
Completion |
2008 |
Q1’18 |
Q1’18 |
Expected 2021 |
Expected 2021 |
Remaining |
Complete |
Complete |
Complete |
Not started |
Not started |
|
|
|
|
|
|
During Q1’18, advancement of the
convey-to-surface decline continued to progress. The
convey-to-surface system is the eventual route of the full 95,000
tonne per day underground ore delivery system to the concentrator;
however, it is not a critical path item for first draw bell planned
in mid-2020. Expected completion of the convey-to-surface system is
2022, which will facilitate the ramp up to full production by
2027.
Supporting infrastructure continued to progress
during Q1’18. Construction of the new camp was more than 75%
complete at the end of Q1’18, including completion and occupancy of
eight buildings. Two additional buildings were approved for
occupancy by the state commissioning authorities at the end of the
quarter.
Safety performance
Safety is a major focus throughout Oyu Tolgoi’s
operations and the mine’s management is committed to reducing risk
and injury. Oyu Tolgoi achieved a strong All Injury Frequency Rate
of 0.21 per 200,000 hours worked for the three months ended March
31, 2018.
Q1’18 open-pit operations
performance
Key financial metrics for Q1’18 are as
follows:
Oyu Tolgoi Key Financial
Metrics(1)
($ in millions, unless otherwise
noted) |
1Q2017 |
2Q2017 |
3Q2017 |
4Q2017 |
1Q2018 |
Full Year2017 |
|
|
|
|
|
|
|
Revenue |
237.5 |
203.7 |
246.9 |
251.7 |
245.6 |
939.8 |
Revenue
by metals in concentrates |
|
|
|
|
|
|
Copper |
196.6 |
173.7 |
209.2 |
216.1 |
202.1 |
795.6 |
Gold |
37.5 |
26.6 |
34.2 |
32.5 |
40.3 |
130.8 |
Silver |
3.4 |
3.3 |
3.5 |
3.2 |
3.2 |
13.4 |
Cost of
sales |
194.4 |
188.9 |
197.8 |
182.7 |
168.9 |
763.8 |
Production and delivery costs |
120.7 |
117.7 |
123.4 |
106.6 |
114.6 |
468.4 |
Depreciation and depletion |
78.3 |
75.0 |
77.4 |
73.4 |
55.6 |
304.1 |
Capital
expenditure on cash basis |
147.9 |
205.2 |
234.0 |
330.4 |
285.7 |
917.5 |
Underground |
136.4 |
184.7 |
205.6 |
309.0 |
270.5 |
835.7 |
Open
pit(2) |
11.5 |
20.5 |
28.4 |
21.4 |
15.2 |
81.8 |
Royalties |
14.3 |
12.5 |
14.5 |
15.8 |
14.9 |
57.1 |
Operating cash costs(3) |
168.4 |
163.6 |
161.9 |
217.7 |
176.6 |
711.6 |
Unit
costs ($) |
|
|
|
|
|
|
Cost of
sales (per pound of copper sold) |
2.23 |
2.30 |
2.43 |
2.32 |
2.23 |
2.32 |
C1 (per
pound of copper produced)(3) |
1.85 |
1.92 |
1.83 |
2.05 |
1.76 |
1.92 |
All-in
sustaining (per pound of copper produced)(3) |
2.15 |
2.27 |
2.76 |
2.40 |
2.07 |
2.39 |
|
|
|
|
|
|
|
(1) Any financial information in this press
release should be reviewed in conjunction with the Company‘s
consolidated financial statements or condensed interim consolidated
financial statements for the reporting periods indicated.(2)
Open-pit capital expenditure includes both sustaining and
non-underground development activities.(3) Please refer to the
NON-GAAP MEASURES section of this press release for further
information.
Revenue of $245.6 million in Q1’18 increased
3.4% over Q1’17 reflecting higher copper and gold prices partly
offset by lower concentrate sales volumes.
Cost of sales for Q1’18 was $168.9 million
compared to $194.4 million in Q1’17 reflecting lower volumes of
concentrates sold and reduced depreciation and depletion due to
certain long-lived assets reaching the end of their depreciable
lives.
Capital expenditure on a cash basis for Q1’18
was $285.7 million compared to $147.9 million in Q1’17, comprising
amounts attributed to the underground project and open-pit
activities of $270.5 million and $15.2 million respectively.
Total operating cash costs3 at Oyu Tolgoi was
$176.6 million in Q1’18 compared to $168.4 million in Q1’17 mainly
due to higher open pit and concentrator maintenance costs.
Operating cash costs include the 5% royalty payable to the
Government of Mongolia and exclude deferred stripping costs.
Cost of sales was $2.23 per pound of copper sold
in Q1’18 consistent with $2.23 per pound of copper sold in
Q1’17.
Oyu Tolgoi’s C1 cash costs3 in Q1’18 were $1.76
per pound of copper produced, a decrease from $1.85 per pound of
copper produced in Q1’17, due primarily to lower realization costs
and higher gold sales.
All-in sustaining costs3 in Q1’18 were $2.07 per
pound of copper produced, compared with $2.15 per pound of copper
produced in Q1’17, with key drivers being the same as for C1 cash
costs per pound of copper produced.
3 Please refer to the NON-GAAP MEASURES section
of this press release for further information.
Key operational metrics for Q1’18 are as
follows:
Oyu Tolgoi Production DataAll
data represents full production and sales on a 100% basis
|
1Q2017 |
2Q2017 |
3Q2017 |
4Q2017 |
1Q2018 |
Full Year2017 |
|
|
|
|
|
|
|
Open pit
material mined (‘000 tonnes) |
24,333 |
25,193 |
27,466 |
28,929 |
23,131 |
105,921 |
Ore
treated (‘000 tonnes) |
10,087 |
9,637 |
10,615 |
10,838 |
9,561 |
41,177 |
Average
mill head grades: |
|
|
|
|
|
|
Copper
(%) |
0.51 |
0.51 |
0.48 |
0.53 |
0.51 |
0.51 |
Gold
(g/t) |
0.15 |
0.16 |
0.18 |
0.20 |
0.25 |
0.17 |
Silver
(g/t) |
1.30 |
1.38 |
1.34 |
1.54 |
1.32 |
1.39 |
Concentrates produced (‘000 tonnes) |
176.0 |
171.0 |
170.0 |
205.4 |
177.3 |
722.5 |
Average
concentrate grade (% Cu) |
21.6 |
21.8 |
21.7 |
22.0 |
21.9 |
21.8 |
Production of metals in concentrates: |
|
|
|
|
|
|
Copper
(‘000 tonnes) |
38.1 |
37.2 |
36.9 |
45.3 |
38.8 |
157.4 |
Gold
(‘000 ounces) |
25 |
24 |
31 |
35 |
42 |
114 |
Silver
(‘000 ounces) |
215 |
236 |
239 |
285 |
221 |
974 |
Concentrates sold (‘000 tonnes) |
190.2 |
182.0 |
176.6 |
175.5 |
163.1 |
724.3 |
Sales of
metals in concentrates: |
|
|
|
|
|
|
Copper
(‘000 tonnes) |
39.5 |
37.3 |
36.9 |
35.7 |
34.3 |
149.3 |
Gold
(‘000 ounces) |
32 |
23 |
29 |
27 |
31 |
111 |
Silver
(‘000 ounces) |
205 |
222 |
229 |
205 |
206 |
860 |
Metal
recovery (%) |
|
|
|
|
|
|
Copper |
74.9 |
74.6 |
73.5 |
78.0 |
79.5 |
75.4 |
Gold |
48.8 |
47.7 |
51.2 |
50.5 |
55.0 |
49.7 |
Silver |
51.8 |
53.9 |
52.8 |
53.0 |
54.6 |
52.9 |
|
|
|
|
|
|
|
Oyu Tolgoi’s first quarter production was in
line with expectations. Material mined decreased 20.0% over Q4’17
due to winter weather effects in January as well as dig-unit
maintenance work during the quarter. Mill throughput decreased
11.8% over Q4’17 due to the January planned maintenance. Copper
production in Q1’18 decreased 14.3% over Q4’17 mainly due to lower
throughput and slightly lower grades. Gold production increased
20.0% over Q4’17 due to higher gold grades from Phase 4A and an
increase in recovery.
Operational outlook
Oyu Tolgoi is expected to produce 125,000 to
155,000 tonnes of copper and 240,000 to 280,000 ounces of gold in
concentrates for 2018. Open-pit operations are expected to mine in
Phase 6 in early 2018 and Phase 4 throughout the year. In addition,
stockpiled ore will be processed during 2018. The increased gold
production relative to the 2016 technical report is due to
splitting Phase 4 into two parts (4A and 4B) and bringing
production forward from future years.
Oyu Tolgoi tax assessment
On January 16, 2018, Turquoise Hill announced
that Oyu Tolgoi had received and was evaluating a tax assessment
for approximately $155 million from the Mongolian Tax Authority
(the MTA) relating to an audit on taxes imposed and paid by Oyu
Tolgoi LLC between 2013 and 2015. In January 2018, Oyu Tolgoi paid
an amount of approximately $5.0 million to settle unpaid taxes,
fines and penalties for accepted items.
Following engagement with the MTA, Oyu Tolgoi
was advised that the MTA could not resolve Oyu Tolgoi’s objections
to the tax assessment. Accordingly, on March 15, 2018, Oyu Tolgoi
issued a notice of dispute to the Government of Mongolia under the
2009 Oyu Tolgoi Investment Agreement (Investment Agreement) and on
April 13, 2018, Oyu Tolgoi submitted a claim to the Mongolian
Administrative Court. Chapter 14 of the Investment Agreement
sets out a dispute resolution process. The issuance of a
notice of dispute is the first step in the dispute resolution
process and includes a 60-working-day negotiation period. If
the parties are unable to reach a resolution during the
60-working-day period, the dispute can be referred to international
arbitration.
Turquoise Hill is of the opinion that Oyu Tolgoi
has now paid all taxes and charges required under the Investment
Agreement, the Amended and Restated Shareholders’ Agreement
(ARSHA), the Underground Plan and Mongolian law.
Force majeure declaration
On January 17, 2018, Oyu Tolgoi declared force
majeure in connection to customer contracts for concentrate due to
protestors using a large number of vehicles to obstruct the main
access road within China at the Ganqimaodu Border Zone. The border
crossing for goods and supplies remained open. The placement of
protestors’ vehicles prevented any traffic from safely traversing
the border, both inbound and outbound.
On January 18, 2018, the blockade was lifted and
the border reopened and on January 19, 2018, Oyu Tolgoi concentrate
convoys recommenced crossing the border. Due to ongoing border
congestion, a waiting period was required for border traffic to
return to pre-blockade levels. In order to lift force majeure, a
period of consistent convoy crossings was required reconfirming a
stable concentrate supply chain.
Effective March 1, 2018, Oyu Tolgoi lifted force
majeure notice to customers. Safe and normal operations, including
underground development, were maintained during the force majeure
period, and no production impact is expected. Turquoise Hill
expects any force majeure-related sales impact to be made up over
the next few quarters.
Oyu Tolgoi power supply
On May 12, 2017, Oyu Tolgoi LLC signed a new
power purchase agreement (PPA) with the National Power Transmission
Grid (NPTG) of Mongolia. The PPA was executed in connection with
the power import arrangement between NPTG and the Inner Mongolia
Power International Corporation (IMPIC). The new arrangement took
effect on July 4, 2017, subsequent to the expiry of the existing
IMPIC agreement, for a term of up to six years, with possibility of
early cancellation after the fourth year, if a domestic power plant
is commissioned earlier. The extension is essential for Oyu Tolgoi
to have secure access to power while it works with the Government
of Mongolia on establishing a permanent domestic power source.
On February 15, 2018, Oyu Tolgoi received
notification that the Government of Mongolia (Government) had
cancelled the Power Sector Cooperation Agreement (PSCA), which was
signed in August 2014. The Government’s cancellation, under Section
1.3 of the PSCA, indicated the Tavan Tolgoi power project was no
longer a viable option. As a result of the Government’s
cancellation, effective February 15, 2018, long-term power for Oyu
Tolgoi must be domestically sourced within four years, in
accordance with the Investment Agreement. Oyu Tolgoi, Turquoise
Hill and Rio Tinto are committed to fulfilling all requirements
under the Investment Agreement and are continuing to evaluate all
viable power options, including construction of an Oyu Tolgoi based
power plant. A final decision on the outcome, cost and financing of
a domestic power supply has not been concluded.
Funding of Oyu Tolgoi by Turquoise
Hill
In accordance with the ARSHA dated June 8, 2011,
Turquoise Hill has funded Oyu Tolgoi’s cash requirements beyond
internally generated cash flows by a combination of equity
investment and shareholder debt.
For amounts funded by debt, Oyu Tolgoi must
repay such amounts, including accrued interest, before it can pay
common share dividends. As of March 31, 2018, the aggregate
outstanding balance of shareholder loans extended by subsidiaries
of the Company to Oyu Tolgoi was $4.1 billion, including accrued
interest of $0.4 billion. These loans bear interest at an effective
annual rate of LIBOR plus 6.5%.
In accordance with the ARSHA, a subsidiary of
the Company has funded the common share investments in Oyu Tolgoi
on behalf of Erdenes. These funded amounts earn interest at an
effective annual rate of LIBOR plus 6.5% and are repayable, by
Erdenes to a subsidiary of the Company, via a pledge over Erdenes’
share of Oyu Tolgoi common share dividends. Erdenes also has the
right to reduce the outstanding balance by making cash payments at
any time. As of March 31, 2018, the cumulative amount of such
funding was $0.9 billion, representing 34% of invested common share
equity; unrecognized interest on the funding amounted to $0.4
billion.
Anti-Corruption Authority Information
Requests
Oyu Tolgoi LLC has received information requests
from the Mongolian Anti-Corruption Authority (ACA) for information
relating to Oyu Tolgoi. Turquoise Hill has inquired as to the
status of the investigation and Oyu Tolgoi has confirmed that it is
complying with the requests, which Turquoise Hill believes relates
to an ACA investigation into possible abuses of power by certain
Government of Mongolia officials in relation to the Oyu Tolgoi
project. To date, neither Turquoise Hill nor Oyu Tolgoi have
received notice from the ACA, or indeed from any regulator, that
they are subjects of any investigation involving the Oyu Tolgoi
project.
The Investment Agreement was authorized by the
Mongolian Parliament, concluded after 16 months of negotiations and
reviewed by numerous constituencies within the Mongolian
Government. Turquoise Hill has been operating in good faith under
the terms of the Investment Agreement since 2009, and we believe
not only that it is a valid and binding agreement, but that it has
proven to be beneficial for all parties.
Adherence to the principles of the Investment
Agreement has allowed for the development of Oyu Tolgoi in a manner
that has given rise to significant long-term benefits to
Mongolia. Benefits from Oyu Tolgoi’s open-pit operations and
underground development include, but are not limited to,
employment, royalties and taxes, local procurement, economic
development and sustainability investments.
CORPORATE ACTIVITIES
Letter to shareholders
On March 14, 2018, the Board of Directors of
Turquoise Hill Resources issued a letter to shareholders regarding
a meeting between members of Turquoise Hill’s board of directors
and representatives of SailingStone Capital Partners
(SailingStone). The meeting followed a publicly-filed letter by
SailingStone on February 1, 2018 in which it raised corporate
governance concerns.
NON-GAAP MEASURES
The Company presents and refers to the following
non-GAAP measures, which are not defined in IFRS. A description and
calculation of each measure is given below and may differ from
similarly named measures provided by other issuers. These measures
are presented in order to provide investors and other stakeholders
with additional understanding of performance and operations at Oyu
Tolgoi and are not intended to be used in isolation from, or as a
replacement for, measures prepared in accordance with IFRS.
Operating cash costs
The measure of operating cash costs excludes:
depreciation and depletion; exploration and evaluation; charges for
asset write-down (including write-down of materials and supplies
inventory) and includes management services payments to Rio Tinto
and management services payments to Turquoise Hill which are
eliminated in the consolidated financial statements of the
Company.
C1 cash costs
C1 cash costs is a metric representing the cash
cost per unit of extracting and processing the Company’s principal
metal product, copper, to a condition in which it may be delivered
to customers net of gold and silver credits from concentrates sold.
It is provided in order to support peer group comparability and to
provide investors and other stakeholders with additional
information about the underlying cash costs of Oyu Tolgoi and the
impact of gold and silver credits on the operations’ cost
structure. C1 cash costs are relevant to understanding the
Company’s operating profitability and ability to generate cash
flow. When calculating costs associated with producing a pound of
copper, the Company deducts gold and silver revenue credits as the
production cost is reduced as a result of selling these
products.
All-in sustaining
costs
All-in sustaining costs (AISC) is an extended
cash-based cost metric providing further information on the
aggregate cash, capital and overhead outlay per unit and is
intended to reflect the costs of producing the Company’s principal
metal product, copper, in both the short term and over the
life-cycle of its operations; as a result, sustaining capital
expenditure on a cash basis is included rather than depreciation.
As the measure seeks to present a full cost of copper production
associated with sustaining current operations, development project
capital is not included. AISC allows Turquoise Hill to assess the
ability of Oyu Tolgoi to support sustaining capital expenditures
for future production from the generation of operating cash
flows.
A reconciliation of total operating cash costs,
C1 cash costs and all-in sustaining costs is provided below.
|
Operating and unit costs |
|
|
(Three Months Ended) |
|
(Year Ended) |
|
C1 costs
(Stated in $000's of dollars) |
March 31, 2018 |
|
December 31, 2017 |
|
March 31, 2017 |
|
December 31, 2017 |
|
Cost of sales |
168,869 |
|
|
182,788 |
|
|
194,379 |
|
|
763,798 |
|
|
Cost of sales:
$/lb of copper sold |
2.23 |
|
|
2.32 |
|
|
2.23 |
|
|
2.32 |
|
|
Depreciation and
depletion |
(55,610 |
) |
|
(73,491 |
) |
|
(78,288 |
) |
|
(304,144 |
) |
|
Provision against
carrying value of copper-gold concentrate |
1,366 |
|
|
(2,711 |
) |
|
4,655 |
|
|
8,718 |
|
|
Change in
inventory |
15,386 |
|
|
44,029 |
|
|
(4,168 |
) |
|
13,885 |
|
|
Other operating
expenses |
30,285 |
|
|
50,701 |
|
|
40,657 |
|
|
201,461 |
|
|
Less: |
|
|
|
|
|
|
|
|
-
Inventory (write-down) reversal |
9,994 |
|
|
11,812 |
|
|
6,154 |
|
|
6,834 |
|
|
-
Depreciation |
(719 |
) |
|
(804 |
) |
|
(1,030 |
) |
|
(3,460 |
) |
|
Management services
payment to Turquoise Hill |
7,049 |
|
|
5,348 |
|
|
6,083 |
|
|
24,554 |
|
|
Operating cash
costs |
176,620 |
|
|
217,672 |
|
|
168,442 |
|
|
711,646 |
|
|
Operating cash
costs: $/lb of copper produced |
2.06 |
|
|
2.18 |
|
|
2.01 |
|
|
2.05 |
|
|
Adjustments to
operating cash costs(1) |
17,246 |
|
|
22,966 |
|
|
27,970 |
|
|
100,018 |
|
|
Less: Gold and silver
revenues |
(43,671 |
) |
|
(35,615 |
) |
|
(40,937 |
) |
|
(144,218 |
) |
|
C1 costs
($'000) |
150,195 |
|
|
205,023 |
|
|
155,475 |
|
|
667,446 |
|
|
C1 costs: $/lb
of copper produced |
1.76 |
|
|
2.05 |
|
|
1.85 |
|
|
1.92 |
|
|
|
|
|
|
|
|
|
|
|
|
All-in
sustaining costs (Stated in $000's of dollars) |
|
|
|
|
|
|
|
|
|
Corporate
administration |
4,893 |
|
|
7,746 |
|
|
4,492 |
|
|
21,999 |
|
|
Asset retirement
expense |
1,695 |
|
|
1,669 |
|
|
1,676 |
|
|
6,583 |
|
|
Royalty expenses |
14,913 |
|
|
15,654 |
|
|
14,349 |
|
|
57,082 |
|
|
Ore stockpile and
stores reversal |
(9,994 |
) |
|
(11,812 |
) |
|
(6,154 |
) |
|
(6,834 |
) |
|
Other expenses |
(38 |
) |
|
274 |
|
|
(627 |
) |
|
3,056 |
|
|
Sustaining cash capital
including deferred stripping |
15,417 |
|
|
21,108 |
|
|
11,675 |
|
|
81,450 |
|
|
All-in
sustaining costs ($'000) |
177,081 |
|
|
239,662 |
|
|
180,886 |
|
|
830,782 |
|
|
All-in
sustaining costs: $/lb of copper produced |
2.07 |
|
|
2.40 |
|
|
2.15 |
|
|
2.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjustments to operating cash costs include: treatment,
refining and freight differential charges less the 5% Government of
Mongolia royalty and other expenses not applicable to the
definition of C1 cost.
Working capital
Consolidated working capital comprises those components of
current assets and liabilities which support and result from the
Company’s ongoing running of its current operations. It is provided
in order to give a quantifiable indication of the Company’s
short-term cash generation ability and business efficiency. As a
measure linked to current operations and the sustainability of the
business, working capital excludes: non-trade receivables and
payables; financing items; cash and cash equivalents; deferred
revenue and non-current inventory.
A reconciliation of consolidated working capital to the
financial statements and notes is provided below.
Working
capital |
|
March 31, |
|
December 31, |
(Stated
in $000's of dollars) |
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Inventories
(current) |
|
$ |
301,679 |
|
|
$ |
274,142 |
|
Trade and other
receivables |
|
|
35,114 |
|
|
|
29,089 |
|
Trade and other
payables: |
|
|
|
|
|
|
|
|
- trade
payables and accrued liabilities |
|
|
(362,834 |
) |
|
|
(360,697 |
) |
- payable
to related parties |
|
|
(46,464 |
) |
|
|
(52,308 |
) |
Consolidated working capital |
|
$ |
(72,505 |
) |
|
$ |
(109,774 |
) |
|
|
|
|
|
|
|
|
|
Contractual obligations
Section 9 of the Company’s MD&A discloses
contractual obligations in relation to the Company’s lease,
purchase and asset retirement obligations. Amounts relating to
these obligations are calculated on the basis of the Company
carrying out its future business activities and operations as
planned at the period end. As such, contractual obligations
presented in the MD&A will differ from amounts presented in the
financial statements, which are prepared on the basis of minimum
uncancellable commitments to pay in the event of contract
termination. The MD&A presentation of contractual obligations
is provided in order to give an indication of future expenditure,
for the disclosed categories, arising from the Company’s continuing
operations and development projects.
A reconciliation of contractual obligations at
March 31, 2018 to the financial statements and notes is provided
below.
|
|
|
|
|
|
(Stated
in $000's of dollars) |
Purchase obligations |
Power commitments |
Operating leases |
Finance leases |
Decommissioning obligations |
|
|
|
|
|
|
Commitments
(MD&A) |
$ |
1,239,152 |
|
$ |
613,515 |
|
$ |
46,932 |
$ |
12,405 |
$ |
268,010 |
|
Cancellable
obligations |
|
(1,003,445 |
) |
|
(174,210 |
) |
|
- |
|
- |
|
- |
|
(net of exit
costs) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued capital
expenditure |
|
(185,764 |
) |
|
- |
|
|
- |
|
- |
|
- |
|
Discounting and other
adjustments |
|
- |
|
|
- |
|
|
- |
|
- |
|
(141,101 |
) |
Financial statement amount |
$ |
49,943 |
|
$ |
439,305 |
|
$ |
46,932 |
$ |
12,405 |
$ |
126,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
QUALIFIED PERSON
Disclosure of a scientific or technical nature
in this MD&A in respect of the Oyu Tolgoi mine was prepared
under the supervision of Bernard Peters, Technical Director –
Mining, OreWin Pty Ltd., B. Eng. (Mining), FAusIMM (201743), and
Sharron Sylvester, Technical Director – Geology, OreWin Pty Ltd.,
BSc (Geol.), RPGeo AIG (10125). Each of these individuals is a
“qualified person” as that term is defined in National Instrument
Standards of Disclosure for Mineral Projects (NI 43-101).
SELECTED QUARTERLY DATA
($ in millions, except
per share information) |
|
Quarter Ended |
|
|
Mar-31 |
Dec-31 |
Sep-30 |
Jun-30 |
|
|
|
2018 |
|
2017 |
|
2017 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
245.6 |
$ |
251.7 |
$ |
246.9 |
|
$ |
203.7 |
|
|
|
|
|
|
|
Income (loss) for the period |
|
$ |
79.7 |
$ |
33.9 |
$ |
47.7 |
|
$ |
(0.4 |
) |
|
|
|
|
|
|
Income attributable to owners of Turquoise Hill |
|
$ |
85.7 |
$ |
51.1 |
$ |
65.3 |
|
$ |
23.8 |
|
|
|
|
|
|
|
Basic and diluted income per share attributable to owners of
Turquoise Hill |
|
$ |
0.04 |
$ |
0.03 |
$ |
0.03 |
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
|
Mar-31 |
Dec-31 |
Sep-30 |
Jun-30 |
|
|
|
2017 |
|
2016 |
|
2016 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
237.5 |
$ |
224.6 |
$ |
226.3 |
|
$ |
329.7 |
|
|
|
|
|
|
|
Income (loss) for the period |
|
$ |
29.7 |
$ |
86.8 |
$ |
(77.8 |
) |
$ |
(24.0 |
) |
|
|
|
|
|
|
Income (loss) attributable to owners of Turquoise Hill |
|
$ |
41.0 |
$ |
93.3 |
$ |
(31.4 |
) |
$ |
29.8 |
|
|
|
|
|
|
|
Basic and
diluted income (loss) per share attributable |
|
|
|
|
|
to owners of Turquoise Hill |
|
$ |
0.02 |
$ |
0.05 |
$ |
(0.02 |
) |
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
KEY STATISTICS1
|
1Q2017 |
2Q2017 |
3Q2017 |
4Q2017 |
1Q2018 |
Full Year2017 |
Operating
results |
|
|
|
|
|
|
Open pit material mined
(‘000 tonnes) |
24,333 |
25,193 |
27,466 |
28,929 |
23,131 |
105,921 |
Ore treated (‘000
tonnes) |
10,087 |
9,637 |
10,615 |
10,838 |
9,561 |
41,177 |
Average mill head
grades: |
|
|
|
|
|
|
Copper
(%) |
0.51 |
0.51 |
0.48 |
0.53 |
0.51 |
0.51 |
Gold
(g/t) |
0.15 |
0.16 |
0.18 |
0.20 |
0.25 |
0.17 |
Silver
(g/t) |
1.30 |
1.38 |
1.34 |
1.54 |
1.32 |
1.39 |
Concentrates produced
(‘000 tonnes) |
176.0 |
171.0 |
170.0 |
205.4 |
177.3 |
722.5 |
Average
concentrate grade (% Cu) |
21.6 |
21.8 |
21.7 |
22.0 |
21.9 |
21.8 |
Production of metals in
concentrates: |
|
|
|
|
|
|
Copper
(‘000 tonnes) |
38.1 |
37.2 |
36.9 |
45.3 |
38.8 |
157.4 |
Gold
(‘000 ounces) |
25 |
24 |
31 |
35 |
42 |
114 |
Silver
(‘000 ounces) |
215 |
236 |
239 |
285 |
221 |
974 |
Concentrates sold (‘000
tonnes) |
190.2 |
182.0 |
176.6 |
175.5 |
163.1 |
724.3 |
Sales of metals in
concentrates: |
|
|
|
|
|
|
Copper
(‘000 tonnes) |
39.5 |
37.3 |
36.9 |
35.7 |
34.3 |
149.3 |
Gold
(‘000 ounces) |
32 |
23 |
29 |
27 |
31 |
111 |
Silver
(‘000 ounces) |
205 |
222 |
229 |
205 |
206 |
860 |
Metal recovery (%) |
|
|
|
|
|
|
Copper |
74.9 |
74.6 |
73.5 |
78.0 |
79.5 |
75.4 |
Gold |
48.8 |
47.7 |
51.2 |
50.5 |
55.0 |
49.7 |
Silver |
51.8 |
53.9 |
52.8 |
53.0 |
54.6 |
52.9 |
|
|
|
|
|
|
|
Financial
results ($ in millions, unless otherwise noted) |
|
|
|
|
|
|
Revenue |
237.5 |
203.7 |
246.9 |
251.7 |
245.6 |
939.8 |
Revenue by metals in
concentrates |
|
|
|
|
|
|
Copper |
196.6 |
173.7 |
209.2 |
216.1 |
202.1 |
795.6 |
Gold |
37.5 |
26.6 |
34.2 |
32.5 |
40.3 |
130.8 |
Silver |
3.4 |
3.3 |
3.5 |
3.2 |
3.2 |
13.4 |
Operating cash
flow |
88.5 |
51.5 |
94.7 |
91.1 |
14.7 |
325.8 |
Cost of sales |
194.4 |
188.9 |
197.8 |
182.7 |
168.9 |
763.8 |
Production and delivery costs |
120.7 |
117.7 |
123.4 |
106.6 |
114.6 |
468.4 |
Depreciation and depletion |
78.3 |
75.0 |
77.4 |
73.4 |
55.6 |
304.1 |
Capital expenditure on
cash basis |
147.9 |
205.2 |
234.0 |
330.4 |
285.7 |
917.5 |
Underground |
136.4 |
184.7 |
205.6 |
309.0 |
270.5 |
835.7 |
Open pit
(2) |
11.5 |
20.5 |
28.4 |
21.4 |
15.2 |
81.8 |
Royalties |
14.3 |
12.5 |
14.5 |
15.8 |
14.9 |
57.1 |
Operating cash
costs(3) |
168.4 |
163.6 |
161.9 |
217.7 |
176.6 |
711.6 |
Unit costs ($) |
|
|
|
|
|
|
Cost of
sales (per pound of copper sold) |
2.23 |
2.30 |
2.43 |
2.32 |
2.23 |
2.32 |
C1 (per
pound of copper produced) (3) |
1.85 |
1.92 |
1.83 |
2.05 |
1.76 |
1.92 |
All-in
sustaining (per pound of copper produced) (3) |
2.15 |
2.27 |
2.76 |
2.40 |
2.07 |
2.39 |
|
|
|
|
|
|
|
Financial
position |
|
|
|
|
|
|
Cash and cash
equivalents ($’000,000) |
1,386.3 |
1,378.5 |
1,485.5 |
1,444.8 |
1,498.4 |
1,444.8 |
(1) Any financial information in this press
release should be reviewed in conjunction with the Company‘s
consolidated financial statements or condensed interim consolidated
financial statements for the reporting periods indicated.(2)
Open-pit capital expenditure includes both sustaining and
non-underground development activities.(3) Please refer to the
NON-GAAP MEASURES section of this press release for further
information.
TURQUOISE HILL RESOURCES LTD. |
|
|
|
|
|
|
Consolidated Statements of Income |
|
|
|
|
|
|
(Stated in thousands of U.S.
dollars) |
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
Note |
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
4 |
|
$ |
245,592 |
|
|
$ |
237,466 |
|
|
Cost of sales |
5 |
|
|
(168,869 |
) |
|
|
(194,379 |
) |
|
Gross margin |
|
|
|
76,723 |
|
|
|
43,087 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses |
6 |
|
|
(30,285 |
) |
|
|
(40,657 |
) |
|
Corporate
administration expenses |
|
|
|
(4,893 |
) |
|
|
(4,492 |
) |
|
Other expenses |
|
|
|
(2,678 |
) |
|
|
(737 |
) |
|
Income (loss) before finance items and taxes |
|
|
|
38,867 |
|
|
|
(2,799 |
) |
|
|
|
|
|
|
|
|
|
|
|
Finance items |
|
|
|
|
|
|
Finance
income |
7 |
|
|
38,895 |
|
|
|
37,906 |
|
|
Finance costs |
7 |
|
|
(23,986 |
) |
|
|
(43,808 |
) |
|
|
|
|
|
|
|
|
14,909 |
|
|
|
(5,902 |
) |
|
Income (loss) from operations before taxes |
|
|
$ |
53,776 |
|
|
$ |
(8,701 |
) |
|
|
|
|
|
|
|
|
|
|
|
Income and other taxes |
|
|
|
25,928 |
|
|
|
38,417 |
|
|
Income for the period |
|
|
$ |
79,704 |
|
|
$ |
29,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to owners of Turquoise Hill Resources Ltd. |
|
|
|
85,692 |
|
|
|
40,968 |
|
|
|
Attributable to owner of non-controlling interest |
|
|
|
(5,988 |
) |
|
|
(11,252 |
) |
|
Income for the period |
|
|
$ |
79,704 |
|
|
$ |
29,716 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share attributable to
Turquoise Hill Resources Ltd. |
18 |
|
$ |
0.04 |
|
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average number of shares outstanding
(000's) |
|
|
|
2,012,314 |
|
|
|
2,012,314 |
|
|
|
|
|
|
|
|
|
|
|
|
The notes
to these financial statements, which are available on our website,
are an integral part of the consolidated financial
statements. |
|
TURQUOISE HILL RESOURCES LTD. |
|
|
|
|
|
Consolidated Statements of Comprehensive
Income |
|
|
|
|
|
(Stated in thousands of U.S.
dollars) |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
Income for the period |
|
$ |
79,704 |
|
|
$ |
29,716 |
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss): |
|
|
|
|
|
Items that
will not be reclassified to income: |
|
|
|
|
|
|
Changes in
the fair value of marketable securities at FVOCI |
|
|
(3,200 |
) |
|
|
2,674 |
|
|
|
|
|
|
|
|
|
|
|
Items that
have been reclassified to income: |
|
|
|
|
|
|
Gain on
revaluation of marketable securities transferred to the statement
of income |
|
|
- |
|
|
|
(39 |
) |
|
Other comprehensive income (loss) for the
period (a) |
|
$ |
(3,200 |
) |
|
$ |
2,635 |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income for the
period |
|
$ |
76,504 |
|
|
$ |
32,351 |
|
|
|
|
|
|
|
|
|
|
|
|
Attributable to owners of Turquoise Hill |
|
|
82,492 |
|
|
|
43,603 |
|
|
|
Attributable to owner of non-controlling interest |
|
|
(5,988 |
) |
|
|
(11,252 |
) |
|
Total comprehensive income for the
period |
|
$ |
76,504 |
|
|
$ |
32,351 |
|
|
|
|
|
|
|
|
|
|
|
(a) No tax
charges and credits arose on items recognized as other
comprehensive income or loss in 2018 (2017: nil). |
|
|
|
|
|
|
|
|
|
|
|
The notes
to these financial statements, which are available on our website,
are an integral part of the consolidated financial
statements. |
|
TURQUOISE HILL RESOURCES LTD. |
|
|
|
|
|
Consolidated Statements of Cash Flows |
|
|
|
|
|
(Stated in thousands of U.S.
dollars) |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
|
Note |
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
Cash generated from operating activities before interest
and tax |
17 |
|
$ |
14,680 |
|
|
$ |
88,480 |
|
|
|
|
|
|
|
|
|
|
Interest
received |
|
|
|
19,019 |
|
|
|
12,338 |
|
Interest
paid |
|
|
|
(12,221 |
) |
|
|
(12,644 |
) |
Income and other taxes paid |
|
|
|
(2,068 |
) |
|
|
(1,886 |
) |
Net
cash generated from operating activities |
|
|
|
19,410 |
|
|
|
86,288 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Receivable
from related party: amounts withdrawn |
19 |
|
|
320,000 |
|
|
|
30,000 |
|
Expenditures on property, plant and equipment |
|
|
|
(285,716 |
) |
|
|
(147,876 |
) |
Proceeds
from sale and redemption of financial assets |
|
|
|
- |
|
|
|
63 |
|
Cash generated from (used in) investing
activities |
|
|
$ |
34,284 |
|
|
$ |
(117,813 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
Cash generated from financing
activities |
|
|
$ |
- |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
Effects of
exchange rates on cash and cash equivalents |
|
|
|
(44 |
) |
|
|
56 |
|
Net increase (decrease) in cash and cash
equivalents |
|
|
$ |
53,650 |
|
|
$ |
(31,469 |
) |
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents - beginning of period |
|
|
$ |
1,444,783 |
|
|
$ |
1,417,754 |
|
Cash and cash equivalents - end of period |
|
|
|
1,498,433 |
|
|
|
1,386,285 |
|
Cash and cash equivalents as presented on the
balance sheets |
|
|
$ |
1,498,433 |
|
|
$ |
1,386,285 |
|
|
|
|
|
|
|
|
|
|
The notes
to these financial statements, which are available on our website,
are an integral part of the consolidated financial
statements. |
TURQUOISE HILL RESOURCES LTD. |
|
|
|
|
|
|
Consolidated Balance Sheets |
|
|
|
|
|
|
(Stated in thousands of U.S.
dollars) |
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
|
|
December 31, |
|
|
|
|
|
|
Note |
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and
cash equivalents |
8 |
|
$ |
1,498,433 |
|
|
$ |
1,444,783 |
|
|
Inventories |
9 |
|
|
301,679 |
|
|
|
274,142 |
|
|
Trade and
other receivables |
|
|
|
35,114 |
|
|
|
29,089 |
|
|
Prepaid
expenses and other assets |
|
|
|
58,137 |
|
|
|
49,552 |
|
|
Receivable from related party |
10 |
|
|
1,099,633 |
|
|
|
1,367,586 |
|
|
|
|
|
|
|
|
|
2,992,996 |
|
|
|
3,165,152 |
|
|
Non-current assets |
|
|
|
|
|
|
Property,
plant and equipment |
11 |
|
|
7,661,759 |
|
|
|
7,346,972 |
|
|
Inventories |
9 |
|
|
40,640 |
|
|
|
43,379 |
|
|
Deferred
income tax assets |
14 |
|
|
506,142 |
|
|
|
473,742 |
|
|
Receivable from related party and other financial
assets |
10 |
|
|
1,748,915 |
|
|
|
1,804,074 |
|
|
|
|
|
|
|
|
|
9,957,456 |
|
|
|
9,668,167 |
|
|
Total assets |
|
|
$ |
12,950,452 |
|
|
$ |
12,833,319 |
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Trade and
other payables |
12 |
|
$ |
474,008 |
|
|
$ |
435,869 |
|
|
Deferred revenue |
|
|
|
60,231 |
|
|
|
67,598 |
|
|
|
|
|
|
|
|
|
534,239 |
|
|
|
503,467 |
|
|
Non-current liabilities |
|
|
|
|
|
|
Borrowings
and other financial liabilities |
13 |
|
|
4,162,871 |
|
|
|
4,159,119 |
|
|
Deferred
income tax liabilities |
14 |
|
|
30,613 |
|
|
|
25,788 |
|
|
Decommissioning obligations |
15 |
|
|
126,909 |
|
|
|
125,721 |
|
|
|
|
|
|
|
|
|
4,320,393 |
|
|
|
4,310,628 |
|
|
Total liabilities |
|
|
$ |
4,854,632 |
|
|
$ |
4,814,095 |
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Share
capital |
|
|
$ |
11,432,122 |
|
|
$ |
11,432,122 |
|
|
Contributed
surplus |
|
|
|
1,558,194 |
|
|
|
1,558,102 |
|
|
Accumulated
other comprehensive income |
|
|
|
519 |
|
|
|
3,719 |
|
|
Deficit |
|
|
|
|
(3,995,816 |
) |
|
|
(4,081,508 |
) |
|
Equity attributable to owners of Turquoise
Hill |
|
|
|
8,995,019 |
|
|
|
8,912,435 |
|
|
Attributable to non-controlling interest |
16 |
|
|
(899,199 |
) |
|
|
(893,211 |
) |
|
Total equity |
|
|
$ |
8,095,820 |
|
|
$ |
8,019,224 |
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and equity |
|
|
$ |
12,950,452 |
|
|
$ |
12,833,319 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments
and contingencies (Note 20) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The notes
to these financial statements, which are available on our website,
are an integral part of the consolidated financial
statements. |
|
TURQUOISE HILL RESOURCES LTD. |
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Stated in thousands of U.S.
dollars) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2018 |
|
Attributable to owners of Turquoise
Hill |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
other |
|
|
|
|
|
|
Non-controlling |
|
|
|
|
|
|
|
|
Contributed |
|
comprehensive |
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
Share capital |
|
surplus |
|
income (loss) |
|
Deficit |
|
Total |
|
|
(Note 16) |
|
Total equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
$ |
11,432,122 |
|
$ |
1,558,102 |
|
$ |
3,719 |
|
|
$ |
(4,081,508 |
) |
|
$ |
8,912,435 |
|
|
|
$ |
(893,211 |
) |
|
$ |
8,019,224 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income for the period |
|
|
- |
|
|
- |
|
|
- |
|
|
|
85,692 |
|
|
|
85,692 |
|
|
|
|
(5,988 |
) |
|
|
79,704 |
|
|
Other comprehensive loss for the |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period |
|
|
- |
|
|
- |
|
|
(3,200 |
) |
|
|
- |
|
|
|
(3,200 |
) |
|
|
|
- |
|
|
|
(3,200 |
) |
|
Employee share plans |
|
|
- |
|
|
92 |
|
|
- |
|
|
|
- |
|
|
|
92 |
|
|
|
|
- |
|
|
|
92 |
|
|
Closing balance |
|
$ |
11,432,122 |
|
$ |
1,558,194 |
|
$ |
519 |
|
|
$ |
(3,995,816 |
) |
|
$ |
8,995,019 |
|
|
|
$ |
(899,199 |
) |
|
$ |
8,095,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2017 |
|
Attributable to owners of Turquoise
Hill |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
other |
|
|
|
|
|
|
Non-controlling |
|
|
|
|
|
|
|
|
Contributed |
|
comprehensive |
|
|
|
|
|
|
Interest |
|
|
|
|
|
|
Share capital |
|
surplus |
|
income (loss) |
|
Deficit |
|
Total |
|
|
(Note 16) |
|
Total equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Opening balance |
|
$ |
11,432,122 |
|
$ |
1,557,913 |
|
$ |
(402 |
) |
|
$ |
(4,262,755 |
) |
|
$ |
8,726,878 |
|
|
|
$ |
(822,892 |
) |
|
$ |
7,903,986 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income for the period |
|
|
- |
|
|
- |
|
|
- |
|
|
|
40,968 |
|
|
|
40,968 |
|
|
|
|
(11,252 |
) |
|
|
29,716 |
|
|
Other comprehensive income for the |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
period |
|
|
- |
|
|
- |
|
|
2,635 |
|
|
|
- |
|
|
|
2,635 |
|
|
|
|
- |
|
|
|
2,635 |
|
|
Employee share plans |
|
|
- |
|
|
100 |
|
|
- |
|
|
|
- |
|
|
|
100 |
|
|
|
|
- |
|
|
|
100 |
|
|
Closing balance |
|
$ |
11,432,122 |
|
$ |
1,558,013 |
|
$ |
2,233 |
|
|
$ |
(4,221,787 |
) |
|
$ |
8,770,581 |
|
|
|
$ |
(834,144 |
) |
|
$ |
7,936,437 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The notes
to these financial statements, which are available on our website,
are an integral part of the consolidated financial statements. |
|
ContactInvestors and Media
Tony Shaffer+ 604 648
3934tony.shaffer@turquoisehill.com
Follow us on Twitter @TurquoiseHillRe
Forward-looking
statementsCertain statements made herein, including
statements relating to matters that are not historical facts and
statements of the Company’s beliefs, intentions and expectations
about developments, results and events which will or may occur in
the future, constitute “forward-looking information” within the
meaning of applicable Canadian securities legislation and
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements and
information relate to future events or future performance, reflect
current expectations or beliefs regarding future events and are
typically identified by words such as “anticipate”, “could”,
“should”, “expect”, “seek”, “may”, “intend”, “likely”, “plan”,
“estimate”, “will”, “believe” and similar expressions suggesting
future outcomes or statements regarding an outlook. These include,
but are not limited to, statements about anticipated business
activities, planned expenditures, corporate strategies, and other
statements that are not historical facts.
Forward-looking statements and information are
made based upon certain assumptions and other important factors
that, if untrue, could cause the actual results, performance or
achievements of the Company to be materially different from future
results, performance or achievements expressed or implied by such
statements or information. There can be no assurance that such
statements or information will prove to be accurate. Such
statements and information are based on numerous assumptions
regarding present and future business strategies, local and global
economic conditions, and the environment in which the Company will
operate in the future, including the price of copper, gold and
silver, anticipated capital and operating costs, anticipated future
production and cash flows, and the status of the Company’s
relationship and interaction with the Government of Mongolia on the
continued development of Oyu Tolgoi and Oyu Tolgoi LLC internal
governance. Certain important factors that could cause actual
results, performance or achievements to differ materially from
those in the forward-looking statements and information include,
among others, copper; gold and silver price volatility;
discrepancies between actual and estimated production, mineral
reserves and resources and metallurgical recoveries; development
plans for processing resources; matters relating to proposed
exploration or expansion; mining operational and development risks;
litigation risks; regulatory restrictions (including environmental
regulatory restrictions and liability); Oyu Tolgoi LLC’s ability to
deliver a domestic power source for the Oyu Tolgoi project within
the required contractual time frame; communications with local
stakeholders and community relations; activities, actions or
assessments, including tax assessments, by governmental
authorities; events or circumstances (including strikes, blockages
or similar events outside of the Company’s control) that may affect
the Company’s ability to deliver its products in a timely manner;
currency fluctuations; the speculative nature of mineral
exploration; the global economic climate; dilution; share price
volatility; competition; loss of key employees; cyber security
incidents; additional funding requirements, including in respect of
the development or construction of a long-term domestic power
supply for the Oyu Tolgoi project; capital and operating costs,
including with respect to the development of additional deposits
and processing facilities; and defective title to mineral claims or
property. Although the Company has attempted to identify important
factors that could cause actual actions, events or results to
differ materially from those described in forward-looking
statements and information, there may be other factors that cause
actions, events or results not to be as anticipated, estimated or
intended. All such forward-looking statements and information are
based on certain assumptions and analyses made by the Company’s
management in light of their experience and perception of
historical trends, current conditions and expected future
developments, as well as other factors management believes are
appropriate in the circumstances. These statements, however, are
subject to a variety of risks and uncertainties and other factors
that could cause actual events or results to differ materially from
those projected in the forward-looking statements or
information.
Readers are cautioned not to place undue
reliance on forward-looking information or statements. By their
nature, forward-looking statements involve numerous assumptions,
inherent risks and uncertainties, both general and specific, which
contribute to the possibility that the predicted outcomes will not
occur. Events or circumstances could cause the Company’s actual
results to differ materially from those estimated or projected and
expressed in, or implied by, these forward-looking statements.
Important factors that could cause actual results to differ from
these forward-looking statements are included in the “Risk Factors”
section in the Company’s Annual Information Form dated as of March
15, 2018 in respect of the year ended December 31, 2017 (the
“AIF”).
Readers are further cautioned that the list of
factors enumerated in the “Risk Factors” section of the AIF that
may affect future results is not exhaustive. When relying on the
Company’s forward-looking statements and information to make
decisions with respect to the Company, investors and others should
carefully consider the foregoing factors and other uncertainties
and potential events.
Turquoise Hill Resources (NYSE:TRQ)
Historical Stock Chart
From Jun 2024 to Jul 2024
Turquoise Hill Resources (NYSE:TRQ)
Historical Stock Chart
From Jul 2023 to Jul 2024