Turquoise Hill Resources today announced the submission of the Feasibility Study for the Tavan Tolgoi Power Plant (TTPP) Project to the Government of Mongolia by Oyu Tolgoi LLC.

Oyu  Tolgoi  LLC  is  obliged  under  the  2009  Oyu  Tolgoi  Investment  Agreement  (Investment  Agreement)  to  secure  a  long-term  domestic  source  of  power  for  the  Oyu  Tolgoi  mine.  The  Power  Source  Framework  Agreement (PSFA) entered into between Oyu Tolgoi LLC and the Government of Mongolia on December 31, 2018 provides a binding framework and pathway for the construction of a Tavan Tolgoi-based power solution for the Oyu Tolgoi mine by June 30, 2023. The power plant would be majority-owned by Oyu Tolgoi LLC and situated  close  to  the  Tavan  Tolgoi  coal  mining  district  located  approximately  150  kilometres  from  the  Oyu  Tolgoi mine.

Oyu Tolgoi is currently sourcing power from China’s Inner Mongolian Western Grid via overhead power lines, via a back-to-back power purchase agreement with National Power Transmission Grid JSC (NPTG), the power importing entity, and the Inner Mongolian Power Company (IMPC).

The Tavan Tolgoi Power Plant (TTPP) Feasibility Study is based on a 300 MW coal fired power plant to be located  in  Tsogttsetsii  soum  of  Umnugovi  province,  with  a  total  project  cost  estimate  of  up  to  $924 million, pending consideration of certain amounts yet to be finalized such as government fees, licenses and certain reimbursements per the Tavan Tolgoi Investment Agreement.

It  is  anticipated  that  back-up  power  requirements  will  be  provided  by  IMPC  until  such  time  as  they  can  be  provided within Mongolia. The project aligns with the Parliament Resolution No.73 (2018) and the government policies to develop a power plant at the Tavan Tolgoi coal fields.

Oyu Tolgoi LLC has made significant progress to develop a cost competitive and optimal solution for TTPP with a fully negotiated EPC contract that is now ready for signature. The current schedule targets two units of the TTPP to be operational by June 2024. 

The existing PSFA specifies target dates for milestones to be achieved through mutual cooperation between Oyu Tolgoi LLC and the Government of Mongolia, several of which have now passed. In accordance with the Contingency  Arrangements  clause  7  4  a  ii  of  the  PSFA,  Oyu  Tolgoi  LLC  has  given  notice  and  is  currently seeking a mutually acceptable alternative basis on which to proceed with securing long term domestic power supply for Oyu Tolgoi.

“Certainty  of  safe,  reliable  and  stable  long  term  power  supply  is  fundamental  to  the  development  of  an  underground mining project like Oyu Tolgoi,” stated Ulf Quellmann, Chief Executive Officer of Turquoise Hill.

“We  will  continue  to  work  with  the  Government  of  Mongolia  and  Rio  Tinto  on  behalf  of  all  stakeholders  to  determine the preferred power solution for Oyu Tolgoi.”

Forward-Looking Statements
Certain 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 and information regarding the construction and timing of construction and operation of the Tavan Tolgoi Power Plant, the expectations set out in the Tavan Tolgoi Power Plant Feasibility Study, anticipated sources of power for the Oyu Tolgoi mine 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 the availability and timing of required governmental and other approvals for the construction of the Tavan Tolgoi Power Plant, 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 and projected gold, copper and silver grades, anticipated capital and operating costs, anticipated future production and cash  flows,  the  status  of  the  Company’s  relationship  and  interaction  with  the  Government  of  Mongolia  on  the  continued  operation,  development of the Oyu Tolgoi mine 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, the risk that certain commercial uncertainties relating to the Tavan Tolgoi Power Plant may not be resolved, including with the Government of  Mongolia,  with  respect  to  land  rights,  funding,  back-up  power,  accession of  Oyu  Tolgoi  to  the  TTPP  Investment  Agreement  and  the  extension  of  the  existing  Electricity  Purchase  and  Sale  agreement  between  IMPC  and  NPTG;  copper;  gold  and  silver  price  volatility; discrepancies between actual and estimated production, mineral reserves and resources and metallurgical recoveries; development plans for  processing  resources;  the  outcome  of  the  definitive  estimate  review;  matters  relating  to  proposed  exploration  or  expansion; mining operational and development risks, including geotechnical risks and ground conditions; 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 Turquoise Hill Resources Ltd.turquoisehill.comSuite 3680 1 Place Ville-MarieMontreal, Quebec, Canada H3B 3P2Telephone + 1 514 848 1567Toll Free + 1 877 589 4455info@turquoisehill.com3key  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 13, 2019 in respect of the year ended December 31, 2018 (the “AIF”) as supplemented by our Management’s Discussion  and  Analysis  of  Financial  Condition  and  Results  of  Operations  for  the  three  and  nine  months  ended  September  30,  2019 (MD&A).

Readers are further cautioned that the list of factors enumerated in the “Risk Factors” section of the AIF and in the MD&A 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.