Turquoise Hill Resources (TRQ) 13 May 212021 Q1 Earnings call transcript

Company Profile

Participants

Roy McDowall	Head of Investor Relations and Corporate Communications
Steve Thibeault	Interim Chief Executive Officer
Jo-Anne Dudley	Chief Operating Officer
Luke Colton	Chief Financial Officer
Orest Wowkodaw	Scotia Capital
Craig Hutchison	TD Securities
Ralph Profiti	Eight Capital
Jackie Przybylowski	BMO
Dalton Baretto	Canaccord Genuity

Call transcript

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Operator

Good morning, ladies and gentlemen, and welcome to the Turquoise Hill First Quarter Financial Results Conference Call. At this time, all lines are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Thursday, May 13, 2021. I would now like to turn the conference over to Roy McDowall. ahead. go Please

Roy McDowall

first Good Dudley, the on our X, certain Relations Annual Joanna. CEO; Steve over like I'd XXXX Roy Head me Jo-Anne These the released XX, McDowall, results This MD&A section on press Colton, call Thank information. MD&A financial includes today website the and Luke turn and Communications. dated morning. XXXX to our the our presentation and Welcome Thibeault, COO. Investor statements. forward-looking our our March by XXXX. we Wednesday and call. are quarter We are XXXX to for and CFO; And Steve. of interim March of results conference supplemented Form to call release, available Information you, items On I'm quarter refer forward-looking the our now, our call financial and With first and ended statements three you to statement months SEDAR.

Steve Thibeault

you, you our for to financial joining everyone. Roy, Thank earnings for quarter XXXX first morning us and Thank call. good

safety The million Tolgoi QX exceptionally paid Mongolia revenues with has be copper proven first due the here modified to Mongolia. also in the measures and gold increased for to to $XXX [indiscernible] our reported the and assessment, COVID production, Government an to surge strong tax quarter. eventful unscheduled quarter we of and design adapt an in XXXX Oyu to in faced mine

Oyu on ability we they to has to sustainable and expected XXXX. challenges continue and XXXX. remained $X.X in QX at our first team billion funding face to liquidity continued unchanged The also gap outstanding unchanged the to production focus at their Our has reaching QX show adapt remained has Tolgoi

from was and and received the ended, surge impact safety the extent in of measures Tolgoi to worked and and call of in introduce of Q&A. program quarter impact safety underground extremely vaccination development. proud pressures. we statements open recent is a XX% for of rate as it The continued I have hours to X significance operation with and Tolgoi perspective. the the through read encourage our yesterday, due pollution Tinto of from the prioritized And an production production Agreement Rio and technical issue COVID-XX local copper to the and XXX,XXX as incorporates while currently gold of have modified and first funding QX had has impact and to copper on our after the we and QX adult tonnes to gold. is continued how as X.X Head COVID and of our efficiently announced of their both, from production of them. XXX fluctuate forward their X. to first note updated contain over XX% underground that Please design communities of completion from have up the forecast gap] of QX. dose, X that addition, XXXX, XXX,XXX and of to quarter in gold. development of Oyu The expected is dose. COVID-XX to shortly second XXX,XXX has the XXX,XXX during Oyu to achieved increased updated ounces Operationally provides ounces rollout Slide assessing Oyu now continued over binding copper and the of the all their Mongolia through due The the plan to of Please workers move quarter pit cautionary team we Slide injury impact the of tonnes per open precautionary In This XXXX maximize received the Mongolia. estimated the company XXX,XXX the mine resulting produce Tolgoi guidance XX,XXX to and production and positive to frequency possible the are the updated you [audio for

Turquoise as our area the believe of the seeing At million precautionary operations somewhat to are into is of fund We operation in but our of related end safety of XXXX available and vigilant $XXX underground the community. XXXX, we expected start stated March earlier. employees can ensuring measures, Hill we which COVID the where relax to remain in liquidity, development had QX our

QX remain expected encouraged payment have in largely billion. copper commodity The with mitigated funding unchanged of improved gap in $X.X unscheduled the seen impact pricing far second the so at the price the tax quarter. Our remains we and we

X, to the Slide our our operating while above quarter, down production the during performance were the nameplate breaking the pound. to strong copper $X.XX cash mentioned Moving mill per costs CX remained capacity addition first highlights, throughput our in

in note provided December technical mine XB both, highlights. measure with resolve The quarter. to on of the of operations The from also force and XXXX productivity underground uncertainty impact XXXX failure COVID open reflect place related the end and Phase resulting related production increased reduced in impact COVID-XX outlook this continue multi-bench of the second previous concern the modification ramp of of concentrate outlook on and will we the in and year towards now the However, the we site. development managing QX. from the control to our in design underground reduction in our currently up pit since shipments through to challenges The continues at the a

Luke of health the Government out. With prioritize Mongolia hand rolled cooperate the program to to vaccination Chief its our now that, employees, I the call Colton will continued Officer. over Tolgoi and as of and with safety Financial Oyu While

Luke Colton

for in of X we million remainder for higher grade the is costs of QX. the in areas comprising was The increase the the benefit key respectively. on result production QX increase and move for revenue with has Phase the primary reason been production, increase in adjusted XXXX. gold guidance The $XXX increases measure the XX% gold and interest for increased guidance in and decrease reason and us to expenditure the XXX% the XB $XXX far million which decrease produced year gold billion XXXX. for guidance to production copper cash pit the range negative benefit in full production. the arising the the to a principally and unit as in which Capital on cash main in increase range good for of the has price to in and of open bases reduce well year. forced revenue March in for was and see research own movements guidance range was both for $X.XX the revenue cost a The activities by expect million to mainly to million the per Thanks reflect the impact capital unfavorable is improved million million as relating in from to $XXX was copper the increase of $X scheduled on metrics offset cash the copper CX XXXX the turn tax, the pound $XXX have increased for to continue slide a in costs and from although due of average million QX partially of XXXX, pit. gold call. our The for to been a was underground the significant and which Steve full versus COVID-XX copper production open before of slowdown throughout metrics trends morning generated XX% full XX% and in by the in summary underground XXXX led of in deferred that's costs, to driven our XXX% The together capital the to financial capital $XXX $X sustaining million. announced revenue credits Revenue everyone $XXX $XXX reduced XXXX Please year so CX and our to controls year that working QX operating

the can $X.X see of billion requirements at please expected our liquidity QX meet X, XXXX. If to to you of Hill of turn be XXXX, Turquoise is sufficient into that you'll to Slide which end had QX

tax million tax maintain and its allowed operational QX liquidity company in to XXXX, company horizon. performance, sales, the Mongolian payments pricing $XXX unscheduled the to of made the authority strong Although

our of assumptions key we Additionally, and undercut the base continue course billion case $X.X other requirements. incremental has monitor requirement remained at future to markets impacts funding and commodity funding and COVID-XX requesting

of and Heads with engaging the implementation the are continue Tinto we updates the to Rio stakeholders due course we provide Agreement of forward, Looking made. progress respect with to relevant to in advance with will

as relevant the as the Successful various Tinto, Dudley, which implementation positively factors, us which Chief hand stakeholders, existing requirement and the Our include continue new lenders, and Jo-Anne will are to will Officer. the funding of such would any company's outside our alignments control. estimated negatively lenders, liquidity may to or to options Rio outlook well of achieve with many by I Mongolia. that, require be impacted over agreement Operating of With call Government either incremental potential

Jo-Anne Dudley

Slide Material the is broadly very you, X Luke. the turn to much with Handling now estimates. overall Thank despite If System remains on we X, in required progressed production sustainable which gross the for construction project [indiscernible] COVID-XX impacts line

to X the During bottom installed moved were QX Crusher for shells chamber Primary XXXX installation. were and shells the top crusher the

and commenced Shaft on conveyor main pulling belt conveyor X X. addition, the Crusher between Primary In

them and on timing production. expected key progress it Materials these are not remains Shafts sustainable progress slow Progress undercut X X mobilizing Handling under sinking in to and suspensions additional 'XX vendors clearing first continued is QX country materially System review. dependent the into site quarantine. impact Although to to of of of and the to expected on resources COVID is and commencement affect overall and X work works impact restrictions, Ongoing due delays from on the

X to of we X from the continues now progressing expected quarter day. in sinking required are meters in meters May. quarter. and required to to Mongolia arrive progress commencement; X and to of commencement undercut not technical XX,XXX during are the the the of and criteria with milestone and completed into the XX,XXX and on-track. are to result ensure slowed shaft of mass in development X development a required mid-XXXX The undercut almost mid-XXXX during commenced Shafts and anticipated for progressed production were continue cubic critical the is tonnes once all up for ramp impacted unimpeded. despite of Panel rapidly drawpoint required basis program. of lateral Additional expected per completed that [indiscernible] undercut vaccination a commencement remains work XXX the through [Indiscernible] impacts are development XXXX Achievement that QX they specialists is equivalent continues it The rates is X the equivalent continue commencement site to key construction Underground support X is to Panels numbers on [indiscernible] support body of however, will development and complete. workforce excavations. to undercut ore the It as has be the a

pressure evolving understanding rapidly However, is the undercut due of the impacts. of exact under the principally timing the COVID-XX to increasing recent

exploration, licenses of that are Asia In operates Mongolia, Turquoise Exploration Khatavch. for terms license; QX successfully Hill LLC, its Hill, In in new an wholly-owned exploration not SGLS a part Gold Tolgoi. subsidiaries, on through and Oyu program XXXX, of Turquoise tendered Heruga Mongolia

for the Hill submitted now have has addition exploration The three to licenses three work With Turquoise Turquoise local and Hill plans authorities. Khatavch, finalized the licenses. been of the

required geophysics exploration the expected undertake program on Hill’s to season field work plans Turquoise is experience, our have I'll late hand QX licenses, over original surveys. exploration For or early the but Od-X situations, team the Due to expertise and begin Timing entire vaccinated. field TRQ continue to With of on geological the is team priced and Steve. in country and that, team plans received to activities. the [indiscernible] once dependent and approvals well is and been is QX COVID-XX XXXX several to [indiscernible] the now Bag in

Steve Thibeault

Thank you, Jo-Anne.

working are Slide and to track milestone overview are a XXXX. first working keep provide for what what on on sustainable Slide XX, key outlaid XX on an I'm of October us to use going through tron to to XXXX to production XXXX, in for Moving we we

are which first The the of to can undercut the commence. are ongoing with ensure Mongolia milestones negotiation the Government critical

undercut out of perspective, pointed mid-XXXX the the Jo-Anne track. for a on As commencement from criteria required remain technical

election. pending and June Government necessary discussion it approval by decision of that elements of confirmation required with for Mongolian commence the in is undercut. regulatory criteria and nontechnical Mongolia and engagement the was However, following the Mongolia still critical including proceed to with Government legislative of resumption in are a are in to Constructive we achieved anticipate Working XXXX the Presidential the April Group consideration

mid-year. and undercut is to Once drawpoint sustainable of scheduled full continues commenced, up The and unimpeded ramping undercut for will second production. construction blasting be forward we the XXXX to looking currently milestone the

questions. continue call delivering would the call turn our Turquoise to stakeholders, milestone approximately development. and and for would like key binding commodity you taking designed committed to The funding all to Tinto is citizens Rio back $X.X the like underground I conference to our for third plan remain to The HoA funding. significant Turquoise to to thank a join long-term including the funding announced to provide Hill the for billion its funding the based address of In on the of the estimates is benefit to of delivering for assumptions. all Mongolia is now plan requirement We time Hill value April, a which and remaining and operator challenges. completion

Operator

question [Operator First Bank. ahead. at Wowkodaw Thank comes from Please Scotia Orest you. go Instructions]

Orest Wowkodaw

think you you back non-technical officer, both, but to technical pretty pressures, for and clear sounds it likely moving underground good morning. radically the should of or the with and sort release you're really same pushing giving government plus and so unless that mean, COVID Is revolve non-technical. your the lifting you're guess this increasing issues it does right the you're think at guidance the and Hi, about you the this that of of forward? How about time, need, that be I and way realized left CapEx CapEx I the both forth, we to restrictions? going the I like kind around worried schedule things to office is timing unchanged improve. respect about increasing

Steve Thibeault

focusing achievement we of this Okay, headwind some been that question. midyear technical for let's [ph] are elements, drilling the we've start everybody I with and in one. the had remain your couple which main as are for is on we okay on mid-XXXX tract. face we from track elements criteria of one undercut that believe Jo-Anne, right commencement, technical mean, decision will of and What some by elements very our we of but the for we're elements like on of a other includes Orest, elements mentioned now there's Orest, the your two we the questions. the actually thanks undercut required all point decision And criteria, has keen and and on it, view COVID, there

you relate elements to to and to other the see to from these the the need proceed with we non-technical approvals Mongolia the related license with of The the to And that able we we we that these proceed. government some to our mine Government any and some work but the not underground. mean, some could refer from approval be that's as in ones, approvals with and keep so working on elements and you world to we need of that I as today different receive need approvals government received levels, the those operate haven’t

COVID on while I the focusing the in the should seen the solution next mean as QX, Mongolia our significant the the in that safety vaccination impact, putting place, our ramp-up couple we we of procedure should overall that an on and improvement you've and to we of And COVID-XX see but over main weeks in the terms but okay? of and able impact also the was the we employees, are be And in improvement of operation. expect site. are there in in Now some

the [indiscernible]. have but I need So information the and the evaluate we don't impact, to I'm not be you, today point important will is telling what

Orest Wowkodaw

every terms like does translate what the does what are as followup, you, that impact in on you And month capital say delay undercut, in able of to can one quantify a the number?

Steve Thibeault

would that like please? to Jo-Anne, you cover Yes,

Jo-Anne Dudley

Yes, thank question absolutely and Orest. you for your

do a undercut the on be putting would may it aren’t indicating lot start this depends in for the in certainly at We're Steve that. the so. delay point, working undercut any a it that possible to into as So delayed work as to have was the as particular understanding been is another, undercut towards that we soon of reason that planning scenario and of

work the Materials the as the work, starts in work blasting, that of continues, continue Handling the other to production. terms important once on undercut well System X, In do start as we preparation of

know actually a a scenario. numbers reason And if Materials on pressure to seeing impacts delay the for to and impact as encountered to inability there we that it recent on schedule as on would But up has the so, a of delay and could prepared of that can of file continue result particular X in now remained might my schedule accelerated could that has production attending as schedule. ahead that this you and was depend, weeks, the working, at then be the continue that work of Handling control ahead the even we're site. COVID due forecasting see But System been have

Orest Wowkadow

if But, followup, mean, able the month say a to you are is per delayed what quantify, non-technical the the but like is the have met, not I CapEx? is you, impact delay because of criteria undercut I to yes

Jo-Anne Dudley

in there the costs would albeit continue will be and this given starts still Right, a necessarily that we occur. something is areas would lot better. to at be moment that as situation And on not -- non-delay that work impact ongoing reduced other as would it overall could be that be because the of which potentially some-- understand assessments trying work continue, a still capital But of to it right understand we quite at be assessing would we schedules we’re ongoing, spent rate. so, and

Steve Thibeault

other is the words be best some and month there expenses just a think delay. one because the it’s and elsewhere would it’s this not for would capital be done, so will it other not way complex at done development I a be work to Orest that, look

addition If said, we’ve and Now, at much should way mean, not mid-year, one it CapEx, and that the having also the at the capital saying moment to point. it equal is this that all that impact significant -- on looking being look on we’re that so at the not timing or don’t timing. say would I -- within not month you the that I I depends it mid-year from impact as an we’re

Orest Wowkadow

capital does seeing billion The incurred? now we’re X, capital included Okay, a thank number? saw just final $X.XX Phase now related and include number some And underground if between being billion to capital the here sustaining just the that the in for you. $X.XX I'm clarification. We and production in sustaining QX is sustainable that that for curious

Steve Thibeault

do the want Luke, to Okay, of give that? you answer

Luke Colton

capital to for $X.XX include, is The is $X.XX not happy to expenditure The for billion expenditure and billion Sure, does development Orest. answer it that’s underground and question the sustaining Steve, case. the been no. thanks excludes the and always that question underground capital

the If additional and expenditure in technical development XXXX in been there's always underground go XXXX, TRQ underground at a look the capital back you reports and distinction and sustaining year billion then $X.XX issued again different between last has CapEx.

Orest Wowkadow

Okay, thank you.

Steve Thibeault

very you, Thank Orest. much

Operator

Thank you.

question from go Craig at Hutchison Next TD ahead. Securities. Please comes

Craig Hutchison

guys. morning Good

Steve Thibeault

Good Craig. morning,

Craig Hutchison

to here of put get $XXX granularity a halfway in grades that what related would COVID kind of should thinking your kind of color to how QX be with and QX much appreciated? going in from for $XXX,XXX we’re of through cut, in true trying particularly any of grade is related? around $XXX,XXX I'm terms we guidance gold that how and here Thanks. And of much kind $XXX, to be is little to more

Steve Thibeault

can to take…? okay? respond to Jo-Anne Jo-Anne on Craig, just that, that let I’ll you Okay,

Jo-Anne Dudley

can Thank hear problem, you you, you thank Steve, me? no Yes, Craig.

Craig Hutchison

can. I Yes,

Steve Thibeault

Yes.

Jo-Anne Dudley

Okay, sorry.

in majority [ph] production three terms result so, material delivery the mine COVID have bars There and has see as played so check it to the processing time. also and in production Just and the and around we of of additions over impacted terms a you into mentioned deferral the gold and then [indiscernible] the that, also combined been in other would the Yes, change being to around that two years the change, in assumptions the other productivity of that would that of as change the of we mine around picture of materials size a productivity change next of that of approximately is wanted redesign, period gold, the the there, the the impacts, are results guidance It’s said have that. some sorry. redesign. some into expect change, assumptions from some

of good and impact due rest terms at productivity terms from In and have we of the having the COVID the terms production, of the see we controls in expect the in quarter had gold do QX operation looking been of to the pit have to some site. concentrator forward to year, implemented productivity from open a that

remain controls program are in and the Phase be being of guidance, guidance for to However, and of XB we XXXX. of expect that will we recovery updated within with used, -- all quarters some that to see high-grade we the expect vaccination that course that remaining and for and the of we do XXXX, having area just of

quite draws can that of add see guess this of move will the Craig, around areas grade there good a we enough terms I different picture be, the I out. grade hopefully of in for pit, to those you is the mean, how in and So the in the play part when pit. we -- else change would something quarters of

released quarters. And just same which so, three is we to we guidance. going tell it quarters for you the the that can the is the the of just But remain settling in to high over straightforward remaining and make that isn’t will know, let next do grade grade we this to year exact newly to you expect be is, what

Steve Thibeault

the an of spread on would next the would be make except the way quarters know, I all saying, what, when that roughly. and are same mean because the it, grade the adjustment if you, know be of say would over at situation COVID it they look QX you quarters I the roughly I I you would to Craig, same probably overall like in

Craig Hutchison

the think? mean were were in They Okay. quite I high QX grades X.XX right? I

Steve Thibeault

Yes.

Craig Hutchison

That’s it.

Steve Thibeault

okay, expected pit there’s be expecting But we’re to grade, grade the in pretty year. the we’re that high much variability be I to in always for in mean but all the

I December all bit, is year be should little even the that would a I but think you with not grade. maybe think concern, it assume but good

Craig Hutchison

I like it would fall of seemed guidance, quite have from okay. the in to but point hit -- the just mean, grades sharply order QX your to I Okay, certainly

Just there’ll do of anticipate you QX up be here think QX? in terms sales guys you do carryover catching into some in or

Steve Thibeault

Luke, can you answer that please?

Luke Colton

Yes, I know, March well, I think forced and this happy to measure so was a XXth year. we do good that. it Craig, question, the it’s of obviously declare did of

operations up We And Mongolia are the there we’re in we them of of what But possible. now aiming shipping China closely again, hopefully improves vaccinations soon of of working started COVID kind the very concentrate cetera. sort Mongolia shipments do and as to and continue ramp started situation know, with normal they QX, that’s to, you as as do resume expect as we’re course alluded COVID have of Jo-Anne with the have the to Government to to impacts. again been Government mid-April, et has over and related

We see COVID impacts QX. in related to are expecting some

the improvement in inventory fairly there still So, continue which you will that inventory expect is should high we of to QX, of of hopefully course down our be we’re kind what at down the the over balance suspect that’s QX, but the QX. draw balances QX, a back moment at of will getting what levels. by would see targeting back normal I to end I probably to of in terms get end We’ll normal

Craig, probably to itself, in but I think year. something So, definitely resolved the your the resolve QX, of over to in question, something completely it’s it's be that think will don't that going down remainder hopefully QX. I itself

Craig Hutchison

and sorry maybe ahead. Thanks Okay. one go last question,

Steve Thibeault

to border truck Yes, cycle sure of putting the vaccinated, a Craig, move said, the I but and while. the of but -- additional inventory, -- bit Luke delivery, resources been take is just additional saying all flavor, that and we’re that’s that make but can mean there’s working time drivers the procedures have like to will I we this a increased give you at that like

Craig Hutchison

important one last And the just will guess, thanks. Parliamentary how presidential on resolving why Thanks. those the resume Mongolian Okay, do post the Presidential of outcome? of, or you wondering XX, I just negotiations terms are sign-off question election Presidential stalled I’m Resolution in elections need remains, kind and

Steve Thibeault

-- no. like, were of election. end our context of had May, the to and TRQ Government the the the The Rio is from end with of mean in I of April, the teams for in March end we Yes, more Mongolia significant to election Mongolia the discussions the from a was facing definitely, discussion best April. Tinto, for in that Mongolia Craig, I everyone mean were mean, I believe in COVID the we surge was we after the the and resume who

would be, Where that be, that completed. Okay? be will we would

elements it the to- know we’re in been we have of the have parties have proper have raised exactly points resolve Being committed discussion or the that have said, I are a in will okay, have a said, I that to we'll before, definitely But government. likely link and there expect by elements we order with of with common couple to undercut and that proceeding around make would discussion that operate and all is period that is detail, need criteria have have down have. the definitely with mean the decision, but you decision we together questions undercut to -- the and that everything. all undercut I points talked like point I -- these may, some license Resolution sit interest, to after the will the need that the okay? Government also the committed finitely I want the to have here. interest license we government, I discussion XX of would terms the to know all not and like have some other discussions. some we to to a the But discussion with that There to resume I not necessarily but related we'll operate All have, have here, mean to, Craig, [indiscernible] and common, don’t but I definitely parties we the so, the of discussion should committed mean after couple Mongolia of are And common are non-technical be we to Craig, is will, or we

Craig Hutchison

thanks, Okay guys.

Steve Thibeault

Okay.

Operator

you. Thank

Next Ralph go Please question Capital. Profiti comes Eight ahead. from at

Ralph Profiti

Good questions. my morning, thanks for taking

Steve Thibeault

morning Good Ralph.

Ralph Profiti

QX the to the QX to and elements, could to back if factors, in these seem and sits morning. critical of in it doesn’t bit it's we material like dropped better. or just and Jo-Anne, the that commencement are going Good come Shaft the critical X, you all me impact really is development rates little development Steve understand I path? and behind X help non-technical can wanted that handling, what as It also a exclude undercut construction

Steve Thibeault

question answer Jo-Anne to let I’ll Ralph. there your

Jo-Anne Dudley

thank you. Thanks Okay, Ralph.

X and undercut development is and COVID had. shoulder really Material quite be the the do other mentioned that of correct and COVID been well going and It well. of mentioning so situation numbers has the well you’re System at or development currently a it’s site now priority done given the acceleration terms to extremely under as have up porter, schedule, weeks worse COVID you’re in been next So, -- Handling in current managed they’ve the active terms not the relatively Handling has has the Handling advanced left increased with on prioritized cases no complete, until cam production, the that aspects as came We head to X construction head certainly vaccination over construction continue schedule these required just key development progressing. mentioned as are up. saying seeing the but the few as site headwinds, control -- and it almost Material you Shafts, the personnel is of might of well, there well, we’ve- has System of be The they’ve Material we’ve moment. what in that, the and start of but the plans transported The additional program we’re of is System it right and all ramp piece lies been light of actually has investment the is well still so cutting is as

of here, So, the into leading also up we been the hope chutes for end but things doing recognize mixing, quarter to that I this we change are that's QX. helpful. and difficult still have

Ralph Profiti

you thank drawbell is, Where us to Jo-Anne, wondering, it’s say, it is, a bit propagation expect for It you of schedule a where also XXXX? Can you little with are drawbell drawbills, understanding for just have at occurs do target rate be that. XX end a now? do you that construction? help my mid-XXXX, on construction, you of sustainable

Jo-Anne Dudley

a to for extraction there Yes, [indiscernible]. level prior the this cave of using we're construction, certainly that the all at The and one of of the mining is a development tall schedule drawbell passes drawbells. the style with undercut blasting over

that we we firing and So currently undercut have until start don’t we any work. to won’t actually are and able drawbells doing the slightly start we aren’t-

after is you the that And is so, like. start something of undercutting that if

understand tidying rock gathering cave instrumented and the aside sustainable terms sustainable ultimately the rock behavior. site we production, we in have timing sales the we and of the estimate the when as actually production it’s understand number mass, of reasonable will the that is but be of estimates addition, the undercut first production when the commences In to of is commences. actual and mass After first

approximation, the to and lead to it drawbells, be reasonably So the of start us we the mass the ahead there close, to but in give number ultimately even criteria will rock XXXX. go be production should looking

Ralph Profiti

understood. it, got much. Got Yes, very thanks well, it,

Operator

Thank you.

Jackie from ahead. Please at Next comes go question Przybylowski BMO.

Jackie Przybylowski

much. to circle then want Craig. to I Steve’s and to Orest, to Thanks response just guess, back I very

license the I’m kind Why to as a like need little the still undercut of why underground? operate a she under same I be undercut? of activities to and Mongolia see specifically materials other was the other, you both in said that that is this the just Jo-Anne work thought on do but she pursuing to or license and Steve, development wouldn’t a mentioned to it confused couple a capital of any they need and some I’m one But to operate the You’ve mean, Wouldn’t prep you're - same? of process? Resolution questions, kind be also, Is think Orest’s to other you when handling I answering times related XX. not that you’re the items. do kind spending

Steve Thibeault

let answer yes, Yes, me that, Jackie.

of there couple statement here question or your answer. your want just elements a are think to in had I you that I

The first one relates to the non-technical and the Resolution XX.

related by You to that some government in to and order world, your operate. license the some any to the should elements mine in because separate are you two, those approval operate need

the tests and I example, the one For by government mine an plan are, that’s mean have. just of example annual would same you okay approved these

the be we we And elements now have departments and proceed and moving there's that government this want proceed awaiting waiting need from that to not the different is sure were so approval, where the with government received to to yet these but some those we we’re and to and approval and weren’t- to make able discuss elements we’re there. on right of work, submitted

okay, also that is the The separate, put the it. you start stop you understand negotiation second but I cannot that element important is to that’s on it it. you mean undercut, once that

that not yet won't delay you at sure okay. for make underground it most we to to mining operation undercut, have itself is want the with you no And mining ready the guarantee okay, cannot you there's have yet, starting what you change start and way make other level won't when so really The proceed the for at -- because you but , right is development to to proper we authorization have the a the sure the sustainable and time, mining important mine it the that you’re not delay progress because production start approval any is So, it, once need and it. to any the okay. undercut but during stop the make it, we we is specific necessarily lateral mining you getting that sure is the

Jackie Przybylowski

say -- before the to So, it thanks Is the fair start say is clarification. for agreement to it fair that is the finalized? undercut investment can

Steve Thibeault

yes. would say I Yes,

Jackie Przybylowski

Okay.

Steve Thibeault

committed it because be approval could when I but undercut, okay, reasonable be having would would the to to think these same the resolving we proceed without move be say ahead. definitely, it at we're with it resolved that could -- that’s because the proceed to resolved time, Jackie, can to we that elements we get we reasonable,

Jackie Przybylowski

it. much very Got me. from That’s thanks it for Thanks that clarification. helpful, That’s really Steve.

Steve Thibeault

welcome. You’re you. Thank

Operator

Thank you.

comes apologize, Canaccord. with question Baretto Next Please Bank. at Dalton go ahead. Scotia Wowkodaw Orest I from do

Orest Wowkodaw

Luke. one the for This ’s up. is taking for Thanks follow actually

the to us can estimate your does case the on i.e. debt Like, or requirement, a On existing require maintain a the certain does for estimate billion, little and taking your assumptions minimum give not X.X cash assumption not the- that effectively of your bit more at you you color year? $X.X that? financing in minimum some does next point assume cross that is cash it cash or you're zero to

Luke Colton

that getting we of of the the the way gap the $X.X so zero is the so $X.X down all we that to Obviously we’re the in well course at on But of point. to HOA, it funding cash advance does -- the implementation the the all we’re And would assume resolve of estimate assume want to point. to able moment taking down that way get and balance zero. take cash to that objective focus to billion wouldn’t to billion

Orest Wowkodaw

and does or balance have certain do restrictions? you cash debt that. So, existing your but you thank require you But minimum a for to maintain no

Luke Colton

on to you. have get it does, question. but back don't can to follow to to get question, I that have going believe to that I’m I back I’ll you

Orest Wowkodaw

you. Thank

Steve Thibeault

Orest, that’s guys a guys, not estimate is and saying environament $XXX all say I'm get going not Luke is not very that, our that, but, is that, of saying there’s would like moment X.X on it’s saying so, elements not lot saying but here’s that And we’ll a and less lot to million. of variable to I’m the information -- happening at be saying you that in I I’m the that I'm back pricing

Luke Colton

Or any. any amount required, if have we

Orest Wowkodaw

you. Thank

Operator

Thank you.

at Next is Baretto from go Canaccord. question Please ahead. Dalton

Dalton Baretto

morning up to pick everybody. Hi thanks, good on… want Steve, I

Steve Thibeault

Good morning, Steve.

Dalton Baretto

up happens, being said be terms understanding XX satisfied. will guys was want able Is My underground was the morning, Rio Good you unless what progress of because Jackie to what to do? pick and start specifically Steve. in there asking as once said, the something about, I Resolution is no you refused that to that stopping. you progress on without willing specifically you've undercut that we to

now. So, basically if you're Resolution hostage XX resolved, is not

Steve Thibeault

it’s the that. okay, key There to to have resolve its we first I it, need concern Government let’s there are operate committed, mean, and are face that of some certain going The Resolution mean, rotate the element around the from the elements first elements there, Dalton, we couple projects the of we approval license, of of that are XX the need, license time. I from we this make pass sure in resolved Mongolia we to a the brings negotiations differences a elements okay, benefits. from is quote and have one, is to that the distribution is can the of how okay, be the and is

important are okay, what’s XX of Resolution the fact of make these, we’re the it committed be is XX would together the and may proceeding the despite sure under that approval the that to the the I time resolve parties -- can to And fix, with are creating forward. work not it regulatory underground. the we but value However, with we move of to fix the Resolution for ahead that to to discuss both detail we all approval and proceed some project multiple to call take the and with

XX not Resolution there to but and -- to scenarios be the able not So a to discuss fix move forward. is

their would we’re done have Dalton that the in, a definitely floor can have a Resolution is XX in there’s two So treating while value the I we and still and separate this government around you XX elements we proper floors with around ahead discussion for while benefits. But where that had undercut. in the cost of discussion--- of building and the the the say we’re concern discussion what’s scenario the important we concern the that ahead having proceeding proper the we're XX around move

Dalton Baretto

economics you give economics why the uncertain? and are uncertain would I'm proceed to guess you why government if B, proceed if to A, approval guys I are want wondering, the But the would

Steve Thibeault

I us. think for important is that’s that, what definitely

we and need to to to of to are aligned. my are we generate aware and that we’re something the time the to From and we’re which a important we need proceeding way we said, like have I have appropriate discuss -- to Dalton, I is at view, sure and aligned, completed -- that’s discussion. make distribution dedication is value. find need and funding at and going the the element to I are be going that First, to have with we we project the The the do -- view. of the is the resolve company, mostly we’re need And to the my government undercut. this moving mean, the, that’s create and We that it’s -- value to doable, think it’s point

Dalton Baretto

and then undercut? undercut, you resolution that and get a negotiations the get do that assumption handle stop on -- on how you proceed initiated that, at if know, can't the point you to XX, the you're you so you'll with the in to approval Okay, the an undercut where, the you

Steve Thibeault

I'm mean a confident forward, definitely. path we can definitely, Dalton, find I that

Dalton Baretto

with gears the and year. do to something Craig to Maybe you production of and gold about asked else answer I’m sort to Okay. got this confused switching as the that’s

If driving throughput? I is where what’s rates stay it? COVID-XX the exactly impacting mean Is same, it to guidance? your are going approximately the gold lower

Steve Thibeault

to that want you do Jo-Anne Okay, answer please?

Jo-Anne Dudley

asked has Yes, the I say. been, was look question take pleased that trying I was -- you What that wasn’t was sure. there And what right don’t we I really trying definitely Dalton, is away, that, say well it has I to do to was in that think if because I’m the those that each going to and for the Phase if year, gold XB. been guidance we’re the we on remainder the still of of have of in we production grade simple quarters some look at then produced area the year high QX, at math think from the

COVID-XX say response that some from on over of result weeks a place the However, and have X in also we've as that plant as will through recent pit site. we Quarter the production controls at the impact can a had

So there will QX. impact be an on

production in those and just guidance. remain However, grades updated high we we’ve the do

So, is the helpful?

Dalton Baretto

just I’m to understand… is. It trying

Jo-Anne Dudley

lost we you. Sorry,

Steve Thibeault

Is it? Dalton. I you lost we think

Roy McDowall

Operator, still? you are

Operator

still line may perhaps gotten Dalton? his Dalton have is connected, muted.

Dalton Baretto

here, me you now? still hear I'm can

Jo-Anne Dudley

ahead. go Yes,

Roy McDowall

can. we Yes,

Dalton Baretto

issues having XX this last the or with call been minutes I’ve so. for Sorry,

So, the in yes, just you’re the then rest impact on my you’re that if restricted going material or I guess to the is grade, amount question should we of higher that the and And to be assume the is, is year? then mining QX processing? of

Jo-Anne Dudley

Yes, be not- I the processing we the clear, mean, I will saying I same not guess be I was was of grade year. to every quarter

is we see reminder of we is remaining over and of just in be will seeing these grade we’re not the in the what was lot there variability that, guidance math high and pit the as saying production I the grade -- but in for we're There the mining think much three the what's guidance of we’ll It’s year. is for So not the difference will QX, the that give. high in rest these the iron is grades happened we COVID and areas ore can released a parts areas. There the of or bauxite. quarters, in that’s between with pit variability I of the what year, if as do

it’s just I the appropriate but a provide talking. So, I’d granularity bit with you love to more we're don’t given which around uncertainties think

Steve Thibeault

is to about it’s the look way that, in more at mostly right the the- specific pit, I at bottom. the guess gold okay, is at speaking area you’re at look the the Dalton around and another when gold, gold it you

very because had do step can wards you a specific area. sit of And to back in. slip And we Okay? the

have that means of bottom the some make that okay, So we the make, accessible less at lost it and to benches, pit.

that grade pit that we with that current XB at of the wanted access XB was. of okay, where current So technically, where our all high have don’t the bottom have modified to gold some the we we

mine but mined later, able be access. be don’t we We’ll have Okay? okay? this later, It year will it to

of the ore, the distribution area, on is Now ore the copper different. side we because other copper have the

so elsewhere, less is. the a access mostly why have of what copper guidance, in that's We the that’s change it have we

Dalton Baretto

to because, so you Okay, I said and the was wanted keep disclosure, of because QX I COVID-XX And we the but there is just impact in slip. on get so be clear that’s what talking it impact that’s wall about a an that more trying wasn't just pit to it’s to your clarify. going function what at, of guidance kind is, said

that to function but planned right mining So pit this now? the you zones on access wall certain can’t had slip is of and

Steve Thibeault

why that you the and will reason to It work, a while, that, how that is. have with it it something, And it we- you understand doesn’t evaluating behave we takes you fault said the try more, and than step had originally all planned, finally has that's bigger eventually the what what we because a this that we not quarter in finished analysis. had impact we’re it had and an impact seeing

Dalton Baretto

guys. Understood. Thank you,

Steve Thibeault

you. Okay, thank

Operator

I That you. today’s concludes Thank session. will closing for Q&A call back now turn the remarks. over

Roy McDowall

Roy much for to you very and everybody questions, really to follow my address. attending I appreciate you there’s thank If any want McDowall or up can call. email out info@turquoisehill.com Yes, myself, interest. your time your this reach

attending. a thank again day. you everybody great So, you for has on very Thank Hope much. that,

Operator

a We lines. great Ladies call concludes ask you and for the we participating thank day. today. please gentlemen you conference Have and that your this for disconnect

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