- Turquoise Hill Resources company announced its financial results for the period ended June 30, 2020.
- “Faced with the challenges of operating within the constraints posed by the COVID-19 pandemic, the Oyu Tolgoi team posted outstanding safety and production performance in the second quarter of 2020. The open pit operations have continued uninterrupted, and the underground development, while experiencing restrictions on workforce numbers and the ability to repatriate specialists from around the world, has continued to progress. The team’s focus on optimization initiatives has resulted in, among other things, an increase to our 2020 gold production guidance.
In Q2, 2020, Oyu Tolgoi produced 36,495 tons of copper and 31,150 ounces of gold. Copper production remains on track to achieve guidance of 140,000 to 170,000 tons. Whereas gold production guidance for 2020 has increased to 155,000 – 180,000 ounces. The increase in gold production guidance is due to a change in the open pit schedule which has brought forward higher grade gold ore from the southwest pit.
Revenue of $278.0 million in Q2’20 decreased by 27.4% from $382.7 million in Q2’19, primarily due to both a 56.7% decrease in gold production and a 6.9% decrease in copper production. Further, the average price of copper fell by 12.3% from Q2’19 to Q2’20 primarily due to the impact of COVID-19 on global copper demand. This was partly offset by the 30.6% increase in average gold price from Q2’19 to Q2’20.
Income for the period was $72.3 million compared with a loss of $736.7 million in Q2’19. This difference was primarily due to a $0.6 billion impairment charge that was recorded in Q2’19 following the announcement on July 15, 2019, wherein the Company confirmed projected increases in underground development capital as well as a range of possible further delays to sustainable first production. In addition, there was an increase of $300.2 million in the amount of deferred tax recognized in Q2’20 compared to Q2’19. Deferred tax of $252.8 million was de-recognized in Q2’19 again reflecting the impact of the July 15, 2019 announcement. These increases in income in Q2’20 compared to Q2’19 were partly offset by the $104.7 million reduction in revenue from Q2’19 to Q2’20.