THE notice of approval for underground development at Oyu Tolgoi is an historic milestone and a significant achievement toward realizing OT’s full value, according to Turquoise Hill Resources’ CEO Jeff Tygesen. “Oyu Tolgoi is the best copper opportunity in development today and an excellent growth project for our shareholders, Mongolia and Oyu Tolgoi’s workforce.”
He said, “Given the early works that began in the second half of 2015, the underground team is well positioned for a smooth construction restart around the middle of this year.
“Approximately 80% of Oyu Tolgoi’s value resides in the underground because the copper grades are roughly three and a half times higher than the open pit.
“Due to declines in copper grades globally, we expect a supply deficit starting in approximately 2019. Oyu Tolgoi’s expected first underground production in 2021 fits in very well with the anticipated supply short fall,” he added.
Entrée Gold, a joint venture partner with Oyu Tolgoi LLC in two of the OT project deposits, also welcomed the notice of approval. President and CEO Stephen Scott said, “We are very pleased and excited by these announcements which represent very significant milestones for the project and all stakeholders, including the people of Mongolia and Entrée shareholders.
“This historic decision is another step towards realising the significant value from this world-class project and is a clear signal of improved investor confidence in Mongolia as an attractive place to do business.”
Entrée has a carried interest in two of the 12km-long OT series of deposits - the Hugo North Extension copper-gold deposit and Heruga copper-gold-molybdenum deposit, which are the northern-most and southern-most, respectively. Hugo North Extension includes a probable reserve, which is included in the first phase of underground mine development, of 35 million tonnes grading 1.59% copper, 0.55 grams/tonne gold and 3.72 grams/tonne silver.
Kincora Copper has a number of prospects in the same area as OT. Its president and CEO Sam Spring said, “Recommencement of OT Stage 2 is a very positive step forward for this copper belt and Mongolia as an investment destination.
“The good thing is that the rocks haven’t changed in Mongolia,” he says. “It’s probably the right time to grow again as an industry.” He also believes that the new momentum at OT will stimulate further deals in the mining sector.