Turquoise Hill's cash position, on a consolidated basis at December 31, 2012, was approximately $1.2 billion. as at March 25, 2013, Turquoise Hill's consolidated cash position was approximately $710 million.
OYU TOLGOI COPPER-GOLD MINE
The Company owns 66.0% of Oyu Tolgoi at March 25, 2013 (December 31, 2012: 66.0%).
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) that has a strike length extending over 26 kilometres. Mineral resources have been identified in a series of deposits throughout this trend. They include, from south to north, the Heruga Deposit, the Southern Oyu deposits (Southwest Oyu, South Oyu, Wedge and Central Oyu) and the Hugo Dummett deposits (Hugo South, Hugo North and Hugo North Extension). Mining of ore commenced in May 2012, with the first concentrate produced, as part of the commissioning activities, in January 2013.
During 2012, additions to property, plant and equipment for the Oyu Tolgoi mine totalled $2.6 billion, which included development costs (2011: $2.8 billion).
The Oyu Tolgoi mine initially is being developed as an open-pit operation. a copper concentrator plant, with related facilities and necessary infrastructure to support an initial throughput of 100,000 tonnes of ore per day, has been constructed to process ore mined from the Southern Oyu open pit. in conjunction with the surface activities, a 95,000-tonne-per-day underground block-cave mine also is being developed at the Hugo North Deposit, which is expected to commence operations in 2016.
Phase-one construction of the Oyu Tolgoi mine 99% complete at the end of 2012
Construction of the Oyu Tolgoi mine's first phase of development reached 99% completion at the end of 2012. Total capital invested in the construction of the first phase of the Oyu Tolgoi mine to the end of 2012 was approximately $6.0 billion. the final cost for the phase-one capital project is expected to be approximately $6.2 billion, within 3% of the budget, excluding foreign-exchange exposures.
Major updates for 2012 and Q1'13 include the following:
-- The mining and stockpiling of the first open-pit ore began in May 2012 and approximately 9.0 million tonnes of ore was stockpiled at the end of 2012. the primary crusher, overland conveyor and coarse-ore stockpile circuits were commissioned in Q3'12 and 435,000 tonnes of ore had been sent through to the coarse ore storage facility at the end of 2012.-- Following the signing of the binding power purchase agreement with the Inner Mongolian Power Corporation in early November 2012, electrical transmission lines for power to the Oyu Tolgoi mine were energized and operational.-- Construction of the concentrator was completed in Q4'12 and a commissioning ceremony was held on December 27, 2012. First ore was fed into the semi-autogenous grinding mill on January 2, 2013.-- First concentrate was produced on January 31, 2013. Commencement of commercial production is expected by the end of Q2'13 subject to the resolution of the issues being discussed with the Government of Mongolia.-- Underground lateral development at the Hugo North Deposit was suspended in February 2012 as planned to enable the upgrading of hoisting equipment at Shaft #1. Following completion of the upgrade in Q3'12, underground lateral development was restarted and approximately 1,500 metres of lateral development were achieved from mid-September 2012 to the end of December 2012.-- Construction of Shaft #2 at the Hugo North Deposit is progressing well with the headframe reaching its final height of 96 metres in Q2'12. the headframe and ancillary buildings were 99% complete at the end of Q4'12. Shaft-sinking activities began in December 2011, and the depth of the shaft is now approximately 980 metres below surface, 74% of its final 1,319 metre depth.-- Pre-sinking works for Shaft #5 began in September 2012 and have now been completed. Sinking activity is planned to commence in April 2013. Shaft #5 will provide primary ventilation for underground operations and is expected to have a final depth of 1,195 metres.-- Construction of off-site facilities and infrastructure were behind schedule at the end of Q4'12 due to slower progress in the building of the Oyu Tolgoi-Gashuun Sukhait road to the Mongolia-China border, the diversion of the Undai River and development of the Khanbumbat permanent airport. Road development was impacted by local permitting issues related to modifications associated with Oyu Tolgoi's environmental commitments. Road work has been suspended for the winter although there should be no impact upon the transporting of concentrate to the border. Work on the river diversion commenced in December 2012; however, progress was also impacted by local permitting issues. the permanent airport work was completed in January 2013 and began operating in February 2013.-- Long-term sales contracts have been signed for 75% of the Oyu Tolgoi mine's concentrate production in the first three years, while 50% of concentrate production is contracted for ten years (subject to renewals). in addition to the signed contracts, in principle commitments have been made at international terms for up to 25% of the concentrate available for export. These commitments range from three to ten years and are subject to the conclusion of detailed sales contracts.