March 8 (Reuters) - Canada's Turquoise Hill Resources Ltd posted a surprise rise in quarterly profit on Monday, helped by increased production of copper and gold at its Oyu Tolgoi mine in Mongolia.

The results come a week after Chief Executive Officer Ulf Quellmann resigned amid a protracted dispute between the company and its top shareholder, Rio Tinto, over funding for the underground expansion of the Oyu Tolgoi copper-gold mine.

Oyu Tolgoi is one of the world's largest copper-gold-silver mines. Rio owns 51% of Turquoise Hill, which in turn owns 66% of the mine. The rest of the mine is owned by government of Mongolia.

Turquoise on Monday also cut its 2021 capital expenditure outlook for the open-pit mine to between $110 million and $140 million from a prior range of about $120 million to $160 million, to reflect the deferral of certain non-critical projects.

Copper production rose 26.4% to 41.6 thousand tonnes in the fourth quarter, while gold production surged 266.7% to 88 thousand ounces, the company said.

Copper prices rose 21.7% and gold prices rose 26.5% as parts of the world, particularly China, began to recover from the COVID-19 pandemic. Copper demand is closely linked to economic health.

All-in sustaining costs halved to $1.45 per pound of copper produced in the quarter, the company said.

Rio Tinto-controlled Turquoise said income attributable to owners of the company was $159.9 million, or 79 cents per share, for the three months ended Dec. 31, compared with $113.1 million, or 56 cents per share, a year earlier.

Analysts on average were expecting profit to fall to 41 cents per share, according to Refinitiv IBES.

(Reporting by Arunima Kumar and Praveen Paramasivam in Bengaluru; Editing by Amy Caren Daniel)