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    TRQ   CA9004352071

TURQUOISE HILL RESOURCES LTD.

(TRQ)
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Turquoise Hill Resources : Q2 2021Conference Call Presentation

07/30/2021 | 06:49am EDT

A Leading Copper and Gold Producer

Developing a Tier-1 Copper Asset

Second Quarter 2021 Financial Results

July 30, 2021

TSX-NYSE: TRQ

Cautionary Notes

2

Certain statements made herein, including statements relating to matters that are not historical facts and statements of Turquoise Hill Resources Ltd.'s (the "Company", "Turquoise Hill" or "TRQ") beliefs, intentions and expectations about developments, results and events which w ill or may occur in the future, constitute "forward-looking information" w ithin the meaning of applicable Canadian securities legislation and "forward-looking statements" w ithin the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forw ard-looking statements and information relate to future events or future performance, reflect current expectations or beliefs regarding future events and are typically identified by w ords such as "anticipate", "could", "should", "expect", "seek", "may", "intend", "likely", "plan", "estimate", "w ill", "believe" and similar expressions suggesting future outcomes or statements regarding an outlook. These include, but are not limited to, statements and information regarding: discussions w ith, and the nature of the Company's relationship and interaction w ith, the Government of Mongolia (GOM) on the continued operation and development of Oyu Tolgoi, including w ith respect to the Definitive Estimate (DE) and the potential termination, amendment or replacement of the 2009 Investment Agreement (IA) or the 2015 Oyu Tolgoi Underground Mine Development and Financing Plan (UDP); the w illingness and ability of the parties to the IA or the UDP to amend or replace either such agreement; the implementation and successful execution of the funding plan that is the subject of the binding Heads of Agreement betw een Rio Tinto and TRQ (HoA) and the amount of any additional future funding gap to complete the Oyu Tolgoi project as well as the amount and potential sources of additional funding required therefor, all as contemplated by the HoA; the expectations set out in the Oyu Tolgoi 2020 Technical Report dated as of June 30, 2020 (OTTR20); the timing and amount of future production and potential production delays; statements in respect of the impacts of any delays on achieving first commercial production and on the Company's cash flows; expected copper and gold grades; the merits of the class action complaints filed against the Company in October 2020 and January 2021, respectively; the likelihood that the Company w ill be added as a party to the international tax arbitration brought by Oyu Tolgoi against the GOM and the merits of the GOM defence and counterclaim; liquidity, funding sources and funding requirements; the amount of any funding gap to complete the Oyu Tolgoi project; the amount and potential sources of additional funding; the Company's ability to re- profile its existing project debt in line with current cash flow projections; the amount by which a successful re-profiling of the Company's existing debt w ould reduce the Company's currently projected funding requirements; the Company's ability to raise supplemental senior debt; the timing of studies, announcements and analyses; status of underground development; the mine design for Panel 0 of Hugo North Lift 1 and the related cost and production schedule implications; the redesign studies for Panels 1 and 2 of Hugo North Lift 1 and the possible outcomes, content and timing thereof; expectations regarding the possible recovery of ore in the tw o structural pillars, to the north and south of Panel 0; the possible progression of the state-owned pow er plant (SOPP) and related amendments to the Pow er Source Framew ork Agreement (PSFA) as w ell as pow er purchase agreements; the timing of construction and commissioning of the potential SOPP; sources of interim pow er; the potential impact of COV ID-19, including any restrictions imposed by health or governmental authorities relating thereto on the Company's business, operations and financial condition; capital and operating cost estimates; mill and concentrator throughput; the outcome of formal international arbitration proceedings; anticipated business activities, planned expenditures, corporate strategies, and other statements that are not historical facts.

Forw ard-looking statements and information are made based upon certain assumptions and other important factors that, if untrue, could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such statements or information. There can be no assurance that such statements or information w ill prove to be accurate. Such statements and information are based on numerous assumptions regarding present and future business strategies, local and global economic conditions, and the environment in w hich the Company w ill operate in the future, including the price of copper, gold and silver; projected gold, copper and silver grades; anticipated capital and operating costs; anticipated future production and cash flows; the anticipated location of certain infrastructure in Hugo North Lift 1 and sequence of mining w ithin and across panel boundaries; the availability and timing of required governmental and other approvals for the construction of the SOPP; the ability of the GOM to finance and procure the SOPP w ithin the timeframes anticipated in the PSFA, as amended, subject to ongoing discussions relating to a standstill period; the w illingness of third parties to extend existing pow er arrangements; the status and nature of the Company's relationship and interactions and discussions with the GOM on the continued operation and development of Oyu Tolgoi and Oyu Tolgoi LLC internal governance (including the outcome of any such interactions or discussions); the willingness and ability of the parties to the IA and the UDP to amend or replace either such agreement; the nature and quantum of the current and projected economic benefits to Mongolia resulting from the continued operation of Oyu Tolgoi; the implementation and successful execution of the funding plan that is the subject of the HoA and the amount of any additional future funding gap to complete the Oyu Tolgoi project as w ell as the amount and potential sources of additional funding required therefor, all as contemplated by the HoA.

.

Cautionary Notes (cont'd)

3

Certain important factors that could cause actual results, performance or achievements to differ materially from those in the forw ard-looking statements and information include, among others: copper, gold and silver price volatility; discrepancies between actual and estimated production; mineral reserves and resources and metallurgical recoveries; development plans for processing resources; public health crises such as COVID-19; matters relating to proposed exploration or expansion; mining operational and development risks, including geotechnical risks and ground conditions; litigation risks, including the outcome of the class action complaints filed against the Company; the outcome of the international tax arbitration proceedings; regulatory restrictions (including environmental regulatory restrictions and liability); Oyu Tolgoi LLC or the GOM's ability to deliver a domestic pow er source for the Oyu Tolgoi project w ithin the required contractual time frame; communications w ith local stakeholders and community relations; activities, actions or assessments, including tax assessments, by governmental authorities; events or circumstances (including public health crises, strikes, blockades or similar events outside of the Company's control) that may affect the Company's ability to deliver its products in a timely manner; delays (including delays in the decision to commence the undercut), and the costs which would result from delays, in the development of the underground mine (w hich could significantly exceed the costs projected in OTTR20); currency fluctuations; the speculative nature of mineral exploration; the global economic climate; global climate change; dilution; share price volatility; competition; loss of key employees; cyber security incidents; additional funding requirements, including in respect of the development or construction of a long-term domestic pow er supply for the Oyu Tolgoi project; capital and operating costs, including w ith respect to the development of additional deposits and processing facilities; defective title to mineral claims or property and human rights requirements. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements and information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. All such forward-looking statements and information are based on certain assumptions and analyses made by the Company's management in light of their experience and perception of historical trends, current conditions and expected future developments, as w ell as other factors management believes are reasonable and appropriate in the circumstances. These statements, how ever, are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements or information.

Readers are cautioned not to place undue reliance on forward-looking information or statements. By their nature, forward-looking statements involve numerous assumptions, inherent risks and uncertainties, both general and specific, w hich contribute to the possibility that the predicted outcomes w ill not occur. Events or circumstances could cause the Company's actual results to differ materially from those estimated or projected and expressed in, or implied by, these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements are included in the "Risk Factors" section in the Company's Annual Information Form dated as of March 8, 2021 in respect of the year ended December 31, 2020 (the AIF), as supplemented by our Management's Discussion and Analysis of Financial Condition and Results of Operations for the three and six months ended June 30, 2021 (MD&A).

Readers are further cautioned that the list of factors enumerated in the "Risk Factors" section of the AIF and in the "Risks and Uncertainties" section of the MD&A that may affect future results is not exhaustive. When relying on the Company's forward-looking statements and information to make decisions w ith respect to the Company, investors and others should carefully consider the foregoing factors and other uncertainties and potential events.

Disclosure of information of a scientific or technical nature in this presentation in respect of the Oyu Tolgoi mine w as approved by Jo-Anne Dudley (FAusIMM( CP)), Chief Operating Officer of Turquoise Hill. Ms. Dudley is a "qualified person" as that ter m is defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects. Reference is made to OTTR2020 w hich is available under the Company's profile on SEDAR at w ww.sedar.com.

This presentation contains certain non-GAAP (Generally Accepted Accounting Principles) measures such as C1 Cash Costs. Such measures have non-standardised meaning under International Financial Reporting Standards ("IFRS") and may not be comparable to similar measures used by other issuers. These measures are presented in order to provide investors and other stakeholders w ith additional understanding of performance and operations at the Oyu Tolgoi mine and are not intended to be used in isolation from, or as a replacement for, measures prepared in accordance with IFRS. See the MD&A for more information about non-GAAP measures reported by the Company.

Presenters

4

Steve Thibeault

Interim Chief Executive Officer

Luke Colton

Chief Financial Officer

Jo-Anne Dudley

Chief Operating Officer

Q2'21 Highlights

5

  • Year to date All Injury Frequency Rate (AIFR) of 0.14 to end Q2 2021
  • Oyu Tolgoi produced 36.7kt of copper and 113.1koz of gold
  • Forecast 2021 copper and gold production of 150 to 180kt and 400 to 480koz, respectively
  • Overall project construction progress remains broadly in line with the Definitive Estimate and the project-related technical criteria on-track to initiate the undercut
  • Outstanding non-technical criteria have delayed the initiation of the undercut, and COVID-19 impacts and delayed budget uplift will further impact project costs
  • $0.7 billion of available liquidity1, sufficient to fund the Company's requirements into Q3 20222
  • Base case incremental funding requirement of $2.4Bn2
  1. As at June 30, 2021. Refer to section - Funding of Oyu Tolgoi LLC by Turquoise Hill - of the MD&A at June 30, 2021
  2. Based on current projections and subject to change

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Turquoise Hill Resources Ltd. published this content on 30 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 July 2021 10:48:02 UTC.


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Sales 2021 1 846 M - -
Net income 2021 543 M - -
Net Debt 2021 3 420 M - -
P/E ratio 2021 5,55x
Yield 2021 -
Capitalization 2 920 M 2 934 M -
EV / Sales 2021 3,43x
EV / Sales 2022 4,57x
Nbr of Employees 3 093
Free-Float 49,2%
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Number of Analysts 8
Last Close Price 14,51 $
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Managers and Directors
Steeve Thibeault Chief Executive Officer & Director
Luke Colton Chief Financial Officer
Robert Peter Charles Gillin Chairman
Jo-Anne Dudley Chief Operating Officer
Russel C. Robertson Independent Director
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