Turquoise Hill Increase In Gold Production Guidance Due To Higher-Grade Ore

MONTREAL - Turquoise Hill Resources Ltd. Chief Executive Officer, Ulf Quellmann, said, ”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.

We look forward to completing the 2020 Technical Report in the third quarter. This report will provide shareholders with an updated ramp-up schedule, which will highlight once again the quality of the Oyu Tolgoi ore body and the value proposition for investors. In addition, the updated data will greatly assist in our on-going efforts to advance our long term funding strategy and address our incremental liquidity requirements.

I'd like to thank the entire Turquoise Hill and Oyu Tolgoi teams, who have come together in the face of the COVID-19 pandemic to deliver yet another quarter of strong safety, production and financial results.”

Highlights include: Safety is our top priority. Oyu Tolgoi delivered a strong safety performance as evidenced by an AIFR of 0.22 per 200,000 hours worked for the six months ended June 30, 2020; Despite the unprecedented challenges posed by the COVID-19 pandemic, the Oyu Tolgoi open pit has continued to operate uninterrupted; & In Q2'20, Oyu Tolgoi produced 36,495 tonnes of copper and 31,150 ounces of gold.

Copper production remains on track to achieve guidance of 140,000 to 170,000 tonnes while gold production guidance for 2020 has increased to 155,000 – 180,000 ounces from 120,000 – 150,000 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.

Work on the Oyu Tolgoi underground continued, achieving strong productivity in underground advancement during Q2'20 achieving 1,8302 equivalent metres (eqm) in June and a monthly average of 1,8312 eqm for the quarter.

Routine Shaft 2 rope shortening was successfully completed in May with remote presence technology from the vendor being used to assist onsite teams to safely perform the task. Payload and speeds have returned to planned levels and people and materials movement via the service hoist continue to operate normally.

Shafts 3 and 4 continued on care and maintenance during Q2'20, and this is expected to continue until expert service providers can return to site to complete technical commissioning of specialized equipment and commence sinking activities. Work also slowed on some essential underground material handling infrastructure, in particular the construction of primary crusher one, which has now returned to 24 hour shifts following a period of day shift only. Personnel numbers on site have been limited in order to manage the risks around COVID-19.

In May the Company announced a new block cave mine design for Panel 0 which anticipates a base case development capital cost of $6.8 billion, with a range of $6.6 billion to $7.1 billion, and a target to first sustainable production of February 2023, with a target range between October 2022 and June 2023, inclusive of an allowance for schedule contingency.

The Company recognizes the unprecedented situation surrounding the ongoing COVID-19 pandemic. Turquoise Hill has established a business resiliency team and is closely monitoring the effect of the COVID-19 pandemic on its business, operations and our people will continue to update the market on the impacts to the Company's business and operations in relation to these extraordinary circumstances.