Turquoise Hill stops underground work at Oyu Tolgoi as talks with Mongolia go on

VANCOUVER – Turquoise Hill Resources (TSX:TRQ) has suspended work on development of the underground copper mine at Oyu Tolgoi after the Mongolian government said financing for the project would require parliamentary approval.

The company said Thursday talks with the government are continuing but, given the uncertainties regarding the timing of the required approvals and completion of the expansion feasibility study, it was unable to complete project financing this year.

The delay means the company is going ahead with a rights offering that will be used to repay a bridge loan and other interim funding.

“Turquoise Hill remains committed to obtaining project financing to fund the development of the Oyu Tolgoi Project and is engaging with the government of Mongolia to achieve this,” the company said.

“Work continues on the optimization of the underground mine design and construction plan and finalization of the feasibility study.”

Turquoise Hill is developing the Oyu Tolgoi copper mining complex in Mongolia, including an open pit mine that began production this year and the underground portion under development.

The company said Thursday it lost $94.0 million or nine cents per share in its third quarter compared with a profit of $112.2 million or 13 cents per share a year ago.

Revenue totalled $15.7 million, up from $3.8 million in the same quarter last year.