Progress in Underground Mining
The Oyu Tolgoi mining project in Mongolia, known for its significant copper deposits, has reported consistent underground development progress. Rio Tinto, the operational manager of the Oyu Tolgoi mine, announced the opening of 72 draw bells in Panel 0 as part of Lift 1 on the mining license area, with 18 of these completed in the third quarter ending September 30, 2023. With a forecast to position Oyu Tolgoi as the fourth largest copper mine globally by 2030, the mine is expected to average 500,000 tons per year of mined copper production from 2028 to 2036.
The construction of the conveyor to surface is nearly three-quarters complete, signaling a step forward in the mine’s infrastructure development. Additionally, the third quarter saw substantial progress in the concentrator conversion, with the main contractor beginning mobilization and the completion of necessary tie-in works during a scheduled plant shutdown.
Shaft Sinking Operations
Shafts 3 and 4 have reached depths of 780 meters and 879 meters, respectively, with the final depths planned at 1,134 meters and 1,176 meters below ground level. Both shafts are on track for commissioning in the latter half of 2024.
Entrée/Oyu Tolgoi JV Exploration Efforts
The Entrée/Oyu Tolgoi joint venture, a partnership between Entrée Resources and Oyu Tolgoi LLC, has advanced its 2023 in-fill drill program at the Hugo North Extension. The joint venture has completed drilling activities on schedule, with additional accelerated underground drilling at the Hugo North Extension underway. Results from these programs are anticipated but not yet released. Furthermore, the third-quarter budget approval included $2.245 million for exploration on JV property, targeting several prospects.
For the three and nine month periods ending September 30, 2023, the company recorded operating losses, marginally higher than the previous year, due to legal costs associated with negotiations and arbitration proceedings. Likewise, there was a modest increase in operating cash outflow for the same periods. The company reported an influx of capital through the exercise of share purchase warrants and stock options, contributing to a cash balance and working capital of $6.9 million each as of the end of the third quarter.
Share Listings and Corporate Objectives
In corporate restructuring actions, the company retracted its common shares from NYSE American listing in 2019 and filed for termination of its registration under the Securities Exchange Act of 1934. However, the shares continue to be traded on the TSX and the OTCQB. Efforts to transfer certain mining licenses to Oyu Tolgoi LLC, as per the joint venture agreement, are ongoing, with several critical issues remaining before a definitive agreement can be finalized.
Arbitration and Legal Proceedings
While aiming for a commercial resolution with Oyu Tolgoi LLC and Rio Tinto, the company is concurrently pursuing arbitration proceedings to affirm the transfer of certain mining licenses, with a hearing scheduled for April 2024.