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Feasibility study updated at Oyu Tolgoi in Mongolia

Mining firm Oyu Tolgoi LLC has completed an updated feasibility study (OTFS20) that it is submitting to the Government of Mongolia.

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Feasibility study updated at Oyu Tolgoi in Mongolia

Mongolian regulations and standards that require mining companies submit updated feasibility studies every five years.

 

The updated study incorporates a new mine design for Panel 0 of the Hugo Dummett North underground mine at Oyu Tolgoi.

 

Rio Tinto, which manages Oyu Tolgoi, said the new design confirms that the caving method of mining remains valid and that the underground schedule and costs remain within the ranges previously disclosed.

 

These ranges include a delay of 21 to 29 months for first sustainable production compared to the original feasibility study guidance in 2016 and an increase of A$1.3B to A$1.8B from the original A$5.3B development capital.

 

“Detailed study, design, engineering and optimisation work is ongoing to support the definitive estimate of Panel 0 for the development of this world-class ore body, which remains due in the second half of 2020,” said Rio.

 

“These estimates are subject to any additional scheduling delays or increases in capital costs arising from the impacts of the ongoing COVID-19 pandemic.”

 

Arnaud Soirat, CEO of Copper & Diamonds at Rio Tinto, said: “This amended mine design is another positive step in the development of the underground mine which will unlock the most valuable part of Oyu Tolgoi. We remain focused on delivering the underground project safely and within the guidance ranges we have announced on both cost and schedule.”

 

The updated mine design is the result of the review announced by Rio Tinto in July 2019 when enhanced geotechnical and geological information obtained from drilling and mapping at depth suggested there may be some stability risks associated with the original mine design.

 

The updated design retains two in-situ rock pillars on either side of Panel 0 for geotechnical stability. In the original mine design, these pillars were within the mining area. The updated design is supported by extensive geotechnical modelling and industry leading technical assurance.

 

As a consequence of leaving the pillars in place, the material contained in the pillars has been reclassified from Ore Reserves to Mineral Resources. It is expected that part of the material contained in these pillars will be recoverable at a later stage following additional studies that are currently underway.

 

“Ore handling infrastructure will be relocated to the pillars, located immediately north and south of the current Panel 0 boundaries. Panels 1 and 2 will now be initiated as independent panels or mine blocks,” said Rio.

 

“Optimisation of mine designs for Panels 1 and 2 is ongoing and it is anticipated that this next phase of study may result in further movements in classifications of Ore Reserves and Mineral Resources. Any such movements will be reported following completion of the studies.”

 

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