Turquoise Hill Resources Announces Financial Results and Review of Operations for 2012

Turquoise Hill Resources Announces Financial Results and Review of Operations 
for 2012 
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/25/13 -- Turquoise
Hill Resources (TSX:TRQ)(NYSE:TRQ)(NASDAQ:TRQ) today announced its
financial results for the quarter ended December 31, 2012. All
figures are in US dollars unless otherwise stated.  
HIGHLIGHTS 


 
--  Following the signing of the binding power purchase agreement in
    November 2012, electrical transmission lines to Oyu Tolgoi were
    energized and operational. 
--  Phase-one construction at Oyu Tolgoi reached 99% completion at the end
    of 2012. 
--  Underground lateral development continued during Q4'12 with
    approximately 1,500 metres achieved by the end of 2012. 
--  Construction of the concentrator was completed in Q4'12 and a
    commissioning ceremony was held on December 27, 2012. First ore was fed
    into the semi-autogenous grinding mill on January 2, 2013. 
--  First concentrate was produced at Oyu Tolgoi on January 31, 2013, and
    commencement of commercial production is expected by the end of June
    2013 subject to the resolution of the issues being discussed with the
    Mongolian Government. 
--  Turquoise Hill and Rio Tinto continue to have productive discussions
    with the Mongolian Government on a range of issues related to the
    implementation of the Investment Agreement and all parties have agreed
    to continue discussions with a goal of resolving matters in the near
    term. 
--  Project financing for Oyu Tolgoi continues to progress with the boards
    of the European Bank of Reconstruction and Development and the
    International Finance Corporation approving their respective
    participation in late February. Bids have been received from a number of
    banks that would allow the Company to achieve its project financing
    target and discussions are ongoing with the lenders to finalize the
    terms of those offers. 
--  Turquoise Hill anticipates the closing of final binding documentation
    and project financing funding to occur in the first half of 2013.  
--  On March 25, 2013, Turquoise Hill filed an updated Oyu Tolgoi Technical
    Report. 
--  As of the end of December 2012, the Oyu Tolgoi mine had a workforce of
    approximately 13,000
, which included over 11,000 Mongolians. 
--  Operations at SouthGobi's Ovoot Tolgoi mine resumed on March 22, 2013
    after being curtailed during the second half of 2012. 
--  Following the commencement of production in February 2012, Ivanhoe
    Australia's Osborne operations produced more than 50,000 tonnes of
    copper-gold concentrate and completed four concentrate shipments by the
    end of 2012. 
--  Turquoise Hill's consolidated cash position was $1.2 billion at December
    31, 2012 and approximately $710 million at March 25, 2013.

 
FINANCIAL RESULTS 
In 2012, Turquoise Hill recorded a net loss of $434.6 million ($0.51
per share), compared to a net loss of $570.4 million ($0.76 per
share) in 2011, which was a decrease of $135.8 million. Results for
2012 included $133.8 million in revenue; $19.5 million in interest
income; $7.2 million in foreign exchange gains; $194.7 million change
in the fair value of the derivative on the 2012 rights offering; a
$39.5 million change in the fair value of SouthGobi's embedded
derivatives and $146.9 million of net loss attributable to
non-controlling interests. These amounts were offset by $208.1
million in cost of sales; $169.0 million in exploration and
evaluation expenses; $159.9 million in other operating expenses;
$154.5 million in general and administrative expenses; $16.2 million
write-down of current assets; $11.9 million in interest expense;
$164.4 million in financing costs; and a $32.9 million share of loss
of significantly influenced investees.  
Turquoise Hill's cash position, on a consolidated basis at December
31, 2012, was approximately $1.2 billion. as at March 25, 2013,
Turquoise Hill's consolidated cash position was approximately $710
million. 
OYU TOLGOI COPPER-GOLD MINE  
The Company owns 66.0% of Oyu Tolgoi at March 25, 2013 (December 31,
2012: 66.0%). 
The Oyu Tolgoi mine is approximately 550 kilometres south of
Ulaanbaatar, Mongolia's capital city, and 80 kilometres north of the
Mongolia-China border. Mineralization on the property consists of
porphyry-style copper, gold, silver and molybdenum contained in a
linear structural trend (the Oyu Tolgoi Trend) that has a strike
length extending over 26 kilometres. Mineral resources have been
identified in a series of deposits throughout this trend. They
include, from south to north, the Heruga Deposit, the Southern Oyu
deposits (Southwest Oyu, South Oyu, Wedge and Central Oyu) and the
Hugo Dummett deposits (Hugo South, Hugo North and Hugo North
Extension). Mining of ore commenced in May 2012, with the first
concentrate produced, as part of the commissioning activities, in
January 2013. 
During 2012, additions to property, plant and equipment for the Oyu
Tolgoi mine totalled $2.6 billion, which included development costs
(2011: $2.8 billion).  
The Oyu Tolgoi mine initially is being developed as an open-pit
operation. a copper concentrator plant, with related facilities and
necessary infrastructure to support an initial throughput of 100,000
tonnes of ore per day, has been constructed to process ore mined from
the Southern Oyu open pit. in conjunction with the surface
activities, a 95,000-tonne-per-day underground block-cave mine also
is being developed at the Hugo North Deposit, which is expected to
commence operations in 2016. 
Phase-one construction of the Oyu Tolgoi mine 99% complete at the end
of 2012 
Construction of the Oyu Tolgoi mine's first phase of development
reached 99% completion at the end of 2012. Total capital invested in
the construction of the first phase of the Oyu Tolgoi mine to the end
of 2012 was approximately $6.0 billion. the final cost for the
phase-one capital project is expected to be approximately $6.2
billion, within 3% of the budget, excluding foreign-exchange
exposures. 
Major updates for 2012 and Q1'13 include the following: 


 
--  The mining and stockpiling of the first open-pit ore began in May 2012
    and approximately 9.0 million tonnes of ore was stockpiled at the end of
    2012. the primary crusher, overland conveyor and coarse-ore stockpile
    circuits were commissioned in Q3'12 and 435,000 tonnes of ore had been
    sent through to the coarse ore storage facility at the end of 2012. 
--  Following the signing of the binding power purchase agreement with the
    Inner Mongolian Power Corporation in early November 2012, electrical
    transmission lines for power to the Oyu Tolgoi mine were energized and
    operational. 
--  Construction of the concentrator was completed in Q4'12 and a
    commissioning ceremony was held on December 27, 2012. First ore was fed
    into the semi-autogenous grinding mill on January 2, 2013. 
--  First concentrate was produced on January 31, 2013. Commencement of
    commercial production is expected by the end of Q2'13 subject to the
    resolution of the issues being discussed with the Government of
    Mongolia. 
--  Underground lateral development at the Hugo North Deposit was suspended
    in February 2012 as planned to enable the upgrading of hoisting
    equipment at Shaft #1. Following completion of the upgrade in Q3'12,
    underground lateral development was restarted and approximately 1,500
    metres of lateral development were achieved from mid-September 2012 to
    the end of December 2012. 
--  Construction of Shaft #2 at the Hugo North Deposit is progressing well
    with the headframe reaching its final height of 96 metres in Q2'12. the
    headframe and ancillary buildings were 99% complete at the end of Q4'12.
    Shaft-sinking activities began in December 2011, and the depth of the
    shaft is now approximately 980 metres below surface, 74% of its final
    1,319 metre depth. 
--  Pre-sinking works for Shaft #5 began in September 2012 and have now been
    completed. Sinking activity is planned to commence in April 2013. Shaft
    #5 will provide primary ventilation for underground operations and is
    expected to have a final depth of 1,195 metres. 
--  Construction of off-site facilities and infrastructure were behind
    schedule at the end of Q4'12 due to slower progress in the building of
    the Oyu Tolgoi-Gashuun Sukhait road to the Mongolia-China border, the
    diversion of the Undai River and development of the Khanbumbat permanent
    airport. Road development was impacted by local permitting issues
    related to modifications associated with Oyu Tolgoi's environmental
    commitments. Road work has been suspended for the winter although there
    should be no impact upon the transporting of concentrate to the border.
    Work on the river diversion commenced in December 2012; however,
    progress was also impacted by local permitting issues. the permanent
    airport work was completed in January 2013 and began operating in
    February 2013. 
--  Long-term sales contracts have been signed for 75% of the Oyu Tolgoi
    mine's concentrate production in the first three years, while 50% of
    concentrate production is contracted for ten years (subject to
    renewals). in addition to the signed contracts, in principle commitments
    have been made at international terms for up to 25% of the concentrate
    available for export. These commitments range from three to ten years
    and are subject to the conclusion of detailed sales contracts.

 
Oyu Tolgoi concludes power purchase agreement 
Turquoise Hill announced on November 5, 2012, that Oyu Tolgoi had
signed a binding power purchase agreement with the Inner Mongolia
Power Corporation to supply power to the Oyu Tolgoi mine. the term of
this agreement covers the commissioning of the business plus the
initial four years of commercial operations.  
The Oyu Tolgoi Investment Agreement recognized that the reliable
supply of electrical power is critical to the mine. the agreement
also confirmed that Turquoise Hill has the right to obtain electrical
power from inside or outside Mongolia, including China, to meet its
initial electrical power requirements for up to four years after Oyu
Tolgoi commences commercial production. the agreement established
that a) Turquoise Hill has the right to build or sub-contract
construction of a coal-fired power plant at an appropriate site in
Mongolia's South Gobi Region to supply the Oyu Tolgoi mine and b) all
of the mine's power requirements would be sourced from within
Mongolia no later than four years after the start of commercial
production. Turquoise Hill continues to evaluate several options to
meet its commitment to sourcing power from within Mongolia, including
the development of a dedicated power plant and ownership and funding
options to meet this requirement. 
Updated technical report released 
The 2013 Oyu Tolgoi Technical Report (2013 OTTR), an updated
independent technical report on the Oyu Tolgoi Project, prepared by
AMC Consultants Pty. Ltd., was released on March 25, 2013. the report
updated the Oyu Tolgoi Project's mineral resources and mineral
reserves and is available under Turquoise Hill's profile on SEDAR at
www.sedar.com. a summary of the 2013 OTTR is also available in the
Company's 2012 Annual Information Form filed on SEDAR. 
The 2013 OTTR is based on a review of the latest technical,
production and cost information prepared by Oyu Tolgoi. the cost
estimates will be refined in the feasibility study which Oyu Tolgoi
expects to complete in the first half of 2014. 
Highlights of the 2013 OTTR include the following: 


 
--  The OTTR revised phase-two capital estimate of $5.1 billion is based on
    the concentrator operating at its initial capacity of 100,000 tonnes per
    day and includes an expansion to the back end of the concentrator to
    process the high grade underground ore. Ore is initially fed from the
    Southern Oyu open pit mine, which is subsequently displaced with the
    more valuable Hugo North Lift 1 underground ore. 
--  The peak production rate from the underground has increased from 85,000
    tonnes per day to 95,000 tonnes per day. 
--  The 2013 OTTR excludes the power plant and concentrator expansion to
    160,000 tonnes per day outlined in the 2012 Integrated Development and
    Operations Plan Technical Report (IDOP). 
--  A decision to expand the concentrator to also process full production
    from the open pit mine does not need to be made until 2015. Prior to
    this decision point, the Company will continue to evaluate and optimize
    options for resource development. 
--  The 100,000 tonne reserve case does not include construction of a power
    station; capital and operating costs have been adjusted to reflect
    purchases from a third party Mongolia based power provider. 
--  The case supporting the mineral reserve has extended from 27 year to 43
    years as concentrator production has been assumed to remain at 100,000
    tonnes per day. 
--  The average cash cost after gold and silver credits for the first ten
    years of production is $0.89 per pound of copper. the increase relative
    to the 2012 IDOP ten year average cash cost was primarily a result of
    incorporating higher third party power costs compared to a dedicated
    power station. This increase in power costs resulted in a large increase
    in processing costs and a smaller increase in mining costs. Higher
    general and administration costs also contribute to the increase in
    average cash cost. 
--  Overall, the Company estimates that there has been a 30% increase in the
    direct capital cost to construct the underground mine. the remainder of
    the increase in the phase-two capital estimate, after adjusting for
    scope changes, is primarily driven by an increase in contingencies,
    contractor costs and owner execution costs. 
--  The independently prepared 2013 OTTR states that the ongoing work being
    undertaken on the feasibility study may result in opportunities to
    improve the economics through cost reductions and optimizations of the
    mine plan. Oyu Tolgoi plans to complete a focused and structured review
    of the feasibility study work to support future capital approvals. 
--  The 2013 OTTR reserves and resources show an increase from previous
    years. the 2013 OTTR states that the deposits contain a currently
    identified resource of 45.8 billion pounds of contained copper and 24.9
    million ounces of contained gold in the measured and indicated mineral
    resource categories and 54.6 billion pounds of contained copper and 36.8
    million ounces of contained gold in the inferred category. the
    reasonable prospects analysis identified a reduction in cut-off grade,
    which was the predominant factor for the change in resources relative to
 
    reporting in previous years. the mineral reserves state 26.5 billion
    pounds recovered copper and 12.9 million ounces recovered gold,
    increases of 4.4% in recovered copper and 4.3% in recovered gold over
    the 2012 IDOP mineral reserve. the increase in reserves is a result of
    re-optimization of the mine designs. Mineral resources are inclusive of
    mineral reserves.

 
Feasibility study for expansion of operations 
The feasibility study for the expansion of operations at the Oyu
Tolgoi mine is on-going. It is now expected to be completed in the
first half of 2014 as Oyu Tolgoi continues to pursue value
engineering and optimization. Actual operating data, as it becomes
available, is expected to be incorporated into the feasibility study. 
Rio Tinto and Turquoise Hill working to complete international
project finance package 
During 2012 and early 2013, both Turquoise Hill and Rio Tinto have
been actively engaged with lenders to refine the overall project
financing plan and term sheet with the aim of raising $3 billion to
$4 billion.  
In August 2012, the Environmental and Social Impact Assessment
undertaken as part of the project finance process was publically
disclosed.  
The overall terms and conditions for project financing have been
generally agreed with lenders. in addition to the core lending group,
the companies invited a wider selection of international banks to
participate in the project finance consortium. in Q1'13, interested
banks conducted a site visit to the Oyu Tolgoi mine. in late February
2013, the boards of the European Bank of Reconstruction and
Development and the International Finance Corporation approved their
respective participation in project financing. Bids have been
received from a number of banks that would allow the Company to
achieve its project financing target and discussions are ongoing with
the lenders to finalize the terms of those offers. the project
financing is subject to the unanimous approval of the Oyu Tolgoi
Board of Directors which includes representatives from the Government
of Mongolia.  
Turquoise Hill anticipates the closing of final binding documentation
and project financing funding to occur in the first half of 2013.  
Skills training programs preparing Mongolians for jobs 
The Oyu Tolgoi mine's staffing strategy continues to focus on the
utilization of Mongolian men and women whose skills are being
developed, and who are receiving training throughout the construction
phase. as of the end of December 2012, the Oyu Tolgoi mine had a
workforce of approximately 13,000, which included over 11,000
Mongolians. 
Oyu Tolgoi has committed more than $126 million in funding over five
years for education and training programs in Mongolia. the majority
of the projects and initiatives under this funding are targeting the
building of a Mongolian talent pipeline for the future. Under this
investment, Oyu Tolgoi is building three new vocational education
centres and upgrading four existing vocational education centres in
seven towns and cities of Mongolia. Oyu Tolgoi is training 3,300
workers in 21 aimags and providing scholarships for hundreds of
students to study in national and international universities. 
Discussions with the Government of Mongolia  
A number of substantive issues have recently been raised by the
Government of Mongolia relating to implementation of the Investment
Agreement, the companion Shareholders' Agreement and project finance. 
Turquoise Hill and Rio Tinto continue to have productive discussions
with the Government of Mongolia on a range of issues related to the
implementation of the Investment Agreement, including project
development and costs, the operating budget, project financing,
management fees and governance. While progress on these issues has
been made, all parties have agreed to continue discussions with a
goal of resolving the issues in the near term. 
The Oyu Tolgoi Board has approved continued funding to progress the
project as discussions with the Government of Mongolia proceed. Oyu
Tolgoi is expected to reach commercial production by the end of June
2013 subject to the resolution of the issues being discussed with the
Government of Mongolia.  
In October 2012, the Company, Rio Tinto and Oyu Tolgoi rejected a
request from the Government of Mongolia to renegotiate the Investment
Agreement. the rejection followed the receipt of a letter from the
Minister of Mining requesting the parties to renegotiate the landmark
agreement that was signed in October 2009 and became fully effective
in March 2010.  
In its proposed 2013 budget, the Government of Mongolia has included
revenue from the application of a progressive royalty scheme to Oyu
Tolgoi. However, the Investment Agreement provides a stabilized
royalty rate of 5% over the life of the agreement and specifies that
new laws made after its signing will not apply to Oyu Tolgoi. Any
change to Oyu Tolgoi's royalty rate would require the agreement of
all parties to the Investment Agreement. 
In October 2011, the Mongolian Government reaffirmed that the
Investment Agreement was signed in full compliance with all laws and
regulations of Mongolia.  
Development drilling continued in 2012  
In January and February 2012, 1,560 metres of underground drilling
was completed before the planned shutdown of Shaft #1. Underground
drilling recommenced in Q4'12. Characterization holes were also
drilled in 2012 for Shaft #4, Shaft #5 and Vent Raise #3.  
At Hugo North Lift 1, 18,829 metres of infill drilling were
completed. the drilling is designed to bring the first seven years of
production into the measured resource confidence category. the infill
drilling program was 60% complete at year end and drilling is
expected to continue in 2013. 
Exploration drilling continued in 2012 
During 2012, exploration drilling continued at the Oyu Tolgoi mine
and 28,431 metres of surface exploration diamond drilling and 1,752
metres of condemnation drilling were completed. the surface
exploration drilling included 13,228 metres of drilling on the Oyu
Tolgoi mine's mining licence, 9,058 metres of drilling on Entree
Gold's Javkhlant mining licence, 5,776 metres on Entree Gold's Shivee
mining licence and 367 metres of drilling on Oyu Tolgoi's Manakht
mining licence. the condemnation drilling was on the Manakht licence. 
At the start of Q1'12, there were five exploration drill rigs in
operation which had been reduced to one drill rig by the end of
Q4'12. in April 2012, management of the exploration program
transferred from the Company to Oyu Tolgoi. Following this change,
the strategy of the Oyu Tolgoi exploration program was restated: (i)
to further the development of a pipeline of projects within the
contract area; (ii) to seek a transformational discovery (long-life,
low-cost, high-grade copper resources), especially in those areas
where it may impact on the current development of the Oyu Tolgoi mine
ore bodies; and (iii) to further delineate the resource potential at
Heruga North.  
To 
implement the strategy there will be a shift in emphasis in 2013
from drilling to data compilation, 3D modelling and interpretation to
generate the next series of prioritized exploration targets. the
Heruga geology model will be updated and a new resource estimate
completed to incorporate the Heruga North resource potential.
Drilling expenditure is expected to be reduced compared to recent
years. 
SOUTHGOBI RESOURCES 
The Company owns 57.6% of SouthGobi at March 25, 2013 (December 31,
2012: 57.6%). 
Sales and operations at SouthGobi's Ovoot Tolgoi coal mine 
SouthGobi's Ovoot Tolgoi mine is in Mongolia's South Gobi Region,
approximately 40 kilometres north of the Shivee Khuren-Ceke crossing
at the Mongolia-China border.  
During Q2'12, SouthGobi commenced curtailing mining activities at the
Ovoot Tolgoi mine to manage coal inventories and to maintain
efficient working capital levels. by June 30, 2012, mining activities
were fully curtailed and remained so for the remainder of 2012;
however, operations at the Ovoot Tolgoi mine resumed on March 22,
2013. SouthGobi continues to minimize uncommitted capital
expenditures and exploration expenditures in order to preserve its
financial resources.  
As a result of these events, Turquoise Hill conducted an impairment
analysis whereby the carrying values of its property, plant and
equipment related to the Ovoot Tolgoi mine were assessed. the
analysis did not result in the identification of impairment. the
estimates and assumptions incorporated in the impairment analysis are
subject to certain risks and uncertainties which may materially
affect the future net cash flows expected to be generated.  
In 2012, SouthGobi recorded revenue of $53.1 million compared to
$179.0 million in 2011. in 2012, SouthGobi's operations were impacted
by infrastructure constraints in Mongolia, the significant
uncertainty resulting from regulatory issues facing SouthGobi and the
softening of inland China coking coal markets. These issues led to
decreased sales volumes and decreased selling prices for individual
coal products. 
In 2012, SouthGobi produced 1.33 million tonnes of raw coal with a
strip ratio of 2.52 compared to production of 4.57 million tonnes of
raw coal with a strip ratio of 3.63 in 2011. the decrease in
production primarily related to the curtailment of SouthGobi's mining
operations in the last three quarters of 2012; whereas, the decrease
in the strip ratio primarily related to the below-trend strip ratio
in Q1'12 which will be normalized over the life-of-mine. 
In 2012, SouthGobi sold 1.33 million tonnes of coal at an average
realized selling price of $47.76 per tonne compared to sales of 4.02
million tonnes of coal at an average realized selling price of $54.03
per tonne in 2011. SouthGobi's average realized selling price was
negatively impacted by the softening of the inland China coking coal
markets closest to SouthGobi's operations throughout 2012.
SouthGobi's higher-ash coals were impacted more substantially than
its other products.  
Cost of sales was $135.3 million in 2012, compared to $184.8 million
in 2011. in 2012, cost of sales included $53.0 million of idled mine
costs due to the curtailment of mining activities at Ovoot Tolgoi,
compared to $nil in 2011. Cost of sales is comprised of the direct
cash costs of product sold, mine administration cash costs of product
sold, idled mine costs, inventory impairments, equipment
depreciation, depletion of mineral properties and share-based
compensation expense. the decrease in cost of sales from 2011, after
factoring in idled mine costs, was primary due to lower sales volumes
and lower unit costs, partially offset by coal stockpile impairments. 
Coal processing and transportation infrastructure  
In February 2012, SouthGobi successfully commissioned the dry-coal
handling facility (DCHF) at the Ovoot Tolgoi mine. the DCHF has the
capacity to process nine million tonnes of run-of-mine (ROM) coal per
year. the DCHF includes a 300-tonne-capacity dump hopper, which
receives ROM coal to feed a coal rotary breaker, screens the coal to
a maximum of 50 millimetres, and rejects oversize ash. the DCHF is
anticipated to reduce screening costs and improve yield recoveries.  
SouthGobi has received all permits to operate the DCHF. However, the
2013 mine plan considers only limited utilization of the DCHF at the
latter end of 2013 due to higher quality coals being mined that
likely will not require processing through the DCHF and can be sold
raw or processed directly through the wet washing facility. the 2013
mine plan assumes a conservative resumption of operations, designed
to achieve a cost effective approach that will allow operations to
continue on a sustainable basis.  
In 2011, SouthGobi entered into an agreement with Ejinaqi Jinda Coal
Industry Co. Ltd (Ejin Jinda) to toll-wash coal from the Ovoot Tolgoi
mine. the agreement has a duration of five years from commencement
and provides for an annual washing capacity of approximately 3.5
million tonnes of input coal. Ejin Jinda's washing facility is
located in China approximately 10 kilometres from the Mongolia-China
border crossing and approximately 50 kilometres from the Ovoot Tolgoi
mine. Medium and higher-ash coals with only basic processing through
Ovoot Tolgoi's onsite DCHF will be transported from the Ovoot Tolgoi
mine to the washing facility under a separate transport agreement.
Based on preliminary samples, SouthGobi expects that the washed coal
generally will meet semi-soft coking coal specifications.
Construction of Ejin Jinda's wet washing facility is now complete and
it has been connected to utility supply. the Company plans to
commence wet washing coals in the second half of 2013.  
In May 2012, eight new border gates, exclusively for coal
transportation, opened at the Shivee Khuren Border Crossing at the
Mongolia-China border. the expanded border crossing infrastructure
eliminated the previous bottleneck at the border crossing and is
expected to increase capacity to approximately 20 million tonnes or
more of coal per year.  
Turquoise Hill and Chalco terminate SouthGobi lock-up agreement and
proportional takeover bid due to approvals timeframe 
On September 3, 2012, the Company announced the termination of the
lock-up agreement entered into with Aluminum Corporation of China
Limited (Chalco) on April 1, 2012, pursuant to which the Company
agreed to tender its shares in SouthGobi into a proportional takeover
offer to be made by Chalco for up to 60%, but not less than 56%, of
the shares in SouthGobi. After careful consideration, both the
Company and Chalco concluded that the proposed transaction had
minimal prospect of obtaining the necessary regulatory approvals
within an acceptable timeframe. as a result, the Company and Chalco
agreed to terminate the lock-up agreement, including Chalco's
obligation to make a proportional offer.  
Following termination of the lock-up agreement, the Company is
working with SouthGobi to improve performance of the business and
more fully recognize SouthGobi's operating potential. 
Status of mining and exploration licences 
On April 16, 2012, SouthGobi announced that the Mineral Resources
Authority of Mongolia (MRAM) held a news conference announcing a
request to suspend exploration and mining activity on certain
licences owned by SouthGobi Sands LLC (SouthGobi Sands), a
wholly-owned subsidiary of SouthGobi. the request for suspension
included the mining licence pertaining to the Ovoot Tolgoi mine. on
September 6, 2012, SouthGobi received official notification from MRAM
confirming that as of September 4, 2012 all exploration and mining
licences held by SouthGobi were in good standing. the Notice of
Investment Dispute filed by SouthGobi pertaining to its valid
pre-mining agreement (PMA) applications remains ongoing.  
Governmental, regulatory and internal investigations  
SouthGobi is subject to continuing investigations by the Mongolian
Independent Authority Against Corruption (the IAAC) and other
governmental and regulatory authorities in the Republic of Mongolia
regarding allegations against SouthGobi and some of its employees
involving possible breaches of Mongolian laws, including
anti-corruption and taxation laws. Certain of those allegations
(including allegations of bribery, money laundering and tax evasion)
have been the subject of public statements and Mongolian media
reports, both prior to and in connection with the recent trial and
conviction of the former Chairman and the former director of the
Geology, Mining and Cadastral Department of the MRAM, and others.
SouthGobi was not a party to that case. SouthGobi understands that
the court's decision is the subject of an appeal. 
A number of the media reports referred to above suggest that, in its
decision, the court in the above-mentioned case referred to two
matters specifically involving SouthGobi Sands. 
In respect of the first matter, being an alleged failure to meet
minimum expenditure requirements under the Mongolian Minerals Law in
relat
ion to four exploration licences, SouthGobi is investigating
these allegations, but advises that three of the four licences were
considered to be non-material and allowed to lapse between November
2009 and December 2011. Activities historically carried out on the
fourth (and the only currently-held) licence include drilling,
trenching and geological reconnaissance. SouthGobi has no immovable
assets located on this licence and it does not contain any of
SouthGobi's NI 43-101 Reserves or Resources. This licence does not
relate to SouthGobi's Ovoot Tolgoi mine and SouthGobi does not
consider this licence to be material to its business.  
The second matter referred to by the court was an alleged impropriety
in the transfer of Licence 5261X by SouthGobi Sands to a third party
in March 2010 in violation of Mongolian anti-corruption laws. the
Company understands, based on media reports, that the court has
invalidated the transfer of this licence, and so the licence's
current status is unclear.  
In addition, the IAAC has advised SouthGobi that it is investigating
other alleged improprieties by SouthGobi Sands as described above.
Neither SouthGobi nor any of its employees have been charged in
connection with the IAAC's investigation, but certain current and
former employees have been advised that they are suspects. the IAAC
has imposed orders placing a travel ban on those employees, and
administrative restrictions on certain of SouthGobi's Mongolian
assets, including local bank accounts, in connection with its
continuing investigation of those allegations. While the orders
restrict the use of in-country funds pending the outcome of the
investigation, they are not expected to have a material impact on
SouthGobi's activities in the short term, although they could create
operational difficulties for SouthGobi in the medium to long term.
SouthGobi is taking and intends to take all necessary steps to
protect its ability to continue to conduct its business activities in
the ordinary course.  
Through SouthGobi's Audit Committee (comprised solely of independent
directors), SouthGobi is conducting an internal investigation into
possible breaches of law, internal corporate policies and codes of
conduct arising from the allegations that have been raised. the
SouthGobi Audit Committee has the assistance of independent legal
counsel in connection with its investigation. the Chair of the
SouthGobi Audit Committee is also participating in a self-created
tripartite committee, comprised of the Chair of the SouthGobi Audit
Committee, a representative of Rio Tinto and the Chair of the
Company's Audit Committee, which is focused on the investigation of
those allegations, including possible violations of anti-corruption
laws. Independent legal counsel and forensic accountants have been
engaged by this committee to assist it with its investigation. All of
these investigations are ongoing but are not yet complete.
Information that has been provided to the IAAC by SouthGobi has also
been provided by the tripartite committee to Canadian and United
States regulatory authorities that are monitoring the Mongolian
investigations. SouthGobi continues to cooperate with all relevant
regulatory agencies in respect of the ongoing investigations.  
The investigations referred to above could result in one or more
Mongolian, Canadian, United States or other governmental or
regulatory agencies taking civil or criminal action against SouthGobi
or any of its affiliates, including the Company, or any of the
current or former employees of the foregoing. the likelihood or
consequences of such an outcome are unclear at this time but could
include financial or other penalties, which could be material, and
which could have a material adverse effect on the Company. See "Risk
Factors-SouthGobi is subject to continuing governmental, regulatory
and internal investigations, the outcome of which is unclear at this
time but could have a material adverse effect on the Company" on page
44 of the Company's MD&A. 
Pending the completion of the investigations, SouthGobi, through its
Board of Directors and new management, has taken a number of steps to
focus ongoing compliance by employees with all applicable laws,
internal corporate policies and codes of conduct, and with
SouthGobi's disclosure controls and procedures and internal controls
over financial reporting. 
Notice of Investment Dispute 
On July 11, 2012, SouthGobi announced that SGQ Coal Investment Pte.
Ltd., a wholly-owned subsidiary of SouthGobi that owns 100% of
SouthGobi Sands, filed a Notice of Investment Dispute on the
Government of Mongolia pursuant to the Bilateral Investment Treaty
between Singapore and Mongolia. SouthGobi filed the Notice of
Investment Dispute following a determination by management that they
had exhausted all other possible means to resolve an ongoing
investment dispute between SouthGobi Sands and the Mongolian
authorities. 
The Notice of Investment Dispute consists of, but is not limited to,
the failure by MRAM to execute the PMA's, associated with certain
exploration licences held by SouthGobi, pursuant to which valid PMA
applications had been lodged in 2011. the areas covered by the valid
PMA applications include the Zag Suuj Deposit and certain areas
associated with the Soumber Deposit outside the existing mining
licence. 
The Notice of Investment Dispute triggers the dispute resolution
process under the Bilateral Investment Treaty whereby the Government
of Mongolia has a six-month cure period from the date of receipt of
the notice to satisfactorily resolve the dispute through
negotiations. If the negotiations are not successful, SouthGobi will
be entitled to commence conciliation/arbitration proceedings under
the auspices of the International Centre for Settlement of Investment
Disputes (ICSID) pursuant to the Bilateral Investment Treaty.
However, in the event that the Government of Mongolia fails to
negotiate, ICSID arbitration proceedings may be accelerated before
the six months have expired. SouthGobi continues to have the right to
commence conciliation/arbitration proceedings under the auspices of
the ICSID pursuant to the Bilateral Investment Treaty. on January 18,
2013, MRAM issued SouthGobi a PMA pertaining to the Soumber Deposit;
however, four valid PMA applications remain outstanding.  
Activities historically carried out on the exploration licences with
valid PMA applications include drilling, trenching and geological
reconnaissance. SouthGobi has no immovable assets located on these
licences and the loss of any or all of these licences would not
materially and adversely affect the existing operations.  
Board of Directors and Management changes 
On September 4, 2012, SouthGobi announced changes to its Board of
Directors, accepting the resignations of Edward Flood, Robert Hanson
and Chairman Peter Meredith, and subsequently appointed Lindsay Dove,
Sean Hinton, Kay Priestly, Brett Salt and Kelly Sanders. Kay Priestly
also was appointed Chairman of the Board. on September 17, 2012,
Alexander Molyneux tendered his resignation as a director of
SouthGobi. Further, on November 8, 2012, Ross Tromans was appointed
an Executive Director.  
SouthGobi also announced senior management changes during Q3'12 and
Q4'12, with the departures of Alexander Molyneux, former President
and Chief Executive Officer (CEO), Curtis Church, former Chief
Operating Officer and Matthew O'Kane, former Chief Financial Officer
(CFO). Ross Tromans was appointed as President and CEO and also
assumed the duties formerly handled by the Chief Operating Officer.
SouthGobi is in the process of identifying a candidate for the CFO
role. in the interim, Ross Tromans has acted as the SouthGobi's
Principal Financial Officer. 
Sale of Tsagaan Tolgoi cancelled 
On March 5, 2012, SouthGobi announced an agreement to sell its
Mongolian thermal coal property, the Tsagaan Tolgoi Deposit to Modun
Resources Limited (Modun), a company listed on the Australian Stock
Exchange. Under the transaction, SouthGobi expecte
d to receive $30.0
million of total consideration, comprising $7.5 million up-front in
cash, $12.5 million up-front in Modun shares and deferred
consideration of an additional $10.0 million also payable in Modun
shares. Subsequently, on August 29, 2012, SouthGobi announced that
the proposed sale of the Tsagaan Tolgoi Deposit to Modun had been
cancelled by mutual agreement of both parties. 
IVANHOE AUSTRALIA 
Turquoise Hill owns 56.5% of Ivanhoe Australia at March 25, 2013
(December 31, 2012: 57.3%). 
Ivanhoe Australia successfully commenced copper and gold production
in late February 2012 at the Osborne processing complex in
north-western Queensland. Two other projects, the Merlin
molybdenum-rhenium project and the Mount Elliott copper-gold project
are in various stages of study. These projects are on granted mining
leases. 
In late May 2012, Ivanhoe Australia announced it was undertaking a
strategic and business review focused on identifying and implementing
the actions required to position the business for future growth and
improve shareholder value. in August 2012, Ivanhoe Australia released
the results of the strategic and business review. the review
confirmed Ivanhoe Australia's goal to build a profitable mid-tier
mining company.  
The review identified approximately A$70 million of capital
expenditure savings over the next two years and approximately A$45
million of annual operating and overhead costs savings. 
Ivanhoe Australia incurred exploration and evaluation expenses of
$102.9 million in 2012, compared to $148.0 million in 2011. the 2012
reduction in expenditure from 2011 was a result of the strategic
review. 
Osborne copper-gold operation  
The Osborne copper-gold operation has performed well during the year
producing in excess of 50,000 tonnes of concentrate, completing four
shipments and with a closing concentrate inventory at year end
sufficient for an additional shipment. the processing plant has
performed in line with plan during 2012. Ore milled for the year
totalled approximately 780,000 tonnes which was within the guidance
range of 700,000 to 900,000 tonnes. Recovery rates during 2012
averaged 93.9% for copper and 78.1% for gold. the plant produced
51,820 dry metric tonnes of concentrate for the year containing
12,220 tonnes of copper. Gold production in both concentrate and dore
totalled 17,269 ounces for the year.  
Ivanhoe Australia recognized product sales revenue of $80.7 million
in 2012 (2011: $nil) following the successful commencement of the
Osborne copper-gold operation. 
During 2012, Ivanhoe Australia mined 773,928 tonnes of ore from both
the Kulthor and Osborne underground mines. Also in 2012, Ivanhoe
Australia continued development of the Starra 276 underground mine,
which it completed in February 2013. in March 2013, Ivanhoe Australia
successfully commenced stope blasting and production at Starra 276.
Mining at Starra 276 will continue to ramp up until full production
rate of approximately 650,000 tonnes per year is reached - expected
in Q2'13. the haul road linking the Starra 276 mine to the Osborne
processing facility was completed in early 2013 to enable transport
of Starra 276 ore to the processing plant. in 2013, Ivanhoe Australia
expects to mine between 1,400,000 and 1,600,000 tonnes from the
Osborne operation's three mines.  
Consolidation of the underground mining and maintenance activities of
Kulthor, Osborne and Starra 276 progressed during Q4'12, with award
and finalization of the contract during the period.  
In September 2012, Ivanhoe Australia announced an upgrade to the
mineral resource at the Kulthor mine with an increase of over 60% in
contained metal. 
Merlin Molybdenum-Rhenium Project 
The phase-one decline development at the Merlin Project was completed
on time and on budget in January 2012. in April 2012, the Merlin
feasibility study was completed. the study identified a potential
mine life of 15 years with ore throughput estimated at 500,000 tonnes
per year with annual production of molybdenum of 5,100 tonnes and
rhenium of 7,300 kilograms for the first seven years following
ramp-up.  
An independent technical review of the Merlin project was conducted
as part of the strategic and business review that was completed in
August 2012. the review reaffirmed the outcomes of the feasibility
study and the technical and commercial viability of the project. It
also identified potential opportunities to further enhance the
technical and commercial aspects of the project. These include
metallurgical testwork that has the potential to reduce the capital
cost and improve returns. a program of testwork has commenced with
the objective to increase the molybdenum-rhenium concentrate grade.  
Mount Elliott 
The Mount Elliott scoping study was released in April 2012. the study
focused on two elements of the mineralized system: the Mount Elliott
open pit (incorporating the original Mount Elliott underground mine)
and the SWAN high-grade zone. 
Drilling to further define the high-grade portions of the SWAN zone
within the Mount Elliott project commenced in early October 2012 and
progressed through Q4'12. the additional drilling combined with
further geological analysis is planned to update the Mount Elliott
mineral resource model. This work is in line with the program of
works outlined in the Mount Elliott scoping study completed in April
2012. 
Regional exploration 
In north-western Queensland, Ivanhoe Australia has a 100% interest in
30 granted Mining Leases (MLs) with a total area of 109 square
kilometres and two ML applications (11 square kilometres). It has 44
granted Exploration Permits for Minerals (EPMs) with a total area of
5,686 square kilometres, including joint ventures, and three EPM
applications (601 square kilometres). the granted EPMs include 12
EPMs in the Ivanhoe / Exco joint venture (423 square kilometres) and
two EPMs in the Ivanhoe / Goldminco joint venture (70 square
kilometres).  
On November 27, 2012, Ivanhoe Australia announced that it had
finalized its acquisition of a 51% interest in some of Emmerson
Resources Limited's tenements in the Tennant Creek Region in the
Northern Territory of Australia. Following this acquisition, Ivanhoe
Australia has a 51% interest in 30 granted Exploration Licences (ELs)
with a total area of 2,270 square kilometres, three EL applications
(129 square kilometres), 121 granted Mineral Claims (23 square
kilometres), 224 granted Mineral Leases (61 square kilometres), six
Mineral Lease applications (1.5 square kilometres) and two Mineral
Authorities (19 square kilometres). 
Equity entitlement offer 
On November 21, 2012, Ivanhoe Australia announced the launch of a
3-for-10 accelerated, non-renounceable rights issue (Entitlement
Offer) to raise up to A$80 million. 
The institutional component of the Entitlement Offer was completed on
November 23, 2012, raising gross proceeds of approximately A$74.7
million from the issue of approximately 155.7 million ordinary shares
at A$0.48 per share. the Company was supportive of the Entitlement
Offer and subscribed for A$40 million. the institutional component of
the Entitlement Offer, excluding the Company's participation, was
underwritten. 
The retail component of the Entitlement Offer was completed on
December 19, 2012, raising gross proceeds of approximately A$0.8
million from the issue of approximately 1.7 million shares at A$0.48
per share. 
In total, gross proceeds of approximately A$75.5 million were raised
via the Entitlement Offer. Net proceeds, as well as operating cash
flows, are intended to be used to repay and terminate the working
capital facility provided by the Company in August 2012 (see below);
fund infrastructure at, and completion of, the Starra 276 mine
ramp-up; provide a special exploration and development reserve; fund
working capital and provide funds for general corporate purposes. 
In February 2013, Ivanhoe Australia successfully placed the shortfall
from the 2012 Entitlement Offer. the shortfall shares from the
placement were i
ssued at the Entitlement Offer price of A$0.48 per
share. Ivanhoe Australia issued approximately 9.3 million shares and
received proceeds of approximately A$4.5 million. as a result of the
shortfall placement, Turquoise Hill's ownership in Ivanhoe Australia
was reduced from 57.3% to 56.5%  
Working capital facility 
In Q3'12, the Company provided a secured, twelve-month working
capital facility to Ivanhoe Australia of up to $50 million. in August
2012, Ivanhoe Australia drew down $20 million from the facility and a
further $11 million was drawn in October 2012. 
Outstanding amounts drawn under the working capital facility were
repaid during Q4'12 and the facility was terminated. 
Sale of Exco Resources shares 
On August 23, 2012, Ivanhoe Australia announced the sale of
approximately 24.3 million shares of its holding in Exco Resources
Ltd. (Exco) to Washington H. Soul Pattinson & Company Limited (WHSP)
for cash consideration of approximately A$4.6 million (A$0.19 per
share).  
Ivanhoe Australia had also advised WHSP that it intended to accept
WHSP's revised takeover offer of A$0.265 per share for its remaining
55.0 million Exco shares, in the absence of a superior offer. 
On November 12, 2012, WHSP advised Exco shareholders that it had
accumulated a 90% interest in Exco and would proceed with a
compulsory acquisition of the remaining shares in Exco. Ivanhoe
Australia received cash consideration of approximately A$14.6 million
from the sale of its remaining 55.0 million shares in Exco. WHSP
announced that it had completed compulsory acquisition of Exco on
December 28, 2012. 
New managing Director and CEO 
Bob Vassie was appointed as Managing Director and CEO on January 14,
2013. Mr Vassie replaced Ines Scotland who stepped into the role in
June 2012 on an interim basis. 
KYZYL GOLD PROJECT 
Altynalmas, a private company, holds 100% ownership of the Kyzyl Gold
Project in northeastern Kazakhstan. the Kyzyl Gold Project contains
the Bakyrchik and Bolshevik gold deposits, as well as a number of
satellite deposits.  
Turquoise Hill owns 50.0% of Altynalmas at March 25, 2013 (December
31, 2012: 50.0%). 
Binding agreement signed for sale of stake in Altynalmas  
On February 13, 2013, Turquoise Hill announced that it had signed a
binding agreement with Sumeru Gold BV for the sale of Turquoise
Hill's 50% interest in Altynalmas for total cash consideration of
$300 million. Completion of the proposed transaction is subject to
customary closing conditions, including regulatory approvals from the
Republic of Kazakhstan's competent authorities. the transaction is
expected to close in Q2'13. 
Drilling program completed
The drilling activities at the Kyzyl Gold Project were completed on
July 29, 2012. a total of 22,330 metres was drilled during 2012, all
on Bakyrchik Exploration Licence No. 27. in 2013, the geology team is
expected to continue work on upgrading the resources on the licence
to meet the Kazakhstan State Commission for Mineral Reserves reserve
definitions, with the objective of converting the exploration licence
to a mining licence. 
Project development 
In February 2012, Turquoise Hill and Altynalmas released the results
of an independent feasibility study of the Kyzyl Gold Project. the
feasibility study encompassed the redevelopment of the Bakyrchik
underground mine, the construction of a new processing plant
incorporating fluidized-bed ore-roasting technology and supporting
mine infrastructure.  
In September 2012, Altynalmas formed a new project team in Kazakhstan
to investigate alternative development paths, including the
preparation of a feasibility study using alternate processing
technologies. This feasibility study is expected to be completed in
2013. 
CORPORATE ACTIVITIES 
On February 20, 2013, the Company's Board of Directors accepted the
resignation of director Andrew Harding and appointed Jean-Sebastien
Jacques to the board.  
QUALIFIED PERSON 
Disclosure of a scientific or technical nature in this MD&A in
respect of the Oyu Tolgoi mine was prepared under the supervision of
Kendall Cole-Rae, B.Sc (Geology), an employee of Rio Tinto,
registered member of the Society for Mining, Metallurgy and
Exploration (SME #4138633) and a "qualified person" as that term is
defined in NI 43-101. 
SELECTED QUARTERLY DATA 


 
($ in millions of dollars, except per share information)                    
                                                                            
                                              Quarter Ended                 
                            ------------------------------------------------
                                  Dec-31      Sep-30      Jun-30      Mar-31
                                    2012        2012        2012        2012
----------------------------------------------------------------------------
Revenue                            $41.6       $23.8       $28.2       $40.2
Cost of sales                     (70.8)      (57.2)      (49.7)      (30.4)
Exploration, evaluation and                                                 
 other operating expenses        (131.7)      (55.3)      (65.1)      (76.8)
General and administrative        (23.7)      (18.3)      (81.0)      (31.5)
Financing costs                        -           -     (164.4)           -
Foreign exchange gains                                                      
 (losses)                          (7.9)        13.9       (8.7)         9.9
Change in fair value of                                                     
 derivative                            -       176.2        18.5           -
Change in fair value of                                                     
 embedded derivatives                0.6        12.9        26.8       (0.8)
Net (loss) income from                                                      
 continuing operations                                                      
 attributable to parent          (182.4)       114.3     (285.9)      (80.6)
(Loss) income from                                                          
 discontinued operations                                                    
 attributable to parent                -           -           -           -
Net (loss) income                                                           
 attributable to parent          (182.4)       114.3     (285.9)      (80.6)
Basic (loss) income per                                                     
 share attributable to                                                      
 parent                                                                     
 Continuing operations           ($0.18)       $0.12     ($0.35)     ($0.10)
 Discontinued operations           $0.00       $0.00       $0.00       $0.00
 Total                           ($0.18)       $0.12     ($0.35)     ($0.10)
                                                                            
Diluted (loss) income per                                                   
 share attributable to                                                      
 parent                                                                     
 Continuing operations           ($0.18)       $0.12     ($0.35)     ($0.10)
 Discontinued operations           $0.00       $0.00       $0.00       $0.00
 Total                           ($0.18)       $0.12     ($0.35)     ($0.10)
----------------------------------------------------------------------------
                                                                            
                                  Dec-31      Sep-30      Jun-30      Mar-31
                                    2011        2011        2011        2011
----------------------------------------------------------------------------
Revenue                            $51.0       $60.5       $47.3       $20.2
Cost of sales                     (60.8)      (54.0)      (49.7)      (20.3)
Exploration, evaluation and                                                 
 other operating expenses         (88.2)    
  (79.6)      (68.6)      (46.2)
General and administrative        (34.6)      (21.4)      (19.5)      (25.3)
Foreign exchange gains                                                      
 (losses)                           13.3      (35.6)         2.3         3.2
Change in fair value of                                                     
 derivative                            -           -           -     (432.5)
Change in fair value of                                                     
 embedded derivatives               10.8        62.1        70.4      (36.8)
Gain on settlement of note                                                  
 receivable                            -       103.0           -           -
Net (loss) income from                                                      
 continuing operations                                                      
 attributable to parent           (85.8)        16.4         0.6     (492.5)
(Loss) income from                                                          
 discontinued operations                                                    
 attributable to parent                -       (9.1)           -           -
Net (loss) income                                                           
 attributable to parent           (85.8)         7.3         0.6     (492.5)
Basic (loss) income per                                                     
 share attributable to                                                      
 parent                                                                     
 Continuing operations           ($0.04)       $0.02       $0.00     ($0.73)
 Discontinued operations           $0.00     ($0.01)       $0.00       $0.00
 Total                           ($0.04)       $0.01       $0.00     ($0.73)
                                                                            
Diluted (loss) income per                                                   
 share attributable to                                                      
 parent                                                                     
 Continuing operations           ($0.04)       $0.02       $0.00     ($0.73)
 Discontinued operations           $0.00     ($0.01)       $0.00       $0.00
 Total                           ($0.04)       $0.01       $0.00     ($0.73)
----------------------------------------------------------------------------

 
About Turquoise Hill Resources  
Turquoise Hill Resources (TSX:TRQ)(NYSE:TRQ)(NASDAQ:TRQ), formerly
Ivanhoe Mines, is an international mining company focused on copper,
gold and coal mines in the Asia Pacific region. the company's primary
operation is its 66% interest in the Oyu Tolgoi copper-gold-silver
mine in southern Mongolia. Other assets include a 58% interest in
Mongolian coal miner SouthGobi Resources (TSX:SGQ)(HK:1878); a 57%
interest in copper-gold miner Ivanhoe Australia (TSX:IVA)(ASX:IVA);
and a 50% interest in Altynalmas Gold, a private company developing
the Kyzyl Gold Project in Kazakhstan, which is in the process of
being sold. 
Follow us on Twitter @TurquoiseHillRe 
Forward-looking statements 
Certain statements made herein, including statements relating to
matters that are not historical facts and statements of Turquoise
Hill's beliefs, intentions and expectations about developments,
results and events which will or may occur in the future, constitute
"forward-looking information" within the meaning of applicable
Canadian securities legislation and "forward-looking statements"
within the meaning of the "safe harbor" provisions of the United
States Private Securities Litigation Reform Act of 1995.
Forward-looking information and statements are typically identified
by words such as "anticipate," "could," "should," "expect," "seek,"
"may," "intend," "likely," "plan," "estimate," "will," "believe" and
similar expressions suggesting future outcomes or statements
regarding an outlook. These include, but are not limited to:
statements respecting anticipated business activities; statements
regarding the Company's outlook for 2013; planned expenditures and
projections regarding the Company's ability to meet its obligations;
anticipated financing arrangements; corporate strategies; proposed
acquisitions and dispositions of assets; discussions with third
parties respecting material agreements; statements concerning the
schedule for carrying out and completing construction of the Oyu
Tolgoi mine; the statement that the memorandum of agreement is
expected to cover the project capital requirements for the Oyu Tolgoi
mine for the next several years; the statement that the commercial
production is expected by the end of Q2'13 subject to the resolution
of the issues being discussed with the Government of Mongolia; the
statement that the Company anticipates the closing of final binding
documentation and project financing funding to occur in the first
half of 2013; the statement that Shaft #5 pre-sinking is expected to
commence in April 2013; statements regarding the final depth of Shaft
#5;
the statement that road work being suspended for the winter should
not impact the transporting of concentrate to the border; the
statements concerning the expected timing of initial production from
the Hugo North block-cave mine; statements concerning the expected
markets and contracts for concentrate produced at the Oyu Tolgoi
mine; statements concerning the underground feasibility study
expected release date in the first half of 2014; statements related
to the expected final phase-one capital costs of the Oyu Tolgoi mine;
initial production estimates; the Oyu Tolgoi mine's anticipated
production of copper and gold; statements regarding the aim of
raising $3 billion to $4 billion in project financing and the
anticipation that the funding will occur in first half of 2013; the
statement that ongoing work being undertaken on the feasibility study
may result in opportunities to improve the economics through cost
reductions and optimizations of the mine plan; the statement that Oyu
Tolgoi plans to complete a focused and structured review of the study
work to support future capital approvals; the statement that actual
operating data for the Oyu Tolgoi mine is expected to be incorporated
into the feasibility study; the statement regarding the infill
drilling program at Hugo North Lift 1; statements regarding the
strategy of the Oyu Tolgoi exploration program; statements regarding
drilling at Heruga North; statements that drilling expenditure at Oyu
Tolgoi will be significantly reduced compared to recent years; the
statement that the DCHF is anticipated to reduce screening costs and
improve yield recoveries; the statement that the Ovoot Tolgoi 2013
mine plan considers only limited utilization of the DCHF at the
latter end of 2013 due to higher quality coals being mined that
likely will not require processing through the DCHF and can be sold
raw or processed directly through the wet washing facility;
mining plans and production forecasts for the coal mine at Ovoot
Tolgoi, including the statement concerning the expectation that wash
coal generally will meet semi-soft coking coal specifications; the
statement that the expanded border crossing is expected to increase
capacity to approximately 20 million tonnes or more of coal per year;
the statements concerning the impact of SouthGobi's restrictions on
the use of in-country funds in Mongolia; the statement that while the
IAAC orders restrict the use of SouthGobi's in-country funds pending
the outcome of the investigation, they are not expected to have a
material impact on SouthGobi's activities in the short term, although
they could create operational difficulties for SouthGobi in the
medium to long term; the statement that SouthGobi intends to take all
necessary steps to protect its ability to continue to conduct its
business activities in the ordinary course; the statements that the
investigations could result in one or more Mongolian, Canadian,
United States or other governmental or regulatory agencies taki
ng
civil or criminal action against SouthGobi or any of its affiliates,
including the Company, or any of the current or former employees of
the foregoing and the statement that the likelihood or consequences
of such an outcome are unclear at this time but could include
financial or other penalties, which could be material, and which
could have a material adverse effect on the Company; the statements
concerning the possibility of the acceleration of ICSID arbitration
proceedings; the statements concerning the cost savings expected as a
result of Ivanhoe Australia's strategic review; the statements
concerning Ivanhoe Australia's cash flows and need for additional
funds to develop its projects; statements concerning expected 2013
mine production from the Osborne operation's mines; the statement
that the sale of the Company's interest in Altynalmas is expected to
close in Q2'13; statements concerning the objective of upgrading the
resources on the Kyzyl Gold Project exploration licence to a mining
licence; the statement that the preparation of a feasibility study
using alternate processing technologies in Kazakhstan is expected to
be completed in 2013; statements regarding SouthGobi's future
liquidity; the impact of amendments to the laws of Mongolia and other
countries in which Turquoise Hill carries on business, particularly
with respect to taxation; statements concerning foreign-exchange rate
volatility; statements concerning global economic expectations and
future demand for commodities; statements concerning costs of
remediation of the Company's existing assets; statements regarding
the Company's anticipated production level and production milestones;
and the anticipated timing, cost and outcome of plans to continue the
development of non-core projects, and other statements that are not
historical facts. 
All such forward-looking information and statements are based on
certain assumptions and analyses made by Turquoise Hill's management
in light of their experience and perception of historical trends,
current conditions and expected future developments, as well as other
factors management believes are appropriate in the circumstances.
These statements, however, 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 information or statements. Important factors that
could cause actual results to differ from these forward-looking
statements include those described under the heading "Risks and
Uncertainties" elsewhere in the Company's MD&A. the reader is
cautioned not to place undue reliance on forward-looking information
or statements.  
The MD&A also contains references to estimates of mineral reserves
and mineral resources. the estimation of reserves and resources is
inherently uncertain and involves subjective judgments about many
relevant factors. the accuracy of any such estimates is a function of
the quantity and quality of available data, and of the assumptions
made and judgments used in engineering and geological interpretation,
which may prove to be unreliable. There can be no assurance that
these estimates will be accurate or that such mineral reserves and
mineral resources can be mined or processed profitably. Mineral
resources that are not mineral reserves do not have demonstrated
economic viability. Except as required by law, the Company does not
assume the obligation to revise or update these forward-looking
statements and forward-looking information after the date of this
document or to revise them to reflect the occurrence of future
unanticipated events. 
Contacts:
Turquoise Hill Resources Ltd. - Investors
Jason Combes
Office: +1 604 648 3920
jason.combes@turquoisehill.com 
Turquoise Hill Resources Ltd. - Media
Tony Shaffer
Office: +1 604 648 3934
tony.shaffer@turquoisehill.com