UPDATE 1-Turquoise Hill sees Oyu Tolgoi production below forecasts

Wed Mar 26, 2014 8:49am EDT

(Adds fourth-quarter results, detail on technical problems.)

March 26 (Reuters) - Technical problems hit first-quarter production at Rio Tinto's Oyu Tolgoi copper and gold mine in Mongolia, and full-year output may be lower than previously forecast, Turquoise Hill Resources said on Wednesday.

Turquoise Hill, which owns a majority interest in Oyu Tolgoi and is controlled by Rio, said rake blades in the mine's tailings thickeners failed, and also that some "debottlenecking" projects were put off to preserve cash.

Full production resumed on Monday, Turquoise Hill said, and the mine is now expected to produce between 135,000 and 160,000 tonnes of copper in concentrates and 600,000 to 700,000 ounces of gold in concentrates in 2014.

The company had previously said the mine was targeting between 150,000 and 175,000 tonnes of copper in concentrates and 700,000 to 750,000 ounces of gold in concentrates.

Turquoise Hill reported its results for the fourth quarter. Net income was $138.4 million, or 11 cents a share, compared with a net loss of $145.0 million, or 11 cents a share, a year earlier. Revenue rose to $84.0 million from $1.3 million.

Rio Tinto owns 50.8 percent of Vancouver-based Turquoise Hill, which in turn holds a 66 percent interest in Oyu Tolgoi. Rio operates the mine. (Reporting by Allison Martell; Editing by Lisa Von Ahn and Stephen Powell)

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