Turquoise Hill Resources Ltd. announced that it has successfully reached a mutual understanding for a renewed partnership with the Government of Mongolia and the Oyu Tolgoi LLC ("OT LLC") board of directors has unanimously approved the commencement of the undercut, namely the commencement of blasting that will start the Oyu Tolgoi (OT) underground mine production. Consequently, the Company expects to begin caving operations in the coming days. With this decision, the Company continues to expect that the underground mine will achieve sustainable production for Panel 0 in the first half of 2023.

The decision to approve the undercut follows resolution of key outstanding issues related to the OT underground mine development project and represents a reset of the relationship with the Government of Mongolia with a view to delivering economic benefits to all stakeholders including the people of Mongolia. In addition, the Company and Rio Tinto have agreed to a comprehensive and binding, amended funding arrangement that provides a pathway forward to address the Company's estimated funding requirements. Key Terms agreed with the Government of Mongolia: As part of the agreements with the Government of Mongolia, Turquoise Hill has agreed to waive in full the US$2.4 billion carry account loan of the Government of Mongolia's state-owned entity through which it owns its interest in OT LLC (“Erdenes Oyu Tolgoi” or EOT).

The loan comprises the amount of equity invested (US$1.4 billion) in OT LLC by Turquoise Hill on behalf of EOT to date, plus US$1.0 billion of accrued interest.1 Further, the parties have also agreed to improve cooperation with EOT in monitoring the OT underground development and enhancing ESG matters. The Parliament of Mongolia has approved a resolution (Resolution 103) to resolve the outstanding issues that the Company and Rio Tinto have been negotiating with the Government of Mongolia over the last two years in relation to Parliament Resolution 92. With this approval, the Parliament of Mongolia has required that certain measures be completed in order for Resolution 92 to be considered formally implemented.

Of these measures, the conditions relating to the write-off of the carry account loan, the improved cooperation with EOT in monitoring the OT underground development and enhancing ESG matters, the approval of the Electricity Supply Agreement and the establishment of a funding structure at OT that does not incur additional loan financing prior to sustainable production for Panel 0 (expected in the first half of 2023) have been addressed. The Company continues to work with the Government of Mongolia and Rio Tinto to finalize the remaining outstanding measures of Resolution 92, namely the formal termination of the Oyu Tolgoi Mine Development and Financing Plan (UDP”) and resolution of the outstanding OT LLC tax arbitration.