Investor Presentation

FEBRUARY 2017

Oyu Tolgoi: Creating long-term value at

world’s best developing copper project
Turquoise Hill’s investment thesis

Oyu Tolgoi is world’s best

developing copper project;
expected to be world’s third-largest
copper mine with underground

Significant cash flow expected from

underground

Hugo North Lift 1 financing in

place1

Early underground production

should benefit from expected drop
in copper supply (~2020)

Oyu Tolgoi’s resources provide

long-term development optionality
1. Financing sources includes project finance facility, supplemental debt (in progress), operating
cash flow from Oyu Tolgoi and Turquoise Hill’s cash; excludes power plant CAPEX. 2
Long-term copper fundamentals strong

Copper supply/demand outlook

Copper market likely to be in
Base Highly Probable Primary Demand Annual avg cu price balance in 2017
30 $4
Forecast
Ongoing attrition at existing
mines driven by declining

Annual average LME copper price (US$/lb)

25 grade
$3
Copper supply/demand (Mt)

Continued demand growth

20 requires new capacity in the
$2 medium-term
15

Market anticipates surplus in
$1
2018-19 before moving into
10 deficit from 2020

China now largest buyer of

5 $-
2000 2005 2010 2015 2020 2025 gold and continues to be
largest consumer of copper
Source: Wood Mackenzie (Q3’16 Long-Term Outlook)

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Oyu Tolgoi underground a Tier 1 asset

2025 copper mine C1+royalties+sustaining normal cost curve

C/lb, 2016$
400

Q1 Q2 Q3 Q4
300

Oyu Tolgoi
Other Mines

200

100

0
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000

Cumulative production (‘000 tonnes)

-100
Source: Wood Mackenzie (Q3’16 Cost Service), 2016 Oyu Tolgoi Technical Report and Turquoise Hill Resources.
Normal C1 cost + sustaining capex, range capped at -100/lb & 400/lb for base, highly probable and probable mines only. Oyu Tolgoi costs and volumes for 2025-30.

4
 Potential full-production valuation upside
Indicative valuation1 (US$B) EV/Reserves EV/M+I+I Resources5,6 Price/NAV

TRQ EV/Reserves ($/lb.) TRQ EV/M+I+I Resources ($/lb.) TRQ P/NAV

$0.17 $0.06 0.82x

Trading comps2

Average EV/Reserves ($/lb.) Average EV/M+I Resources ($/lb.) Average P/NAV

Current EV3: $5.7B

$0.33 $0.13 1.01x
Reserves4: 33.9B lb. $0.30 Range +/- 10% $0.37 $0.12 Range +/- 10% $0.14 0.91x Range +/- 10% 1.11x
Resources5,6: 95.7B lb.
NAV7: $6.9B Implied TRQ EV ($B) Implied TRQ EV ($B) Implied TRQ NAV ($B)

$11.3B $12.2B $7.0B+

$10.2B Range +/- 10% $12.4B $11.0B Range +/- 10% $13.5B $6.3B+ Range +/- 10% $7.7B+

EV/Reserves EV/M+I+I Resources5,6 Price/NAV

TRQ EV/Reserves ($/lb.) TRQ EV/M+I+I Resources ($/lb.) TRQ P/NAV
Transaction comps2

$0.17 $0.06 0.82x

Average EV/Reserves ($/lb.) Average EV/M+I Resources ($/lb.) Average P/NAV

$0.36 $0.17 1.10x
Current EV3: $5.7B
Reserves4: 33.9B lb. $0.33 Range +/- 10% $0.40 $0.15 Range +/- 10% $0.19 0.99x Range +/- 10% 1.21x
Resources5,6: 95.7B lb.
NAV7: $6.9B Implied TRQ EV ($B) Implied TRQ EV ($B) Implied TRQ NAV ($B)

$12.3B $16.1B $7.6B

$11.1B Range +/- 10% $13.5B $14.5B Range +/- 10% $17.7B $6.8B+ Range +/- 10% $8.4B+

1. Valuation is based on the current trading multiples in $2.60 per pound copper price environment; current long term (2-3 years) copper price assumption varies between $2.75 - $3.00 per pound; transaction comps based
mostly on deals done in $2.18 - $2.51 per pound copper price ranges; does not include valuation uplift from the expected copper price increase ~ 2020; 2. Valuation based on range derived for companies with projects with
similar characteristics and in full production; 3. Adjusted for project finance drawdown cash; 4. Reserves and resources are based on equivalent units of production; 5. Resources includes reserves; 6. TRQ reserves and
resources figures includes 80% of EJV. Resources figure assumes conversion of inferred resources into M+I category (with the exception of Heruga) around the time of achieving full production; 7. The NAV would be higher
closer to production. Source: Brokers, Capital IQ, Mergermarket, company technical reports, annual reports and press articles. Share prices as of 09/12/16. Note: Full production comparables analysis shows Turquoise Hill
valuation 5
2016 Reserves Case mining areas

Oyut Open Pit

~950Mt (reserve)
0.45% copper; 0.28 g/t gold

Hugo North Lift 1, panels 0,1,2

~500Mt (reserve)
1.66% copper; 0.35 g/t gold

Hugo North Lift 1 Underground Open Pit Plant

Ramp-up (2020-2027), full production (~33mtpa)

Highest grade ore mined first (copper ~2.5%)

Opportunities to reduce construction time, faster
ramp-up and increase underground production
>95ktpd

Concentrator 40mtpa, 10% above nameplate

Open-pit mine tops-up concentrator when
Hugo North Lift 1 begins production

After 2039, open-pit head grades average
~ 0.45% copper

First production in January 2013; ~2.5 million
tonnes of concentrate produced by year-end
2016 6
Underground mining sequence

Initial underground production

begins with Panel 0
Hugo North Lift 1, panels 0,1,2
~500Mt (reserve)
Highest copper grades occur
1.66% copper; 0.35 g/t gold during ramp up exceeding
2.5% in several years

2024-2026: Oyu Tolgoi “peak”

copper production during
period expected to average >
Initial 600,000 tonnes annually due to
production
high grades

2024-2036: Total mine copper

Plant
production over period
expected to average > 500,000
tonnes annually

Following completion of Panel

0, production will move
outward with Panels 1 and 2
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Complete ramp-up expected by 2027

Sustainable underground production Complete convey to surface

Project First draw Complete concentrator Complete

re-start bell firing upgrade ramp-up

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Pre-start

Excavation (lateral / mass / vertical)

Excavation (lateral)

Undercutting

Extraction level access

Extraction level access

Material handling (conveyto surface + crushers+ shafts)

Surface infrastructure

Concentrator upgrade
Expansion capital
Sustaining capital

Timeline is illustrative only and subject to change

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Key underground components

Shaft 1 Shaft 2 Shaft 5 Shaft 3 Shaft 4

(early development (production and (ventilation) (ventilation) (ventilation)
and ventilation) ventilation)

Total Depth 1,385 metres 1,284 metres 1,178 metres 1,148 metres 1,149 metres

Diameter 6.7 metres 10 metres 6.7 metres 10 metres 11 metres

Completion 2008 Expected 2017 Expected 2017 Expected 2021 Expected 2021

Remaining Complete ~90 metres ~840 metres Not started Not started

Underground Development
Lateral Development 2008-2013
(includes conveyor development)

16km 65km ~200km

completed to first over life
draw bell of mine

2013 2020 2035

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2016 Resources Case

Oyut Open Pit

~950Mt (reserve)
0.45% copper; 0.28 g/t gold

Hugo South
~300Mt (resource)
Heruga
1.07% copper
~700Mt (resource)
0.06 g/t gold
0.42% copper
0.43 g/t gold; >100Mlb moly
Hugo North Lift 1, panels 0,1,2
~500Mt (reserve)
1.66% copper; 0.35 g/t gold

Hugo North Lift 2

~700Mt (resource) Hugo North Lift 1, panels 3,4,5
1.13% copper; 0.36 g/t gold ~250Mt (resource)
0.70% copper; 0.20 g/t gold

10
 Alternative Production Cases

Resources 120 Case

• ~Year 20, concentrator
capacity ~120mtpa
• NPV8% $8.8 billion1
• Expansion capex ~$14.9 billion3

Resources 100 Case

• ~Year 20, concentrator
capacity ~100mtpa
• NPV8% $8.9 billion1
• Expansion capex ~$13.5 billion3
Resources 50 Case
• Assumes concentrator creep from
40mtpa to 50mtpa with little capital
• NPV8% $9.3 billion1
• Expansion capex ~$9.7 billion3

2016 Reserves Case

• Concentrator capacity ~40mtpa
• NPV8% $6.9 billion1
• Expansion capex $4.6 billion2

Plant

1. NPV8% assumes $3.00/lb copper and $1,300/oz gold 2016 Resources Case
2. Expansion capital costs include only direct project costs and exclude interest expense, capitalized interest, debt repayments, tax pre-payments and forex
adjustments. In all cases, total capital cost excludes capital costs for the year 2016. Expansion capital for 2016 excluded is $0.46 billion. • Concentrator capacity ~40mtpa
3. Expansion capital costs inclusive of 2016 Reserves Case expansion capital. Expansion capital costs include only direct project costs and exclude interest • Base Case NPV8% $8.4 billion1
expense, capitalized interest, debt repayments, tax pre-payments and forex adjustments. In all cases, total capital cost excludes capital costs for the year 2016. • Expansion capex ~ $9.7 billion3 11
Production highlights

All Injury Frequency Rate Concentrator throughput

(per 200,000 hours worked) ('000 tonnes)

0.47 38,152
0.43 34,537

0.33 27,872

20,317
0.22

2013 2014 2015 2016 2013 2014 2015 2016

Industry-leading safety performance Multiple productivity initiatives have led to improved throughput

Copper in concentrates Gold in concentrates

('000 tonnes) ('000 ounces)

653
202 201 589

148

300
77
157

2013 2014 2015 2016 2013 2014 2015 2016

Exceeded 2016 guidance of 175,000–195,000 tonnes of cooper 2016 gold production reflects lower grades due
and 255,000 – 285,000 ounces of gold to completion of mining in Phase 2

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Financial highlights

Cash position Operating cash flow

($'000,000) ($'000,000)

$1,437 $719
$1,344 $651

$381

$863 Cu:$3.10 Cu:$2.49 Cu:$2.15

Au:$1,266 Au:$1,160 Au:$1,259

2013
2013 2014 2015 Q3'16 YTD
Cu:$3.33*
Au:$1,411*

$78
($631)
2013 2014 2015 Q3'16
Strong cash position Consecutive periods of positive operating cash flow
*Source: Average quarterly Comex copper price and average quarterly LBMA gold price.

Open-pit capital expenditures C1 and All-in sustaining costs (AISC)

($'000,000)
C1 AISC
$1,075
$1.95

$1.37 $1.36

$1.14
$242 $0.86
$116 $75 $0.57

2013 2014 2015 Q3'16 YTD 2014 2015 Q3'16 YTD

2016 YTD open-pit CAPEX reflects completion of Phase 2, near- Competitive unit costs
surface capital for Phase 3 and 6 as well as Phase 4 stripping Note: C1 and AISC not meaningful in 2013.

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Production and financial guidance

2016 2017
Copper in concentrates 201,300 tonnes (actual) 130,000 – 160,000 tonnes
175,000 – 195,000 tonnes

Gold in concentrates 300,000 ounces (acutal) 100,000 – 140,000 ounces

255,000 – 285,000 ounces

Operating cash costs $840 million* $720 million

Capital expenditures $200 million* (open pit) $100 million (open pit)
$825 million - $925 million (underground)

2017 production impacted by ~25% less copper head grade and ~50% less gold head grade

2017 operating cash costs reflects cost improvements and impact of lower logistics costs from
decreased production

2017 open-pit CAPEX reflects lower maintenance costs, reduced deferred stripping cost due
to optimization and improved tailings storage costs

* Estimate; full-year 2016 results expected to be released on March 27,2017.

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Managing near-term ore grade challenges

Phase 3 nearly complete (2017)

Phase 6 and lower-grade stockpile ore processed mid-2016 to mid-2018

Phase 4 waste mining critical; uncovers 2017 medium-grade ore and 2018 high-grade ore

Primary Crusher 2017-18 Ore

(Phase 4a & 6, stockpiles)

Waste
Dumps
Tailings
Facility

Final Open
Pit
2018-22 Ore Current Ore
(Phase 4/5) (Phase 3 & 6)
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Oyu Tolgoi’s impact in Mongolia

Mongolian Workforce Taxes and Fees In-country Spend

94% $1.6B $6.1B

At the end of 2016, ~94% Between 2010 and 2016, Between 2010 and 2016,
of Oyu Tolgoi’s workforce Oyu Tolgoi paid $1.6B in Oyu Tolgoi has spent
was Mongolian taxes, fees and other $6.1B in Mongolia1
payments to the
Mongolian Government

Taxpayer Rank Community Investment Water Recycling

#1 $9.7M 86.2%
Oyu Tolgoi was the top Oyu Tolgoi invested $9.7M Oyu Tolgoi’s water
corporate taxpayer in in sustainable long-term recycling rate averaged
Mongolian for 2015 projects in the South Gobi 86.2% for 2016 against a
community in 2016 recycling target of 80%

1. In-country spend includes salaries, payments to Mongolian suppliers, taxes and other payments to the Government of Mongolia. 16
Oyu Tolgoi– a long-term growth opportunity

Underground development progressing

Long-term development optionality and plant expansion

opportunities

Open-pit mine performing as expected in low gold areas

Demonstrated productivity and cost improvements

Oyu Tolgoi is the best copper asset in development today

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Appendix
Approved underground CAPEX

$1.3

$1.2 $1.2

$1.0

$0.8

$0.5 $0.5
$0.3 $0.4 $0.4 $0.4
$0.3

Underground expansion capital, VAT and escalation of $5.3 billion

Underground sustaining capital, VAT and escalation of $2.8 billion to full ramp-up expected in 2027

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Project financing – flow of funds

At September 30, 20161 At project finance drawdown

Payable to Turquoise Hill* Receivable from Oyu Tolgoi* Proceeds: $4.3 billion2 $4.3 billion3 $4.2 billion
Shareholder loan: $2.9 billion Shareholder loan: $2.9 billion
Payable to Turquoise Hill* Receivable from Oyu Tolgoi* Deposit from Turquoise Hill
Shareholder loan: $2.9 billion Shareholder loan: $2.9 billion Deposit: $4.2 billion
Waive 2.5%** guarantee fee
with amount on deposit
1. In accordance with the ARSHA, Turquoise Hill funded the common share investments in 2. Project finance facility made directly with Oyu Tolgoi
Oyu Tolgoi on behalf of Erdenes Oyu Tolgoi LLC; at September 30, 2016 the balance was 3. Amount received net of bank fees
approximately $1.0 billion * Interest rate LIBOR + 6.5%
* Interest rate LIBOR + 6.5% ** When guarantee fee paid, Oyu Tolgoi pays 1.9% and Turquoise Hill pays 0.6%

Priority of funding used for development Oyu Tolgoi cash call

#1 Oyu Tolgoi operating cash flow

Funding Funding Funding

#2 Project finance funds Payable to Turquoise Hill Receivable from Oyu Tolgoi* Reduction in deposit
(2.5%** guarantee fee on funds used) from Turquoise Hill*

Shareholder loan: ↑ Shareholder loan: ↑ Deposit: ↓

#3 Turquoise Hill cash Equity loan: ↑ Equity loan: ↑

* Indicative, does not show the withholding tax implications | original shareholder loan interest rate LIBOR + 6.5% | Oyu Tolgoi’s all-
in project finance interest rate, including upfront and ongoing fees as well as the guarantee fee, is LIBOR + 6.0%
** Guarantee fee - Oyu Tolgoi pays 1.9% and Turquoise Hill pays 0.6%

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Oyu Tolgoi at China’s doorstep

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