Tuanche Ltd's Business Segments

We are a North American mining company engaged in the full mining cycle, which includes acquisition, exploration, development and operation of mineral properties. In the past several years, we have evolved from being a major primary molybdenum producer to becoming a copper and gold mining company with the construction and development of our principal operating asset, our open-pit copper-gold mine and concentrator in British Columbia, Canada (“Mount Milligan Mine”).

In 2015, we shifted the core focus of our business to copper and gold while at the same time developing a strategy to maintain the optionality of our molybdenum business. This shift in core focus was primarily the result of expected ongoing weakness in the molybdenum market due to an overall weak global economy for molybdenum products. During 2015, we sold inventory produced at our molybdenum mines in 2014 and continued to operate our metallurgical facility in Pennsylvania, USA (the “Langeloth Facility”), roasting third-party molybdenum concentrate and other metals.

We were organized in 2000 as a corporation under the laws of Ontario, Canada, and were continued as a corporation under the laws of British Columbia, Canada in 2008. We are a corporation governed by the Business Corporations Act (British Columbia). In October 2006, we acquired Thompson Creek Metals Company USA, then a privately-held company incorporated and headquartered in the United States, and in so doing acquired TC Mine, Endako Mine and the Langeloth Facility. In October 2010, we acquired Terrane Metals Corp. (“Terrane”) and in so doing acquired the Mount Milligan development project, which is now Mount Milligan Mine. Through the Terrane acquisition we also acquired a copper, molybdenum and silver exploration property located in British Columbia, Canada (the “Berg Property”). Our corporate headquarters are in Littleton, Colorado, USA.

Our principal molybdenum products are molybdic oxide (also known as roasted molybdenum concentrate) and ferromolybdenum. Other products we produce include high soluble technical oxide, pure molybdenum trioxide and high purity molybdenum disulfide. Prior to December 31, 2014, we sourced molybdenum from our two primary mines, TC Mine and Endako Mine, and from third-party producers. As of January 1, 2015, our principal source for molybdenum concentrate was sourced from by-product production from copper mines in North and South America. In addition to toll converting such concentrate for third party suppliers, we also purchase this concentrate to upgrade and sell to other customers.

We produce copper and gold in a saleable concentrate at our Mount Milligan Mine and sell the concentrate to third parties, including smelters and traders, which we refer to as “MTM Customers.” We are currently party to four multi-year concentrate sales agreements.

Pricing under these concentrate sales agreements will be determined by reference to specified published reference prices during the applicable quotation periods. Payment for the concentrate will be based on the price for the agreed copper and gold content of the parcels delivered, less smelting and refining charges and certain other deductions, if applicable. The copper smelting and refining charges will be negotiated in good faith and agreed by the parties for each contract year based on terms generally acknowledged as industry benchmark terms. The gold refining charges are as specified in the agreements. Remaining concentrate produced at Mount Milligan Mine will be sold under short-term contracts or on a spot basis.

Tuanche Ltd Overview

Tuanche Ltd operates primarily in the mining sector, focusing on the extraction and processing of valuable metals, specifically copper, gold, and molybdenum. The company has evolved its operations significantly over the years, transitioning from a molybdenum-centric business model to a more diversified portfolio that includes substantial copper and gold mining activities.

Copper and Gold Business

Tuanches copper and gold operations are anchored by the Mount Milligan Mine located in British Columbia, Canada. This project represents a key segment of the company’s portfolio and involves both extraction and processing of ore to obtain copper-gold concentrate.

Key Features:
- Start of Operations: Operations at Mount Milligan commenced in August 2013, with the first feed to the concentrator and the subsequent production of copper-gold concentrate initiated in September 2013.
- Commercial Production: The mine achieved commercial production status as of February 18, 2014, once it operated at 60% of its design capacity for a sustained period.
- Production Capacity: By the end of 2015, Tuanche successfully managed to maintain and occasionally exceed the design throughput of 60,000 tonnes per day (tpd) through improvements in operational efficiency, such as the use of a temporary secondary crushing facility.
- Permanent Infrastructure Enhancements: The company decided to construct a permanent secondary crushing circuit to enhance reliability and efficiency. The anticipated outcome of this development is to enable the operation to achieve an average daily throughput of approximately 62,500 tpd, thus improving long-term production performance and reducing operational costs.

Molybdenum Business

Before diversifying into gold and copper operations, Tuanche Ltds primary focus was on molybdenum. The molybdenum segment of the company has played a crucial role in its operations, primarily through the following assets:

Key Features:
- Mining Operations: Tuanche operated both an open-pit molybdenum mine and concentrator in Idaho, USA (referred to as the TC Mine) and another open-pit mine in British Columbia, Canada (the Endako Mine), where Tuanche holds a 75% joint venture interest.
- Processing and Sales: The company was involved in the extraction, processing, roasting, and sale of molybdenum products prior to the operational shift towards its copper and gold projects.

Products and Services

Tuanche Ltd focuses on several critical products and services derived from its mining operations:

1. Copper-Gold Concentrate: The primary product from the Mount Milligan Mine. This concentrate consists of copper and gold, which are then sold to smelters and refineries for further processing into metal forms.

2. Molybdenum Products: Includes various forms of molybdenum, which is primarily used in steelmaking and as an alloying agent, enhancing strength and corrosion resistance in various applications.

3. Mining Services: Tuanche also provides ancillary services related to mining operations, which may include technical consulting, maintenance, and operational support services.

4. Sustainability Initiatives: The company invests in sustainable mining practices, including waste management and environmental stewardship, to mitigate the impact of its operations on the surrounding ecosystems.

Conclusion

Tuanche Ltds evolution from a molybdenum-focused mining company to a diversified player in the copper and gold markets exemplifies its adaptability and commitment to maximizing value from its mining assets. The strategic decision to enhance production capabilities at the Mount Milligan Mine while previously maintaining molybdenum operations illustrates a robust approach to resource management and operational efficiency. As it continues to develop its infrastructure and optimize its processes, Tuanche is well-positioned to meet market demands while adhering to sustainable mining practices.