Vancouver, B.C., June 19, 2017 – Entrée Resources Ltd. (TSX:ETG; NYSE MKT:EGI – the "Company" or "Entrée") is pleased to provide the following corporate update after completion of its restructuring plan which involved the re-branding of "Entrée Gold Inc." to "Entrée Resources Ltd." and the spin-out of its U.S. development and exploration assets into a new TSX listed vehicle called "Mason Resources Corp." (TSX:MNR). Entrée has retained ownership of its joint venture interest in the construction stage Oyu Tolgoi underground mining project in Mongolia as its flagship asset, with other royalty assets in Peru and Australia.
Stephen Scott, Entrée’s President and CEO, stated, “We are very happy to report that the restructuring was completed on schedule and effective May 12, 2017 Entrée and Mason Resources began trading independently. Entrée’s immediate focus will be on protecting and enhancing the value of its Oyu Tolgoi joint venture interest. The Oyu Tolgoi underground project is one of the world’s most important new copper-gold mines, and under the stewardship of our partners, Oyu Tolgoi LLC and developer/operator Rio Tinto, construction remains substantially on schedule. I am very excited about the fast approaching commencement of first development work on the joint venture licenses followed by first joint venture development production in approximately 2021. Entrée Resources launched with more than US$9 million in cash which, given our focus on rigorous fiscal management, is sufficient to meet all funding requirements for the foreseeable future.”
OYU TOLGOI UNDERGROUND DEVELOPMENT PROJECT UPDATE
Turquoise Hill Resources reported on May 15, 2017 that the focus of underground development activities in Q1 2017 continued to be lateral development, sinking of Shafts 2 and 5, support infrastructure and the convey-to-surface system. Approximately the equivalent of one kilometre of lateral development was completed during Q1 2017 and since the re-start of development in 2016 a total of 2.6 equivalent kilometres of lateral development have been completed. Sinking of Shaft 2 is expected to reach its final depth of 1,284 metres later in 2017. Shaft 5 sinking has progressed more slowly than expected due to an extended construction re-start period and lower productivity with completion now likely in early 2018. While sinking progress was slower than expected during Q1 2017, Turquoise Hill expects improved sinking rates for the balance of 2017. Shaft 5 will be dedicated to ventilation thereby increasing the capacity for underground activities. Sinking of Shaft 4, which Entrée expects to commence in 2018 based on the anticipated completion date, will be the first physical development on the Entrée/Oyu Tolgoi joint venture property. Turquoise Hill has previously announced that Shaft 4 should be complete in 2021.
Supporting infrastructure progressed during Q1 2017 with camp construction activities increasing. The new development crusher and dewatering system are on target to enable an additional development crew to be added in Q3 2017.
During Q1 2017, development of the convey-to-surface decline continued to progress following completion of bulk excavation at the end of 2016. The convey-to-surface system is the eventual route of the full 95,000 tonne per day underground ore delivery system to the concentrator. Turquoise Hill continues to expect production from the first draw bell on the Oyu Tolgoi property in mid-2020.
Refer to Turquoise Hill’s May 15, 2017 press release for further details on the development of the underground mine at Oyu Tolgoi.
Near term priorities for Entrée will include:
Completion of an updated Technical Report which will include a Preliminary Economic Assessment of the Entrée/Oyu Tolgoi joint venture’s Hugo North Extension Lift 2 and Heruga deposits. Amec Foster Wheeler has been retained to complete an initial data review to be followed by the updated Technical Report. Completion of this Technical Report will be an important milestone and help investors understand the underlying value of Entrée’s flagship asset.
Entrée will continue to assess other value accretive royalty and development opportunities, however given the quality of existing assets, Entrée will take a very disciplined approach and apply stringent filters to the evaluation process.
Identifying opportunities to streamline Entrée’s joint venture interest and/or crystalize value ahead of production from the Entrée/Oyu Tolgoi joint venture property.
The Company will continue to remain prudent and identify opportunities to reduce its corporate burn rate expected to be approximately US$1 million per annum going forward.
Entrée Resources will continue to be managed by the successful Entrée Gold team led by Chairman Michael Howard, President and CEO Stephen Scott, CFO Duane Lo, VP Legal Affairs Susan McLeod, and VP Corporate Development Rob Cinits.
ABOUT ENTRÉE RESOURCES LTD.
Entrée Resources Ltd. is a well-funded Canadian mining company with a unique carried joint venture interest on a significant portion of one of the world’s largest copper-gold projects – the Oyu Tolgoi project in Mongolia. The Entrée/Oyu Tolgoi joint venture property includes the Hugo North Extension and Heruga copper-gold deposits, as well as a large underexplored, highly prospective land package. Rio Tinto is managing the construction of Lift 1 of the Hugo North underground block cave on both the Oyu Tolgoi mining license and the Entrée/Oyu Tolgoi joint venture property. Lift 1 underground development is fully financed. Entrée has a 30% carried interest in all mineralization identified above 560 metres elevation, and a 20% carried interest in all mineralization extracted below 560 metres elevation from the Entrée/Oyu Tolgoi joint venture property. Sandstorm Gold Ltd., Rio Tinto and Turquoise Hill Resources Ltd. are major shareholders of Entrée, holding approximately 14%, 10% and 8% of the shares of the Company, respectively. More information about Entrée can be found at www.EntreeResourcesLtd.com