Vancouver, B.C., January 25, 2022 – Entrée Resources Ltd. (TSX:ETG; OTCQB:ERLFF – the “Company” or “Entrée”) reports that on January 24, 2022, Turquoise Hill Resources Ltd. (“Turquoise Hill”), announced the resolution of key outstanding issues related to the Oyu Tolgoi underground mine:

Turquoise Hill and the Government of Mongolia reached a mutual understanding for a renewed partnership.
Turquoise Hill and Rio Tinto entered into a binding agreement that delineates a comprehensive funding arrangement to address Turquoise Hill’s estimated incremental funding requirements to complete the project.
The Oyu Tolgoi LLC (“OTLLC”) board approved the signing of an Electricity Supply Agreement to provide Oyu Tolgoi with a long-term source of power from the Mongolian grid on terms fully agreed with the Government of Mongolia.

As a result, the OTLLC board unanimously approved commencement of the undercut to start Hugo North Lift 1 Panel 0 underground mine production on the Oyu Tolgoi mining licence.

Oyu Tolgoi includes two separate land holdings: the Oyu Tolgoi mining licence, which is held by Entrée’s joint venture partner, OTLLC, and the Entrée/Oyu Tolgoi JV Property, a partnership between Entrée and OTLLC. The Hugo North Extension deposit on the Entrée/Oyu Tolgoi JV Property is located at the northern portion of Panel 1 and is an integral part of the Lift 1 mine plan.

Stephen Scott, Entrée’s President & CEO commented, “This is great news for Entrée and all Oyu Tolgoi project stakeholders. Establishing a strong relationship between all parties going forward is an essential element of ensuring optimal operational and financial performance at the Oyu Tolgoi mine for decades to come. Resolution of outstanding issues has enabled commencement of Panel 0 underground mining operations. This is a key milestone towards achieving design production rates from the underground mine which will require contributions from all three panels in the Lift 1 mine plan, including Panel 1, a significant portion of which is on the Entrée/ Oyu Tolgoi JV Property. Panel 1 includes some of the highest-grade mineralization in the entire Oyu Tolgoi combined project area.”

Highlights of Turquoise Hill’s January 24, 2022 news release include:


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 which owns its interest in OTLLC (“Erdenes Oyu Tolgoi”).
Turquoise Hill and Rio Tinto have agreed to an amended and restated Heads of Agreement (the “Amended HoA”), replacing the prior Heads of Agreement dated April 9, 2021. The Amended HoA delineates a funding arrangement to address Turquoise Hill’s estimated US$3.4 billion incremental funding requirement. Key elements of the Amended HoA include:
pursuing the rescheduling of principal repayments of existing debt (“Re-profiling”) to potentially reduce the base case funding requirement by up to US$1.7 billion;
seeking to raise up to US$500 million of senior supplemental debt (“SSD”);
Rio Tinto committing to provide a co-lending facility, incremental to the Re-profiling and the SSD, of up to US$750 million to be made available once sustainable production from Panel 0 has been achieved (currently expected in H1 2023);
Rio Tinto committing to provide a short-term bridge financing directly to Turquoise Hill by way of one or more secured advances up to a maximum of US$300 million, which would be indirectly repaid out of the proceeds of the US$750 million co-lending facility; and
Turquoise Hill agreeing to conduct an equity offering in a form of its choosing of at least US$650 million (including a Rio Tinto pro rata participation) by no later than August 31, 2022.
Once the Mongolian grid is capable of reliably meeting Oyu Tolgoi’s power requirements, the Electricity Supply Agreement provides the framework for OTLLC to obtain access to a reliable and secure domestic power source.

Terms agreed between Oyu Tolgoi stakeholders with respect to project financing and Erdenes Oyu Tolgoi’s carry account loan do not impact the Entrée/Oyu Tolgoi joint venture, which is governed by the terms of the joint venture agreement between OTLLC and Entrée.

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. Entrée has a 20% or 30% carried participating interest in the Entrée/Oyu Tolgoi joint venture, depending on the depth of mineralization. Sandstorm, Rio Tinto and Turquoise Hill are major shareholders of Entrée, holding approximately 25%, 9% and 7% of the shares of the Company, respectively. More information about Entrée can be found at www.EntreeResourcesLtd.com.

FURTHER INFORMATION

David Jan
Investor Relations
Entrée Resources Ltd.