Vancouver, B.C., November 3, 2023 – Entrée Resources Ltd. (TSX:ETG; OTCQB:ERLFF – the “Company” or “Entrée”) has today filed its interim financial results for the third quarter ended September 30, 2023. All numbers are in U.S. dollars unless otherwise noted.

Q3 2023 HIGHLIGHTS

Oyu Tolgoi Underground Development Update

The Oyu Tolgoi project in Mongolia includes two separate land holdings: the Oyu Tolgoi mining licence, which is held by Entrée’s joint venture partner Oyu Tolgoi LLC (“OTLLC”) and the Entrée/Oyu Tolgoi JV Property, which is a partnership between Entrée and OTLLC. Rio Tinto owns 66% of OTLLC and is the manager of operations at Oyu Tolgoi.

On October 17, 2023, Rio Tinto announced it continues to see strong performance from the underground mine, with a total of 72 Lift 1 draw bells opened from Panel 0 on the Oyu Tolgoi mining licence, including 18 draw bells during the quarter ended September 30, 2023. Oyu Tolgoi is set to become the world’s fourth largest copper mine by 2030 with the operation expected to deliver average mined copper production of ~500ktpa between 2028 and 2036.
As at September 30, 2023, construction of conveyor to surface works was approaching 75% completion. Construction works for the concentrator conversion also progressed during the third quarter, with the main contractor mobilized and required tie-in works completed during a planned plant shutdown.
Shaft sinking continued during the third quarter 2023. At the end of September, Shafts 3 and 4 reached 780 metres and 879 metres below ground level, respectively. Updated final depths required for Shafts 3 and 4 are 1,134 metres and 1,176 metres below ground level, respectively. Rio Tinto continues to expect both shafts to be commissioned in the second half 2024.

Entrée/Oyu Tolgoi JV Property

In the third quarter 2023, the Entrée/Oyu Tolgoi joint venture (“Entrée/Oyu Tolgoi JV”) Management Committee approved a 2023 in-fill drill program for Hugo North Extension comprising both underground (12 holes totalling 3,889 metres) and surface (six holes totalling 9,082 metres) diamond drilling. The underground holes are collared from underground drill stations on the Oyu Tolgoi mining licence crossing onto the Entrée/Oyu Tolgoi JV Property. On October 27, 2023, OTLLC advised the Company that Lift 2 underground drilling is ahead of schedule, providing OTLLC with an opportunity to accelerate the Lift 2 program by completing additional underground drilling at Hugo North Extension. The Company will report further details as they are received. Full results from the 2023 in-fill program for Hugo North Extension are pending. The principal purpose for the 2023 drilling is to support the Lift 2 Order of Magnitude Study and updated resource model.
In the third quarter 2023, the Entrée/Oyu Tolgoi JV Management Committee also approved a budget of ~$2.245 million for exploration on the Entrée/Oyu Tolgoi JV Property, including three inclined diamond drill holes totalling 2,600 metres on the Heruga South and Railway targets (Javhlant licence) and four diamond drill holes totalling 2,600 metres on the Ulaan Khud South target (Shivee Tolgoi licence). On October 27, 2023, OTLLC advised the Company all drilling was complete. Full results are pending. 20% of the exploration expenditures will be contributed by OTLLC on Entrée’s behalf as a loan in accordance with the joint venture agreement (the “Entrée/Oyu Tolgoi JVA”).

Corporate

For the three and nine month periods ended September 30, 2023, the Company’s operating loss was $0.7 million and $2.5 million, respectively, compared to $0.5 million and $1.8 million, respectively, for the comparative periods in 2022. The increase in the three and nine month periods ended September 30, 2023 was due to legal costs for both commercial negotiations with OTLLC and Rio Tinto and the arbitration proceedings.
For the three and nine month periods ended September 30, 2023, the Company’s operating cash outflow before changes in non-cash working capital items was $0.6 million and $2.2 million, respectively, compared to $0.5 million and $1.8 million, respectively for the comparative periods in 2022.
Share purchase warrants to purchase 5,139,000 common shares with an exercise price of C$0.60 were exercised resulting in gross proceeds of C$3.1 million being received by the Company since January 1, 2023.
Since January 1, 2023, stock options to purchase 1,000,000 common shares with exercise prices ranging from C$0.55 to C$0.77 were exercised resulting in gross proceeds of C$0.6 million being received by the Company.
As at September 30, 2023, the cash balance was $6.9 million and the working capital balance was $6.9 million.
Effective October 1, 2019, the Company voluntarily withdrew its common shares from listing on NYSE American and on September 5, 2023, the Company voluntarily filed a Form 15 with the United States Securities and Exchange Commission for the purpose of terminating the registration of the Company’s common shares under Section 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and suspending its reporting obligations under Sections 13(a) and 15(d) of the Exchange Act. The Company’s shares will continue to trade in Canada on the Toronto Stock Exchange (“TSX”) under the symbol “ETG” and in the United States on the Over-the-Counter OTCQB Venture Market (“OTCQB”) under the symbol “ERLFF”.
The Company’s primary objective for 2023 is to confirm the transfer of the Shivee Tolgoi and Javhlant mining licences from the Company’s Mongolian subsidiary to OTLLC as contemplated by the existing Entrée/Oyu Tolgoi JVA. On July 17, 2023, the Company announced it has made good progress in its previously disclosed negotiations with OTLLC and Rio Tinto to restructure or amend the existing Entrée/Oyu Tolgoi JVA to streamline the operating environment for both parties and confirm the transfer of the Shivee Tolgoi and Javhlant mining licences to OTLLC. However, several key items still need to be resolved before any definitive agreement could be finalized and executed, including with respect to a potential acquisition by the Government of Mongolia of 34% of the Company’s economic interest in the Entrée/Oyu Tolgoi JV Property.
While the Company remains committed to achieving a commercial resolution with OTLLC and Rio Tinto, the previously announced binding arbitration proceedings commenced by the Company on May 26, 2022 to, in part, confirm the transfer of the Shivee Tolgoi and Javhlant mining licences, also continued to progress during the third quarter 2023. The Company is seeking declarations and orders for specific performance relating to certain provisions of the Equity Participation and Earn-in Agreement (the “Earn-in Agreement”) with Turquoise Hill Resources Ltd. (“Turquoise Hill”) dated October 15, 2004, as amended and subsequently assigned to OTLLC and the Entrée/Oyu Tolgoi JVA. Both Turquoise Hill and OTLLC are respondents to the arbitration proceedings. A three-member Tribunal has been appointed and a merits hearing is set for April 2024.

OUTLOOK AND STRATEGY

Entrée’s primary objective is to confirm the transfer of the Shivee Tolgoi and Javhlant mining licences to OTLLC as contemplated by the Entrée/Oyu Tolgoi JVA, either in conjunction with finalization, execution, and closing of an agreement with OTLLC to restructure or amend the existing Entrée/Oyu Tolgoi JVA to streamline the operating environment for both parties, or enforcement of certain provisions of the Earn-in Agreement and Entrée/Oyu Tolgoi JVA pursuant to binding arbitration proceedings. The Company currently is registered in Mongolia as the 100% ultimate holder of the licences. The Company is also in discussions with Erdenes Oyu Tolgoi LLC (the State-owned company that holds the Government’s 34% interest in OTLLC) regarding a potential acquisition by the Government of Mongolia of 34% of the Company’s economic interest in the Entrée/Oyu Tolgoi JV Property. The Minerals Law of Mongolia provides the State may share in up to 34% of the economic benefit derived from exploitation of a mineral deposit of strategic importance where proven reserves were determined through funding sources other than the State budget. The Hugo North Extension copper-gold deposit on the Shivee Tolgoi mining licence and the Heruga copper-gold-molybdenum deposit on the Javhlant mining licence are mineral deposits of strategic importance.

Any definitive agreement reached between the Company and OTLLC to restructure or amend the existing Entrée/Oyu Tolgoi JVA would be subject to TSX acceptance and the requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions applicable to a related party transaction. There are no assurances that a definitive agreement will be finalized and executed, or if finalized and executed, that the transaction would close.

The Company’s interim financial statements and Management’s Discussion and Analysis (“MD&A”) for the third quarter ended September 30, 2023 are available on the Company’s website at www.EntreeResourcesLtd.com, on SEDAR+ at www.sedarplus.ca, and on OTC Markets at www.otcmarkets.com.

QUALIFIED PERSON

Robert Cinits, P.Geo., consultant to Entrée and the Company’s former Vice President, Corporate Development, and a Qualified Person as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects, has approved the technical information in this release. For further information on the Entrée/Oyu Tolgoi JV Property, see the Company’s Technical Report, titled “Entrée/Oyu Tolgoi Joint Venture Project, Mongolia, NI 43-101 Technical Report”, with an effective date of October 8, 2021, available on the Company’s website at www.EntreeResourcesLtd.com, and on SEDAR+ at www.sedarplus.ca.

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 JV, depending on the depth of mineralization. Horizon Copper Corp. and Rio Tinto are major shareholders of Entrée, beneficially holding approximately 25% and 16% 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.
Tel: 604-687-4777 | Toll Free: 1-866-368-7330
E-mail: djan@EntreeResourcesLtd.com

Vorig jaar de derde kw. cijfers op nov. 9th (2022)
We expect the coming weeks (2) news of Rio Tinto.