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.
CORPORATE ACTIVITIES
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.
MANAGEMENT
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.
This news release contains forward-looking
statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and forward-looking
information within the meaning of applicable Canadian securities
laws with respect to corporate strategies and plans; requirements
for additional capital; uses of funds; the value and potential
value of assets and the ability of Entrée to maximize returns to
shareholders; anticipated future production, capital and operating
costs, cash flows and mine life; completion of an updated technical
report that includes a Preliminary Economic Assessment of Entrée’s
interest in Lift 2 of the Hugo North Extension deposit and the
Heruga deposit; the expected timing of first physical development
on the Entrée/Oyu Tolgoi joint venture property; the expected
timing for completion of Shaft 4; the expected timing of first
development production from Lift 1 of the Hugo North Extension
deposit; construction and continued development of the Oyu Tolgoi
underground mine; anticipated business activities; proposed
acquisitions and dispositions of assets; and future financial
performance.
While the Company has based these
forward-looking statements on its expectations about future events
as at the date that such statements were prepared, the statements
are not a guarantee of Entrée’s future performance and are based on
numerous assumptions regarding present and future business
strategies, local and global economic conditions, legal proceedings
and negotiations and the environment in which the Company will
operate in the future, including the price of copper, gold and
silver, and the status of the Company’s relationship and
interaction with the Government of Mongolia, Oyu Tolgoi LLC
(“OTLLC”), Rio Tinto and Turquoise Hill Resources. With respect to
the construction and continued development of the Oyu Tolgoi
underground mine, important risks, uncertainties and factors which
could cause actual results to differ materially from future results
expressed or implied by such forward-looking statements and
information include, amongst others, the timing and cost of the
construction and expansion of mining and processing facilities; the
timing and availability of a long term power source for the Oyu
Tolgoi underground mine; the ability of OTLLC to draw down on the
supplemental debt under the Oyu Tolgoi project finance facility and
the availability of additional financing on terms reasonably
acceptable to OTLLC, Turquoise Hill and Rio Tinto to further
develop Oyu Tolgoi; delays, and the costs which would result from
delays, in the development of the underground mine; projected
copper, gold and silver prices and demand; and production estimates
and the anticipated yearly production of copper, gold and silver at
the Oyu Tolgoi underground mine. Other uncertainties and
factors which could cause actual results to differ materially from
future results expressed or implied by forward-looking statements
and information include, amongst others, unanticipated costs,
expenses or liabilities; discrepancies between actual and estimated
production, mineral reserves and resources and metallurgical
recoveries; the size, grade and continuity of deposits not being
interpreted correctly from exploration results; the results of
preliminary test work not being indicative of the results of future
test work; fluctuations in commodity prices and demand; changing
foreign exchange rates; actions by Rio Tinto, Turquoise Hill and/or
OTLLC and by government authorities including the Government of
Mongolia; the availability of funding on reasonable terms; the
impact of changes in interpretation to or changes in enforcement of
laws, regulations and government practices, including laws,
regulations and government practices with respect to mining,
foreign investment, royalties and taxation; the terms and timing of
obtaining necessary environmental and other government approvals,
consents and permits; the availability and cost of necessary items
such as power, water, skilled labour, transportation and
appropriate smelting and refining arrangements; and misjudgments in
the course of preparing forward-looking statements.
In addition, there are also known and unknown
risk factors which may cause the actual results, performance or
achievements of the Company to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking statements and information. Such factors
include, among others, risks related international operations,
including legal and political risk in Mongolia; risks associated
with changes in the attitudes of governments to foreign investment;
risks associated with the conduct of joint ventures; discrepancies
between actual and anticipated production, mineral reserves and
resources and metallurgical recoveries; global financial
conditions; changes in project parameters as plans continue to be
refined; inability to upgrade Inferred mineral resources to
Indicated or Measured mineral resources; inability to convert
mineral resources to mineral reserves; conclusions of economic
evaluations; future prices of copper, gold, silver and molybdenum;
failure of plant, equipment or processes to operate as anticipated;
accidents, labour disputes and other risks of the mining industry;
delays in obtaining government approvals, permits or licenses or
financing or in the completion of development or construction
activities; environmental risks; title disputes; limitations on
insurance coverage; as well as those factors discussed in the
Company’s most recently filed Management’s Discussion and Analysis
and in the Company’s Annual Information Form for the financial year
ended December 31, 2016, dated March 10, 2017 filed with the
Canadian Securities Administrators and available at www.sedar.com.
Although the Company has attempted to identify important factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking statements,
there may be other factors that cause actions, events or results
not to be as anticipated, estimated or intended. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements. The Company is under no obligation to update or alter
any forward-looking statements except as required under applicable
securities laws.
FURTHER INFORMATION
David Jan
Investor Relations
Entrée Resources Ltd.
Tel: 604-687-4777
Fax: 604-687-4770
Toll Free: 1-866-368-7330
E-mail: djan@entreeresourcesltd.com
Entree Resources (TSX:ETG)
Historical Stock Chart
From Feb 2024 to Mar 2024
Entree Resources (TSX:ETG)
Historical Stock Chart
From Mar 2023 to Mar 2024