Entree Resources Stock Price, News & Analysis

Entrée Resources Ltd. (OTCQB: ERLFF) is a Canadian mining company in the gold ore mining industry that focuses on copper-gold assets through a carried joint venture interest in the Oyu Tolgoi project in Mongolia. According to company disclosures, Entrée holds a unique position on a significant portion of what it describes as one of the world’s largest copper-gold projects, the Entrée/Oyu Tolgoi joint venture property.

The Oyu Tolgoi project in Mongolia comprises two main land holdings: the Oyu Tolgoi mining licence, which is held by Oyu Tolgoi LLC ("OTLLC"), and the Entrée/Oyu Tolgoi joint venture property, which is a partnership between Entrée and OTLLC. Entrée reports that Rio Tinto owns 66% of OTLLC and acts as manager of operations at Oyu Tolgoi.

Joint Venture Structure and Carried Interest

Entrée states that it has a 20% or 30% carried participating interest in the Entrée/Oyu Tolgoi joint venture, depending on the depth of mineralization. Under the Entrée/Oyu Tolgoi Joint Venture Agreement (Entrée/Oyu Tolgoi JVA), OTLLC, as Manager, is required to hold title to the Shivee Tolgoi and Javkhlant mining licences on behalf of the joint venture participants. The geographic area covered by these licences is referred to as the Entrée/Oyu Tolgoi JV Property.

The company describes its interest as a carried participating interest, with OTLLC contributing funds on Entrée’s behalf for joint venture expenditures, with each such contribution treated as a loan to Entrée under the terms of the JVA.

Key Assets: Hugo North Extension and Heruga

Within the Entrée/Oyu Tolgoi JV Property, Entrée highlights two principal deposits:

• The Hugo North Extension (HNE) copper-gold deposit on the Shivee Tolgoi mining licence, located in the northern portion of Panel 1 of the Lift 1 underground mine plan for Oyu Tolgoi.
• The Heruga copper-gold-molybdenum deposit on the Javkhlant mining licence, which is part of the Oyu Tolgoi group of deposits.

Company news releases describe extensive in-fill and regional diamond drilling programs at HNE and on the Shivee Tolgoi and Javkhlant licences. Reported analytical results include long intervals of copper-gold mineralization at HNE from both surface and underground drill holes, which the company indicates will support updated resource models and technical studies.

Relationship with Oyu Tolgoi LLC, Rio Tinto and the State of Mongolia

Entrée’s disclosures emphasize its close operational and contractual relationship with OTLLC and Rio Tinto. OTLLC is the joint venture partner and Manager under the Entrée/Oyu Tolgoi JVA, and Rio Tinto, through Rio Tinto International Holdings Ltd., owns 66% of OTLLC and manages operations at Oyu Tolgoi.

The company also discusses the role of the Government of Mongolia and Erdenes Oyu Tolgoi LLC in relation to the Oyu Tolgoi strategic group of deposits. The Shivee Tolgoi and Javkhlant licences are within the boundaries of the Oyu Tolgoi group of deposits, which have been classified as a mineral deposit of strategic importance under Mongolian law. Entrée notes that Mongolian legislation provides for potential State participation of up to 34% of the economic benefit derived from such deposits, or royalty arrangements in lieu of equity participation.

Licensing, Arbitration and Regulatory Context

Entrée has provided detailed information about arbitration proceedings and subsequent steps to implement a partial final award made by an international arbitration tribunal in favor of the company in its dispute with OTLLC and Turquoise Hill Resources Ltd. As part of implementing that award, Entrée and OTLLC executed the Entrée/Oyu Tolgoi JVA and License Transfer Agreements governing the transfer of the Shivee Tolgoi and Javkhlant mining licences from Entrée’s Mongolian subsidiary, Entrée LLC, to OTLLC as Manager.

The company reports that these License Transfer Agreements and supporting documentation were lodged with the Mongolian tax authority for assessment of corporate income tax on the transfer, with the methodology for valuing the licences set out in a Mongolian Ministry of Finance decree. Entrée has disclosed that it filed a claim with the Administrative Court of Mongolia seeking an order requiring the tax authority to review and confirm the calculations of the values of the licences, which is a prerequisite to completing the transfer and registering it with the Mineral Resources and Petroleum Authority of Mongolia.

Entrée also describes the establishment of a Parliamentary Temporary Oversight Committee and a Government Working Group in Mongolia to review the Oyu Tolgoi strategic group of deposits, including the area of the joint venture licences, and to negotiate the State’s interest in that area. The company states that it has provided extensive documentation and participated in meetings in support of these processes.

Underground Development and Drilling Activity

Company updates describe the commencement of Lift 1 Panel 1 underground development work on the Entrée/Oyu Tolgoi JV Property in the southwest corner of the Hugo North Extension deposit. This work has focused on lateral development in rock classified as waste as part of initial ore handling and ventilation infrastructure. Entrée has also reported that this development work was paused pending completion of the transfer of the joint venture licences to OTLLC.

In parallel, Entrée reports ongoing in-fill and regional drilling programs at HNE and on other targets within the Shivee Tolgoi and Javkhlant licences. These programs are intended, according to the company, to fill gaps in the geological model, support pre-feasibility and other technical studies, and evaluate regional exploration targets. News releases provide detailed drill collar information and assay results for multiple holes, including intervals with significant copper equivalent grades.

Shareholder Base and Funding

Entrée identifies Horizon Copper Corp. and Rio Tinto as major shareholders, each beneficially holding significant percentages of the company’s shares based on its public statements. The company has also described itself as well-funded in recent news releases and has disclosed private placement financings and working capital balances as part of its financial reporting.

Regulatory Status and Trading

Entrée Resources Ltd. is identified in company news as being listed on the Toronto Stock Exchange under the symbol ETG and trading on the OTCQB market in the United States under the symbol ERLFF. No information in the provided materials indicates delisting, deregistration, or cessation of operations, and there are no SEC filings referenced for this issuer in the supplied data.

Risk and Legal Considerations

Entrée’s news releases contain extensive forward-looking information and risk factor discussions. The company highlights risks related to arbitration outcomes, regulatory processes in Mongolia, timing and completion of licence transfers, potential State participation in the joint venture area, underground mine development schedules, commodity prices, funding requirements, and broader geopolitical and regulatory conditions. These risks are further discussed in the company’s Management’s Discussion and Analysis and Annual Information Form, as referenced in its disclosures.

FAQs about Entrée Resources Ltd. (ERLFF)

• What does Entrée Resources Ltd. do?
  Entrée Resources Ltd. is a Canadian mining company that reports a carried participating interest in the Entrée/Oyu Tolgoi joint venture property, which covers a significant portion of the Oyu Tolgoi copper-gold project in Mongolia. Its business is focused on this joint venture and related exploration and development activities.
• Where are Entrée’s key mining interests located?
  According to company disclosures, Entrée’s key interests are in Mongolia, on the Shivee Tolgoi and Javkhlant mining licences that make up the Entrée/Oyu Tolgoi JV Property, including the Hugo North Extension and Heruga deposits.
• How is Entrée’s joint venture with Oyu Tolgoi LLC structured?
  Under the Entrée/Oyu Tolgoi Joint Venture Agreement, OTLLC is the Manager and is required to hold title to the Shivee Tolgoi and Javkhlant licences on behalf of the joint venture participants. Entrée reports a 20% or 30% carried participating interest in the joint venture, depending on the depth of mineralization, with OTLLC contributing funds on Entrée’s behalf as loans under the agreement.
• What role does Rio Tinto play in Entrée’s projects?
  Entrée states that Rio Tinto, through Rio Tinto International Holdings Ltd., owns 66% of OTLLC and manages operations at Oyu Tolgoi. Rio Tinto is also identified as a major shareholder of Entrée, beneficially holding a significant percentage of the company’s shares.
• What is the significance of the Hugo North Extension deposit?
  The Hugo North Extension copper-gold deposit lies on the Shivee Tolgoi mining licence within the Entrée/Oyu Tolgoi JV Property. It is located in the northern portion of Panel 1 of the Lift 1 underground mine plan for Oyu Tolgoi and is a focus of underground development and in-fill drilling programs described by the company.
• How does Mongolian law affect Entrée’s joint venture interests?
  Entrée notes that under the Minerals Law of Mongolia, the State may share in up to 34% of the economic benefit from exploitation of a mineral deposit of strategic importance, such as the Oyu Tolgoi group of deposits, which include the Shivee Tolgoi and Javkhlant licences. The company has stated its willingness to fulfil any obligation under Mongolian law to provide the State with 34% of the economic benefit it derives from its interest in the joint venture area.
• What is the status of the licence transfer to Oyu Tolgoi LLC?
  The company reports that License Transfer Agreements have been executed between Entrée LLC and OTLLC and lodged with the Mongolian tax authority for assessment of corporate income tax on the transfer. Entrée has filed a claim with the Administrative Court of Mongolia seeking confirmation of the licence value calculations, which is required before the transfer documentation can be registered with the Mineral Resources and Petroleum Authority of Mongolia.
• Is Entrée Resources involved in arbitration or legal proceedings?
  Entrée has disclosed that an international arbitration tribunal issued a partial final award in its favor in proceedings against OTLLC and Turquoise Hill Resources Ltd., and that the tribunal dismissed the respondents’ counterclaims. Implementation of that award, including licence transfer and related matters, is a central focus of the company’s strategy as described in its public filings and news releases.
• On which exchanges does Entrée Resources trade?
  Based on company news releases, Entrée Resources Ltd. trades on the Toronto Stock Exchange under the symbol ETG and on the OTCQB market in the United States under the symbol ERLFF.
• What commodities are associated with Entrée’s joint venture property?
  Entrée’s disclosures describe the Entrée/Oyu Tolgoi JV Property as part of a copper-gold project, with the Hugo North Extension identified as a copper-gold deposit and Heruga described as a copper-gold-molybdenum deposit.