Entrée Resources Announces First Quarter 2019 Results
ENTRÉE RESOURCES ANNOUNCES FIRST QUARTER 2019 RESULTS
Vancouver, B.C., May 14, 2019 – Entrée Resources Ltd. (TSX:ETG; NYSE American:EGI – the “Company”
or “Entrée”) has today filed its interim financial results for the first quarter ended March 31, 2019. All
numbers are in U.S. dollars unless otherwise noted.
Q1 2019 HIGHLIGHTS
Entrée/Oyu Tolgoi JV Property – Mongolia
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. On April 15, 2019, Turquoise Hill Resources
Ltd. ( “Turquoise Hill ”) provided an update on underground development on the Oyu Tolgoi mining
licence:
• During the first quarter of 2019, work continued on critical Shaft 2 equipping activities, central
heating plant, mine infrastructure, underground materials handling systems and on priority
underground development. Pre-sinking works for Shaft 3 and Shaft 4 have also commenced.
• Rio Tinto International Holdings Ltd. (“Rio Tinto”), as project manager, has advised Turquoise Hill
that the fit -out and commissioning work on Shaft 2 (the main production and services shaft) is
now expected to be completed by the end of October 2019.
• As previously announced by Turquoise Hill, more detailed geotechnical information and different
ground conditions have required a review of the mine design and the development schedule. The
impact of these changes, including the further delay to Shaft 2, will be includ ed in the definitive
estimate review, which is expected to be completed towards the end of 2019. Turquoise Hill will
also explore potential mitigation options.
Entrée is not currently aware of any expected delays to development production or initial bloc k cave
production from the first lift (Lift 1 ) of the Hugo North Extension deposit on the Entrée/Oyu Tolgoi JV
Property resulting from delays to individual activities at the Oyu Tolgoi project. Entrée will evaluate any
information made available to it by Rio Tinto or OTLLC and will update the market accordingly.
Corporate
• During Q1 2019, the Company disposed of all its investment in Anglo Pacific Group PLC common
shares for net proceeds of $1.0 million and realized a $0.1 million gain.
• Q1 2019 operating loss was $0.4 million compared to an operating loss of $0.5 million in Q1 2018.
The 20% reduction was related to lower administrative costs in Q1 2019.
• Q1 2019 operating cash outflow after working capital was $0.7 million compared to a $0.2 million
operating cash outflow in Q1 2018 and, as at March 31, 2019, cash and short -term investments
balance was $6.5 million. The working capital balance as at March 31, 2019 was $6.4 million.
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OUTLOOK AND STRATEGY
The Company’s primary objectives for the 2019 year continue to include:
• Continuing constructive discussions with the Government of Mongolia; and
• Working with other Oyu Tolgoi stakeholders to advance potential amendments to the joint
venture agreement (the “Entrée/Oyu Tolgoi JVA ”) that currently governs the r elationship
between Entrée and OTLLC. The form of Entrée/Oyu Tolgoi JVA was agreed between the parties
in 2004, prior to the execution of the Oyu Tolgoi Investment Agreement and commencement of
underground development. The Company believes that amendments that align the interests of
all stakeholders as they are now understood, would be in the best interests of the Company and
its shareholders provided there is no net erosion of value to Entr ée. No agreements have been
finalized and there are no assurances agreements may be finalized in the future.
Corporate costs, which include Mongolian site management and compliance costs, remain estimated
between $1.2 million and $1.5 million for the full 2019 year. The Company continues to focus its efforts
on conserving cash reserves and remaining prudent with its expenditures.
The Company’s interim financial statements and Management’s Discussion and Analysis (“MD&A”) for
the first quarter ended March 31, 2019 are available on the Company ’s website at
www.EntreeResourcesLtd.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
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 January 15 , 201 8,
available on SEDAR at www.sedar.com.
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 Gold Ltd., Rio Tinto and Turquoise Hill are major
shareholders of Entrée, holding approximately 1 6%, 9% and 8% 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: [email protected]
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; uses
of funds and projected expenditures; construction and continued development of the Oyu Tolgoi underground mine; the expected timing of first
development production from Lift 1 of the Entrée/Oyu Tolgoi JV Property; potential production delays and the impact of such delays; discussions
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with the Government of Mongolia, Rio Tinto, OTLLC and Turquoise Hill on a range of issues including Entrée’s interest in the Entrée/Oyu Tolgoi JV
Property, the Shivee Tolgoi and Javhlant mining licences and certain material agreements; anticipated business activities; an d future financial
performance.
In certain cases, forward -looking statements and information can be iden tified by words such as "plans", "expects" or "does not expect", "is
expected", "budgeted", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate" or "believes" or variations of such
words and phrases or statements that certain actions, events or results "may", "could", "would", "might", "will be taken", "occur" or "be achieved".
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 pres ent and
future business strategies, local and global economic conditions and the environment in which Entrée will operate in the future, including the price
of copper, gold and silver, projected grades, anticipated capital and operating costs, anticipated future production and cash flows and the status
of Entrée’s relationship and interaction with the Government of Mongolia, OTLLC, Ri o Tinto and Turquoise Hill. With respect to the construction
and continued development of the Oyu Tolgoi underground mine, important risks, uncertainties and factors which could cause ac tual 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 do mestic power source
for Oyu Tolgoi (or the availability of financing for OTLLC to construct such a source); the ability of OTLLC to secure and draw down on the
supplemental debt under the Oyu Tolgoi project finance facility and the availability of additional financing on terms reasona bly 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 their market demand; and production es timates and the anticipated yearly
production of copper, gold and silver at Oyu Tolgoi.
Other risks, uncertainties and factors which could cause actual results, performance or achievements of Entrée to differ mate rially from future
results, performance or achievements 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 res ources and
metallurgical recoveries; development plans for processing resources; matters relating to proposed exploration or expansion; mining operational
and development risks, including geotechnical risks and ground conditions; regulatory restrictions (including environmental regulatory restrictions
and liability); risks related to 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; inability to upgrade Inferred mineral resources to
Indicated or Measured mineral resources; inability to convert mineral resources to mineral reserves; conclusions of economic evaluations;
fluctuations in commodity prices and demand; changing fo reign exchange rates; the speculative nature of mineral exploration; the global
economic climate; dilution; share price volatility; activities, actions or assessments by Rio Tinto, Turquoise Hill 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 wi th 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 water, skilled labour, transportation and ap propriate smelting and
refining arrangements; unanticipated reclamation expenses; geotechnical or hydrogeological considerations during mining being different from
what was assumed; changes to assumptions as to the availability of electrical power, and the power rates used in operating cost estimates and
financial analyses; changes to assumptions as to salvage values; ability to maintain the social licence to operate; accidents , labour disputes and
other risks of the mining industry; environmental risks; global climate change; title disputes; limitations on insurance coverage; competition; loss
of key employees; cyber security incidents; misjudgements in the course of preparing forward -looking statements; as well as those factors
discussed in the Company’s most recently filed MD&A and in the Company’s Annual Information Form for the financial year ended December 31,
2018, dated March 29, 2019 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 f orward-looking statements. The Company is under no
obligation to update or alter any forward-looking statements except as required under applicable securities laws.