Entrée Resources Announces First Quarter 2025 Results
Entrée Resources Announces First Quarter 2025 Results
VANCOUVER, British Columbia, May 08, 2025 -- Entrée Resources Ltd. (TSX:ETG; OTCQB:ERLFF – the “ Company” or
“Entrée”) has today filed its interim financial results for the first quarter ended March 31, 2025. All numbers are in U.S. dollars
unless otherwise noted.
Q1 2025 HIGHLIGHTS
Arbitration and Entrée/Oyu Tolgoi JVA
• On December 19, 2024, a partial final award (the “ Award”) was made by the three-member international arbitration
Tribunal appointed in connection with the Company’s binding arbitration proceedings against its joint venture partner
Oyu Tolgoi LLC (“OTLLC”) and Turquoise Hill Resources Ltd. (together, the “Respondents”). The Tribunal ruled in favor
of the Company on all issues and dismissed the Respondents’ counterclaims.
• As the first step in the implementation of the Award, on February 3, 2025, the Company and OTLLC formally executed
and delivered the Joint Venture Agreement appended to the amended 2004 Equity Participation and Earn-In Agreement
between the parties. The Joint Venture Agreement (the “ Entrée/Oyu Tolgoi JVA ”), which has governed joint venture
operations and the rights and obligations of the parties since the joint venture was formed in 2008, has an effective date
of June 30, 2008, as amended on February 3, 2025.
• In conjunction with the formal execution and delivery of the Entrée/Oyu Tolgoi JVA, the Company assigned to OTLLC
an 80% or 70% (depending on the depth of mineralization) beneficial interest in the area covered by the western portion
of the Shivee Tolgoi mining licence (the “Shivee West Property ”), which was previously 100% owned by the Company.
The Entrée/Oyu Tolgoi JVA incorporates amended definitions of “Existing Licenses” and “Properties” to include the
Shivee West Property for all purposes under the Entrée/Oyu Tolgoi JVA. The geographic area covered by the Shivee
Tolgoi and Javkhlant mining licences is the “Entrée/Oyu Tolgoi JV Property ”.
• The Entrée/Oyu Tolgoi JVA requires OTLLC, as Manager, to hold title to the Shivee Tolgoi and Javkhlant mining
licences (the “Licences”) on behalf of the joint venture (“Entrée/Oyu Tolgoi JV ”) participants. On February 5, 2025,
Entrée’s wholly owned subsidiary Entrée LLC and OTLLC duly executed and delivered License Transfer Agreements
(the “License Transfer Agreements ”) to govern the transfer of the Licences from Entrée LLC to OTLLC as Manager.
• On February 11, 2025, the parties lodged the License Transfer Agreements and supporting documentation with the
Mongolian tax authority for the assessment of tax on the transfer of the Licences in accordance with applicable laws of
Mongolia as the next step in the implementation of the Award. Timely transfer of the Licences is required to minimize
delays to Lift 1 Panel 1 lateral underground development work planned to be completed in 2025 at the Hugo North
Extension deposit.
• Notwithstanding the formal execution of the Entrée/Oyu Tolgoi JVA, the Company and OTLLC have agreed the parties
will continue to work towards potential conversion of the Entrée/Oyu Tolgoi JVA into a more effective agreement of
equivalent economic value. The agreement would include a mechanism for the Company to fulfil any obligation under
Mongolian law to share with the State up to 34% of its economic benefit from the area of the Licences. Unless and until
the parties complete the potential conversion, future development work and mining on the Entrée/Oyu Tolgoi JV
Property will be governed by the Entrée/Oyu Tolgoi JVA.
Entrée/Oyu Tolgoi JV Property Update
• First Oyu Tolgoi Lift 1 Panel 1 underground development work on the Entrée/Oyu Tolgoi JV Property commenced in
October 2024 in the southwest corner of the Hugo North Extension deposit (“HNE”).
◦ The work is part of the initial Panel 1 western ore handling truck chute design which, when completed, will
include extraction level tipple development, which connects the truck chute chamber on the haulage level, and
the supporting ventilation loop with the return air level.
◦ At March 31, 2025, OTLLC had completed 95 equivalent metres of lateral development work on the return air
level. All development work was in rock classified as waste, and no saleable minerals, concentrates, metals or
other saleable mineral end product were produced.
◦ Plans to continue development work in 2025 in the southwest corner of HNE in line with the 2025 Oyu Tolgoi
Mine Plan approved by the Mineral Resources and Petroleum Authority of Mongolia (“ MRPAM”) are contingent
upon the resolution of certain outstanding issues, including the transfer of the Licences from Entrée LLC to
OTLLC as Manager of the Entrée/Oyu Tolgoi JV.
• As at March 31, 2025, 5,031.6 metres of surface drilling in eight holes had been completed under the 2024 HNE in-fill
diamond drilling program. One additional surface hole is currently in progress. A total of 6,566.88 metres of underground
drilling on the Shivee Tolgoi mining licence had also been completed in 27 underground holes. The 2024 drilling program
will support the Lift 2 Panel 1 Pre-Feasibility Study and the updated resource model for Hugo North (including HNE),
which will include Lift 2 mineralization.
• For 2025, the Entrée/Oyu Tolgoi JV Management Committee approved an in-fill diamond drilling program at HNE
comprised of ~8,329 metres on the Shivee Tolgoi mining licence in 19 underground holes and five surface holes totaling
~9,050 metres. As at March 31, 2025, 349.7 metres of drilling on the Shivee Tolgoi mining licence in one underground
hole had been completed. The 2025 drilling program is intended to focus on gaps in the geological model.
• In the first quarter 2025, the Company continued to announce new analytical results from deposit and regional diamond
drilling programs conducted by OTLLC between 2022 and 2024. See the Company’s press release dated February 27,
2025, available on SEDAR+ at www.sedarplus.ca, OTC Markets at www.otcmarkets.com and on the Company’s
website at www.EntreeResourcesLtd.com. Additional results will be reported by the Company as they become available
from OTLLC.
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
OTLLC and the Entrée/Oyu Tolgoi JV Property, which is a joint venture between Entrée and OTLLC. Rio Tinto International
Holdings Ltd. (“Rio Tinto”) owns 66% of OTLLC and is the manager of operations at Oyu Tolgoi. On April 16, 2025, Rio Tinto
announced that Oyu Tolgoi achieved record copper production in March in line with the Lift 1 underground mine ramp-up plan.
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 ~500 ktpa between 2028 and 2036. Refer to Rio Tinto’s press release dated April 16, 2025, titled
“Rio Tinto releases first quarter 2025 production results” available on its website at www.riotinto.com for further details.
• March 2025 was a record production month as the Lift 1 Panel 0 underground mine on OTLLC’s Oyu Tolgoi mining
licence continued to set material handling records achieving an average of 28 ktpd and record highs of 45 ktpd.
• Year-on-year, the project is on track for a greater than 50% increase in production, with growth weighted to the second
half of the year when the concentrator conversion is fully commissioned and primary crusher 2 is complete.
• The conveyor to surface system, which is able to transport ore to the concentrator from a depth of 1,300 metres, is now
fully operational and providing the necessary material handling capability to support the Lift 1 underground mining ramp-
up.
• The floatation priority works for the concentrator conversion are now commissioned, with the remaining works to be
completed through the second quarter 2025.
• Construction of primary crusher 2 is progressing to plan and remains on track to be completed during the fourth quarter
2025.
• The Mongolian regulatory acceptance process for OTLLC’s 2023 Oyu Tolgoi Feasibility Study (“OTFS23”) for the Lift 1
underground mine is ongoing. The Lift 1 underground mine incorporates the development of three panels (Panels 0, 1,
and 2). The HNE deposit on the Entrée/Oyu Tolgoi JV Property is located at the northern portion of Panel 1.
• Rio Tinto is intensifying its work with all stakeholders towards a longer-term solution for mining the Entrée/Oyu Tolgoi
JV Property, including HNE Lift 1.
Corporate
• For the Q1 2025 period, the Company’s operating loss was $0.6 million compared to $1.1 million in Q1 2024. The
decrease was due to higher legal costs in 2024 for both commercial negotiations with OTLLC and Rio Tinto and the
arbitration proceedings.
• For the Q1 2025 period, the operating cash outflow before changes in non-cash working capital items was $0.6 million
compared to $1.0 million in Q1 2024.
• As at March 31, 2025, the cash balance was $5.8 million and the working capital balance was $5.9 million.
• On January 24, 2025, the Company closed a non-brokered private placement issuing 2,577,700 units at a price of
C$2.21 per unit for aggregate gross proceeds of C$5.7 million ($4.0 million).
OUTLOOK AND STRATEGY
The Company’s primary objective is to fully implement the Award and affect the transfer of the Licences from the Company’s
Mongolian subsidiary Entrée LLC to OTLLC in accordance with applicable laws of Mongolia. Under the terms of the
Entrée/Oyu Tolgoi JVA, the Manager (OTLLC) is required to hold all assets, including the Licences, on behalf of the
Entrée/Oyu Tolgoi JV participants. Transfer of the Licences to OTLLC, as Manager and owner of an 80% or 70% participating
interest in the Entrée/Oyu Tolgoi JV Property, is necessary to maximize operational efficiencies, provide certainty with respect
to taxes and royalties, and minimize delays to Lift 1 Panel 1 lateral development work planned to be completed in 2025 at
HNE.
Following the Award, the Company and OTLLC formally executed and delivered the Entrée/Oyu Tolgoi JVA. License Transfer
Agreements were then finalized and executed by Entrée LLC and OTLLC and submitted with supporting documentation to the
Mongolian tax authority for the assessment of tax on the transfer of the Licences. Taxes must be assessed by the Mongolian
tax authority and paid before the License Transfer Agreements and other documentation necessary to affect the transfer of the
Licences may be submitted to MRPAM. In conjunction with the transfer of the Licences to OTLLC, corporate income tax at a
rate of 10% of the value of the Licences (with certain deductions allowed) will be assessed. The methodology to determine the
value of the Licences for corporate income tax purposes is set out in Decree No. 302 passed by the Minister of Finance on
December 31, 2019. As part of the Award, the Tribunal issued a final and binding declaration that all fees and taxes assessed
on the transfer of the Licences pursuant to applicable laws of Mongolia will be for the account of the Entrée/Oyu Tolgoi JV,
with OTLLC contributing the Company’s 20% share as a loan under Section 10.1 of the Entrée/Oyu Tolgoi JVA.
The Tribunal reserved Entrée’s claims for specific performance, and in the alternative equitable damages, and the issue of
costs, to a subsequent award, if necessary.
Notwithstanding the formal execution of the Entrée/Oyu Tolgoi JVA that governs development work and mining on the
Entrée/Oyu Tolgoi JV Property, the Company and OTLLC remain committed to working towards the potential conversion of the
Entrée/Oyu Tolgoi JVA into a more effective agreement of equivalent economic value. The agreement would include a
mechanism for the Company to fulfil any obligation under Mongolian law to share with the State up to 34% of its economic
benefit from the area of the Licences. Conversion of the Entrée/Oyu Tolgoi JVA would be subject to Toronto Stock Exchange
acceptance and the requirements of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special
Transactions applicable to a related party transaction.
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 (a “ Strategic Deposit ”) where proven reserves were determined through funding
sources other than the State budget. The Shivee Tolgoi mining licence (including the HNE copper-gold deposit) and the
Javkhlant mining licence (including the Heruga copper-gold-molybdenum deposit) are within the boundaries of the Oyu Tolgoi
group of deposits. The Oyu Tolgoi group of deposits were classified a Strategic Deposit by Resolution No. 27 dated February
6, 2007, adopted by the Parliament of Mongolia.
If the Company’s primary objective of fully implementing the Award and affecting the transfer of the Licences to OTLLC is not
achieved in the near term, future lateral development work on the Entrée/Oyu Tolgoi JV Property could be delayed.
The Company’s interim financial statements and Management’s Discussion and Analysis (“MD&A”) for the first quarter ended
March 31, 2025 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., 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 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 24% 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: [email protected]
This News Release contains 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 and projected expenditures;
arbitration proceedings, including the potential benefits, timing and outcome of arbitration proceedings; the Company’s plans
to continue discussions with OTLLC and Rio Tinto regarding a potential conversion of the Entrée/Oyu Tolgoi JVA; the
Company’s plans to continue discussions with the Government of Mongolia regarding the potential for the State to share in
34% of the Company’s economic benefit from its interest in the Entrée/Oyu Tolgoi JV Property pursuant to applicable laws of
Mongolia; the Company’s ability to transfer the Shivee Tolgoi and Javkhlant mining licences to OTLLC pursuant to the License
Transfer Agreements; the potential for Entrée to be included in or otherwise receive the benefits of the Oyu Tolgoi Investment
Agreement; the expectations set out in OTFS20 and the 2021 Technical Report on the Company’s interest in the Entrée/Oyu
Tolgoi JV Property; timing and status of Oyu Tolgoi underground development; the expected timing of development work on
the Shivee Tolgoi mining licence and the potential for delay if the Shivee Tolgoi mining licence cannot be transferred to
OTLLC in a timely fashion; the nature of the ongoing relationship and interaction between OTLLC and Rio Tinto and the
Government of Mongolia and Erdenes Oyu Tolgoi LLC with respect to the continued operation and development of Oyu Tolgoi;
the technical studies for Lift 1 Panels 1 and 2, OTFS23, the Lift 2 Pre-Feasibility Study, and the updated resource model for
Hugo North (including Hugo North Extension) Lifts 1 and 2 and the possible outcomes, content and timing thereof; timing and
amount of production from Lifts 1 and 2 of the Entrée/Oyu Tolgoi JV Property, potential production delays and the impact of
any delays on the Company’s cash flows, expected copper, gold and silver grades, liquidity, funding requirements and
planning; future commodity prices; the estimation of mineral reserves and resources; projected mining and process recovery
rates; estimates of capital and operating costs, mill and concentrator throughput, cash flows and mine life; capital, financing
and project development risk; mining dilution; potential actions by the Government of Mongolia with respect to the Shivee
Tolgoi and Javkhlant mining licences and Entrée’s interest in the Entrée/Oyu Tolgoi JV Property; potential size of a
mineralized zone; potential expansion of mineralization; potential discovery of new mineralized zones; potential metallurgical
recoveries and grades; plans for future exploration and/or development programs and budgets; permitting time lines;
anticipated business activities; proposed acquisitions and dispositions of assets; and future financial performance.
In certain cases, forward-looking information can be identified 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 this forward-looking information on its expectations
about future events as at the date that such information was prepared, the information is not a guarantee of Entrée’s future
performance and is based on numerous assumptions regarding present and future business strategies; the correct
interpretation of agreements, laws and regulations; the commencement and conclusion of arbitration proceedings, including
the potential benefits, timing and outcome of arbitration proceedings; the potential benefits, timing and outcome of
discussions with the Government of Mongolia, Erdenes Oyu Tolgoi LLC, OTLLC, and Rio Tinto; the future ownership of the
Shivee Tolgoi and Javkhlant mining licences; that the Company will continue to have timely access to detailed technical,
financial, and operational information about the Entrée/Oyu Tolgoi JV Property, the Oyu Tolgoi project, and government
relations to enable the Company to properly assess, act on, and disclose material risks and opportunities as they arise; local
and global economic conditions and the environment in which Entrée will operate in the future, including commodity prices,
projected grades, projected dilution, anticipated capital and operating costs, including inflationary pressures thereon resulting
in cost escalation, and anticipated future production and cash flows; the anticipated location of certain infrastructure and
sequence of mining within and across panel boundaries; the construction and continued development of the Oyu Tolgoi
underground mine; the status of Entrée’s relationship and interaction with the Government of Mongolia, Erdenes Oyu Tolgoi
LLC, OTLLC, and Rio Tinto; and the Company’s ability to operate sustainably, its community relations, and its social licence
to operate.
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 information include, amongst others, an uncertain and unstable global economic and political environment,
including China-U.S. tensions and the indirect impacts of the war in Ukraine and conflict in the Middle East, which could lead
to falling commodity prices, trade actions (including increased tariffs, retaliations, and sanctions), and government efforts to
exert more control over natural resources or to protect domestic economies by changing contractual, regulatory, or tax
measures; the impacts of climate change and the transition to a low-carbon future; the nature of the ongoing relationship and
interaction between OTLLC, Rio Tinto, Erdenes Oyu Tolgoi LLC and the Government of Mongolia with respect to the continued
operation and development of Oyu Tolgoi; the continuation of undercutting in accordance with the mine plans and designs in
OTFS23; applicable taxes and royalty rates; the future ownership of the Shivee Tolgoi and Javkhlant mining licences; the
amount of any future funding gap to complete the Oyu Tolgoi project and the availability and amount of potential sources of
additional funding; the timing and cost of the construction and expansion of mining and processing facilities; inflationary
pressures on prices for critical supplies for Oyu Tolgoi resulting in cost escalation; the ability of OTLLC or the Government of
Mongolia to deliver a domestic power source for Oyu Tolgoi (or the availability of financing for OTLLC or the Government of
Mongolia to construct such a source) within the required contractual timeframe; sources of interim power; OTLLC’s ability to
operate sustainably, its community relations, and its social license to operate in Mongolia; the impact of changes in, changes
in interpretation to or changes in enforcement of, laws, regulations and government practises in Mongolia; delays, and the
costs which would result from delays, in the development of the underground mine; the anticipated location of certain
infrastructure and sequence of mining within and across panel boundaries; projected commodity prices and their market
demand; and production estimates and the anticipated yearly production of copper, gold and silver at the Oyu Tolgoi
underground mine.
Other risks, uncertainties and factors which could cause actual results, performance or achievements of the Company to
differ materially from future results, performance or achievements expressed or implied by forward-looking information include,
amongst others, unanticipated costs, expenses or liabilities; discrepancies between actual and estimated production, mineral
reserves and resources and metallurgical recoveries; the impacts of geopolitics on trade and investment; trade tensions
between the world’s major economies; 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 related to the potential impact of global or national health concerns; risks associated
with changes in the attitudes of governments to foreign investment; risks associated with the conduct of joint ventures,
including the ability to access detailed technical, financial and operational information; risks related to the Company’s
significant shareholders, and whether they will exercise their rights or act in a manner that is consistent with the best interests
of the Company and its other shareholders; 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 foreign exchange rates; the speculative nature of mineral exploration; the global
economic climate; dilution; share price volatility; activities, actions or assessments by Rio Tinto or OTLLC and by government
stakeholders or authorities including Erdenes Oyu Tolgoi LLC and 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, strategic deposits,
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 appropriate smelting
and refining arrangements; unanticipated reclamation expenses; 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 license to operate; accidents, labour disputes and other risks of the mining industry;
global climate change; global conflicts; natural disasters; the impacts of civil unrest; breaches of the Company’s policies,
standards and procedures, laws or regulations; increasing societal and investor expectations, in particular with regard to
environmental, social and governance considerations; the impacts of technological advancements; title disputes; limitations
on insurance coverage; competition; loss of key employees; cyber security incidents; misjudgements in the course of
preparing forward-looking information; and 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, 2024, dated March 12, 2025 filed with the
Canadian Securities Administrators and available at www.sedarplus.ca. 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
information, 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 information will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on
forward-looking information. The Company is under no obligation to update or alter any forward-looking information except as
required under applicable securities laws.