Entrée Resources Announces the Sale of its Royalty on the Cañariaco Copper Project
Entrée Resources Announces the Sale of its Royalty
on the Cañariaco Copper Project
Vancouver, B.C., June 8, 2018 – Entrée Resources Ltd. (TSX:ETG; NYSE American:EGI – the “Company” or
“Entrée”) is pleased to announce it has sold its 0.5% net smelter returns royalty (the “Royalty”) on
Candente Copper Corp.’s Cañariaco Copper Project in Northern Peru to Anglo Pacific Group PLC (LSE: APF;
TSX: APY – “Anglo Pacific”).
Under the agreement with Anglo Pacific (the “ Agreement”), Entrée transferred all the issued and
outstanding shares of its subsidiaries that directly or indirectly hold the Royalty to Anglo Pacific for
consideration of US$1 million, payable by the issuance of 478,951 Anglo Pacific shares at the Anglo Pacific
30-day volume weighted average price of 156.6079 GBP per share as of June 5, 2018 (the “ Share
Consideration”). Entrée has agreed to hold the Share Consideration for a period of at least 90 days
following closing.
In addition, Entrée retains the right to a portion of any future royalty income received by Anglo Pacific in
relation to the Royalty as follows:
• 20% of any royalty payment received for any calendar quarter up to and including the quarter
ending December 31, 2029;
• 15% of any royalty payment received for any calendar quarter commencing January 1, 2030 up to
and including the quarter ending December 31, 2034; and
• 10% of any royalty payment received for any calendar quarter commencing January 1, 2035 up to
and including the quarter ending December 31, 2039.
Stephen Scott, President and CEO of Entrée comments, “We are very pleased to enter into this agreement
with Anglo Pacific. I n addition to making a 100% gain on its initial US$500,000 investment, Entrée also
retains long-term exposure to a potential royalty income stream from the Cañariaco Copper Project, when
and if it is developed. In addition to potential appreciation on the Share Consideration and potential
royalty income, Anglo Pacific has a c ontinuing policy of paying a substantial portion of its income from
royalties and streams to shareholders as dividends. We look forward to that dividend income as a future
source of cash . The sale of Entrée’s respective subsidiaries that hold the Royalty to Anglo Pacific will
further reduce Entrée’s annual cash burn rate, better positioning the Company as it moves towards first
development production from the Entrée/Oyu Tolgoi joint venture property in Mongolia.”
ABOUT ANGLO PACIFIC GROUP PLC
Anglo Pacific Group PLC is a global natural resources royalty and streaming company. Anglo Pacific’ s
strategy is to develop a leading international diversified royalty and streaming company with a portfolio
centred on bas e metals and bulk materials, focusing on accelerating income growth through acquiring
royalties and streams on projects that are currently cash flow generating or are expected to be within the
next 24 months, as well as investment in earlier stage projects. It is a continuing policy of Anglo Pacific to
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pay a substantial portion of these royalty and stream revenues to shareholders as dividends. More
information about Anglo Pacific can be found at www.anglopacificgroup.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% carried participating interest in the Entrée/Oyu Tolgoi joint venture, with
a 30% interest in all mineralization identified above 560 metres elevation on the Entrée/Oyu Tolgoi joint
venture property. Sandstorm Gold L td., Rio Tinto and Turquoise Hill are major shareholders of Entrée,
holding approximately 14%, 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; sources
and uses of funds; the value and potential value of assets and the ability of Entrée to maximize returns to shareholders; construction and continued
development of the Oyu Tolgoi underground mine; anticipated business activities; proposed acquisitions and dispositions of assets; and future
financial performance.
In certain cases, forward-looking statements and information can be identified by the use of 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
present 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, 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, Oyu Tolgoi LLC (“OTLLC”), Rio Tinto and Turquoise Hill Resources on the
Entrée/Oyu Tolgoi joint venture and the continued development of the Entrée/Oyu Tolgoi joint venture property. 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 ter m domestic power source
for the Oyu Tolgoi underground mine (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 reasonably
acceptable to OTLLC, Turquoise Hill and Rio Tinto to further develop Oyu Tolgoi; delays, and the costs which would result fro m 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 fut ure results expressed or implied by forward-looking
statements and information include, amongst others, unanticipated costs, expenses or liabilities; discrepancies between actua l 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; fluct uations in commodity
prices and demand; changi ng foreign exchange rates; actions by Rio Tinto, Turquoise Hill Resources and 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 govern ment 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; 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 estima tes and financial
analyses; changes to assumptions as to salvage values; abilit y to maintain the social licen se to operate; 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 Entrée to b e
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 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; global financial
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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 pr ices 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
MD&A and in the Company’s Annual Information Form for the financial year ended December 31, 201 7, dated March 8, 2018 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.