Entree Gold Reports First Resource Estimate for the Blue Hill

Entree Gold Reports First Resource Estimate for the Blue Hill Copper
Deposit, Nevada 
Inferred Resource Contains 277 Million Pounds Near-Surface Oxide
Copper 
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 10/29/12 -- Entree
Gold Inc. (TSX:ETG)(NYSE Amex:EGI)(NYSE MKT:EGI)(FRANKFURT:EKA)
("Entree" or the "Company") reports the first resource estimate for
the Blue Hill copper deposit ("Blue Hill" or the "Deposit"), located
1.5 kilometres northwest of the Ann Mason copper-molybdenum porphyry
deposit. Combined Inferred oxide and mixed resource categories total
72.13 million tonnes ("Mt") averaging 0.17% copper (at a base case
0.10% copper cut-off), or 277.5 million pounds of copper. The
underlying Inferred sulphide resource is estimated to contain 49.86
Mt averaging 0.23% copper at a base case 0.15% copper cut-off.  
Greg Crowe, President and CEO commented, "This first resource
estimate on the Blue Hill Deposit is very encouraging. The near
surface, easily leachable material could enhance the entire Ann Mason
project, through the potential production from copper oxide in the
early stages of Ann Mason development. The copper oxide
mineralization at Blue Hill has not been closed off, and other known
and underexplored areas of oxide mineralization on the project
property could significantly add to the overall tonnage. In addition,
the full extent of the sulphide mineralization underlying the copper
oxide at Blue Hill has not been determined. This preliminary sulphide
resource is based on a limited number of drill holes, and it is our
belief we are dealing with a much larger mineralized system. More
exploration drilling will be required to determine its full extent
and relationship to the nearby Ann Mason deposit. 
"With a positive Preliminary Economic Assessment of our 100% owned
Ann Mason deposit in hand, we are currently evaluating strategic
alternatives in order to advance the Ann Mason project as quickly as
possible in a manner that enhances shareholder value." 
Highlights 


 
--  Initial oxide, mixed and sulphide Inferred resources of (Tables 1 and
    2): 
    --  72.13 Mt averaging 0.17% copper (at a 0.10% copper cut-off) of
        combined oxide and mixed material containing 277.5 million pounds of
        copper; 
    --  49.86 Mt of underlying sulphide material averaging 0.23% copper (at
        a 0.15% copper cut-off) containing 253.5 million pounds of copper. 
--  Oxide and mixed mineralization is acid-soluble and amenable to low-cost
    heap leach and solvent extraction/electrowinning ("SX/EW") processing
    with potentially low strip ratio of waste to mineralized material. 
--  Indicated average acid soluble copper recovery of oxide material is 86%
    and of mixed material is 83% (combined average 85%). 
--  Underlying sulphide porphyry copper mineralization remains open in most
    directions. 

 
The Company prepared the resource estimate as a first step in
determining if Blue Hill could serve to generate early cash flow for
the Ann Mason project (the "Project"), should the Ann Mason deposit
advance to production. The Blue Hill Deposit, as currently defined by
the 0.075% copper shell and the constraining resource pit, underlies
a 900 metre by 450 metre area. Combined oxide and mixed zones range
up to 185 metres in thickness (thinning to the northwest) with the
sulphide zone appearing at an average depth of 160 metres below
surface. Mineralization remains open in several directions.  
Preliminary metallurgy suggests the oxide and mixed copper
mineralization is amenable to low-cost, heap leach and SX/EW
processing. Average copper recovery in the oxide mineralization in
column leach testing is 86%, while the mixed material returned 83%
recovery (refer to News Release dated July 26, 2012). The underlying
sulphide-copper mineralization has only been tested with ten widely
spaced holes and remains open in most directions. 
Pit-constrained resources are reported separately for oxide, mixed
and sulphide copper mineralization.  
The resource estimate was completed by AGP Mining Consultants
("AGP"), an independent Canadian-based consulting company.  
Table 1. Summary of Blue Hill Inferred Mineral Resources, 31 July
2012. 


 
----------------------------------------------------------------------------
                                                     Cu                     
                      Cutoff    Tonnes     Cu  (Million     Mo     Au     Ag
Zone                  (Cu %) (Million)    (%)       lb)    (%)  (g/t)  (g/t)
----------------------------------------------------------------------------
Oxide                   0.10     47.44   0.17    179.37    ---    ---    ---
----------------------------------------------------------------------------
Mixed                   0.10     24.69   0.18     98.12    ---    ---    ---
----------------------------------------------------------------------------
Oxide/Mixed Sub-                                                            
 total                  0.10     72.13   0.17    277.49    ---    ---    ---
----------------------------------------------------------------------------
Sulphide                0.15     49.86   0.23    253.46  0.005   0.01    0.3
----------------------------------------------------------------------------

 
Table 2. Blue Hill Inferred Mineral Resources, 31 July 2012. 


 
----------------------------------------------------------------------------
                                                     Cu                     
                      Cutoff    Tonnes     Cu  (Million     Mo     Au     Ag
Zone                  (Cu %) (Million)    (%)       lb)    (%)  (g/t)  (g/t)
----------------------------------------------------------------------------
Oxide                   0.25      3.33   0.28     20.85    ---    ---    ---
----------------------------------------------------------------------------
                        0.20     12.42   0.24     65.03    ---    ---    ---
----------------------------------------------------------------------------
                        0.15     28.40   0.20    125.55    ---    ---    ---
----------------------------------------------------------------------------
                        0.10     47.44   0.17    179.37    ---    ---    ---
----------------------------------------------------------------------------
Mixed                   0.25      1.30   0.31      8.90    ---    ---    ---
----------------------------------------------------------------------------
                        0.20      7.32   0.24     38.09    ---    ---    ---
----------------------------------------------------------------------------
                        0.15     19.22   0.19     82.35    ---    ---    ---
----------------------------------------------------------------------------
                        0.10     24.69   0.18     98.12    ---    ---    ---
----------------------------------------------------------------------------
Sulphide                0.25     16.59   0.31    111.93  0.007   0.01    0.3
----------------------------------------------------------------------------
                        0.20     29.31   0.27    173.87  0.006   0.01    0.3
----------------------------------------------------------------------------
                        0.15     49.86   0.23    253.46  0.005   0.01    0.3
----------------------------------------------------------------------------
                        0.10     57.82   0.22    276.80  0.004   0.01    0.3
----------------------------------------------------------------------------

 
Resource Notes (Tables 1 and 2): 


 
1.  The mineral resource estimate has an effective date of July 31, 2012 and
    was prepared by M. Waldegger, P. Geo. from AGP. 
2.  Summations within the tables may not agree due to rounding.  
3.  Molybdenum, gold and silver were estimated for the Sulphide only. 
4.  Contained metal values are in-situ and not in consideration of
    metallurgical recoveries. 

 
Technical Discussion 
The current pit-constrained resource was completed by AGP, based on
Entree's recent drilling of 30 reverse circulation ("RC") and core
holes totalling approximately 6,822 metres. In addition, the estimate
incorporates approximately 2,381 metres of RC drilling (7 holes) and
1,057 metres of core drilling (2 holes) completed by PacMag Metals,
and 10 historic Anaconda RC and core holes totalling approximately
2,927 metres. The mineral resource estimate is CIM 2010 compliant and
prepared in accordance with National Instrument 43-101 - Standards of
Disclosure for Mineral Projects ("NI 43-101").  
The key estimation parameters used by AGP for the Blue Hill estimate
are as follows: 


 
--  Domains were modelled in 3D to separate oxide, supergene and primary
    mineralization from surrounding waste rock. The domains were modelled to
    a nominal 0.075% copper cut-off. 
--  High grade outliers in the drill hole assay database were capped to
    0.75% copper prior to compositing. 
--  Drill hole assays were composited to 5 metre lengths interrupted by the
    overall mineralization boundary. 
--  Block grades for copper were estimated from the drill hole composites
    using inverse distance weighted to the second power ("ID2") into 40 x 40
    x 15 metre blocks coded by domain. 
--  Dry bulk density was estimated globally for each domain from drill core
    samples (411 measurements) collected throughout the deposit (268
    measurements in the mineralized wireframes and 143 measurements in the
    waste rock). The oxide and mixed zones were assigned a density of 2.57
    tonnes per cubic metre ("t/m3") and the sulphide zone was assigned a
    density of 2.62 t/m3. 
--  All blocks were classified as Inferred in accordance with CIM
    definitions. 
--  Mineral resources were reported within a Lerchs-Grossman ("LG") pit
    shell, generated by AGP, above a copper cut-off of 0.10% for the oxide
    and mixed zones and 0.15% for the sulphide zone. The general parameters
    of the LG pit are as follows: 
    --  Gross metal values of $3.61/lb copper, $13.50/lb molybdenum,
        $1,100/oz gold and $15/oz silver were used. After adjustment for
        payables, smelting, refining, roasting and transportation charges,
        and transit losses as appropriate, the net metal prices are: 
        a.  $3.32/lb copper for oxide and mixed material; 
        b.  $3.16/lb copper, $12.12/lb molybdenum, $1,057/oz gold, and
            $13.58/oz silver for sulphide material. 
    --  Metallurgical recoveries of: 
        a.  81.7% leachable oxide material (60-day column leach value); 
        b.  75% for leachable mixed material (60-day column leach value); 
        c.  92% copper, 50% molybdenum, 50% gold and 55% silver flotation
            recoveries for sulphide material. 
    --  Mining costs: $1.13/tonne base cost, with an additional $0.17/t for
        oxide material incremental haulage. 
    --  Combined Process and general management and administration ("G&A")
        costs of: 
        a.  $5.06/tonne for oxide and mixed material; 
        b.  $6.22/tonne for sulphide material. 
    --  Pit slopes of 40 degrees in both the overlying volcanic and in the
        mineralized granodiorite. 
--  No assurance can be given that the estimated quantities will be
    produced. All figures have been rounded to reflect accuracy and to
    comply with securities regulatory requirements.  

 
Metallurgy 
As previously reported on July 26, 2012, Metcon Research of Tucson,
Arizona completed column leach testing of four composite samples
comprised of split drill core from the Blue Hill target. Three are
from oxide-style mineralization, with calculated head grades ranging
between 0.13% copper to 0.25% copper. The fourth is from mixed
oxide-sulphide mineralization grading 0.17% copper. The samples were
crushed by Metcon to 80% passing 3/4 inch. From this, 40 kilograms
each were loaded into separate 3 metre by 10 centimetre (10-foot by
four-inch) diameter columns. After a typical agglomeration and a
five-day curing process, the columns were initiated on March 13, 2012
using a flow rate of 7.33 litres/hour/m2 and a sulphuric acid
concentration of 7 grams/litre.  
After a 91 day leach cycle, the columns yielded excellent recoveries,
ranging from approximately 83% in the mixed composite to 87% in the
mid-grade composite. The average recovery of the four composites is
85%. All composites showed very fast recovery rates with the four
columns returning indicated cumulative copper extractions averaging
70% after 15 days of leach cycle. Sulphuric acid consumption in the
four columns ranged between 8.37 kg/kg copper and 15.49 kg/kg/copper
and averaged 11.95 kg/kg copper.  
More conservative estimates of recovery were used for pit
optimization, allowing for scaling from test columns to production
leaching. 
Discussion and Future Work 
Copper oxide and mixed mineralization at Blue Hill extends from
surface to a maximum depth of 185 metres (average approximately 125
metres), over an area of 900 by 450 metres and remains open in
several directions. To the east, oxide and mixed mineralization is
truncated by the low angle Blue Hill Fault, however, underlying
sulphide mineralization continues in this direction. Drilling of the
underlying sulphide target remains very widely-spaced, but has
identified a target area more than one kilometre in width, which
still remains open in most directions. Significant molybdenum
mineralization was also intersected in two of the drill holes
targeting the sulphide mineralization. Most recent drill holes were
targeted to test oxide mineralization; however, two diamond holes
(019 and 021) were drilled east of the oxide copper zone to test
deeper sulphide copper potential. In addition, previously released
hole EG-BH-11-031 (refer to Management's Discussion & Analysis for
the six months ended June 30, 2012) is approximately one kilometre
east of the Deposit. This hole returned a weighted average of 0.28%
copper over 13.8 metres, starting at 22.2 metres depth. Further
drilling will be required in this area and if successful could
provide additional mineralization for a potential SX/EW operation.  
The area between the Ann Mason and Blue Hill deposits has seen some
wide-spaced, mostly shallow drilling and therefore the potential to
host additional sulphide and oxide mineralization remains as a strong
target. South of Ann Mason, recent soil surveying and mapping
indicates potential for near surface oxide copper mineralization that
could be included in an overall study of alternatives to optimize the
Ann Mason Project and reduce the current strip ratio in the Ann Mason
deposit Preliminary Economic Assessment ("PEA") mine design (refer to
News Release dated October 24, 2012).  
RESOURCE ESTIMATE and QUALIFIED PERSONS 
The Blue Hill resource estimate was completed independently by AGP
Mining Consultants Inc. ("AGP"), Toronto. The information in this
news release that relates to the resource estimate was prepared by
Mike Waldegger, P. Geo., Senior Associate Resource Geologist (AGP)
and Lyn Jones, P.Eng., Senior Associate Metallurgist (AGP). 
Robert Cinits, P. Geo., Director, Technical Services with Entree, a
Qualified Person as defined by NI 43-101, approved this news release. 
A NI 43-101 compliant Technical Report, supporting the mineral
resource estimate will be filed on SEDAR. 
All references to "$" in this news release are to United States
currency. 
ABOUT ENTREE GOLD INC.  
Entree Gold Inc. is a Canadian mineral exploration company balancing
opportunity and risk with key assets in Mongolia and Nevada. As a
joint venture partner with a carried interest on a portion of the Oyu
Tolgoi mining complex in Mongolia, Entree Gold has a unique
opportunity to participate in one of the world's largest copper-gold
projects managed by one of the premier mining companies - Rio Tinto.
Oyu Tolgoi, with its series of deposits containing copper, gold and
molybdenum, has been under exploration and development since the late
1990s. Phase 1 is on the verge of production, and Entree Gold could
see first development production from the joint venture ground as
early as 2015.  
In addition to being on the path to production in Mongolia, Entree
Gold has been advancing its Ann Mason Project in one of the world's
most favourable mining jurisdictions, Nevada. The Ann Mason Project
hosts the sizeable Ann Mason copper and molybdenum porphyry deposit
as well as the Blue Hill copper deposit within the rejuvenated
Yerington copper camp. Based on the PEA announced in October, 2012,
the Ann Mason deposit is expected to yield a base case pre-tax, 7.5%
net present value of $1.11 billion and an internal rate of return of
14.8%, using assumed copper, molybdenum, gold and silver prices of
$3.00/lb, $13.50/lb, $1,200/oz and $22/oz, respectively(i).  
Rio Tinto and Turquoise Hill Resources (formerly Ivanhoe Mines) are
major shareholders of Entree, holding approximately 13% and 11% of
issued and outstanding shares, respectively. Rio Tinto, through its
majority ownership of Turquoise Hill Resources, beneficially owns
23.6% of Entree's issued and outstanding shares. 
(i)Readers are cautioned that the PEA on the Ann Mason deposit is
preliminary in nature and includes inferred mineral resources that
are considered too speculative geologically to have the economic
considerations applied to them that would enable them to be
categorized as mineral reserves, and there is no certainty that the
PEA will be realized.  
This News Release contains forward-looking statements and
forward-looking information (together, "forward-looking statements")
within the meaning of applicable securities laws and the United
States Private Securities Litigation Reform Act of 1995, with respect
to the estimation of mineral resources, the realization of mineral
resource estimates, future mineral production, costs of production
and capital expenditures, the availability of project financing,
potential size of a mineralized zone, potential expansion of
mineralization, the timing and results of future resource estimates,
potential type(s) of mining operation, amount or timing of proposed
production figures, potential metallurgical recoveries and grades,
plans for future exploration and/or development programs and budgets,
anticipated business activities, corporate strategies, uses of funds
and future financial performance. In certain cases, forward-looking
statements can be identified by the use of words such as "plans",
"expects" or "does not expect", "is expected", "budget", "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" or "will be taken", "occur" or "be achieved". While
Entree 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 Entree's future
performance and are subject to risks, uncertainties, assumptions and
other factors which could cause actual results to differ materially
from future results expressed or implied by such forward-looking
statements.
Such factors and assumptions include, amongst others, that the size,
grade and continuity of deposits and resource and reserve estimates
have been interpreted correctly from exploration results; that the
results of preliminary test work are indicative of what the results
of future test work will be; that the prices of copper, gold, silver
and molybdenum and foreign exchange rates will remain relatively
stable; the effects of general economic conditions, including
inflation; future actions by Rio Tinto, joint venture partners and
government authorities including the Government of Mongolia; the
availability of capital; that applicable legislation, including
legislation with respect to taxation, will not materially change;
uncertainties associated with legal proceedings and negotiations; and
misjudgements in the course of preparing forward-looking statements.
In addition, there are also known and unknown risk factors which may
cause the actual results, performances or achievements of Entree to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements.
Such factors include, among others, risks related to international
operations, including legal and political risk in Mongolia; recent
global financial conditions; actual results of current exploration
activities; changes in project parametres 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; possible variations in
ore reserves, grade recovery and rates; 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 licences or financing or in the
completion of development or construction activities; environmental
risks; title disputes; limitations on insurance coverage; as well as
those factors described in the Company's Annual Information Form for
the financial year ended December 31, 2011, dated March 29, 2012
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. 
Cautionary Note to U.S. Readers Concerning Estimates of Measured,
Indicated and Inferred Mineral Resources 
The terms "mineral resource", "measured mineral resource", "indicated
mineral resource" and "inferred mineral resource" are defined in and
required to be disclosed by NI 43-101; however, these terms are not
defined terms under the Securities Exchange Commission's Industry
Guide 7 and normally are not permitted to be used in reports and
registration statements filed with the SEC. Investors are cautioned
not to assume that all or any part of mineral deposits in these
categories will ever be converted into reserves. "Inferred mineral
resources" have a great amount of uncertainty as to their existence,
and great uncertainty as to their economic and legal feasibility. It
cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of inferred mineral resources may not form the basis
of feasibility or pre-feasibility studies, except in rare cases. 
Accordingly, information contained in this news release containing
descriptions of our mineral deposits may not be comparable to similar
information made public by U.S. companies subject to the reporting
and disclosure requirements under the United States federal
securities laws and the rules and regulations thereunder.
Contacts:
Entree Gold Inc.
Mona Forster
Executive Vice President
604-687-4777 or Toll Free: 866-368-7330
604-687-4770 (FAX)
mforster@entreegold.com
www.entreegold.com