Entree Gold Provides Update on Oyu Tolgoi Power Purchase Agreement
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/05/12 -- Entree
Gold Inc. (TSX:ETG)(NYSE MKT:EGI)(FRANKFURT:EKA) ("Entree" or the
"Company") is pleased to announce that the power supply deal for the
Oyu Tolgoi mine in Mongolia has been finalized. Turquoise Hill
Resources announced today that Oyu Tolgoi LLC has signed a binding
power purchase agreement with the Inner Mongolia Power Corporation.
This agreement is a critical milestone in the development of the Oyu
Tolgoi mining complex.
Turquoise Hill stated that finalization of the power purchase
agreement will enable Oyu Tolgoi to complete commissioning leading to
the first production of copper-gold concentrate. Oyu Tolgoi is
expected to begin a seven-week commissioning of the ore-processing
equipment within the next few weeks. First concentrate production
will follow within one month and the commencement of commercial
production is expected three to five months later.
Greg Crowe, Entree's President and CEO commented, "On October 9,
2012, Turquoise Hill announced that construction of the power
transmission infrastructure has been completed and the power lines
are ready for use. Conclusion of the power purchase agreement is the
final step to securing the initial supply of electricity to the
nearly-completed mine. Rio Tinto, Turquoise Hill and Oyu Tolgoi LLC
are reportedly on track to bring the first phase of the world-class
Oyu Tolgoi mine into production in the first half of 2013. The
commencement of commercial production from the open pits will be
vital to the further development of Mongolia's economy."
Lift 1 of the Entree-Oyu Tolgoi LLC joint venture's Hugo North
Extension deposit is included in the second phase of development.
Entree has a carried interest in the Hugo North Extension deposit and
the much larger Heruga deposit, both of which form part of the Oyu
Tolgoi mining complex. First development production on the joint
venture property is expected as early as 2015.
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 i
n 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 future mineral production, anticipated business activities,
corporate strategies 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 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, Turquoise Hill
Resources, Oyu Tolgoi LLC 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
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 and
the Company's most recent Management's Discussion and Analysis filed
with the Canadian Securities Administrators and available
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.
Entree Gold Inc.
Executive Vice President
604-687-4777 or Toll Free: 866-368-7330
Press spacebar to pause and continue. Press esc to stop.