Entree Gold Announces Fiscal Year 2013 Results and Reviews Corporate Highlights
NEWS RELEASE TRANSMITTED BY Marketwired
FOR: Entree Gold Inc.
TSX SYMBOL: ETG
NYSE MKT SYMBOL: EGI
FRANKFURT SYMBOL: EKA
MARCH 27, 2014
Entree Gold Announces Fiscal Year 2013 Results and Reviews Corporate Highlights
VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 27, 2014) - Entree Gold Inc.
(TSX:ETG)(NYSE MKT:EGI)(FRANKFURT:EKA) ("Entree" or the
"Company") has today filed its annual operational and financial
results for the year ended December 31, 2013. The Company's Annual Report
on Form 20-F has been filed with the SEC, and is available on the Company
website. Shareholders can receive a free hard copy of the Company's
audited Annual Financial Statements upon request. All dollar figures in this
news release are in United States currency unless otherwise noted.
Greg Crowe, President and CEO commented, "With the completion of our
financing in early 2013, Entree substantially added to its treasury, thus
enabling us to focus on growth, rather than simply surviving. During these
challenging economic times, opportunities are created for those companies that
can operate from a position of financial strength. Entree has continued to
focus operationally on our core projects while also assessing other initiatives
that have the potential to deliver long term value to our shareholders."
"Concurrently, we have maintained ongoing dialogue with the Government of
Mongolia in relation to the joint venture property, held in concert with Oyu
Tolgoi LLC, which forms an integral part of the planned underground block cave
operations at Oyu Tolgoi. We continue to advance discussions with the
Government of Mongolia, and, while no definitive agreements have been
finalized, we are continuing to make constructive progress."
Highlights for the year ended December 31, 2013 and subsequent developments
through March 27, 2014 include:
Oyu Tolgoi Project Update
Entree has a carried joint venture interest in two of the Oyu Tolgoi
copper-gold deposits in Mongolia - the Hugo North Extension and the Heruga
deposits. The remaining deposits are held by Entree's joint venture
partner, Oyu Tolgoi LLC ("OTLLC") (66% Turquoise Hill Resources Ltd.;
34% Government of Mongolia). Phase 1 (Southern Oyu open pits) is in commercial
production and Phase 2 (Lift 1 of the underground block cave mining operation,
which includes a portion of the Hugo North Extension deposit) scheduled for
development by Rio Tinto.
-- First ore from the Phase 1 open pits at Oyu Tolgoi was processed through
the concentrator on January 2, 2013 and production of the first copper- gold concentrate followed on January 31, 2013. Turquoise Hill announced
that the first shipment of copper concentrate left the Oyu Tolgoi open
pit mine for customers in China on July 9, 2013.
-- On July 28, 2013, Turquoise Hill announced that funding and development
of the Oyu Tolgoi underground mine will be delayed until outstanding
matters with the Mongolian Government can be resolved and a new
timetable has been agreed. On August 13, 2013, underground development
-- On September 1, 2013, the Oyu Tolgoi mine achieved Commencement of
Production as defined in the October 2009 Investment Agreement
between Turquoise Hill, Rio Tinto, OTLLC and the Government of Mongolia.
-- On October 14, 2013, Turquoise Hill reported that the concentrator was
operating at name-plate capacity of approximately 100,000 tonnes of ore
processed per day. The necessary approvals from Chinese customs
officials to allow customers to collect purchased concentrate were
received in October and a convoy carrying concentrate departed from the
Chinese-border warehouse on October 19, 2013.
-- Turquoise Hill reiterated in March 2014 that the feasibility study for
the expansion of operations at the Oyu Tolgoi mine is ongoing. This
study is expected to be complete within the first half of 2014. Once
complete, it must be approved by OTLLC shareholders as well as the
Mongolian Minerals Council.
-- Turquoise Hill provided an update on discussions with the Government of
Mongolia on March 26, 2014. Negotiations between all parties involved
are continuing with the aim of resolving a number of outstanding
shareholder issues and progressing project financing. Further delays may
occur if the outstanding issues are not resolved before the expiration
of lender commitments on existing project finance arrangements.
Entree - OTLLC Joint Venture
-- On February 27, 2013, notice (the "Notice") was delivered to
the Mineral Resources Authority of Mongolia that the Ministry of Mining
had cancelled the July 10, 2009 Order of the Ministry of Mineral
Resources and Energy registering the Hugo Dummett (including the Hugo
North Extension) and Heruga reserves. The Notice further advises that
any transfer, sale or lease of the Shivee Tolgoi and Javhlant mining
licences is temporarily restricted.
The Company was subsequently advised that the temporary transfer
restriction would be lifted and that the reserves for the joint venture
deposits would stand as originally presented.
-- Entree has been in discussions with stakeholders of the Oyu Tolgoi
project, including the Government of Mongolia, OTLLC, Erdenes Oyu Tolgoi
LLC, Erdenes MGL LLC and Rio Tinto, since the Government of Mongolia
temporarily restricted the joint venture licences from transfer in
February 2013. The discussions to date have focussed on issues arising
from Entree's exclusion from the OTIA, including the fact that the
Government of Mongolia does not have a full 34% interest in the joint
venture property; the fact that the mining licences integral to future
underground operations are held by more than one corporate entity; and
the fact that Entree does not benefit from the stability that it would
otherwise have if it were a party to the 2009 OTIA. Meetings to discuss
possible ways of addressing all parties' concerns in a mutually
satisfactory manner have been positive and constructive. No final
agreements have been reached and further discussions with all
stakeholders are required.
-- An updated mining plan based on reserves only and derived from the
latest OTLLC technical, production and cost data was released by
Turquoise Hill in March 2013. Entree filed a separate technical report
dated March 28, 2013, which discusses the impact of the updated mine
plan on the Entree-OTLLC joint venture property.
Ann Mason, Nevada
The Ann Mason Project is Entree's most advanced project outside of
Mongolia. With the completion of a positive Preliminary Economic Assessment in
late 2012, Entree is now evaluating the most efficient and effective way of
advancing the Ann Mason Project through pre-feasibility and feasibility. Future
programs will also focus on priority exploration targets that could enhance Ann
Mason Project economics. In addition, the Company is considering strategic
partnerships, joint ventures and similar arrangements that would help
facilitate the development of the project.
In the third quarter of 2013, the Company completed a combined core and reverse
circulation ("RC") drilling program. The drilling targeted the Ann
Mason and Blue Hill deposits and new exploration targets located nearby.
Drilling included approximately 4,755 metres of core and RC drilling, of which
3,333 metres were drilled in seven holes at Ann Mason and 1,422 metres were
drilled in 11 holes at Blue Hill.
Drilling results from 2013 enhanced our understanding of the geometry and
potential of the Ann Mason and Blue Hill deposits. Three of the five core holes
drilled at Ann Mason extended copper mineralization 190 metres to 250 metres
northwest and northeast of the deposit and within the current pit design. In
addition, Ann Mason mineralization remains open in several directions and
future drilling programs will be needed to test this potential. Two shallow,
widely-spaced RC holes (totalling 180 metres) were also completed about 500
metres to 900 metres west of Ann Mason to test a new, near-surface oxide copper
target. Holes EG-AM-13-038 and 039 encountered narrow intervals of 0.16% -
0.20% oxide copper within strong, quartz-sericite-pyrite alteration. Deeper
sulphide potential below these holes remains untested.
The 2013 drilling at Blue Hill successfully tested for westward extensions of
the current deposit and also highlighted the structural complexity of the Blue
Hill area. 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 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 (EG-BH-11-019 and -021) were drilled
east of the oxide copper zone to test deeper sulphide copper potential. In
addition, hole EG-BH-11-031, located approximately one kilometre east of Blue
Hill, intersected a near-surface zone of copper-oxide mineralization assaying
an average of 0.28% copper over 13.8 metres from a depth of 22.2 metres.
Further drilling will be required in this area and if successful could provide
additional feed for a potential SX/EW operation.
A program of 31 line kilometres of in-fill induced polarization
("IP") geophysics was completed in June 2013. This work was
successful in better defining the Blackjack IP anomaly and in defining a strong
chargeability feature to the west of Blue Hill. This new chargeability feature
represents a significant expansion of the IP anomaly that contains the Ann
Mason and Blue Hill deposits.
Baseline environmental studies commenced in the second quarter of 2013 and are
continuing. These studies include wildlife, biology, archaeology and cultural
surveys which will be used to expand the area covered under the existing Plan
of Operations. Studies were largely complete at the end of 2013, except for
minor additional cultural and raptor field surveys.
Entree has a conditional agreement with a private Peruvian company whereby
Entree may acquire up to a 100% interest in the Lukkacha property located in
Tacna Province of southeastern Peru. The property is situated within 50
kilometres of the international border with Chile, and initiation of work is
subject to Entree obtaining a Supreme Decree allowing it to work on the
A joint military inspection took place on September 12, 2013 with Entree
personnel accompanying the military team. The military commander submitted a
favourable written opinion to the General Secretary of the Ministry of Defense
on September 15, 2013. The opinion now requires signatures of the Minister of
Defense and Minister of Energy and Mines, and of the President and Prime
The property consists of seven concessions totaling 4,400 hectares which cover
two large areas of surface alteration, iron oxides and quartz veining
indicative of porphyry-style mineralization, located approximately 50
kilometres along the structural trend southeast from the giant Toquepala mining
operation of Grupo Mexico. The property has never been drilled and represents a
unique opportunity for early stage exploration within an under-explored major
The Blue Rose copper-iron-gold-molybdenum joint venture property is located in
the Olary Region of South Australia, 300 kilometres north-northeast of
Adelaide. Magnetite iron formations occur in the southern portion of this 1,000
square kilometre tenement, and a zone of copper oxide mineralization and a gold
target (Golden Sophia) are located in the north-central area of the tenement.
In August 2013, the Company entered into an agreement to transfer the iron ore
rights on the Blue Rose joint venture property and in October 2013, Entree
received A$475,778 as consideration for the transfer of the iron ore rights,
with an additional A$475,778 payable in October 2014.
Other Corporate Highlights
-- A comprehensive financing package with Sandstorm Gold Ltd. was announced
on February 15, 2013. The financing package consisted of three key
-- Equity participation and funding agreement ("Funding Agreement")
with a US$40 million upfront deposit and ongoing payments from
Sandstorm. In return, Entree will use future payments that it
receives from its mineral property interests to purchase and deliver
metal credits, in amounts that are primarily indexed to Entree's
share of gold and silver by-products and, to a lesser extent, copper
production from the Company's joint venture interest in Mongolia.
-- CAD$10 million private placement pursuant to which Entree issued
17,857,142 shares to Sandstorm at a price of CAD$0.56 per share.
-- US$5 million payment for a 0.4% net smelter return royalty on the
Ann Mason and Blue Hill deposits in Nevada.
-- On June 27, 2013, shareholders confirmed an alteration to the
Articles to add advance notice provisions, for the purpose of providing
shareholders, directors and management of Entree with a clear framework
for nominating directors.
-- The Rt. Honourable Lord Howard of Lympne was appointed non-executive
Chairman of the Company's Board of Directors on June 27, 2013. James
Harris was appointed non-executive Deputy Chairman.
-- Lindsay Bottomer retired from his role as Vice President Business
Development with the Company, effective December 31, 2013.
Greg Crowe, President and CEO of Entree, noted, "Lindsay has been an
integral part of Entree's growth over the past 11 years, both in his
capacity as director and as an officer of the Company. His breadth of technical
knowledge and considerable expertise has been invaluable to our team. We are
pleased he has remained on as a director of the Company."
Following Mr. Bottomer's retirement, the Company was pleased to promote
Mr. Robert Cinits to the position of Vice President, Corporate Development with
the Company, effective January 1, 2014.
For the year ended December 31, 2013, the Company incurred a net loss of
US$11,422,025 (US$0.08 per share) compared to a net loss of US$15,196,129
(US$0.12 per share) for the year ended December 31, 2012. The decrease in net
loss is due to lower operating expenditures, primarily from decreased
exploration expenses on the Ann Mason Project. Other factors that contributed
to lower operating expenditures include higher foreign exchange gains and a
decreased loss from the Entree-OTLLC joint venture property. These lower
operating expenditures were partially offset by higher general and
administration and higher consultancy and advisory fees related primarily to
expenditures associated with the Sandstorm financing and ongoing efforts to
resolve Mongolian contractual matters. As at December 31, 2013, the Company had
working capital of US$46,394,496, including cash of US$46,701,216.
SELECTED FINANCIAL INFORMATION
As at December 31, 2013 As at December 31, 2012
Working capital (1) 46,394,496 4,699,256
Total assets 97,395,105 64,173,530
Total long term
liabilities (2) 50,956,860 15,286,041
(1) Working Capital is defined as Current Assets less Current Liabilities.
(2) Increase in long term liabilities primarily due to recording of
Sandstorm $40 million equity participation and funding agreement Deposit as
The Company's Annual Financial Statements, management's discussion
and analysis ("MD&A") and Annual Information Form are available
on the Company website, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Robert Cann, P.Geo., Entree's Vice-President, Exploration, a Qualified
Person as defined by National Instrument 43-101, has approved the technical
information in this release.
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 project
in Mongolia, Entree 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.
Additionally, Entree has been advancing its Ann Mason Project in one of the
world's most favourable mining jurisdictions, Nevada. The Ann Mason
Project hosts the Ann Mason copper-molybdenum deposit as well as the Blue Hill
copper deposit within the rejuvenated Yerington copper camp.
Sandstorm Gold, Rio Tinto and Turquoise Hill Resources are major shareholders
of Entree, holding approximately 12%, 11% and 9% of issued and outstanding
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
Forward-looking statements include, but are not limited to, statements with
respect to future mineral production; the availability of project financing;
the potential impact of future exploration results on Ann Mason mine design and
economics; the potential development of future phases of the Oyu Tolgoi
project, including Lift 1 of the Hugo North Extension deposit; discussions
regarding Entree's interest in the joint venture property, the joint
venture licences and material agreements; potential actions by the Government
of Mongolia with respect to the Shivee Tolgoi and Javhlant mining licences; the
resolution of outstanding issues between the Government of Mongolia, Entree,
Rio Tinto and Turquoise Hill; potential size of a mineralized zone; potential
expansion of mineralization; plans for future exploration and/or development
programs and budgets; anticipated business activities; corporate strategies;
requirements for additional capital; 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
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 and information. 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; the effects of general economic conditions, changing
foreign exchange rates and actions by Rio Tinto, Turquoise Hill and/or OTLLC
and by government authorities including the Government of Mongolia; the impact
of the decision announced by Turquoise Hill to delay the funding and
development of the Oyu Tolgoi underground mine pending resolution of
outstanding issues with the Government of Mongolia and the costs which could
result from delays; 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 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 the governments to foreign investment; risks associated with the
conduct of joint ventures; recent global financial conditions; changes in
project parameters as plans continue to be refined; conclusions of economic
evaluations; future prices 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 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 discussed in the section entitled
"Risk" in the Company's most recently filed Management's
Discussion and Analysis and in the Company's Annual Information Form for
the financial year ended December 31, 2013, dated March 27, 2014 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 and 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 statements and
information will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements and
information. Except as required under applicable securities legislation, the
Company undertakes no obligation to publicly update or revise forward-looking
statements and information, whether as a result of new information, future
events, or otherwise. Accordingly, readers should not place undue reliance on
forward-looking statements and information.
FOR FURTHER INFORMATION PLEASE CONTACT:
Entree Gold Inc.
Manager, Investor Relations
604-687-4777 or Toll Free: 866-368-7330
INDUSTRY: Manufacturing and Production - Mining and Metals
-0- Mar/27/2014 23:32 GMT
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