VANCOUVER, Aug. 14, 2017 /CNW/ - Entrée Resources Ltd.
(TSX:ETG; NYSE MKT:EGI – the "Company" or "Entrée")
is pleased to report its financial results for the three and six
months ended June 30, 2017.
Details of the Company's second quarter 2017 financial
results are contained in the unaudited consolidated financial
statements and Management's Discussion and Analysis, which are
available on the Company's website at www.EntreeResourcesLtd.com,
on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. All
figures are in US dollars unless otherwise noted.
SECOND QUARTER 2017 HIGHLIGHTS
Entrée/Oyu Tolgoi
JV Property
- Entrée has engaged Amec Foster Wheeler to complete an initial
data review to be followed up by an updated Technical Report which
will include a Preliminary Economic Assessment of the Entrée/Oyu
Tolgoi joint venture's Hugo North Extension Lift 2 and Heruga
deposits. Completion of this Technical Report will be an important
milestone and help investors understand the underlying value of
Entrée's flagship asset.
- As reported by Turquoise Hill Resources Ltd. ("Turquoise Hill")
on July 31, 2017, production from the
underground mine remains on track for first draw bell in mid-2020
and sustainable first production in 2021. Activities reported in Q2
2017 include:
-
- Underground lateral development, sinking of Shafts 2 and 5 and
the convey-to-surface decline system all continued to
progress;
- Underground lateral development made good progress during Q2
with approximately 1.4 equivalent kilometres completed; and
- Shaft 5 sinking progressed approximately 190 metres during Q2
with sinking rates increasing significantly beyond those seen in Q1
2017.
Corporate
- Q2 2017 net loss from continuing operations, was $0.6 million as compared to Q2 2016 ($0.7 million), a reduction of 11% from the
comparative period of 2016.
- As at June 30, 2017, cash on hand
was $7.8 million and a working
capital balance of $7.8 million.
- On June 1, 2017, the Company
re-located its head office in Vancouver as part of the Company's ongoing
effort to reduce expenses
- On May 9, 2017, the Company
completed its strategic reorganization of Entrée's business (the
"Arrangement"). Entrée's U.S. based assets, the Ann Mason Project
and Lordsburg property, were transferred to a newly incorporated
company, Mason Resources Corp. (TSX:MNR – "Mason Resources") and
Entrée shareholders exchanged their old Entrée shares for shares of
two separate and focused, well-capitalized, debt-free TSX-listed
companies, each with a high quality advanced project. The
reorganization provides new and existing shareholders with
optionality as to investment strategy and risk profile.
- On May 9, 2017, the Company
changed its name from Entrée Gold Inc. to Entrée Resources
Ltd.
- On May 9, 2017, the Company
entered into an Administrative Services Agreement with Mason
Resources, pursuant to which Entrée will provide office space,
furnishings and equipment, communications facilities and personnel
necessary for Mason Resources to fulfill its basic day-to-day head
office and executive responsibilities on a pro-rata cost-recovery
basis.
OUTLOOK AND STRATEGY
Entrée/Oyu Tolgoi JV
Property
In Q2 2017, Entrée engaged Amec Foster Wheeler to
complete an initial data review to be followed by an updated
Technical Report which will include a Preliminary Economic
Assessment of the Entrée/Oyu Tolgoi joint venture's Hugo North
Extension Lift 2 and Heruga deposits. The Company estimates the
cost to be approximately $0.5 million
to complete and publish the report.
Development of the Oyu Tolgoi project continues to advance with
the focus on lateral development, sinking of Shafts 2 and 5,
support infrastructure and the convey-to-surface system. Sinking of
Shaft 4, which Entrée expects to commence in 2018 based on the
anticipated completion date, will be the first physical development
on the Entrée/Oyu Tolgoi joint venture property. Turquoise Hill has
previously announced that Shaft 4 should be complete in 2021.
Turquoise Hill and the Company expect first development production
from the Entrée/Oyu Tolgoi joint venture property in approximately
2021.
Management will continue through 2017 to improve the investment
community's understanding of the potential value of Entrée's
interest in the Entrée/Oyu Tolgoi joint venture property.
Corporate
The Company has focused, and will continue
to focus its efforts on conserving cash reserves. Corporate
objectives for 2017 include maximizing the market value of the
Company's assets through restructuring, increasing investor
awareness and cash conservation. Total corporate costs, which
include marketing and compliance costs, remain estimated to be
between $1.6 million and $1.8 million
for the 2017 year.
QUALIFIED PERSON
Robert Cinits, P.Geo., Entrée's Vice
President, Corporate Development, a Qualified Person as defined by
National Instrument 43-101, has approved the technical information
in this release.
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. The Entrée/Oyu Tolgoi
joint venture property includes the Hugo North Extension and Heruga
copper-gold deposits, as well as a large underexplored, highly
prospective land package. Rio Tinto is managing the construction of
Lift 1 of the Hugo North underground block cave on both the Oyu
Tolgoi mining license and the Entrée/Oyu Tolgoi joint venture
property. Lift 1 underground development is fully financed. 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 from the Entrée/Oyu Tolgoi joint venture
property. Sandstorm Gold Ltd., Rio Tinto and Turquoise Hill
Resources Ltd. are major shareholders of Entrée, holding
approximately 14%, 10% and 8% of the shares of the Company,
respectively. More information about Entrée can be found at
www.EntreeResourcesLtd.com.
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; requirements for additional
capital; uses of funds; the value and potential value of assets and
the ability of Entrée to maximize returns to shareholders;
anticipated future production, capital and operating costs, cash
flows and mine life; completion of an updated Technical Report that
includes a Preliminary Economic Assessment of Entrée's interest in
Lift 2 of the Hugo North Extension deposit and the Heruga deposit;
the expected timing of first physical development on the Entrée/Oyu
Tolgoi joint venture property; the expected timing for completion
of Shaft 4; the expected timing of first development production
from Lift 1 of the Hugo North Extension deposit; construction and
continued development of the Oyu Tolgoi underground mine;
anticipated business activities; proposed acquisitions and
dispositions of assets; and future financial performance.
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, legal proceedings and negotiations and the
environment in which the Company will operate in the future,
including the price of copper, gold and silver, and the status of
the Company's relationship and interaction with the Government of
Mongolia, Oyu Tolgoi LLC
("OTLLC"), Rio Tinto and Turquoise Hill Resources. 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 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 term power source for the Oyu
Tolgoi underground mine; the ability of OTLLC to 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 from
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
future results expressed or implied by forward-looking statements
and information include, amongst others, unanticipated costs,
expenses or liabilities; discrepancies between actual 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; fluctuations in commodity prices and demand; changing
foreign exchange rates; actions by Rio Tinto, Turquoise Hill and/or
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 government approvals, consents and permits;
the availability and cost of necessary items such as power, water,
skilled labour, transportation and appropriate smelting and
refining arrangements; 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
the Company 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 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; discrepancies between actual
and anticipated production, mineral reserves and resources and
metallurgical recoveries; global financial 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 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 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 Management's
Discussion and Analysis and in the Company's Annual Information
Form for the financial year ended December
31, 2016, dated March 10, 2017
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.
SOURCE Entrée Resources