VANCOUVER, May 14, 2019 /PRNewswire/ - Entrée
Resources Ltd. (TSX:ETG; NYSE American:EGI – the
"Company" or "Entrée") has today filed its
interim financial results for the first quarter ended March 31, 2019. All numbers are in U.S. dollars
unless otherwise noted.
Q1 2019 HIGHLIGHTS
Entrée/Oyu Tolgoi JV Property – Mongolia
The Oyu Tolgoi project in
Mongolia includes two separate
land holdings: the Oyu Tolgoi mining licence, which is held by
Entrée's joint venture partner Oyu Tolgoi LLC ("OTLLC") and
the Entrée/Oyu Tolgoi JV Property, which is a partnership between
Entrée and OTLLC. On April 15, 2019,
Turquoise Hill Resources Ltd. ("Turquoise Hill") provided an
update on underground development on the Oyu Tolgoi mining
licence:
- During the first quarter of 2019, work continued on critical
Shaft 2 equipping activities, central heating plant, mine
infrastructure, underground materials handling systems and on
priority underground development. Pre-sinking works for Shaft 3 and
Shaft 4 have also commenced.
- Rio Tinto International Holdings Ltd. ("Rio Tinto"), as
project manager, has advised Turquoise Hill that the fit-out and
commissioning work on Shaft 2 (the main production and services
shaft) is now expected to be completed by the end of October 2019.
- As previously announced by Turquoise Hill, more detailed
geotechnical information and different ground conditions have
required a review of the mine design and the development schedule.
The impact of these changes, including the further delay to Shaft
2, will be included in the definitive estimate review, which is
expected to be completed towards the end of 2019. Turquoise Hill
will also explore potential mitigation options.
Entrée is not currently aware of any expected delays to
development production or initial block cave production from the
first lift (Lift 1) of the Hugo North Extension deposit on the
Entrée/Oyu Tolgoi JV Property resulting from delays to individual
activities at the Oyu Tolgoi project. Entrée will evaluate any
information made available to it by Rio Tinto or OTLLC and will
update the market accordingly.
Corporate
- During Q1 2019, the Company disposed of all its investment in
Anglo Pacific Group PLC common shares for net proceeds of
$1.0 million and realized a
$0.1 million gain.
- Q1 2019 operating loss was $0.4
million compared to an operating loss of $0.5 million in Q1 2018. The 20% reduction
was related to lower administrative costs in Q1 2019.
- Q1 2019 operating cash outflow after working capital was
$0.7 million compared to a
$0.2 million operating cash outflow
in Q1 2018 and, as at March 31, 2019,
cash and short-term investments balance was $6.5 million. The working capital balance
as at March 31, 2019 was $6.4 million.
OUTLOOK AND STRATEGY
The Company's primary objectives for the 2019 year continue to
include:
- Continuing constructive discussions with the Government of
Mongolia; and
- Working with other Oyu Tolgoi stakeholders to advance potential
amendments to the joint venture agreement (the "Entrée/Oyu
Tolgoi JVA") that currently governs the relationship between
Entrée and OTLLC. The form of Entrée/Oyu Tolgoi JVA was
agreed between the parties in 2004, prior to the execution of the
Oyu Tolgoi Investment Agreement and commencement of underground
development. The Company believes that amendments that align the
interests of all stakeholders as they are now understood, would be
in the best interests of the Company and its shareholders provided
there is no net erosion of value to Entrée. No agreements have been
finalized and there are no assurances agreements may be finalized
in the future.
Corporate costs, which include Mongolian site management and
compliance costs, remain estimated between $1.2 million and $1.5
million for the full 2019 year. The Company continues to
focus its efforts on conserving cash reserves and remaining prudent
with its expenditures.
The Company's interim financial statements and Management's
Discussion and Analysis ("MD&A") for the first quarter
ended March 31, 2019 are available on
the Company's website at www.EntreeResourcesLtd.com, on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov.
QUALIFIED PERSON
Robert Cinits, P.Geo., consultant to
Entrée and the Company's former Vice President, Corporate
Development, and a Qualified Person as defined by National
Instrument 43-101 – Standards of Disclosure for Mineral
Projects, has approved the technical information in this
release. For further information on the
Entrée/Oyu Tolgoi JV Property, see the Company's Technical Report,
titled "Entrée/Oyu Tolgoi Joint Venture Project, Mongolia, NI 43-101 Technical Report", with an
effective date of January 15, 2018,
available on SEDAR at www.sedar.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% or 30% carried participating
interest in the Entrée/Oyu Tolgoi joint venture, depending on the
depth of mineralization. Sandstorm Gold Ltd., Rio Tinto and
Turquoise Hill are major shareholders of Entrée, holding
approximately 16%, 9% 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; uses of funds and
projected expenditures; construction and continued development of
the Oyu Tolgoi underground mine; the expected timing of first
development production from Lift 1 of the Entrée/Oyu Tolgoi JV
Property; potential production delays and the impact of such
delays; discussions with the Government of Mongolia, Rio Tinto, OTLLC and Turquoise Hill
on a range of issues including Entrée's interest in the Entrée/Oyu
Tolgoi JV Property, the Shivee Tolgoi and Javhlant mining licences
and certain material agreements; anticipated business activities;
and future financial performance.
In certain cases, forward-looking statements and information
can be identified by 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, projected grades, 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, OTLLC, Rio Tinto and
Turquoise Hill. 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
domestic power source for Oyu Tolgoi (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 from delays, in the development of
the underground mine; projected copper, gold and silver prices and
their market demand; and production estimates and the anticipated
yearly production of copper, gold and silver at Oyu Tolgoi.
Other risks, uncertainties and factors which could cause
actual results, performance or achievements of Entrée to differ
materially from future results, performance or achievements
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;
development plans for processing resources; matters relating to
proposed exploration or expansion; mining operational and
development risks, including geotechnical risks and ground
conditions; regulatory restrictions (including environmental
regulatory restrictions and liability); 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; inability to
upgrade Inferred mineral resources to Indicated or Measured mineral
resources; inability to convert mineral resources to mineral
reserves; conclusions of economic evaluations; fluctuations in
commodity prices and demand; changing foreign exchange rates; the
speculative nature of mineral exploration; the global economic
climate; dilution; share price volatility; activities, actions or
assessments by Rio Tinto, Turquoise Hill 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 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 estimates and financial
analyses; changes to assumptions as to salvage values; ability to
maintain the social licence to operate; accidents, labour disputes
and other risks of the mining industry; environmental risks; global
climate change; title disputes; limitations on insurance coverage;
competition; loss of key employees; cyber security incidents;
misjudgements in the course of preparing forward-looking
statements; 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, 2018, dated March 29, 2019 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.
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SOURCE Entrée Resources