Entree Resources Reports Updated Feasibility Study for its Interest in the Entree Oyu Tolgoi Joint Venture Property.
| Date | 16 June 2021 |
| Published date | 16 June 2021 |
ENPNewswire-June 16, 2021--Entree Resources Reports Updated Feasibility Study for its Interest in the Entree Oyu Tolgoi Joint Venture Property
(C)2021 ENPublishing - http://www.enpublishing.co.uk
Release date- 15062021 - VANCOUVER - Entree Resources Ltd. (TSX: ETG) (OTCQB: ERLFF) (the 'Company' or 'Entree') is pleased to announce the results of an updated Feasibility Study that was completed on its interest in the Entree/Oyu Tolgoi joint venture property (the 'Entree/Oyu Tolgoi JV Property').
Entree has a 20% or 30% participating interest (depending on the depth of mineralization) in the joint venture (the 'Entree/Oyu Tolgoi JV') with Oyu Tolgoi LLC ('OTLLC') holding the remaining 80% or 70% interest. The Entree/Oyu Tolgoi JV Property comprises a significant portion of the long-life, high-grade Oyu Tolgoi copper-gold mining project in Mongolia.
Mr. Stephen Scott, Entree's President and CEO comments, 'We are pleased to report updated information that aligns Entree's disclosure with that of other Oyu Tolgoi project stakeholders on development of the first lift of the underground mine. Even more exciting is that, based on OTLLC's 2020 Oyu Tolgoi Feasibility Study, first Lift 1 development production on the Entree/Oyu Tolgoi JV Property is expected to commence in 2022. What has historically seemed like a long way out is very fast becoming a reality. Coincident with receiving first development production, Entree will retain 10% of the available cash flow from the sale of its share of production until its share of joint venture costs is repaid in accordance with the terms of the Joint Venture Agreement. We are also looking forward to completion of Panel 1 optimization studies currently underway that have potential to further improve Lift 1 economics for the Entree/Oyu Tolgoi JV.'
The updated Feasibility Study (the '2021 Reserve Case') is based on mineral reserves attributable to the Entree/Oyu Tolgoi JV from the first lift ('Lift 1') of the Hugo North Extension deposit. Lift 1 of Hugo North (including Hugo North Extension) is currently in development by project operator Rio Tinto as an underground block cave with first development production from Hugo North Extension expected in 2022. By 2030, Oyu Tolgoi is expected to be the fourth largest copper mine in the world. The 2021 Reserve Case aligns the Company's disclosure with that of Turquoise Hill Resources Ltd. ('Turquoise Hill Resources') with respect to OTLLC's 2020 Oyu Tolgoi Feasibility Study ('OTFS20') completed on Hugo North (including Hugo North Extension) Lift 1.
Entree is also reporting the results of a Preliminary Economic Assessment ('2021 PEA') on a conceptual second lift ('Lift 2') of the Hugo North Extension deposit. The 2021 PEA is based on Indicated and Inferred Mineral Resources from Lift 2, as the second potential phase of development and mining on the Hugo North Extension deposit. Lift 2 is directly below Lift 1. There is no overlap in the Mineral Reserves from the 2021 Reserve Case and the Mineral Resources from the 2021 PEA. Development and capital decisions will be required for the eventual development of Lift 2 once production commences at Hugo North Extension Lift 1.
The economic analysis in the 2021 PEA is based on a conceptual mine plan and does not have as high a level of certainty as the 2021 Reserve Case. The 2021 PEA 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 2021 PEA will be realized. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
In both the 2021 Reserve Case and the 2021 PEA, Entree is only reporting the production and cash flows attributable to the Entree/Oyu Tolgoi JV Property, not production and cash flows for other Oyu Tolgoi project areas owned 100% by OTLLC. The production and cash flows from the 2021 Reserve Case and the 2021 PEA are from separate parts of the Hugo North Extension deposit and there is no overlap of the mineralization.
Both the 2021 Reserve Case and the 2021 PEA are based on...
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