Entree Gold announces fiscal year 2013 results


Canadian miner Entree Gold Inc. filed its annual operational and financial results last week for the year ended December 31, 2013.
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.”
He added, “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.”

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, owned 66 percent by Turquoise Hill Resources and 34 percent by the Government of Mongolia. Phase 1, or the southern Oyu open pits, is in commercial production and Phase 2, the underground block cave mining operation, which includes a portion of the Hugo North Extension deposit, is 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 was suspended.
On September 1, 2013, the Oyu Tolgoi mine achieved commencement of roduction as defined in the October 2009 investment agreement between Turquoise Hill, Rio Tinto, Oyu Tolgoi LLC 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 tons 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 Oyu Tolgoi LLC shareholders as well as the Mongolian Minerals Council.

Discussions with the government of Mongolia

Turquoise Hill said last week that the company, Rio Tinto and the Government of Mongolia continue to work together with the aim of resolving outstanding shareholder issues and finalizing project finance for further development of the underground mine at Oyu Tolgoi. “Progress is being made and some matters have been resolved. All parties remain committed to further development of Oyu Tolgoi,” the company said.
“While discussions remain constructive, it may not be possible to resolve the shareholder issues until the underground feasibility study has been completed, reviewed and approved by all parties and all necessary permits have been received. The feasibility study is expected to be completed in the first half of 2014.”
According to Turquoise Hill, if agreement on outstanding shareholder issues is deferred until after the completion and approval of the feasibility study, the project finance will not be able to be closed prior to the current expiry of the lender commitments on March 31, 2014. In this event, the shareholders will consider requesting an extension of the commitments from the project finance lenders and finalization of the Oyu Tolgoi project financing may be deferred to the second half of 2014.

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