Entrée reports updated feasibility for its interest in JV with Oyu Tolgoi
(Kitco News) - Entrée Resources (TSX: ETG) today announced the results of an updated feasibility study that was completed on its interest in the Entrée/Oyu Tolgoi joint venture property, which comprises a significant portion of the long-life, high-grade Oyu Tolgoi copper-gold mining project in Mongolia.
Entrée has a 20% or 30% participating interest (depending on the depth of mineralization) in the joint venture with Oyu Tolgoi LLC ("OTLLC") holding the remaining 80% or 70% interest.
According to the report, Hugo North Extension Lift 1 Updated Reserve Case After-Tax NPV(8%) is $114 million and Hugo North Extension Lift 2 Preliminary Economic Assessment After-Tax NPV(8%) is $306 million.
The company said that first development production from Hugo North Extension Lift 1 expected in 2022. There is significant leverage to copper price as Reserve Case and Preliminary Economic Assessment use $3.25/lb copper, the company added.
The mineral deposits on the Entrée/Oyu Tolgoi joint venture property will be developed, operated and processed by Rio Tinto on behalf of OTLLC, the manager of the Entrée/Oyu Tolgoi JV.
The company noted that coincident with receiving first development production, Entrée 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.
Entrée Resources is a 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. Sandstorm Gold, Rio Tinto and Turquoise Hill Resources are major shareholders of Entrée, holding approximately 24%, 9% and 8% of the shares of the company, respectively.