Reserve and Resource Estimates

The Entrée/Oyu Tolgoi JV Property mineral reserve estimate for the Hugo North Extension deposit has an effective date of January 15, 2018.

Entrée/Oyu Tolgoi JV Property mineral reserves are contained within the Hugo North Extension Lift 1 block cave mining plan (see table below). The mine design work on Hugo North Lift 1, including the Hugo North Extension, was prepared by OTLLC. The mineral reserve estimate is based on what is deemed minable when considering factors such as the footprint cut-off grade, the draw column shut-off grade, maximum height of draw, consideration of planned dilution and internal waste rock.

The mineral reserve estimate only considers mineral resources in the Indicated category and engineering that has been carried out to a feasibility level or better to state the underground mineral reserve. There is no Measured mineral resource currently estimated within the Hugo North Extension deposit. Copper and gold grades for the Inferred mineral resources within the block cave shell were set to zero and such material was assumed to be dilution. The block cave shell was defined by a US$17.00/t net smelter return ("NSR"). Future mine planning studies may examine lower shut-offs. 

Hugo North Extension Mineral Reserves Statement

Entrée/Oyu Tolgoi JV Property – Mineral Reserve
Hugo North Extension Lift 1
Classification Tonnage NSR Cu Au Ag Recovered Metal
(Mt) (US$/t) (%) (g/t) (g/t) Cu (Mlb) Au (Koz) (Ag(Koz)
Probable 35 100.57 1.59 0.55 3.72 1,121 519 3,591
  1. Mineral reserves have an effective date of January 15, 2018. Mr Ian Loomis, P. E., an Amec Foster Wheeler employee, is the Qualified Person responsible for the mineral reserve estimate.
  2. For the underground block cave, all mineral resources within the shell has been converted to mineral reserves. This includes low-grade Indicated mineral resources and Inferred mineral resource assigned zero grade that is treated as dilution.
  3. A footprint cut-off NSR of US$46.00/t and column height shut-off NSR of US$17.00/t were used to define the footprint and column heights. An average dilution entry point of 60% of the column height was used.
  4. The NSR was calculated with assumptions for smelter refining and treatment charges, deductions and payment terms, concentrate transport, metallurgical recoveries, and royalties using base data template 31. Metallurgical assumptions in the NSR include recoveries of 90.6% for Cu, 82.3% for Au, and 87.3% for Ag.
  5. Mineral reserves are reported on a 100% basis. OTLLC has a participating interest of 80%, and Entrée has a participating interest of 20%. Notwithstanding the foregoing, in respect of products extracted from the Entrée/Oyu Tolgoi JV Property pursuant to mining carried out at depths from surface to 560 m below surface, the participating interest of OTLLC is 70% and the participating interest of Entrée is 30%.
  6. Figures have been rounded as required by reporting guidelines, and may result in apparent summation differences.

The Entrée/Oyu Tolgoi JV has significant mineral resources in the Hugo North Extension and Heruga deposits.

The Entrée/Oyu Tolgoi JV mineral resource estimate for the Heruga deposit has an effective date of January 15, 2018. The mineral resource model and the mineral resource estimate have not changed since March 30, 2010, the effective date of the previous mineral resource estimate completed by Entrée/Oyu Tolgoi.

Entrée/Oyu Tolgoi JV Property Mineral Resources

Entrée/Oyu Tolgoi JV Property –  Mineral Resources
Classification Tonnage

 

(Mt)

Cu

 

(%)

Au

 

(g/t)

Ag

 

(g/t)

Mo

 

(ppm)

CuEq

 

(%)

Contained Metal
Cu

 

(Mlb)

Au

 

(Koz)

Ag

 

(Koz)

Mo

 

(Mlb)

Hugo North Extension (>0.37% CuEq Cut-Off)
Indicated 122 1.68 0.57 4.21 ___ 2.03 4,515 2,200 16,500 ___
Inferred 174 1.00 0.35 2.73 ___ 1.21 3,828 2,000 15,200 ___
Heruga (>0.37% CuEq Cut-Off)
Inferred 1,700 0.39 0.37 1.39 113.2 0.64 14,604 20,410 75,932 424
  1. Mineral resources have an effective date of January 15, 2018. Mr Peter Oshust, P. Geo, an Amec Foster Wheeler employee, is the Qualified Person responsible for the mineral resource estimate.
  2. Mineral resources are reported inclusive of the mineral resources converted to mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
  3. Mineral resources are constrained within three-dimensional shapes and above a CuEq grade. The CuEq formula was developed in 2016, and is CuEq16 = Cu + ((Au*AuRev) + (Ag*AgRev) + (Mo*MoRev)) ÷ CuRev; where CuRev = (3.01*22.0462); AuRev = (1250/31.103477*RecAu); AgRev = (20.37/31.103477*RecAg); MoRev = (11.90*0.00220462*RecMo); RecAu = Au recovery/Cu recovery; RecAg = Ag recovery/Cu recovery; RecMo = Mo recovery/Cu recovery.  Differential metallurgical recoveries were taken into account when calculating the copper equivalency formula. The metallurgical recovery relationships are complex and relate both to grade and Cu:S ratios. The assumed metal prices are US$3.01/lb for copper, US$1,250.00/oz for gold, US$20.37/oz for silver, and US$11.90/lb for molybdenum. Molybdenum grades are only considered high enough to support potential construction of a molybdenum recovery circuit at Heruga, and hence the recoveries of molybdenum are zeroed out for Hugo North Extension. A net smelter return (NSR) of US$15.34/t would be required to cover costs of US$8.00/t for mining, US$5.53/t for processing, and US$1.81/t for G&A. This translates to a CuEq break-even underground cut-off grade of approximately 0.37% CuEq for Hugo North Extension mineralization.
  4. Considerations for reasonable prospects for eventual economic extraction for Hugo North included an underground resource-constraining shape that was prepared on vertical sections using economic criteria that would pay for primary and secondary development, block-cave mining, ventilation, tramming, hoisting, processing, and general and administrative ("G&A") costs. A primary and secondary development cost of US$8.00/t and a mining, process, and G&A cost of US$12.45/t were used to delineate the constraining shape cut-off. Inferred resources at Heruga have been constrained using a CuEq cut-off of 0.37%.
  5. Mineral resources are stated as in situ with no consideration for planned or unplanned external mining dilution. The contained copper, gold, and silver estimates in the mineral resource table have not been adjusted for metallurgical recoveries.
  6. Mineral resources are reported on a 100% basis. OTLLC has a participating interest of 80%, and Entrée has a participating interest of 20%. Notwithstanding the foregoing, in respect of products extracted from the Entrée/Oyu Tolgoi JV Property pursuant to mining carried out at depths from surface to 560 m below surface, the participating interest of OTLLC is 70% and the participating interest of Entrée is 30%.
  7. Figures have been rounded as required by reporting guidelines, and may result in apparent summation differences.

The mineral resource estimates and models were reviewed by Peter Oshust, P.Geo., Principal Geologist of Amec Foster Wheeler who is a Qualified Person for the purposes of NI 43-101 and who is independent of the Company. Mr. Oshust concludes that the mineral resource estimates were prepared in accordance with the May 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves and will support mine planning.

Last updated: January 2018