Reserve and Resource Estimates

The Entrée/Oyu Tolgoi JV Property mineral reserve is contained within the Hugo North Extension Lift 1 block cave, included in the current phase of Oyu Tolgoi underground mine development. The mineral reserve estimate is reported in "Lookout Hill Feasibility Study Update" (LHTR16) dated March 29, 2016, prepared for Entrée by OreWin Pty Ltd (OreWin). The Entrée/Oyu Tolgoi JV Property mineral reserve will be mined as part of the Oyu Tolgoi project and as such is a subset of the total Oyu Tolgoi mineral reserves reported in Turquoise Hill Resource’s technical report titled "Oyu Tolgoi 2014 Technical Report" (2014 OTTR), which was filed in October, 2014. 2014 OTTR assumes processing of 1.5 billion tonnes of ore, mined from OTLLC’s Oyu (and Southern Oyu) open pit and from Lift 1 of the Hugo North (including Hugo North Extension) block cave. Lift 1 of Hugo North (including Hugo North Extension) is the most significant value driver for the Oyu Tolgoi project.

The reserve was prepared by Bernard Peters, B. Eng. (Mining), FAusIMM, Technical Director – Mining for OreWin. Mineral reserves are classified in accordance with the CIM Definition Standards for Mineral Resources and Mineral Reserves and prepared in accordance with NI 43-101.

Entrée/Oyu Tolgoi JV Property - LHTR16 Mineral Reserve
Hugo North Extension Lift 1, Effective 20 September 2014

Classification

Ore

NSR

Cu

Au

Ag

Recovered Metal

(Mt)

($/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. Entrée has a 20% interest in the reported mineral reserve.
  2. Metal prices used for calculating the Hugo North Extension underground Net Smelter Return (NSR) are as follows: copper at $3.01/lb; gold at $1,250/oz; and silver at $20.37/oz, all based on long-term metal price forecasts at the beginning of the mineral reserve work. The analysis indicates that the mineral reserve is still valid at these metal prices.
  3. The NSR has been calculated with assumptions specific to Hugo North Extension for smelter refining and treatment charges, deductions and payment terms, concentrate transport, metallurgical recoveries and royalties.
  4. The block cave shell was defined using a NSR cut-off of $15/t NSR.
  5. For the underground block cave, all mineral resources within the shell have been converted to mineral reserves, however, low-grade Indicated mineral resources and Inferred mineral resources have been assigned a zero grade and are treated as dilution.
  6. Only Indicated mineral resources were used to report Probable mineral reserves.
  7. The base case financial analysis has been prepared using the following current long-term metal price estimates: copper at $3.08/lb; gold at $1,304/oz; and silver at $21.46/oz.
  8. The mineral reserves reported above are not additive to the mineral resources.
  9. “$” means United States Dollars.

The Entrée/Oyu Tolgoi JV has significant mineral resources in the Hugo North Extension and Heruga deposits. Mineral resource estimates are reported in "Lookout Hill Feasibility Study Update" (LHTR16) dated March 29, 2016, prepared for Entrée by OreWin Pty Ltd (OreWin). The mineral resource estimate for the Hugo North Extension deposit is effective as of March 28, 2014 and is based on drilling completed to February 14, 2014. The effective date for the Heruga mineral resource is March 30, 2010 and is based on drilling completed to June 21, 2009.

The mineral resources were classified in a manner consistent with the CIM Definition Standards required by National Instrument 43-101 - Standards of Disclosure for Mineral Projects. Mineral resources are not mineral reserves until they have demonstrated economic viability based on a feasibility study or prefeasibility study. Sharron Sylvester, B.Sc (geology), RPGeo AIG (10125), employed by OreWin as Technical Director – Geology, was responsible for the preparation of the mineral resources.

Entrée/Oyu Tolgoi JV Property - LHTR16 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)

CuEq

(Mlb)

Hugo North Extension (>0.37% CuEq Cut-Off)

Measured

1.2

1.38

0.12

2.77

38.4

1.47

36

4.4

105

0.1

38

Indicated

128

1.65

0.55

4.12

33.6

1.99

4,663

2,271

16,988

9.5

5,633

Inferred

179

0.99

0.34

2.68

25.4

1.20

3,887

1,963

15,418

10.0

4,730

Heruga (>0.37% CuEq Cut-Off)

Inferred

1,700

0.39

0.37

1.39

113.2

0.64

14,610

20,428

75,955

424

24,061

  1. Entrée has a 20% interest in mineralization extracted from the Hugo North Extension and Heruga deposits.
  2. “CuEq” is copper-equivalent grade, expressed in percent.
  3. The effective date for the Hugo North Extension resource estimate is March 28, 2014; for Heruga the effective date is March 30, 2010.
  4. The 0.37% CuEq cut-off is equivalent to the underground mineral reserve cut-off as determined by OTLLC.
  5. CuEq has been calculated using assumed metal prices ($3.01/lb for copper, $1,250/oz for gold, $20.37/oz for silver, and $11.90/lb for molybdenum).
    1. Hugo North Extension CuEq% = Cu% + (( Au (g/t) x 1,250 x 0.0321507 x 0.913) + ( Ag (g/t) x 20.37 x 0.0321507 x 0. 942)) / (3.01 x 22.0462)
    2. Heruga CuEq% = Cu% + (( Au (g/t) x 1,250 x 0.0321507 x 0.911) + ( Ag (g/t) x 20.37 x 0.0321507 x 0. 949) + (Mo (ppm) x 11.9 x 0.0022046 x 0.736)) / (3.01 x 22.0462)
  6. The contained copper, gold, copper, silver, and molybdenum in the tables have not been adjusted for metallurgical recovery.
  7. Totals may not match due to rounding.
  8. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
  9. “$” means United States Dollars.

Last updated: April 2017