Entrée Gold Encouraged by Ivanhoe Minesâ€™ Agreement in Principle
April 10, 2007
Vancouver, B.C., Tuesday, April 10, 2007 - Entrée Gold Inc. (TSX: ETG; AMEX:EGI; Frankfurt: EKA - "Entrée" or the "Company") learned today that Ivanhoe Mines Ltd. (TSX:IVN; NYSE:IVN; NASDAQ:IVN – “Ivanhoe”) and its strategic partner, Rio Tinto (NYSE:RTP; LSX:RIO; ASX:RIO – “Rio Tinto”), had reached an agreement in principle with the Mongolian Government’s Working Group regarding the draft Investment Agreement for the development of Oyu Tolgoi.
“Entrée is particularly interested in this latest development, as our Lookout Hill project has been confirmed to host the extension of the Hugo Dummett Deposit at Oyu Tolgoi. The successful resolution of the Investment Agreement is tied to the future development of the region, including Lookout Hill,” stated Greg Crowe, President and CEO of Entrée. “Ivanhoe and Rio Tinto are major shareholders in Entrée and we feel the successful conclusion to these negotiations will benefit all parties. We further believe that ratification of the Investment Agreement will be a positive step forward, not only for mineral resource companies working in the country but also for the people of Mongolia.”
Ivanhoe clearly stated that the draft agreement is still subject to review and approval by the Mongolian Government, as well as the boards for Ivanhoe and Rio Tinto.
ABOUT ENTRÉE GOLD INC.
Entrée Gold Inc. (www.entreegold.com) is a Canadian mineral exploration company focused on gold and copper prospects. The Company is a large landholder in Mongolia and has an option to acquire an early-stage copper porphyry project in Arizona, USA.
Entrée holds a 100% interest in mineral concessions that comprise the 179,590-hectare Lookout Hill (Shivee Tolgoi) property, which completely surrounds the 8,500-hectare Turquoise Hill (Oyu Tolgoi) project of Ivanhoe Mines Ltd. (“Ivanhoe”), and hosts the Hugo North Extension of the Hugo Dummett Deposit.
Lookout Hill Earn-in Agreement and Hugo North Extension
Under an “Earn-In Agreement” announced in October 2004, Ivanhoe has the right to earn an interest in approximately 40,000 hectares of Entrée’s Lookout Hill property. Details of the Earn-In Agreement are available on Entrée’s website at www.entreegold.com and on SEDAR at www.sedar.com. The Hugo North Extension on Lookout Hill, identified through drilling conducted by Ivanhoe as part of the Earn-In Agreement, contains an indicated resource of 117 million tonnes averaging 1.8% copper and 0.61 grams per tonne (g/t) gold for a copper equivalent grade of 2.19%. The contained metal in this Indicated Resource is estimated at 4.6 billion pounds of copper and 2.3 million ounces of gold. An additional Inferred Resource for this area is estimated at 95.5 million tonnes grading 1.15% copper and 0.31 g/t gold for a copper equivalent grade of 1.35%, containing 2.4 billion pounds of copper and 950,000 ounces of gold. Both the Indicated and Inferred Resources use a 0.6% copper equivalent cut-off grade. No consideration was made for metallurgical recoveries. (See the Company news release from March 29, 2007).
Rio Tinto and Ivanhoe Investment in Entrée
Significant investments by Rio Tinto and Ivanhoe have contributed to Entrée’s treasury, which currently exceeds CDN$16 million. Entrée plans to use these funds to explore its wholly owned projects in Mongolia and Arizona, and to acquire and explore new projects globally. Ivanhoe and Rio Tinto are the largest shareholders of Entrée, holding approximately 15% and 9% of Entrée’s issued shares, respectively. They have the option to increase their positions to approximately 16% each, by exercising warrants at C$2.75 per share and C$3.00 per share.
Rio Tinto Investment in Ivanhoe
On October 18, 2006, Rio Tinto announced its plans to invest up to US$1.5 billion to acquire a 33.35% equity interest in Ivanhoe, for the purpose of funding the joint development of the Oyu Tolgoi copper-gold project in Mongolia. This is a major vote of confidence by one of the world’s pre-eminent mining companies in both the Oyu Tolgoi project and in Mongolia. Ivanhoe now has a strategic partner with sufficient capital resources to take the world’s richest porphyry copper-gold project to production.
Rio Tinto has also announced that it intends to join Ivanhoe in negotiations with the Mongolian government for a long-term investment agreement. Such an agreement would provide the basis for the financing and development of Oyu Tolgoi. The Mongolian Government appointed a “working group” in September 2006 to work with Ivanhoe for the preparation of an agreement for submission to the Mongolian government’s cabinet.
Entrée common shares trade on the TSX under the symbol “ETG”, on the AMEX under the symbol “EGI” and on the Frankfurt Stock Exchange under the symbol “EKA”.
Monica Hamm, Investor Relations
Entrée Gold Inc.
E-mail: [email protected]
Email: [email protected]
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