Entrée Forms Joint Venture with Ivanhoe Mines
July 16, 2008
Vancouver, B.C., July 16, 2008 - Entrée Gold Inc. (TSX:ETG; AMEX:EGI; Frankfurt:EKA – “Entrée” or the “Company”) has been notified by Ivanhoe Mines Ltd. (TSX: IVN; NYSE: IVN; NASDAQ: IVN – “Ivanhoe Mines”) that its subsidiary, Ivanhoe Mines Mongolia Inc. XXK, has incurred expenditures of US$35 million on exploration of the Entrée-Ivanhoe Mines area covered by the 2004 earn-in agreement (the “Earn-In Agreement”). Under the terms of the Earn-In Agreement, once this level of expenditures has been reached, a joint venture is deemed to be formed and the Earn In Agreement will be replaced by a joint venture agreement.
“Ivanhoe Mines has been an outstanding partner, as evidenced by the discovery of the resources at Hugo North Extension and Heruga. These deposits complement their already substantial reserves. We look forward to working with Ivanhoe Mines as our joint venture partner. This will clearly benefit all of our shareholders and the people of Mongolia,” commented Entrée’s President and CEO, Greg Crowe.
Under the original Earn-In Agreement, Ivanhoe Mines was required to spend a minimum of US$20 million in order to earn any interest in the Project Property and could acquire 70% interest in mineralization above a depth of 560 metres and 80% interest in mineralization below a depth of 560 metres by spending US$35 million. Entrée has the right to require Ivanhoe to fund its share of subsequent joint venture costs through to production, to be recovered only from production cash flow. This ensures Entrée cannot be diluted out of its interest due to an inability to finance.
ABOUT ENTRÉE GOLD INC.
Entrée Gold Inc. is a Canadian mineral exploration company focused on the worldwide exploration and development of gold and copper prospects. Most notably, the Company is a large landholder in Mongolia, where it holds three exploration licenses that comprise the 179,590-hectare Lookout Hill property. Lookout Hill completely surrounds the 8,500-hectare Oyu Tolgoi project of Ivanhoe Mines, and hosts the Hugo North Extension of the Hugo Dummett deposit and the newly discovered Heruga deposit.
The Company continues to explore its large landholdings in Mongolia as well as evaluating new opportunities throughout the region and elsewhere in Asia. Entrée plans to explore the Huaixi copper project in Zhejiang Province in China, under the terms of an agreement with the No. 11 Geological Brigade. In North America, the Company is exploring for copper-molybdenum porphyry systems in the southwest USA. The Company is also seeking additional opportunities to utilize its expertise in exploring for deep and/or concealed ore deposits.
Ivanhoe Mines and Rio Tinto are major shareholders of Entrée, holding approximately 15% and 16% of issued and outstanding shares respectively.
|Mona Forster, VP & Corporate Secretary
Entrée Gold Inc.
E-mail: [email protected]
This News Release contains forward-looking statements. Forward-looking statements are statements which relate to future events. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results. Readers are referred to the sections entitled “Risk Factors” in the Company’s periodic filings with the British Columbia Securities Commission, which can be viewed at www.SEDAR.com, and with the United States Securities and Exchange Commission, which can be viewed at www.SEC.gov.