Entrée Resources Announces Second Quarter 2025 Results
VANCOUVER, British Columbia, Aug. 14, 2025 (GLOBE NEWSWIRE) -- Entrée Resources Ltd. (TSX:ETG; OTCQB:ERLFF, the "Company" or "Entrée"), (TSX:ETG; OTCQB:ERLFF, the "Company" or "Entrée") has today filed its interim financial results for the second quarter ended June 30, 2025. All numbers are in U.S. dollars unless otherwise noted.
Q2 2025 HIGHLIGHTS Entrée/Oyu Tolgoi Joint Venture Mining Licences
The Joint Venture Agreement between the Company and Oyu Tolgoi LLC ("OTLLC"), with an effective date of June 30, 2008, as amended on February 3, 2025 (the "Entrée/Oyu Tolgoi JVA"), requires OTLLC, as Manager, to hold title to the Shivee Tolgoi and Javkhlant mining licences (the "Licences") on behalf of the joint venture ("Entrée/Oyu Tolgoi JV") participants.
In February 2025, OTLLC and Entrée's wholly owned subsidiary Entrée LLC duly executed and lodged License Transfer Agreements (the "License Transfer Agreements") and supporting documentation with the Mongolian tax authority (the "MTA") for the assessment of tax on the transfer of the Licences in accordance with applicable laws of Mongolia. The calculations of the values of the Licences for corporate income tax purposes must be confirmed by the MTA and taxes assessed and paid before the documentation necessary to affect the transfer of the Licences may be submitted to the Mineral Resources and Petroleum Authority of Mongolia ("MRPAM") for registration.
During the second quarter 2025, the Company and OTLLC actively engaged with the MTA and provided all materials necessary for the MTA to confirm the calculations of the values of the Licences in accordance with applicable laws of Mongolia. On August 1, 2025, Entrée LLC filed a claim with the Administrative Court of Mongolia seeking an order for the MTA to review and provide confirmation of the calculations of the values of the Licences. See "Outlook and Strategy" below.
State Interest in Area of Licences
On April 9, 2025, the Government of Mongolia adopted Resolution No. 170, which establishes the boundaries of certain mineral deposits of strategic importance, including the Oyu Tolgoi group of deposits (the "Oyu Tolgoi Strategic Deposit"). The Licences are included in the boundaries of the Oyu Tolgoi Strategic Deposit. The Minister of Industry and Mineral Resources is assigned to oversee the implementation of Resolution No. 170.
The State already holds 34% of the economic benefit that OTLLC derives from its 80% contractual interest in the area of the Licences by virtue of Erdenes Oyu Tolgoi LLC's shareholding in OTLLC and the 2009 Oyu Tolgoi Investment Agreement (the "OTIA"). The Company has consistently maintained its willingness to fulfil any obligation under Mongolian law to provide the State 34% of the economic benefit that the Company derives from its 20% contractual interest in the area of the Licences. During the second quarter 2025, the Company continued its efforts to engage with representatives of the Government of Mongolia and Erdenes Oyu Tolgoi LLC ("EOT") to resolve issues around the State's interest. See "Outlook and Strategy" below.
Entrée/Oyu Tolgoi JV Property Update
First Oyu Tolgoi Lift 1 Panel 1 underground development work on the Shivee Tolgoi mining licence area waste zone commenced in October 2024 in the southwest corner of the Hugo North Extension ("HNE") deposit in rock classified as waste. As at May 30, 2025, ~230 equivalent metres of lateral development primarily on the return air level had been completed by OTLLC.
On June 6, 2025, the Company, OTLLC, and Rio Tinto separately announced a pause in Oyu Tolgoi Lift 1 Panel 1 underground development work on the Shivee Tolgoi mining licence area. Under the 2025 Oyu Tolgoi Mine Plan approved by MRPAM, work in the HNE deposit footprint had been conditionally scheduled to commence in June 2025. Development work in the ore zone cannot proceed until transfer of the Licences from Entrée LLC to OTLLC has been completed.
In the second quarter 2025, the final hole of the 2024 HNE in-fill diamond drilling program was completed. The 2024 program comprises a total of 5,340.70 metres of drilling in 10 surface holes, and 6,566.88 metres of drilling on the Shivee Tolgoi mining licence in 27 underground holes. The 2024 drilling program will support the Lift 2 Panel 1 Pre-Feasibility Study and the updated resource model for Hugo North (including HNE), which will include Lift 2 mineralization.
For 2025, the Entrée/Oyu Tolgoi JV Management Committee approved an in-fill diamond drilling program at HNE comprised of ~8,329 metres of drilling on the Shivee Tolgoi mining licence in 19 underground holes and ~9,050 metres of drilling in 5 surface holes. As at June 30, 2025, 965 metres of drilling on the Shivee Tolgoi mining licence in 5 underground holes had been completed, with 2 of the underground holes still in progress. In addition, 1,728 metres of drilling in 2 surface holes had been completed, with both surface holes still in progress. The 2025 drilling program is intended to focus on gaps in the geological model.
Regional exploration programs on the area of the Licences commenced in the second quarter 2025.
In the second quarter 2025, the Company continued to announce new analytical results from deposit and regional diamond drilling programs conducted by OTLLC between 2022 and 2024. See the Company's press release dated May 14, 2025, available on SEDAR+ at www.sedarplus.ca, OTC Markets at www.otcmarkets.com and on the Company's website at www.EntreeResourcesLtd.com. Additional results will be reported by the Company as they become available from OTLLC.
Oyu Tolgoi Underground Development UpdateThe Oyu Tolgoi project in Mongolia includes the Oyu Tolgoi mining licence, which is 100% owned and held by OTLLC and the Entrée/Oyu Tolgoi JV property (the "Entrée/Oyu Tolgoi JV Property"), which is a joint venture between Entrée and OTLLC. Rio Tinto International Holdings Ltd. ("Rio Tinto") owns 66% of OTLLC and is the manager of operations at Oyu Tolgoi. On July 16, 2025, Rio Tinto announced the second quarter 2025 was a record quarter for Oyu Tolgoi copper production as it ramps up to become the world's fourth largest copper mine before the end of the decade. Refer to Rio Tinto's press release dated July 16, 2025, titled "Rio Tinto releases second quarter 2025 production results" available on its website at www.riotinto.com for further details.
The second quarter 2025 was a record quarter for copper production, due to the continued underground ramp-up with improving head grade and recovery rates.
New material handling records were set achieving a monthly average in June of 34 ktpd and a single day record high of 47 ktpd for the underground mine.
Year-on-year, the project saw rising contribution from the higher-grade underground mine, with Panel 0 construction on the Oyu Tolgoi mining licence complete and the conveyor to surface - the second largest in the world by capacity - becoming operational between these periods.
Rio Tinto noted engagement continues with the Company and the Government of Mongolia on the transfer of the Licences to allow mining in the Panel 1 Entrée/Oyu Tolgoi JV area. The underground mine plan offers flexibility in terms of panel sequencing depending on the timing of the transfer of the Licences.
Project ramp-up remains on track to reach an average of ~500 thousand tonnes of copper per year (100% basis and stated as recoverable metal) from 2028 to 2036.
The filtration and thickener facilities for the concentrator conversion have commenced load-commissioning. Ball Mill construction is complete, and load commissioning is forecast to be completed in the third quarter 2025.
Construction of primary crusher 2 is progressing to plan and remains on track to be completed during the fourth quarter 2025.
Corporate
For the three and six month periods ended June 30, 2025, the Company's operating loss was $0.6 million and $1.3 million, respectively, compared to $0.9 million and $2.0 million for the comparative periods in 2024. The decrease was due to higher legal costs in 2024 for both commercial negotiations with OTLLC and Rio Tinto and the arbitration proceedings.
For the three and six month periods ended June 30, 2025, the operating cash outflow before changes in non-cash working capital items was $0.5 million and $1.0 million, respectively, compared to $0.9 million and $1.9 million in the comparative periods in 2024.
