Entrée Resources Announces Third Quarter 2024 Results
VANCOUVER, British Columbia, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Entrée Resources Ltd. (TSX:ETG, OTCQB:ERLFF) has today filed its interim financial results for the third quarter ended September 30, 2024. All numbers are in U.S. dollars unless otherwise noted.
Q3 2024 HIGHLIGHTS Oyu Tolgoi Underground Development UpdateThe Oyu Tolgoi project in Mongolia includes two separate land holdings: the Oyu Tolgoi mining licence, which is held by Oyu Tolgoi LLC ("OTLLC") and the Entrée/Oyu Tolgoi JV Property, which is a joint venture partnership between Entrée and OTLLC (the "Entrée/Oyu Tolgoi JV"). Rio Tinto owns 66% of OTLLC and is the manager of operations at Oyu Tolgoi.
On October 16, 2024, Rio Tinto announced ramp up of the Oyu Tolgoi Lift 1 underground mine remains on track to reach 500 thousand tonnes of copper per year for the years 2028 to 2036. Oyu Tolgoi is set to become the world's fourth largest copper mine by 2030. Refer to Rio Tinto's press release dated October 16, 2024, titled "Rio Tinto releases third quarter production results" available on its website at www.riotinto.com for further details.
OTLLC has opened a total of 120 Lift 1 drawbells from Panel 0 on the Oyu Tolgoi mining licence, including six drawbells during the quarter ended September 30, 2024. In the third quarter 2024, OTLLC delivered 1.5 million tonnes of ore milled from the underground mine on the Oyu Tolgoi mining licence at an average copper head grade of 2.05%.
Ventilation Shafts 3 and 4 were commissioned during the third quarter 2024 with fresh air now being drawn into the underground mine.
As at September 30, 2024, construction of the conveyor to surface works was 98% complete. Rio Tinto reported after a minor delay to the start of commissioning, first ore was expected on the belt in the second half of October 2024.
Construction works for the concentrator conversion is ongoing. Commissioning is expected to be progressively completed from the fourth quarter 2024 through to the second quarter 2025.
Construction of primary crusher 2 is progressing to plan and remains on track to be completed by the end of 2025.
The Mongolian regulatory acceptance process for OTLLC's 2023 Oyu Tolgoi Feasibility Study ("OTFS23") for the Lift 1 underground mine is ongoing. The Lift 1 underground mine incorporates the development of three panels (Panels 0, 1, and 2). The Hugo North Extension ("HNE") deposit on the Entrée/Oyu Tolgoi JV Property is located at the northern portion of Panel 1.
Drilling programs to support a Lift 2 Pre-Feasibility Study are in progress. Mineralization from Lift 2 will be included in an updated resource model for Hugo North (including Hugo North Extension).
Entrée/Oyu Tolgoi JV Property Update
First Oyu Tolgoi Lift 1 Panel 1 underground development work on the Entrée/Oyu Tolgoi JV Property commenced on October 28, 2024. The work is included in the 2024 Oyu Tolgoi Mine Plan previously submitted to and approved by the Mineral Resources and Petroleum Authority of Mongolia. The work is limited as to scope, and the timing of any future development work in the HNE deposit footprint is contingent upon the resolution of certain outstanding issues described in "Outlook and Strategy" below, including the transfer of the Shivee Tolgoi licence to OTLLC.
The Entrée/Oyu Tolgoi JV Management Committee approved a maximum of 212 metres of lateral development work in the southwest corner of HNE in line with the 2024 Oyu Tolgoi Mine Plan (the "2024 Development Work"). The 2024 Development Work will be performed in accordance with the terms and conditions of the joint venture agreement appended to the amended 2004 Equity Participation and Earn-in Agreement (the "Entrée/Oyu Tolgoi JVA"). The 2024 Development Work is part of the initial Panel 1 western ore handling truck chute design which, when completed, will include extraction level tipple development, which connects the truck chute chamber on the haulage level, and the supporting ventilation loop with the return air level.
As the 2024 Development Work is in rock classified as waste, no saleable minerals, concentrates, metals or other saleable mineral end product is expected to be produced.
The Entrée/Oyu Tolgoi JV Management Committee approved a $4.4 million direct capital budget for the 2024 Development Work (based on 212 metres of work) and confirmed OTLLC will charge the Company a sum equal to 2% of actual costs allocated to Entrée in lieu of general and administrative expenses. OTLLC will contribute Entrée's 20% share of actual costs and charges when they are incurred, with such contribution to be treated as a loan in accordance with Article 10 of the Entrée/Oyu Tolgoi JVA.
During the third quarter 2024, OTLLC has continued to drill at the HNE deposit with all holes targeting the potential Lift 2 mineralized footprint. OTLLC has advised the Company that approximately 5,287 metres of underground drilling in 23 holes and approximately 2,476 metres of surface drilling in 4 holes had been completed on the Shivee Tolgoi mining licence as of October 31, 2024. It is the Company's understanding that, similar to the 2022 and 2023 drilling programs, all of the 2024 drill holes will be drilled within the current mineralized footprint or within the hanging and/or footwall rocks, with the objective to update the HNE mineral resources estimate and to conduct geological and geotechnical characterization to support the Lift 2 Pre-Feasibility Study. Results will be reported as they become available.
OTLLC has advised the Company the approximately 8,785 metres of diamond drilling in 5 surface holes on the Heruga deposit (Javhlant mining licence) originally planned for 2024 has been postponed due to drill rig availability.
The 2024 exploration program for the Shivee Tolgoi mining licence is focused on the Airstrip, Ulaan Khud South and Ridge (the area between HNE and Ulaan Khud South) targets, including one inclined diamond drill hole totalling 1,200 metres at the Ridge target (completed), one inclined diamond drill hole at the Ulaan Khud South target which is in progress (811 meters of a planned 1,300 metres completed as of October 31, 2024), and geochemical and geophysical studies. During 2024, work on the Javhlant mining licence is focused on the Bumbat Ulaan target and the Heruga Trend (Heruga South and Heruga West targets), including drilling programs and geological and geophysical studies. As of October 31, 2024, the following drilling on the Javhlant mining license had been completed: one diamond drill hole totalling 1,500 metres at the western edge of the Heruga deposit, one diamond drill hole totalling 640 metres at the Heruga West target, and a total of 1,200 metres of diamond drilling in 4 holes at Bumbat Ulaan. Detailed results are pending.
On July 18, 2024 and November 4, 2024, the Company announced additional diamond drill hole results from the 2022 and 2023 drilling programs over the HNE deposit.
Corporate
For the three and nine month periods ended September 30, 2024, the Company's operating loss was $0.7 million and $2.7 million, respectively, compared to $0.7 million and $2.5 million for the comparative periods in 2023.
For the three and nine month periods ended September 30, 2024, the operating cash outflow before changes in non-cash working capital items was $0.6 million and $2.5 million, respectively, compared to $0.6 million and $2.2 million in the comparative periods in 2023.
As at September 30, 2024, the cash balance was $3.4 ...
