Entrée Gold Inc.
Entrée Gold Inc.: US$1.5 Billion Investment by Rio Tinto in Ivanhoe Mines
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The issuer is solely responsible for the content of this announcement.
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Entrée Welcomes US$1.5 Billion Investment by Rio Tinto in Ivanhoe Mines
“A Major Vote of Confidence in Oyu Tolgoi and Mongolia”
Vancouver, B.C., Thursday, October 20, 2006 – Entrée Gold Inc. (TSX: ETG;
AMEX: EGI; Frankfurt: EKA – “Entrée” or the “Company”) welcomes the
announcements made yesterday by Rio Tinto (NYSE: RTP; LSX: RIO; ASX: RIO –
“Rio Tinto”) and Ivanhoe Mines Ltd. (TSX: IVN, NYSE: IVN; NASDAQ: IVN–
“Ivanhoe”). Rio Tinto has agreed to invest up to US$1.5 billion to acquire
up to a 33.35% equity interest in Ivanhoe for the purpose of funding the
joint development of the Oyu Tolgoi copper-gold project in Mongolia.
Entrée Comment
Entrée President and CEO, Greg Crowe, stated: “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.”
Mr. Crowe continued: “The development of Oyu Tolgoi will have a profound
impact on Entrée. The extension to the rich Hugo Dummett ore body has been
drilled to the inferred resource status over a strike distance of 625
meters north onto Entrée’s ground and drilling results suggest the further
extension of the deposit to at least 1,300 meters north of the property
boundary (see Entrée’s News Release of February 1, 2006). The initial
inferred resource is estimated to contain approximately 6.6 billion pounds
of copper and over 3.2 million ounces of gold and defines some of the
richest mineralization intersected to date at Oyu Tolgoi.”
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.
Mongolian Government Investment Agreement
In its news release, Rio Tinto reported that it intended 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 to work with Ivanhoe for the preparation of an
agreement for submission to the Mongolian government’s cabinet.
Entrée Independent Exploration
Entrée continues exploration of its 100% owned Lookout Hill property, with
three drills operating to the west of Oyu Tolgoi. Ivanhoe currently has
one drill on Entrée’s ground to the north of Entrée’s Copper Flats resource
area. Drilling at the Manlai project, for which Rio Tinto holds a first
right of refusal, is nearing completion for this exploration season.
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 recently acquired an early stage copper
porphyry project in Arizona, USA.
Entrée holds a 100% interest in mineral concessions comprising 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”).
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.
Drilling conducted by Ivanhoe as part of the Earn-In Agreement has
confirmed the extension of the Hugo North Deposit onto Lookout Hill. An
initial inferred resource was estimated at 190,160,000 tonnes (calculated
using a 0.6% copper equivalent cut-off), averaging 1.91% copper equivalent,
containing over 6.5 billion pounds of copper and 3.2 million ounces of gold
(see Entrée’s news release of February 1, 2006).
Significant investments by Rio Tinto plc and Ivanhoe have contributed to
Entrée’s treasury, which currently exceeds CDN$17 million. Entrée plans to
use these funds to explore its wholly-owned projects in Mongolia and
Arizona, and acquire and explore new projects globally.
Value Relations GmbH
Tel: (069) 95 92 46 – 13;
Sternstr. 15
D-60318 Frankfurt
(c)DGAP 20.10.2006
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