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VANCOUVER, BC, March 25, 2022 /PRNewswire/ – Entrée Resources Ltd. (TSX:ETG) (OTCQB:ERLFF) (– the “Company” or “Entrée“) has today filed its annual operational and financial results for the year ended December 31, 2021. All numbers are in US dollars unless otherwise noted.
2021 HIGHLIGHTS
Entrée/Oyu Tolgoi JV Property
On October 21, 2021Entrée filed an amended Technical Report (the “2021 Technical Report“) for its interest in the Entrée/Oyu Tolgoi joint venture property in Mongolia (the “Entrée/Oyu Tolgoi JV Property“). The 2021 Technical Report has an original effective date of May 17, 2021and an amended effective date of October 8, 2021.
- The 2021 Technical Report discusses an updated reserve case (the “2021 Reserve Case“) based on mineral reserves attributable to the Entrée/Oyu Tolgoi joint venture (the “Entrée/Oyu Tolgoi JV“) from the first lift (“Lift 1“) of the Hugo North Extension deposit and a Preliminary Economic Assessment on a conceptual second lift (“Lift 2“) of the Hugo North Extension deposit (“2021 PEA“).
- Life-of-mine (“LOM“) financial highlights attributable to Entrée from the 2021 Reserve Case and the 2021 PEA include:
|
2021 Reserve Case |
2021 PEA |
|||
|
HNE Lift 1 |
HNE Lift 2 |
|||
|
LOM cash flow, pre-tax |
$M |
$449 |
$1,982 |
|
|
Net present value, after tax |
||||
|
• |
5% |
$M |
$185 |
$541 |
|
• |
8% |
$M |
$131 |
$306 |
|
Mine life |
Years |
17 |
twenty two |
|
|
LOM Metal recovered |
||||
|
• |
Copper |
Mlb |
1,249 |
4,564 |
|
• |
Gold |
Koz |
549 |
2,025 |
|
• |
Silver |
Koz |
3,836 |
15,067 |
|
Notes: |
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|
1. |
Long term metal prices used in the net present value (“NPV“) economic analyses are: copper $3.25/lb, gold $1,591.00/oz and silver $21.08/oz. |
|
2. |
The mineral reserves that form the basis of the 2021 Reserve Case are from a separate portion of the Hugo North Extension deposit than the mineral resources in the 2021 PEA. The 2021 Reserve Case and the 2021 PEA are therefore exclusive of each other. |
|
3. |
The economic analysis in the 2021 PEA does not have as high a level of certainty as the 2021 Reserve Case. The 2021 PEA is preliminary in nature and includes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the 2021 PEA will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability. |
|
4. |
2021 Reserve Case cash flows are discounted to the beginning of 2021. |
|
5. |
2021 PEA cash flows are discounted to the beginning of 2027, the assumed beginning of Hugo North Lift 2 development. Attributable Entrée/Oyu Tolgoi JV production is assumed to begin in 2031 and ramps up to stable production in 2043. Final Entrée/Oyu Tolgoi JV attributable production is assumed to conclude in 2056. |
|
6. |
Entrée has a 20% attributable interest in the recovered metal. |
|
7. |
2021 Reserve Case mine life includes 4-years development production followed by 13-years block cave production. 2021 PEA mine life includes 4-years development production followed by 18-years block cave production. |
- Both the 2021 Reserve Case and the 2021 PEA are based on information supplied by Entrée’s joint venture partner Oyu Tolgoi LLC (“OTLLC“) or reported within the 2020 Oyu Tolgoi Mongolian Statutory Study (previously referred to as the 2020 Oyu Tolgoi Feasibility Study) (“OTMSS20“), which was completed by OTLLC on the Oyu Tolgoi project in July 2020 (refer to the July 2, 2020 press release from Turquoise Hill Resources Ltd. (“Turquoise Hill“)). OTMSS20 discusses the mine plan for Lift 1 of the Hugo North (including Hugo North Extension) underground block cave on both the Oyu Tolgoi mining licence and the Entrée/Oyu Tolgoi JV Property. The Lift 1 mine plan incorporates the development of three panels and in order to reach the full sustainable production rate of 95,000 tonnes per day (“tpd“) from the underground operations, all three panels need to be in production. Hugo North Extension on the Entrée/Oyu Tolgoi JV Property is located in the northern portion of Panel 1.
- The Lift 1 mine design presented in OTMSS20 and the 2021 Reserve Case is subject to future refinements and updates. Hugo North (including Hugo North Extension) Lift 1 surface and underground drilling programs will support the evaluation by OTLLC of different design and sequencing options for Panels 1 and 2. As reported by Turquoise Hill, during 2021 a total of 10,494 metres of Panel 1 drilling was undertaken to increase orebody knowledge. The data collected has been used to refine the structural and geotechnical models which form the basis of the mine design. From 2022 onwards, the focus of drilling will shift to Lift 2 and peripheral areas of Lift 1. In 2021, 1,009 metres of Lift 2 Panel 1 drilling was completed. The Panel 1 study is scheduled for completion in the first half of 2023. Entrée has not yet received any details or results of OTLLC’s surface and underground drilling programs from 2021.
- The 2021 Technical Report assumes first development production from Hugo North Extension Lift 1 in H2 2022. Turquoise Hill has reported that Panels 1 and 2 are expected to be delayed as a result of the delay in commencement of the Panel 0 undercut, COVID-19 related work restrictions impacting progress on Shafts 3 and 4 and underground development, and changes to mining scope. Turquoise Hill has reported that efforts to minimize delays to Panels 1 and 2 due to ventilation constraints ahead of Shaft 3 and 4 commissioning continue. Shafts 3 and 4 are required to provide ventilation to support production from Panels 1 and 2 during ramp up to 95,000 tpd. An approximately 9-month delay to Shafts 3 and 4 is currently anticipated with the first Panel 1 draw bell now expected by …
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