VANCOUVER, BRITISH COLUMBIA, Jul 16, 2008
(MARKET WIRE via COMTEX) — Entree Gold Inc. has been notified by Ivanhoe Mines Ltd. that its subsidiary, Ivanhoe Mines Mongolia Inc. XXK, has incurred expenditures of US$35 million on exploration of the Entree-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 Entree’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. Entree 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 Entree cannot be diluted out of its interest due to an inability to finance.