Entree Gold Inc., a Canadian mineral exploration company, announced today that its application for conversion of the Shivee Tolgoi and Javhlant exploration concessions to mining licenses has been approved by the Mineral Resources Authority of Mongolia. The sites are located in southern Mongolia, not far from the northern border of China, and total over 75,000 hectares, or about 185,000 acres.
The Javhlant license, along with the eastern portion of the Shivee Tolgoi license, are subject to a joint venture with Ivanhoe Mines Ltd through its subsidiary Ivanhoe Mines Mongolia Inc. LLC (NYSE: IVN, Nasdaq: IVN). The license sites completely surround Ivanhoe Mine’s Oyu Tolgoi mining license site, and conversion of these licenses consolidates a huge land position upon which the Oyu Tolgoi mining complex will be established. Mining licenses have a 30-year term, with two possible renewals of 20 years each.
Entree president and CEO, Greg Crowe, stated: “The granting of the mining licenses provides the long term security necessary for Entree and its joint venture partner, Ivanhoe Mines, to advance the known deposits at Oyu Tolgoi through development to production. It also provides sufficient time for testing the potential along strike extensions to Entree’s Hugo North Extension and Heruga deposits and for the diligent and systematic exploration of other copper, gold and molybdenum prospects. The granting of these mining licenses represents a pivotal moment in the advancement of our Mongolian assets.”
The portion of the Shivee Tolgoi license outside of the joint venture is 100% owned by Entree LLC, Entree’s Mongolian subsidiary. The company believes that further exploration in this area, covering some 35,000 hectares, is warranted to identify additional mineralization which could be processed through the Oyu Tolgoi facilities.
Successful conversion of these licenses to mining licenses was a condition precedent to the Investment Agreement signed between Ivanhoe Mines, the company’s largest shareholder Rio Tinto (NYSE: RTP), and the Mongolian government. Under terms of the Entree-Ivanhoe Mines joint venture, Entree retains either a 20% or 30% carried interest on these licenses, depending on the depth of mineralization.
Entree Gold is also exploring other landholdings in Mongolia, including the coal discovery Nomkhon Bohr, and is evaluating opportunities elsewhere in Asia, including China. In North America, the company is exploring for copper in Arizona and New Mexico, and in British Columbia. With cash in excess of $40 million (Canadian), the company is well funded for future exploration.