Entrée Gold, Inc. (EGI) Gets Major Coal License in Mongolia
Entrée Gold Inc., www.entreegold.com – the globally-focused, Canadian-based mineral exploration firm with major operations in Mongolia, announced yesterday that the Company has received a mining license for its Nomkhon Bohr coal discovery.
Originally explored in 08-09, the license covers some 14,030 hectares over Permian strata historically characterized by rich coal deposits in this part of the Gobi Desert – indeed, the license covers what is basically the NW corner of the proven former Togoot exploration license.
President and CEO of Entrée, Greg Crowe, cited the diligent efforts of the Company in working closely with resource consultants in Mongolia, as well as the Minerals Council, to ensure rigorous adherence to regulatory criterion, and characterized the 100percents-ownership, 30-year initial term license as constituting an ideal strategic position.
The thermal coal seams at Nomkhon Bohr are projected to be from the same strata as the proven, multi-billion-ton thermal and metallurgical deposits at Tavan Tolgoi, 80km NW of the license.
Currently two groups are transporting coal into the demand-saturated Chinese market via a robust and soon-to-be-paved road system that runs immediately north of Nomkhon Bohr.
With a railway system to service Tavan Tolgoi, and Oyu Tolgoi planning (in the immediate future) to increase coal capacity to China from the region, the Company is in a very good position, as its flagship Lookout Hill property surrounds the 8,500-hectare Oyu Tolgoi (Ivanhoe Mines).
Part of Lookout Hill is in a joint venture with Ivanhoe, via its subsidiary Oyu Tolgoi LLC, which has great future potential for additional mineralization discoveries and covers the Hugo North Extension copper-gold deposit and the Heruga copper-gold-molybdenum deposit.
The joint venture stipulates that the Company can elect to be carried through to production via debt financing from Ivanhoe, with interest accruing at Ivanhoe’s actual cost of capital (or prime +2percents, whichever is less) at the date of the advance.
Repayment of debt, either in whole or part, may derive from, and only from, 90percents of cash flow attributable to product sales, with application first to accrued interest and then to the principal. Product sales are to be calculated as Entrée’s net proceeds minus costs on its share of product sold.
Ivanhoe Mines and Rio Tinto hold 13 percents and 12percents of issued and outstanding shares, respectively, in Entrée, making them major shareholders.
Entrée is well capitalized with Cusd32 million, and is looking to employ its expertise in deep/concealed ore deposit exploration:
• Continued exploration in Asia recently began digging deeper at the Huaixi copper project in Zhejiang, China via an agreement with the No. 11 Geological Brigade.
• Pursuing porphyry-related copper systems in Arizona and New Mexico under two agreements with Empirical Discovery LLC
• Optioned the Blackjack and Roulette contiguous properties in Nevada through HoneyBadger Exploration Ltd., and Bronco Creek Exploration Inc., which are contiguous with the recently acquired Ann Mason property (from PacMag Metals Limited)
• Pursuing opportunity to obtain a 100percents interest in an early-stage copper-molybdenum Crystal property via an agreement with Taiga Consultants Limited