Entree Gold Reports 2014 Oyu Tolgoi Feasibility Study Increases Hugo North Extension Probable Reserve

Entrée Gold Inc. (TSX:ETG,NYSEMKT:EGI,FWB:EKA) reported that it has reviewed sufficient data from the 2014 Oyu Tolgoi Feasibility Study, to report on changes and impacts specific to the joint venture. The Hugo North Extension Probable reserve increased to 35 million tonnes at 1.59% copper, 0.55 grams per tonne gold and 3.72 g/t silver.

As quoted in the press release:

OTFS14 Highlights:

• Hugo North Extension Probable reserve increased to 35 million tonnes (“Mt”) at 1.59% copper, 0.55 grams per tonne (“g/t”) gold and 3.72 g/t silver. This has resulted in a 2.8% increase in recovered copper and an 11.2% increase in recovered silver.
• Hugo North Extension Net Smelter Returns (“NSR”) is $99.69/t (calculated from the financial model). The NSR calculation reflects the net value received for the ore by the mine (after all costs and charges). An NSR has been calculated on a US Dollar per tonne basis for each of the mineral reserve areas. The Hugo North Extension has the highest NSR calculated for all the deposits at Oyu Tolgoi.
• 2014 Reserve Case after tax net present value (using an 8% discount) (“NPV8%”) decreased to $102 million from $110 million in the LHTR13. This is mainly due to a development delay on the Hugo North block cave and a subsequent two year delay on the Hugo North Extension ore. The NPV8% case is also impacted by more cautious cave performance assumptions, which led to a reduction in recovered metal and a slowing of cave ramp-up.
• The updated Hugo North Extension Indicated mineral resource estimate is very similar to the previously reported resource estimate. The local improvement in resources on the joint venture side has increased the reserve tonnage and contained copper.
• The updated Hugo North Extension Inferred mineral resource estimate has increased substantially from the previous estimate. This increase is largely due to new, more refined geological modelling, but a change to the copper equivalency formula has also had a small effect.
• The change to the formula used to calculate copper equivalency for Heruga has had a more pronounced effect on the Inferred mineral resource estimate, with a 7% drop in tonnage and an overall 10% drop in copper equivalent metal.
• Increased dilution and draw point losses have negatively impacted the OTLLC licence side more that the Entrée-OTLLC joint venture (“EJV”) side.
• Underground block cave mine production remains at 95 ktpd.
• The plant rate for the Reserve Case is the current nominal 100 ktpd.
• Underground ore handling will now be conveyed to surface via decline, which opens the project to additional production flexibility and future optionality. The new mine plan will still make use of the existing shafts and the planned shafts that were defined in the LHTR13. The combined capacity of the decline conveyor and shafts will be 130-140 ktpd.
• Several alternative production cases are also discussed allowing for continuous improvement in plant throughput and plant expansions up to 350 ktpd.

Entree Gold President and CEO, Greg Crowe, saidL

OTFS14 outlines an updated Reserve Case from which Entrée’s current NPV associated with our portion of this massive project is calculated to be over $100 million. There is great potential for this project to expand considerably. There are several deposits which are being considered in the production time-line. The alternative production cases illustrate that there is flexibility to potentially bring deposits such as Lift 2 of the Hugo North Extension deposit or the Heruga deposit online sooner than currently planned.

Click here to read the Entrée Gold Inc. (TSX:ETG,NYSEMKT:EGI,FWB:EKA) press release