Entree Gold August Presentation


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Entree Gold August Presentation

  1. 1. On the Path to Production Entrée Gold at Copper OxideOyu Tolgoi Headframe Ann Mason Project Ann Mason Drilling August 2012 TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 1
  2. 2. Cautionary StatementThis corporate update contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaningof applicable Canadian securities laws.Forward-looking statements include, but are not limited to, statements with respect to the future prices of copper, gold and molybdenum, the estimation of mineral reserves and resources, therealization of mineral reserve and resource estimates, the timing and amount of estimated future production, costs of production and capital expenditures, the costs and timing of the development ofnew deposits, the potential for the discovery of additional mineralized zones on properties in which Entrée has an interest, the potential for the expansion of existing deposits in which Entrée has aninterest, plans to prepare and the timing for release of a Preliminary Economic Assessment on the Ann Mason Project, the timing of and potential for future resource estimates on properties in whichEntrée has an interest, plans for future exploration and/or development programs and budgets, permitting time lines, anticipated business activities, corporate strategies, proposed acquisitions anddispositions of assets and future financial performance. While Entrée Gold Inc. (“Entrée” or the “Company”) has based these forward-looking statements on its expectations about future events as atthe date that such statements were prepared, the statements are not a guarantee of the Company’s future performance and are subject to risks, uncertainties, assumptions and other factors whichcould cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such factors and assumptions include, amongst others, that the size, gradeand continuity of deposits and resource and reserve estimates have been interpreted correctly from exploration results, that the prices of copper, gold and molybdenum will remain relatively stable,the effects of general economic conditions, changing foreign exchange rates and actions by joint venture partners and by government authorities including the Government of Mongolia, uncertaintiesassociated with legal proceedings and negotiations and misjudgements in the course of preparing forward-looking statements. In addition, there are also known and unknown risk factors which maycause the actual results, performances or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-lookingstatements. Known risk factors are described in the section entitled “Risk Factors” in the Company’s Annual Information Form dated March 29, 2012 and in the Company’s most recent managementdisclosure and anlysis filed with the Canadian Securities Administrators and available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actualactions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated orintended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking statements, whether as a result of new information, futureevents, or otherwise. Accordingly, readers should not place undue reliance on forward-looking statements.The Companys exploration activities are under the supervision of Robert Cann, P.Geo., Vice President, Exploration of Entrée. Mr. Cann is a “qualified person” as defined in National Instrument 43-101- Standards of Disclosure for Mineral Projects (“NI 43-101”). Mr. Cann has approved this corporate update.All minerals reserves and mineral resources have been calculated in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and NI 43-101. Cautionary Note toUnited States Investors: United States investors are advised that while the terms “measured mineral resources”, “indicated mineral resources” “inferred mineral resources” and “probable mineralreserves” are recognized and required by Canadian regulations, the United States Securities and Exchange Commission (SEC) does not recognize them. United States investors are cautioned not toassume that any part or all of the mineral deposits in these categories will ever be upgraded to a higher category, or converted into mineral reserves. Inferred mineral resources have a great amountof uncertainty as to their existence, and as to their economic and legal feasibility. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or othereconomic studies. United States investors are cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally minable. Disclosure of “containedounces” is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute reserves as in place tonnage and gradewithout reference to unit measures. Accordingly, information contained in this corporate update containing descriptions of the Company’s mineral properties may not be comparable to similarinformation made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.Theinformation in this corporate update is for informational purposes only. Readers should not rely on the information for any purpose other than to gain general knowledge of Entrée. This information isnot intended to be, and should not be construed as, part of an offering or solicitation of securities.Note 1: See the technical report titled "Technical Report 2012 on the Lookout Hill Property" dated March 29, 2012 ("LHTR12") prepared by AMC Consultants Pty Ltd, a copy of which is available on SEDAR atwww.sedar.com.Note 2: See the technical report titled "Technical Report and Updated Mineral Resource Estimate on the Ann Mason Project Nevada, USA" dated March 26, 2012, prepared by Robert Cinits, P. Geo., the Company’sDirector, Technical Services, Scott Jackson, F.AusIMM, a principal of Quantitative Group Pty Ltd and Lyn Jones, P. Eng., a senior associate metallurgist for AGP Mining Consultants Inc., a copy of which is available onSEDAR at www.sedar.com. TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 2
  3. 3. On the Path to ProductionHugo North Extension and Heruga, Mongolia Oyu Tolgoi Development Underway Phase I Construction 94% Complete HNE Development Production in 2015 TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 3
  4. 4. On the Path to ProductionAnn Mason, Nevada Indicated: 8.0 Billion lbs Copper (0.2% Cu cut-off) 5.3 Billion lbs Copper (0.3% Cu cut-off) Inferred: 7.3 Billion lbs Copper (0.2% Cu cut-off) 3.5 Billion lbs Copper (0.3% Cu cut-off) N TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 4
  5. 5. Corporate StrategyStriking the balance between opportunity and risk UNITED STATES MONGOLIA Ann Mason Deposit Hugo North Extension Blue Hill Heruga Entrée-OTLLC JV 100% Entrée Cu-Au-Mo Cu-Mo Shivee West 100% Entrée Cu-Au Grass Roots Exploration United States ▪ Australia ▪ Peru TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 5
  6. 6. Resources Indicated Resource 1.1B lbs CuEq* (with 0.5M oz Au) 0.6% Cut-off HNE Inferred Resource 4.1B lbs CuEq* (with 3M oz Au)Indicated Resource 0.6% Cut-off HNE and Heruga 8.0B lbs Cu 0.2% Cut-offInferred Resource 7.3B lbs Cu 0.2% Cut-off HNE = Hugo North Extension 5.4B lbs Cu 0.3% Cut-off Indicated Resource and 3.5B lbs Cu Inferred Resource at 0.3% Cut-off *CuEq estimated using US$1.35/lb Cu, US$650/oz Au, US$10/lb Mo. Figures are NI 43-101 compliant. TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 6
  7. 7. Shareholder Base Fully Diluted 12.0% 10.0% 59% 9.1% Held by top 14 7.6% Shareholders 4.8% 4.1% 3.9% 2.1% 2.1% 2.0% 1.1% 0.4% 0.4% 0.2%• Rio Tinto holds beneficial ownership over shares held by Turquoise Hill TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 7
  8. 8. Board of DirectorsGreg Crowe President & CEO, DirectorJames Harris Chairman, DirectorMichael Howard Deputy Chairman, DirectorLindsay Bottomer VP Business Development, DirectorPeter Meredith DirectorMark Bailey DirectorAlan Edwards DirectorGorden Glenn Director TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 8
  9. 9. Financial InformationTreasury (As of June 30, 2012) ~Cdn$10.5 millionIssued and Outstanding 128,877,243Options - 9,235,500 (Average price ~Cdn$1.98)Fully Diluted 138,112,74352 week High / Low Cdn$2.40 / $0.53Analyst Coverage TD Newcrest Hallgarten & Co. LLC TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 9
  10. 10. Growth Through Exploration & AcquisitionsUSANevada MongoliaAnn Mason Deposit Hugo North ExtensionBlue HillRoulette HerugaBlackjack Shivee WestNew MexicoLordsburgOak Grove AustraliaPeru Blue RoseLukkacha Mystique  Mongolia Gold exploration on Shivee West Drilling on JV property  USA PEA at Ann Mason deposit Upcoming Blue Hill resource estimate TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 10
  12. 12. The Nevada Advantage  Top global mining jurisdiction  Limited political risk  Long history of mining Yerington, McArthur and Minnesota Mines Local community support  Clear permitting guidelines  Excellent infrastructure Power, road, water and rail near project Year round accessibility TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 12
  13. 13. History of YeringtonEARLY DISCOVERY AND ANACONDA ERA 1860s Copper oxide showings discovered 1907-1930 Development and mining of copper oxide 1943-1966 Minnesota Mine production (1943-1945; 1952-1966) 1941-1978 Anaconda operates Yerington Mine Produces cement copper and sulphide concentrate Ann Mason copper porphyry discovered in 1968 Mine closed due to low metal prices 1989-1997 Arimetco operates Yerington and McArthur Mines TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 13
  14. 14. History of YeringtonRECENT YEARS 2003 PacMag Metals acquires Ann Mason 2006 Nevada Copper acquires Pumpkin Hollow 2007 Quaterra acquires Arimetco assets 2009 Entrée signs Blackjack and Roulette agreements 2010 Entrée acquires PacMag Metals (including Ann Mason) 2011 Resource Estimate updated at Pumpkin Hollow 2011 Entrée drill program on Ann Mason and Blue Hill 2012 Quaterra publishes McArthur PEA 2012 Entrée updates resource for Ann Mason PEA initiated TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 14
  15. 15. Yerington, NevadaUSA Underdeveloped camp  Significant copper discoveries  20 billion pounds No major company investment Nearby deposits include: · Yerington Mine - Quaterra Produced 1.9 Billion lbs Cu (1918-1982) · MacArthur - Quaterra 0.68 Billion lbs Cu @ 0.21% · Pumpkin Hollow - Nevada Copper 5.8 Billion lbs Cu @ 0.48% (M&I; OP & U/G) TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 15
  16. 16. Ann Mason Deposit Cu-Mo porphyry  2.3 km by 1.3 km  >1 km depth  Open Recoveries  Cu >93%  High quality concentrate PEA H2-2012 TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 16
  17. 17. Ann MasonSection 304,300 E Highlights:0.42% CuEq over 642 m0.30% CuEq over 863 m TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA Not 43-101 compliant 17
  18. 18. Ann MasonSection 4,317,700 N TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA Not 43-101 compliant 18
  19. 19. Porphyry MineralizationAnn Mason Drill Hole EG-AM-10-003  0.79% total Cu  Quartz-sericite stockwork in quartz monzonite porphyry dyke  Chalcopyrite, bornite & trace molybdenum  Secondary biotite in host rock760 m depthDrill Hole EG-AM-10-003 0.82% total Cu Albitized quartz monzonite porphyry dyke Chalcopyrite & trace bornite Quartz-sericite alteration 2 cm 828 m depth TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 19
  20. 20. Ann Mason DepositAdvancing to a PEA 8.0 Billion lbs Cu Indicated 7.3 Billion lbs Cu Inferred (0.2% Cu cut-off) TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 20
  21. 21. Ann Mason - Blue Hill Long Section OPEN OPEN TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 21
  22. 22. Blue Hill Target Near surface oxide Cu and underlying Cu-Mo porphyry Initial resource estimate  Expected completion H2-2012 Shallow oxide mineralization  800 m x 500 m x 185 m (max) depth Sulphide mineralization  Below oxides & continuing SE Column leaching testwork  Average >84% indicated recovery (91 day column leach test)  Fast extraction (60% recovery in 10 days) Possible development synergy with Ann Mason TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 22
  23. 23. Mineralization Blue Hill Drill Hole EG-BH-11-017  1.30% total Cu  Brecciated quartz monzonite porphyry dyke  Malachite, epidote & blue-green copper sulphate 28 m depthDrill Hole EG-BH-11-015 0.13% total Cu Quartz monzonite porphyry dyke Green copper sulphate with black copper oxide coating a fracture surface 58 m depth TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 23
  24. 24. Yerington Project Exploration potential Untested IP targets  Between Ann Mason and Blue Hill  Blackjack targets Untested Magnetic target  Roulette Exploration potential  Majority of project untested  Limited outcrop TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 24
  25. 25. Porphyry Related Copper Deposits Western North America 1.5 Red Chris* 0.5 Pumpkin Hollow 1.0 Schaft Creek Rosemont Copper Creek Chino 0.5 0.4 % Copper Ajax Billion Tonnes Mt Milligan* Bagdad Excelsior Mineral Park * 0.3 Ann Mason Tyrone Copper 1.1 Bt Mountain Poplar Gibraltar Yerington Highland Valley MacArthur 0.2 Sierrita*CuEqInferred resources not includedAdditional Ann Mason inferred resources: 1,131 million tonnes averaging 0.31% Cu Eq (0.29% Cu, 0.004% Mo) at 0.2% Cu cut-off TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 25
  26. 26. Other Properties USA Lordsburg  Porphyry discovery  District known for vein style deposits  Intercepts to 0.44% CuEq* over 60 m  Further exploration planned Oak Grove  New target  Magnetic anomaly similar to Chino Mine  Near producing Tyrone Mine * Copper equivalent estimated using US$1.35/lb TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA Cu and US$650/oz Au. Intercept contains 0.31%26 Cu and 0.21 g/t Au.
  27. 27. MongoliaTSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 27
  28. 28. Strategic Partners Rio Tinto (13%)* Entrée 51% of Turquoise Hill 20/30% Commitment to funding development ~13% at Oyu Tolgoi Joint Venture Entrée – OTLLC Turquoise Hill (11%)* Hugo North Extension Rio 66% of Oyu Tolgoi & Heruga Tinto 80/70% Entrée-OTLLC JV ~11% US$35,000,000 JV earn-in Oyu Tolgoi LLC >US$54 million to date 51% Entrée 20% - OTLLC 80% (deep) 34% 66% Entrée 30% - OTLLC 70% (shallow) Carried to production Mongolian Turquoise Hill Government *Issued & Outstanding Rio Tinto beneficial ownership is now 23.6% due to majority ownership of Turquoise Hill TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 28
  29. 29. Shivee Tolgoi - Oyu Tolgoi Trends TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 29
  30. 30. Oyu Tolgoi Trend*Indicated resource grade; HNE inferred resource grade = 1.4% CuEq **Inferred resource gradeModified from Lookout Hill Technical Report 2012Mineral reserves are not additive to the mineral resourcesCopper equivalent estimated using US$1.35/lb Cu, US$650/oz Au, US$10/lb Mo. A 0.6% CuEq cut-off was usedPhase 2 does not include mine plan for Lift 2 extraction TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 30
  31. 31. Oyu Tolgoi Trend Potential Heruga Shaft +1% CuEq Moly ZoneOPEN Lift 1 Extraction Level Possible Extraction Level Gold Zone Lift 2 Extraction Level OPEN OPEN OPEN OTLLC OTLLCModified from Lookout Hill Technical Report 2012Mineral reserves are not additive to the mineral resourcesCopper equivalent estimated using US$1.35/lb Cu, US$650/oz Au, US$10/lb Mo. A 0.6% CuEq cut-off was usedEntrée carries a 20% interest in the mineralization of the Hugo North Extension and Heruga deposits TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 31
  32. 32. Entrée-OTLLC JV Deposit Resources Entrée ownership - 20% Carried Interest Hugo North Extension Heruga Cu-Au Cu-Au-MoProbableMineral 27Mt oreReserves* 1.85% Cu and 0.72 g/t Au 1B lbs Cu / 0.53M oz AuIndicatedResources** 5.6B lbs CuEq 117 million tonnes*** - 1.80% Cu, 0.61 g/t Au 4.6B lbs Cu / 2.3M oz AuInferred 2.8B lbs CuEq 17.4B lbs CuEqResources** 95.5 million tonnes***- 1.15% Cu, 0.31 g/t Au 910 million tonnes*** 2.4B lbs Cu / 0.95M oz Au 0.48% Cu, 0.49 g/t Au, 0.014% Mo 9.6B lbs Cu / 14M oz Au HUGO See Lookout Hill Technical Report 2012. NORTH * The mineral reserves are not additive to the mineral resources. EXTENSION ** Copper equivalent estimated using US$1.35/lb Cu, US$650/oz Au, US$10/lb Mo. *** 0.6% CuEq cutoff. HERUGA TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 32
  33. 33. Hugo North Extension & HerugaOn the Path to ProductionCurrent  Premier asset  High grade – long life  OT Phase I construction 94% complete  Entrée carried to productionTimeline for Entrée’s Assets  First ore from HNE1 in 2015  50+ year potential mine life  LOM Case: HNE1+HNE2+Heruga  HNE & Heruga Deposits remain open TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 33
  34. 34. Argo and Zone III Gold TargetsShivee West (100% Entrée)  2.5 km magnetic low parallel to OT Trend Argo Zone Hole 111 X Surface Sampling Hole 112  Low sulphidation Zone III Hole 123 epithermal signature  First high-grade gold discovered on property  Limited drilling TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 34
  35. 35. Argo and Zone III Gold TargetsShivee West (100% Entrée)  High grade surface samples 81.4 g/t Au over 3 m 42.4 g/t Au over 4 m 19.3 g/t Au over 3 m  2011 drill results 2.21 g/t Au over 3 m (hole 111) 1.82 g/t Au over 14 m (hole 112) including 9.32 g/t Au over 2 m 2.08 g/t Au over 8 m (hole 123) including 5.60 g/t over 2 m TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 35
  36. 36. Advancing our AssetsAnn Mason Project Hugo North Extension & Heruga 100% Entrée Joint Venture Drilling Ann Mason 2012 Drilling Heruga 2012 Ann Mason PEA Blue Hill resource Development HNE 1 2015 First developmentShivee Tolgoi, Mongolia production HNE 1 100% Entrée 2012 Advance Argo Zone 50+ 2060 year potential production in LOM Case TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 36
  37. 37. Current Copper Assets 12 10 8 7.3B lbs Cu Ann MasonBillion lbs 0.2 % Cu cut-off 6 8.0B lbs Cu 4 HNE & Heruga 2 4.1B lbs CuEq* 0.6% CuEq cut-off (with 3M oz Au) 1.1B lbs CuEq* (with 0.5M oz Au) 0 Indicated Inferred *CuEq estimated using US$1.35/lb Cu, US$650/oz Au, US$10/lb Mo. Figures are NI 43-101 Compliant. TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 37
  38. 38. Copper Resources vs. Share Price $4.00 Share price 20 $3.50 Billion Pounds Copper Heruga Investment Discovery Agreement $3.00 Rio-IVN Exercise 16 Share Price BMO 2005 Financing Mongolian Windfall Tax Warrants Falling Metal Prices $2.50 Rio Investment PacMag 12 Acquisition $2.00 Withdrawal of Windfall Tax HNE Discovery $1.50 8 IVN-Rio Deal $1.00 Ann Mason Updated IVN Deal Mineral 4 Resources $0.50 $0.00 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 Indicated (Billion lbs) Inferred (Billion lbs) TSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 38*0.2% Cu Cut-off
  39. 39. Mona Forster – Executive Vice President mforster@entreegold.com 604-687-4777 www.entreegold.comTSX:ETG | NYSE MKT:EGI | FRANKFURT:EKA 39