VANCOUVER, BRITISH COLUMBIA- - Entree Gold
Inc. (TSX:ETG)(AMEX:EGI)(FRANKFURT:EKA) ("Entree" or the "Company") has
been notified by Ivanhoe Mines Ltd. (TSX:IVN)(NYSE:IVN)(NASDAQ:IVN)
("Ivanhoe Mines") 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.
ABOUT ENTREE GOLD INC.
Entree Gold Inc. is a Canadian mineral exploration company
focused on the worldwide exploration and development of gold and copper
prospects. Most notably, the Company is a large landholder in Mongolia,
where it holds three exploration licenses that comprise the
179,590-hectare Lookout Hill property. Lookout Hill completely
surrounds the 8,500-hectare Oyu Tolgoi project of Ivanhoe Mines, and
hosts the Hugo North Extension of the Hugo Dummett deposit and the
newly discovered Heruga deposit.
The Company continues to explore its large landholdings in
Mongolia as well as evaluating new opportunities throughout the region
and elsewhere in Asia. Entree plans to explore the Huaixi copper
project in Zhejiang Province in China, under the terms of an agreement
with the No. 11 Geological Brigade. In North America, the Company is
exploring for copper-molybdenum porphyry systems in the southwest USA.
The Company is also seeking additional opportunities to utilize its
expertise in exploring for deep and/or concealed ore deposits.
Ivanhoe Mines and Rio Tinto are major shareholders of Entree,
holding approximately 15% and 16% of issued and outstanding shares
respectively.
This News Release contains forward-looking statements.
Forward-looking statements are statements which relate to future
events. In some cases, you can identify forward-looking statements by
terminology such as "may", "should", "expects", "plans", "anticipates",
"believes", "estimates", "predicts", "potential" or "continue" or the
negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity,
performance or achievements expressed or implied by these
forward-looking statements.
While these forward-looking statements, and any assumptions
upon which they are based, are made in good faith and reflect our
current judgment regarding the direction of our business, actual
results will almost always vary, sometimes materially, from any
estimates, predictions, projections, assumptions or other future
performance suggested herein. Except as required by applicable law,
including the securities laws of the United States, the Company does
not intend to update any of the forward-looking statements to conform
these statements to actual results. Readers are referred to the
sections entitled "Risk Factors" in the Company's periodic filings with
the British Columbia Securities Commission, which can be viewed at
www.SEDAR.com, and with the United States Securities and Exchange
Commission, which can be viewed at www.SEC.gov.
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