Entree Resources outlines Oyu Tolgoi JV license talks

Executive Summary

• Entree Resources provided a significant update on the regulatory and legal landscape surrounding the Entree/Oyu Tolgoi joint venture licences in Mongolia, detailing the outcomes of a Parliamentary temporary oversight committee investigation and the formation of a new government working group.
• The Parliamentary temporary oversight committee has submitted a draft resolution to Parliament regarding the state's ownership interest and valuation of the JV licence areas, which is now under consideration by the Standing Committee on Economics.
• Entree Resources has filed an administrative court claim to compel the Mongolian tax authority to review and confirm licence valuations, a prerequisite for transferring licence documentation to Oyu Tolgoi LLC (OT LLC).

Key Details

• Parliamentary Oversight Committee:
  • Established via Resolution No. 62 on July 2, 2025, to investigate Mongolia's interests and benefits from the Oyu Tolgoi strategic group.
  • Scope included determining state ownership interest and percentage based on reserves and valuation of JV licence areas.
  • Entree Resources submitted thousands of pages of documents and participated in numerous meetings.
  • A three-day public hearing was held in the first half of December 2025.
  • Approximately 300 witnesses were summoned, including former PMs, presidents, ministers, and representatives from Rio Tinto and OT LLC.
  • Stephen Scott (CEO) attended the Dec 8 hearing to answer questions regarding JV licences.
  • Dec 10 and 12 hearings focused on OT LLC's 2011 amended and restated shareholders' agreement.
  • On Dec 19, 2025, the committee reported findings and submitted a draft resolution to Parliament.
  • The draft resolution was returned to the Parliamentary Standing Committee on Economics for further consideration before resubmission to Parliament for debate.
• Government Working Group:
  • Established by Prime Minister Order No. 73 on Aug 22, 2025, led by the Minister of Industry and Mineral Resources.
  • Mandate: Negotiate the state's interest in the area of the JV licences.
  • Entree received official notice on Sept 18, 2025, and responded to the Minister's request regarding its negotiating team on Oct 17, 2025.
  • A preliminary meeting was held in Ulaanbaatar on Dec 10, 2025.
  • Negotiations are expected to commence shortly.
  • Entree will work with OT LLC and the government to resolve state participation in a mutually beneficial manner.
  • OT LLC holds an 80% (or 70% depending on mineralization depth) economic interest and has exclusive rights to construct/operate infrastructure, explore, and mine/process in the JV licence area.
• Administrative Court Claim:
  • Filed in Q3 2025 by Entree LLC with the Administrative Court of Mongolia.
  • Objective: Seek an order for the Mongolian tax authority to review and confirm the calculations of values of the JV licences in accordance with Mongolian law.
  • Context: Taxes must be paid before documentation for the transfer of JV licences to OT LLC can be submitted to the Mineral Resources and Petroleum Authority of Mongolia.
  • Status: Court hearing expected to be scheduled shortly.
• Company Interest:
  • Entree Resources holds a 20% or 30% carried participating interest in the Entree/Oyu Tolgoi joint venture, depending on the depth of mineralization.
  • Major shareholders: Royal Gold Inc. (~24%) and Rio Tinto (~16%).

Notable Quotes

• "The company supported the activities of the temporary oversight committee by submitting thousands of pages of requested documents in a timely manner and participating in numerous inspector meetings and discussions."
• "The company will work closely with its joint venture partner OT LLC and the government working group to ensure state participation in the area of the JV licences is resolved in a mutually beneficial manner in accordance with applicable laws."