Entree Resources Ltd.

Entree Resources Ltd. is a junior copper producer headquartered in Vancouver, Canada, operating primarily in Asia. The company's portfolio consists of 2 projects, comprising 1 development and 1 advanced exploration project. Key assets include Hugo North Extension and Heruga. The company operates as a non-operating joint venture partner with a carried interest in a large-scale, long-life development project managed by a major global operator. Its business model is structured around a partnership where the operator funds the company's share of development and operating costs through a loan facility. This debt is repayable from a majority (90%) of the company's future share of cash flow from the sale of products, allowing the entity to retain a portion of cash flow even during the repayment period. This arrangement limits dilution risk and capital outlay for the company during the capital-intensive development phase. All mineral products are processed at the operator's facilities on an at-cost basis, eliminating the need for the company to develop its own processing infrastructure. The company's success is intrinsically linked to the operator's ability to successfully develop and manage the integrated operations, with value realization dependent on the project reaching and sustaining production as planned. The entity relies on its partner for all operational execution, technical studies, and information flow, with oversight provided through a joint venture management committee.

Strategic focus centers on de-risking its primary interest and securing its contractual rights to facilitate project development. A key strategic action involved initiating and successfully concluding binding arbitration proceedings to enforce the terms of foundational agreements, which resulted in the formal execution of a joint venture agreement and established a clear process for the transfer of key licenses to the project operator. This license transfer is a critical objective, necessary to optimize operational efficiencies and achieve certainty regarding the tax and royalty framework. Management's approach includes continuing discussions with its partner to potentially convert the existing joint venture agreement into a more effective structure of equivalent economic value. This potential new agreement would also provide a mechanism to address the state's right to economic participation. The enterprise supports the operator's technical studies and drilling programs aimed at optimizing mine design, de-risking development, and expanding the resource base, thereby enhancing the long-term value of its carried interest without direct operational involvement.

Executive leadership is composed of seasoned professionals with extensive global mining industry experience. The President and Chief Executive Officer possesses over 30 years of experience, including senior commercial roles at a major global mining firm. The Chief Financial Officer has over 20 years of experience in financial management for mining operations and development projects. The board of directors consists of 6 members, 5 of whom are independent, ensuring strong oversight. Board expertise is notable in specialized technical and financial areas, with one director having over 40 years of experience focused on block caving methods and another bringing extensive experience in mining finance from senior roles at major global investment banks. Governance is structured through 4 standing committees: Audit, Compensation, Corporate Governance & Nominating, and Technical. The Audit Committee, composed entirely of independent and financially literate directors, oversees financial reporting integrity and the external auditor relationship. The Technical Committee reviews and provides recommendations on work programs, mine designs, and resource estimates related to the joint venture's activities.

The organization demonstrates its commitment to social responsibility through targeted educational initiatives in the jurisdictions where it operates. In 2023, the company launched an annual scholarship program to provide financial support for university students enrolled in undergraduate programs in geology, mining engineering, and environmental science. This program, which covers tuition and accommodation for rural students, was expanded in 2024 to provide 40 one-year scholarships. To formalize its commitment to education, the entity entered into a Memorandum of Understanding with the School of Geology and Mining of the Mongolian University of Science and Technology. Furthering its support for youth development, the company also presented English language training scholarships in 2023 to 85 student and teacher medallists competing in State Olympiads for informatics, math, physics, and chemistry. While the project operator manages on-site environmental and social programs, these direct educational investments represent the company's distinct contribution to human development and capacity building.

The company's primary asset is its interest in a joint venture with Oyu Tolgoi LLC (OTLLC), which is managed by Rio Tinto. The company holds a 20% interest in mineralization below 560 metres and a 30% interest above that depth, with its share of costs funded by OTLLC via a loan. In February 2025, the Joint Venture Agreement was formally executed following a binding arbitration award in the company's favor against OTLLC and Turquoise Hill Resources Ltd. Major shareholders include Horizon Copper Corp., holding approximately 24.25% of outstanding shares, and Rio Tinto, with approximately 15.8%. Horizon acquired its position from Sandstorm Gold Ltd. in 2022. The company has a material contract, the Amended and Restated Equity Participation and Funding Agreement, with Sandstorm Gold Ltd., under which Sandstorm provided an upfront deposit in exchange for the future delivery of metal credits from a percentage of the company's share of production. The company's wholly-owned subsidiary, Entrée LLC, holds the mining licenses on behalf of the joint venture. In January 2025, the company completed a non-brokered private placement, which included participation from its insider, Horizon Copper Corp.