Entree Resources provides update on mining license transfers

Entree Resources (ERLFF) provides an update regarding efforts to transfer the Shivee Tolgoi and Javkhlant mining licenses in Mongolia to the Company’s joint venture partner Oyu Tolgoi and other corporate matters. Stephen Scott, the Company’s President and CEO, commented, “Given the critical nature of the transfer of the JV Licenses to OTLLC, the Company wanted to provide an update to shareholders on this and other ongoing issues, including State participation in Entree’s interest in the area of the JV Licenses. We are encouraged by the Government of Mongolia’s commitment to improving the business environment for foreign investors, as evidenced by the Prime Minister’s recent statements during the Mongolia Economic Forum and certain resolutions passed at a July 23, 2025 Cabinet meeting. Entree is on standby to work with Government of Mongolia representatives and agencies to resolve all outstanding issues as quickly as possible to pave the way for resumption of Lift 1 Panel 1 development work at the Hugo North Extension deposit. The timely restart of work is necessary to avoid economic loss to all parties, including the people of Mongolia”. On June 6, 2025, the Company, OTLLC, and Rio Tinto (RIO) separately announced a pause in Lift 1 Panel 1 underground lateral development work on the Shivee Tolgoi mining license until the JV Licenses have been transferred from the Company’s wholly owned subsidiary Entree LLC to OTLLC as Manager on behalf of the Entree/Oyu Tolgoi joint venture. In February 2025, following a partial final award made by the three-member international arbitration Tribunal appointed in connection with the Company’s binding arbitration proceedings against OTLLC, Entree LLC and OTLLC executed License Transfer Agreements to govern the transfer of the JV Licenses. The parties jointly lodged the License Transfer Agreements and supporting documentation with the Mongolian tax authority for the assessment of tax on the transfer of the JV Licenses in accordance with applicable laws of Mongolia. Corporate income tax at a rate of 10% of the value of the JV Licenses will be assessed. The methodology to calculate the value of the JV Licenses for corporate income tax purposes is set out in Decree No. 302 passed by the Minister of Finance on December 31, 2019. The calculations must be confirmed by the MTA and taxes assessed and paid before the documentation necessary to affect the transfer of the JV Licenses may be submitted to the Mineral Resources and Petroleum Authority of Mongolia for registration. The Company and OTLLC have actively engaged with the MTA and have provided all materials necessary for the MTA to confirm the calculations of the values of the JV Licenses in accordance with the Methodology. No confirmation has been received from the MTA within the timeframe prescribed by law. On May 19, 2025, Entree LLC lodged a formal complaint with the MTA. On July 3, 2025, the MTA advised Entree LLC in writing it cannot confirm the calculations of the values of the JV Licenses and provide a tax payment certificate until the percentage of State ownership is determined. On August 1, 2025, Entree LLC filed a claim with the Administrative Court of Mongolia seeking an order for the MTA to review and provide confirmation of the calculations of the values of the JV Licenses in accordance with applicable laws of Mongolia.