Entree Resources reports Q2 operating loss $0.6M vs. $0.9M last year

The company said, “On December 19, 2024, a partial final award was made by the three-member international arbitration Tribunal appointed in connection with the Company’s binding arbitration proceedings against OTLLC and Turquoise Hill Resources. The Tribunal ruled in favor of the Company on all issues and dismissed the Respondents’ counterclaims. A principal objective of the Company is to affect the transfer of the Licences from the Company’s Mongolian subsidiary Entree LLC to OTLLC in accordance with applicable laws of Mongolia as the next step in the implementation of the Award. Under the terms of the Entree/Oyu Tolgoi JVA, the Manager is required to hold all assets, including the Licences, on behalf of the Entree/Oyu Tolgoi JV participants. Transfer of the Licences to OTLLC, as Manager and owner of an 80% or 70% participating interest in the Entree/Oyu Tolgoi JV Property, is necessary to maximize operational efficiencies, provide certainty with respect to taxes and royalties, and minimize delays to Lift 1 Panel 1 lateral development work on the Shivee Tolgoi mining licence area. In February 2025, License Transfer Agreements were executed by Entree LLC and OTLLC to govern the transfer of the Licences. The parties jointly lodged the License Transfer Agreements and supporting documentation with the MTA for the assessment of tax on the transfer of the Licences. Corporate income tax at a rate of 10% of the value of the Licences will be assessed. The methodology to calculate the value of the Licences 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 Licences may be submitted to MRPAM for registration. As part of the Award, the Tribunal issued a final and binding declaration that all fees and taxes assessed on the transfer of the Licences pursuant to applicable laws of Mongolia will be for the account of the Entree/Oyu Tolgoi JV, with OTLLC contributing the Company’s 20% share as a Loan under Section 10.1 of the Entree/Oyu Tolgoi JVA. The Company and OTLLC have been actively engaged with the MTA and have provided all materials necessary for the MTA to confirm the calculations of the values of the Licences 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 Licences 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 Licences in accordance with applicable laws of Mongolia. Failure to complete the transfer of the Licences to OTLLC in a timely fashion will result in delays, which may be significant, to Oyu Tolgoi Lift 1 Panel 1 lateral development work on the Shivee Tolgoi mining licence area. Such delays could have an adverse effect on development costs and schedule, the business, assets, future cash flow, and financial condition of the Company, and the Company’s share price.”