Entree Resources provides update on arbitration

As previously disclosed, on May 26, 2022, the Company commenced binding arbitration proceedings to seek declarations and orders for specific performance relating to certain provisions of the 2004 Equity Participation and Earn-in Agreement and the JV Agreement. The arbitration was commenced in Vancouver, British Columbia under the International Commercial Arbitration Act. A three-member Tribunal was appointed and the evidentiary hearing took place in Vancouver on April 8 and 9, 2024. Closing submissions were heard in Toronto on July 10, 2024. To date, no decision has been released and the Company does not know when a decision will be forthcoming. Further, the Company does not know if the Tribunal will release a partial or final decision. If a partial decision is released further submissions and hearings may be necessary. There can be no assurance that a decision will be favourable to the Company. If an arbitration decision is received prior to the execution of a definitive alternative agreement, there can be no assurances as to whether both parties would continue to try to progress a commercial resolution as currently contemplated or at all. Stephen Scott commented, “In 2022, Lift 1 Panel 0 underground development work was progressing. We were doubtful the Company could successfully negotiate a reasonable outcome before the work reached the JV license boundary, which at the time was expected at some point in 2023. We were facing the prospect of significant delays to JV development work if contractual certainty and transfer of the licenses could not be achieved. Nor could we advance discussions with the Government of Mongolia in a meaningful way without first confirming our underlying contractual rights and obligations vis-a-vis OTLLC. In that context, our Board made the difficult decision to commence binding arbitration. The Company’s interest in the Entree/Oyu Tolgoi JV property has always been its most important asset, and our future cannot be left to chance. It appears we may yet need a positive decision from the Tribunal to avoid further delays to development. That said, the parties’ preference has always been to align through negotiation, and we remain hopeful that can be achieved.”