Entree Gold hammered after permit near Oyu Tolgoi cancelled
Vancouver's Entrée Gold (TSX:ETG) fell on Tuesday after Mongolian authorities pulled the company's mining licence near Oyu Tolgoi, Rio Tinto's massive copper-gold project in the Asian nation.
Bloomberg reports Mongolia's mining ministry in 2009 upgraded Entrée Gold's exploration permits to mining licenses, but according to the country's regulations only the Mineral Resource Authority are allowed to grant these, rendering the Canadian company's licence invalid
According to a statement "should Entree Gold mine the area, Mongolia will lose its share of profits from Oyu Tolgoi."
Entrée Gold was trading down 8% in Toronto on Tuesday affording it a $64 market value.
Just two weeks ago the company entered into a $55 million financing agreement with Sandstorm Gold (TSX:SSL) to advance its Mongolian and Nevada projects.
Rio Tinto, directly and through its majority ownership of Turquoise Hill Resources, the operators of Oyu Tolgoi, owns 23.6% of Entrée.
Oyu Tolgoi near the Chinese border is one of the biggest mining projects in the world with a final bill that could reach as much as $13 billion.
Mongolia has long coveted a a bigger slice of the massive copper-gold-silver project that recently produced its first concentrate and a mining bill to facilitate this is currently before the country's parliament.