Entrée Gold jumps on Oyu Tolgoi licence deal progress
Entrée Gold (TSX:ETG) added 10% on Tuesday after the company announced progress in talks with Mongolian authorities over a disputed licence.
Mongolia in February suspended the Vancouver-based company's mining permits in an area adjacent to the Oyu Tolgoi, Rio Tinto's massive copper-gold project in the Asian nation.
According to Bloomberg the Mongolian government will take 34% of the Entree license within weeks, "based on a law that says Mongolia should have 34 percent of a strategic deposit," as part of the country's ongoing talks with Rio Tinto about Oyu Tolgoi phase 2 underground expansion.
Entrée Gold, now worth $44 million in Toronto, was more circumspect in its statement saying that talks are continuing and that any outcome must be acceptable to Entrée and its shareholders:
"While Entree has acknowledged that the transfer of the joint venture mining licences to OTLLC [Oyu Tolgoi LLC], as currently contemplated by the Entree-OT LLC joint venture, is important as these licences form an integral part of the future underground operations at Oyu Tolgoi, no final agreements have been reached and further discussions with all stakeholders are required."
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 $14 billion.