Mr. David Jan reports

ENTREE RESOURCES ANNOUNCES FIRST QUARTER 2024 RESULTS

Entree Resources Ltd. has filed its interim financial results for the first quarter ended March 31, 2024. All numbers are in U.S. dollars unless otherwise noted.

Q1 2024 highlights

Oyu Tolgoi underground development update

The Oyu Tolgoi project in Mongolia includes two separate landholdings: the Oyu Tolgoi mining licence, which is held by Oyu Tolgoi LLC (OTLLC), and the Entree/Oyu Tolgoi joint venture property, which is a joint venture partnership between Entree and OTLLC. Rio Tinto owns 66 per cent of OTLLC and is the manager of operations at Oyu Tolgoi.

• On April 17, 2024, Rio Tinto announced ramp-up of the Oyu Tolgoi Lift 1 underground mine continues in line with its long-term plan. Oyu Tolgoi is set to become the world's fourth-largest copper mine by 2030 with the operation expected to deliver average mined copper production of approximately 500,000 tonnes per annum between 2028 and 2036.
• OTLLC continues to see strong performance from the Lift 1 underground mine, with a total of 99 Lift 1 draw bells opened from Panel 0 on the Oyu Tolgoi mining licence, including 13 draw bells during the quarter ended March 31, 2024. In the first quarter 2024, OTLLC delivered 1.3 million tonnes of ore milled from Panel 0 on the Oyu Tolgoi mining licence at an average copper head grade of 1.67 per cent.
• Shaft sinking continued during the first quarter 2024. At the end of March, shafts 3 and 4 reached 1,076 metres and 1,150 metres below ground level, respectively. Final depths required for shafts 3 and 4 are 1,130 metres and 1,176 metres below ground level, respectively. Shaft 4 breakthrough (sinking completion) was achieved in early April. Rio Tinto continues to expect both shafts to be commissioned in the second half 2024.
• As at March 31, 2024, construction of the conveyor to surface works was 94 per cent complete. Commissioning remains on track for the second half 2024.
• Construction works for the concentrator conversion remain on schedule. Commissioning is expected to be progressively completed from the fourth quarter 2024 through to the second quarter 2025.
• Construction of primary crusher 2 commenced in December, 2023, and is due to be completed by the end of 2025.
• OTLLC's 2023 Oyu Tolgoi feasibility study (OTFS23) for the Lift 1 underground mine has been submitted to and is under review by applicable regulatory bodies in Mongolia. The Lift 1 underground mine incorporates the development of three panels (panels 0, 1 and 2). The Hugo North Extension (HNE) deposit on the Entree/Oyu Tolgoi JV property is located at the northern portion of Panel 1.
• Drilling programs to support a Lift 2 prefeasibility study are in progress. Mineralization from Lift 2 will be included in an updated resource model for Hugo North (including Hugo North Extension).

Entree/Oyu Tolgoi JV property:

• First Lift 1 Panel 1 development work on the Shivee Tolgoi mining licence is expected to commence in the fourth quarter 2024. Development work will start in the southwest corner of the HNE deposit and will establish the initial Panel 1 western ore handling truck chute, including extraction-level tipple development, the truck chute chamber on the haulage level and the supporting ventilation loop with the return air level. OTLLC has advised the company all 2024 development will be in rock classified as waste, which will be stockpiled separately and sampled in accordance with OTLLC's standard sampling protocols and procedures.
• Underground and surface infill diamond drilling at the Hugo North Extension deposit on the Shivee Tolgoi mining licence is in progress. Approximately 14,128 metres of underground drilling in 25 holes and 6,840 metres of surface drilling in four holes is planned for 2024. To date, approximately 4,475 metres of underground drilling in 13 holes and approximately 1,012 metres of surface drilling in one hole has been completed. The principal purpose for the drilling is to support the Lift 2 prefeasibility study and updated resource model for Hugo North (including Hugo North Extension).
• OTLLC is also proposing approximately 8,785 metres of diamond drilling in five surface holes on the Heruga deposit (Javhlant mining licence) in 2024 to increase orebody knowledge and support an order of magnitude study. No drilling has been conducted on the Heruga deposit since 2008.
• The 2024 exploration program planned for the Shivee Tolgoi mining licence will focus on the Airstrip, Ulaan Khud South and Ridge targets, including approximately 2,500 metres of diamond drilling in two inclined holes (one at Ulaan Khud South (approximately 1,300 metres) and the other at the Ridge target (approximately 1,200 metres), located midway between Ulaan Khud and Hugo North Extension) and geological and geophysical studies. On the Javhlant mining licence, work will be conducted on the Bumbat Ulaan target and the Heruga Trend (Heruga South and Heruga West targets). One diamond drill hole is planned for each of the Heruga South (approximately 1,300 metres) and Heruga West (approximately 600 metres) targets as well as geological and geophysical studies. At Bumbat Ulaan, approximately 1,200 metres of scout reverse circulation drilling in four holes is planned.

Corporate:

• For the Q1 2024 period, the company's operating loss was $1.1-million compared with $900,000 in Q1 2023. The increase was mainly due to legal costs for both commercial negotiations with OTLLC and Rio Tinto and the arbitration proceedings.
• For the Q1 2024 period, the operating cash outflow before changes in non-cash working capital items was $1-million compared with $700,000 in Q1 2023.
• As at March 31, 2024, the cash balance was $5.1-million and the working capital balance was $4.9-million.

Outlook and strategy

Entree's primary objective is to confirm the transfer of the Shivee Tolgoi and Javhlant mining licences from the company's Mongolian subsidiary to OTLLC as contemplated by the joint venture agreement between the company and OTLLC, either in conjunction with finalization, execution and closing of an agreement with OTLLC to restructure or amend the existing Entree/Oyu Tolgoi JVA to streamline the operating environment for both parties, or enforcement of certain provisions of the 2004 equity participation and earn-in agreement and Entree/Oyu Tolgoi JVA pursuant to binding arbitration proceedings commenced by the company in 2022. The company currently is registered in Mongolia as the 100-per-cent ultimate holder of the licences.

The commencement of arbitration proceedings followed protracted discussions with Rio Tinto and OTLLC to confirm the transfer of the Shivee Tolgoi and Javhlant mining licences to OTLLC. The arbitration was commenced in Vancouver, B.C., under the International Commercial Arbitration Act (British Columbia). A three-member tribunal has been appointed and the first arbitration hearing took place in Vancouver on April 8 and 9, 2024.

Notwithstanding the continuing arbitration proceedings, the company remains committed to achieving a commercial resolution with Rio Tinto and OTLLC. Any definitive agreement reached between the company and OTLLC to restructure or amend the existing Entree/Oyu Tolgoi JVA would be subject to Toronto Stock Exchange acceptance and the requirements of Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions applicable to a related party transaction. There are no assurances that a definitive agreement will be finalized and executed, or if finalized and executed, that the transaction would close.

The company has also been in discussions with Erdenes Oyu Tolgoi LLC (the state-owned company that holds the government's 34-per-cent interest in OTLLC) regarding the potential for the government of Mongolia and Erdenes Oyu Tolgoi LLC to conclude an agreement with the company for the state to share in 34 per cent of the economic benefit of the company's interest in the Entree/Oyu Tolgoi JV property. The Minerals Law of Mongolia provides the state may share in up to 34 per cent of the economic benefit derived from exploitation of a mineral deposit of strategic importance where proven reserves were determined through financing sources other than the state budget. The Hugo North Extension copper-gold deposit on the Shivee Tolgoi mining licence and the Heruga copper-gold-molybdenum deposit on the Javhlant mining licence are mineral deposits of strategic importance.

The company's interim financial statements and management's discussion and analysis (MD&A) for the first quarter ended March 31, 2024, are available on the company's website, on SEDAR+ and on OTC Markets.

Qualified person

Robert Cinits, PGeo, consultant to Entree and the company's former vice-president, corporate development, and a qualified person as defined by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects, has approved the technical information in this release. For further information on the Entree/Oyu Tolgoi JV property, see the company's technical report, titled "Entree/Oyu Tolgoi Joint Venture Project, Mongolia, NI 43-101 Technical Report," with an effective date of Oct. 8, 2021, available on the company's website and on SEDAR+.

About Entree Resources Ltd.

Entree Resources is a well-financed Canadian mining company with a unique carried joint venture interest on a significant portion of one of the world's largest copper-gold projects -- the Oyu Tolgoi project in Mongolia. Entree has a 20-per-cent or 30-per-cent carried participating interest in the Entree/Oyu Tolgoi joint venture, depending on the depth of mineralization. Horizon Copper Corp. and Rio Tinto are major shareholders of Entree, beneficially holding approximately 24 per cent and 16 per cent of the shares of the company, respectively.

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