Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Bullboard - Stock Discussion Forum Entree Resources Ltd ERLFF


Primary Symbol: T.ETG

Entree Resources Ltd. is a Canadian mining company. The Company is focused on the development and exploration of mineral property interests. The Company is principally focused on its Entree/Oyu Tolgoi JV Property in Mongolia. The Entree/Oyu Tolgoi joint venture property includes Lift 1 and Lift 2 of the Hugo North Extension copper-gold deposit, the Heruga copper-gold-molybdenum deposit, and a... see more

TSX:ETG - Post Discussion

Entree Resources Ltd > Waiting Game
View:
Post by Countrygent on Jul 28, 2023 11:08am

Waiting Game

It's been 19 years since ETG surrendered 80% of what have turned out to be immensely valuable deposits in HNE (Lifts 1 and 2) and Heruga to IVN by entering into the Earn-In Agreement.  Since then the JV has had long periods of restricted or no exploration.  The expense commitment of $40 million  promised by IVN turned out to be virtually negligible, although the financing of all exploration and development to production has been helpful to allow ETG to remain a viable player at OT.

But consider the failures of IVN, and then OTLLC (its successor to the OT assets and obligations after the IA was agreed with Mongolia in 2009).  The Earn-in promised best efforts to procure same-as IA treatment for ETG.  Not delivered.  A final JV Agreement should have been negotiation and executed - not accomplished.  The key high grade ore comprising HNE, particularly Lift 2, should have been definitively outlined by condemnation drilling - the question of the strike length and depth of Lift 2 and HNE is critical to ETG's valuation - not accomplished.  High priority drill targets across the JV - undrilled.  The question of Mongolia's goal of having a 34% interest in all OT deposits not resolved relating to ETG - no doubt because Rio and TRQ refused to shoulder the cost notwithstanding a contractual obligation to use best efforts to procure IA treatment for ETG.  The two mining licences over HNE and Heruga, still held in ETG's name notwithstanding an intention in 2008 forward that they would be transferred to OTLLC - they stand as security for unfulfilled obligations under the Earn in and Draft JV terms pending resolution.

I've repeated the same idea many times - OTLLC should buy out ETG in whole at a fair valuation, especially regarding the value of a materially increased size of HNE Lift 2 and the value of the prospective JV targets, 100% Shivee West, and an in-situ value for Heruga that gives value for the optionality of advancing the Heruga development timeline.  All ETG issues would vanish and the inefficient and clumsy ownership of a small passive interest holder (relative to all of OT) would be ended.  The public listing and the management of ETG contributes title or nothing to the project except unnecessary and duplicating administration expense.

But we wait.  In the meantime, however, watch the long term trend lines for copper and gold, once again both trending very close to what seem to be important psychological market levels of $4 copper and $2000 gold on the spot market.  

TRQ was taken out at a thin valuation - I have an axe to grind with the very accommodating valuation opinion given by TD Bank which employed a $3.50 long term price for copper in particular.  Reason being, even if copper producers could achieve supply balance for anticipated high growth demands in the next 15 years or so, in the valuation the discounting of future cashflows beyond 20 years or so renders the interim price far more important for defining the total asset value.  And the outlook for copper prices over the next ten years is that they should trend substantially higher.  They will also, like all commodities, respond to financial price inflation mitigating mining cost escalation.  In short, by waiting, the valuation picture for ETG is only going to improve, both by advancing time to production, and by confirming a period of higher metals prices in the JV production stream.

The stock is severely undervalued.  So hang in there if you can, signs are positive for substantial price gains whether by a large premium takeout, or merely the market finally recognizing the sizeable near term free cashflows due to ETG as HNE Lift 1 mining on the JV approaches.

it's all about the value of the NSR's and the situation looks very positive.

cg

Comment by Rock9011 on Jul 29, 2023 10:19pm
Give the big guys 80% and they want more. They deliver nothing as was promised. Certainly a good case for arbitration.   THe BS delay to April is a pretty febile execuse in my opinion. 
Comment by mrpancake on Aug 01, 2023 12:35am
Its been seven years since you convinced me to (to convince myself) to sell TRQ at $4.50 and start buying Entree at 34 cents (around end of October) That was a great move becuase TRQ was eventually  around $1. It got to the point where it would be foolish to buy more ETG ...now with an average 51 cents or so, I too look forward to resolution likely this year
Comment by UNKLAL on Aug 03, 2023 9:02am
Great post as usual Gent, good to hear from you!!! Let's hope Rio doesn't get the chance to buy this little gem on the cheap like TRQ, that I've been holding for a coon's age. It would be great if the stock gets taken out soon, cause I have some bank stocks I'm looking to put this dead money into right NOW!!! UNKLAL
Comment by Countrygent on Aug 04, 2023 7:55pm
Unk, you are a loyal shareholder through all of our ups and downs, like many.  It's interesting to me the number of veteran plungers in mining stocks who have built up positions and are not trading ETG, all of us pretty strong on the opinion we aren't seeing fair value in the stock trading price. As for dead money, I don't know, we do have a leveraged play here against copper and ...more  
The Market Update
{{currentVideo.title}} {{currentVideo.relativeTime}}
< Previous bulletin
Next bulletin >

At the Bell logo
A daily snapshot of everything
from market open to close.

{{currentVideo.companyName}}
{{currentVideo.intervieweeName}}{{currentVideo.intervieweeTitle}}
< Previous
Next >
Dealroom for high-potential pre-IPO opportunities