Entrée Resources Ltd. has commenced binding arbitration proceedings in connection with the earn-in agreement with Turquoise Hill Resources Ltd. The parties have been operating under the joint venture agreement (JVA) terms since Oyu Tolgoi completed its earn-in obligations on the Entrée/Oyu Tolgoi joint venture property in Mongolia in 2008. Both Turquoise Hill and Oyu Tolgoi are respondents to the arbitration proceedings.
The commencement of arbitration proceedings follows ongoing discussions with Rio Tinto International Holdings Ltd. and Turquoise Hill regarding the potential for finalization and execution of an amended JVA. Entrée said its primary objective has been to advance amendments that it believes align the interests of all stakeholders as they are now understood, and upon finalization and execution, confirm the transfer of the Shivee Tolgoi and Javhlant mining licenses to Oyu Tolgoi as manager of the Entrée/Oyu Tolgoi joint venture.
Entrée said it remains committed to continuing discussions with Rio Tinto and Turquoise Hill.
The arbitration is being commenced in Vancouver, British Columbia, under the International Commercial Arbitration Act.
Entrée has a 20% or 30% carried participating interest in the Entrée/Oyu Tolgoi joint venture, depending on the depth of mineralization. Sandstorm Gold, Rio Tinto and Turquoise Hill are major shareholders of Entrée, holding approximately 25%, 9% and 7% of the shares of the company, respectively.
Turquoise Hill said it disputes the characterizations made by Entrée. Turquoise Hill said it has been in discussions with Entrée in order to resolve certain commercial disagreements in connection with the earn-in agreement. “The company reserves all of its rights and will vigorously defend itself,” it said.
