VANCOUVER, BRITISH COLUMBIA--(Marketwired - Feb. 28, 2017) - Entrée Gold Inc. ("Entrée or the "Company") (TSX:ETG)(NYSE MKT:EGI)(FRANKFURT:EKA) is pleased to announce that its Board of Directors (the "Board") has unanimously approved a strategic reorganization of its business (the "Arrangement"). Pursuant to the Arrangement, Entrée's Ann Mason and Lordsburg projects (the "US Projects") will be transferred to a newly incorporated company, Mason Resources Corp. ("Mason"). Shareholders of Entrée ("Shareholders") will receive common shares in Mason ("Mason Common Shares") in proportion to their shareholdings in Entrée. There will be no change to Shareholders' existing interests in Entrée.
It is intended that, as part of the Arrangement, the Shareholders will receive Mason Common Shares by way of a share exchange, pursuant to which each existing share of Entrée (an "Entrée Common Share") is exchanged for one "new" share of Entrée and 0.45 of a Mason Common Share. Optionholders ("Optionholders") and warrantholders ("Warrantholders") of Entrée will receive replacement options and warrants of Entrée and options and warrants of Mason which are proportionate to, and reflective of the terms of, their existing options and warrants of Entrée. The reorganization will be effected by way of a plan of arrangement under the Business Corporations Act (British Columbia) (the "Plan of Arrangement") and must be approved by the Supreme Court of British Columbia (the "Court") and by the affirmative vote of 66 2/3% of the Shareholders, as well as the Shareholders, Optionholders and Warrantholders (collectively, the "Securityholders") voting together as a single class. A meeting of Securityholders to approve, among other things, the Arrangement, will be held on May 1, 2017 (the "Meeting").
Once the Arrangement becomes effective, the result will be two separate and focused, well-capitalized entities, each with a high quality advanced project providing new and existing shareholders with optionality as to investment strategy and risk profile.
Entrée currently has a treasury of approximately US$18.5 million, of which US$8.75 million will be transferred to Mason as part of the Arrangement. In the event that all outstanding warrants are exercised following the Arrangement, the two companies would receive up to an additional approximately C$6 million in the aggregate.
Entrée is undertaking the Arrangement in order to focus on its carried 20% joint venture interest in two of the Oyu Tolgoi deposits in Mongolia and potentially acquiring other value accreting and synergistic assets. The Arrangement is also intended to maximize Shareholder value by allowing the market to value Entrée's assets independently of the US Projects. It is expected that transferring the US Projects from Entrée to Mason will help accelerate development of the Ann Mason project and give scope to new acquisitions.
Mason will initially be managed by Entrée's current team of officers. Its board will consist of four directors who also currently sit on the Entrée Board, as well as at least one other new director who is independent of Entrée.
Additional details of the spin-out transaction will be included in an information circular to be mailed to Securityholders on or about March 24, 2017 in connection with the Meeting. Subject to receipt of all required Securityholder, Court and regulatory approvals, the Arrangement is expected to close by May 30, 2017.
Entrée will be attending PDAC in Toronto between March 5 and 9, 2017 and will give a presentation at the conference on Monday, March 6 at 2:20 p.m.
ABOUT ENTRÉE GOLD INC.
Entrée Gold Inc. is a Canadian mineral exploration company balancing opportunity and risk with key assets in Mongolia and Nevada. As a joint venture partner with a carried interest on a portion of the Oyu Tolgoi mining project in Mongolia, Entrée has a unique opportunity to participate in one of the world's largest copper-gold projects managed by one of the premier mining companies - Rio Tinto. Oyu Tolgoi, with its series of deposits containing copper, gold and molybdenum, has been under exploration and development since the late 1990s. Additionally, Entrée has also been advancing its Ann Mason Project in one of the world's most favourable mining jurisdictions, Nevada. The Ann Mason Project hosts the Ann Mason copper-molybdenum deposit as well as the Blue Hill copper deposit within the rejuvenated Yerington copper camp.
Sandstorm Gold, Rio Tinto and Turquoise Hill Resources are major Shareholders, holding approximately 14%, 10% and 8% of issued and outstanding shares, respectively.
