Dear Shareholder/Investor:
Thank you for your interest in Entrée Gold Inc., a Canadian gold and exploration company engaged in the exploration and advancement of copper and gold prospects worldwide.
I am pleased with the progress we continue to make on the development of our property portfolio in Mongolia and our recent acquisition in Arizona, USA. We have actively explored our Mongolian land package since 2002, attracting financial investments from Rio Tinto and Ivanhoe Mines Ltd. Our treasury now contains approximately C$34 million.
Our flagship asset is the Lookout Hill property, located in the south Gobi Desert near the border with China. Lookout Hill is comprised of three contiguous mining concessions covering more than 179,000 hectares completely surrounding Ivanhoe’s Oyu Tolgoi property. Oyu Tolgoi is host to the Hugo Dummett deposit, now recognized as the richest copper-gold porphyry deposit of its kind in history.
As a result of extensive drill testing, outlined in an agreement that Entrée signed with Ivanhoe in November 2004, an extension to the Hugo Dummett deposit has been confirmed to 625 metres north of the Entrée-Ivanhoe property boundary. On March 29, 2007, we announced that the Hugo North Extension is estimated to host an Indicated Resource of 117 million tonnes averaging 1.8% copper and 0.61 grams per tonne (g/t) gold for a copper equivalent grade of 2.19%. The contained metal in this Indicated Resource is estimated at 4.6 billion pounds of copper and 2.3 million ounces of gold. An additional Inferred Resource for this area is estimated at 95.5 million tonnes grading 1.15% copper and 0.31 g/t gold for a copper equivalent grade of 1.35%, containing 2.4 billion pounds of copper and 950,000 ounces of gold. Both the Indicated and Inferred Resources use a 0.6% copper equivalent cut-off grade. No consideration was made for metallurgical recoveries. Further drilling has encountered Hugo Dummett style mineralization for up to 1,300 metres north of the joint Entrée-Ivanhoe boundary indicating the mineralization system remains open to the north and to depth.
In conjunction with the work that Ivanhoe is conducting on the Hugo North Extension, we are actively exploring the remainder of the Lookout Hill project that lies outside the Entrée-Ivanhoe Agreement Area and our Manlai project, located 120 kilometers to the north.
In May 2006, Entrée secured an option to acquire the Sol Dos copper project in southeastern Arizona. The early-stage Sol Dos property is situated near the intersection of two major mineral-bearing structural trends in one of the premier copper districts in the world. Drilling of Sol Dos commenced April 2007 on targets outlined by IP and magnetometer surveys in 2006.
Rio Tinto and Ivanhoe participated in a Private Placement in Entrée in July 2005, adding over C$22 million to the treasury. Warrants associated with the Private Placement were exercised June 2007 resulting in an additional C$21.6 million. These investments and the recent exercise of warrants signify a strong endorsement by world-leading mining companies in Entrée’s management and property holdings. Our shares currently trade on three exchanges: The TSX (“ETG”), AMEX (“EGI”) and Frankfurt (“EKA”), thus giving us exposure to three very influential investing communities. Entrée is in sound financial condition and is well-positioned to build upon the value of the Company.
If you would like additional information, please visit our website at www.entreegold.com. Once again, I thank you for your interest and hope you will participate in the continued success of Entrée Gold Inc.
Sincerely,
Gregory G. Crowe
President & CEO
