Lookout Hill

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 and surrounds 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. The Hugo Dummett deposit is further divided into Hugo North and Hugo South deposits.

Porphyry systems are generally regional in scale and often occur as clusters of several deposits covering geographic areas spanning many kilometres. An extension to the Hugo North deposit has been extensively drill tested to 625 metres north of the Entrée-Ivanhoe property boundary, onto an area of Lookout Hill known as Copper Flats. This drilling was done as part of an agreement that Entrée signed with Ivanhoe in November 2004. On February 1, 2006, we announced that an inferred mineral resource estimate for the extension area had been prepared by Ivanhoe. This initial inferred resource on Entrée’s Copper Flats(at a 0.6% copper equivalent cut-off) is estimated at 190 million tonnes averaging 1.57% copper and 0.53 g/t gold (for a copper equivalent grade of 1.91 %), containing approximately 6.6 billion pounds copper and 3.2 million ounces gold.

Drilling has encountered Hugo North style mineralization for up to 1,300 metres north of the joint Entrée-Ivanhoe boundary. This drilling was also done as part of the Agreement with Ivanhoe. This Agreement allows Ivanhoe to earn up to 70 – 80% interest in a portion of Lookout Hill by conducting deep drilling and development within a specified Project Property area. Ivanhoe has completed 42 drill holes totally 32, 400 meters on the Project Property and continues an aggressive drilling program as the deposit is still open to the north.

Since 2002, Entrée has conducted a comprehensive exploration program on the 100% owned Entrée property, outside of the agreement area. Work has focused on the following targets:

• Zone III epithermal gold zone
• Zone I/II – West Grid advanced argillic (quartz-alunite-topaz) epithermal zone
• Bayan Ovoo copper showings
• Ring Dyke gold-copper prospect

Zone III is defined at surface by a 400 by 150 metre area of silica and sericite altered volcanics. The area is cut by strongly auriferous quartz veins that lie at the northern margin of a subtle 2+ kilometre-long IP chargeability anomaly and at the northern end of a 5+ kilometre-long NNE-trending magnetic low, interpreted to represent a zone of hydrothermal alteration. Soil sampling completed in 2005 extended the zone for an additional 2.5 kilometres southwards along the axis of the magnetic low. To date, only 600 metres at the north end of Zone III has been tested by eight drill holes, two of which were completed in 2005. The deep IP survey also outlined a new anomalous area lying to the west of Zone III. This 3+ kilometre-long chargeability anomaly coincides with scattered gold and copper values in soils, with values exceeding 400 ppm copper and 200 ppb gold.

Zones I/II and West Grid Areas

Detailed geological mapping south from the Zone I/II advanced argillic alteration in 2005 defined a major unconformity separating younger Carboniferous age volcanics and sediments in the area of Zones I/II from older Devonian age volcanics, sediments and intrusives underlying much of the West Grid area. The Devonian rocks appear to be direct correlatives of the “hanging wall” sequence that immediately overlies Ivanhoe’s Hugo North copper-gold deposit, which is the northern extension of the Oyu Tolgoi system. Geological mapping has also identified a new area of silica and advanced argillic (quartz+alunite+clay) alteration approximately 3.5 kilometres south of and on strike from Zone I. Deep probing geophysical (IP, resistivity and magnetic) surveys were completed in 2005 and were successful in defining six large, deep targets occurring within the Devonian rocks over a strike length in excess of eight kilometres in the area of the West Grid. Three of these targets have associated anomalous copper and gold values in soils and one is associated with anomalous molybdenum values in selected rock samples ranging from 1,000 to 8,400 ppm. This NNE-trending series of geophysical anomalies now covers more than 12 kilometres and is similar in dimensions to, and sub-parallel with, the Oyu Tolgoi porphyry copper-gold system to the east.

Bayan Ovoo

The Bayan Ovoo copper showings are located in the extreme southwest corner of the property. In this area, a resistant ridge of andesitic to basaltic volcanics hosts copper oxide showings over a strike length of 2+ kilometres. Immediately north of and sub-parallel to the copper showings are a four kilometre-long series of IP chargeability anomalies. Preliminary drilling of these targets in 2005 encountered thick zones of advanced argillic alteration with significant amounts of disseminated and vein controlled pyrite and anomalous copper values (up to 379 ppm copper over two metres).

Ring Dyke Area

Entrée’s Ring Dyke area is a new target discovered by the 2005 reconnaissance program, located 8.5 kilometres northeast of the Bayan Ovoo copper showings. The area hosts numerous limonitic and silicified outcrops that define a circular area having a diameter of approximately 1 kilometre. Initial surface sampling in selected rocks returned anomalous gold and copper values to 149 ppb gold and 1,235 ppm copper. IP and magnetic surveys were completed over a 4.5 by 6 kilometre grid area in the fall of 2005. Results of the geophysics show a strong circular chargeability anomaly (approximately three kilometres east-west and 2.5 kilometres north-south) which is truncated to the northwest by a major regional structure.

Manlai

The Manlai project is located 120 kilometres north of Entrée’s Lookout Hill project and is adjacent to Ivanhoe’s Kharmagtai copper-gold project. Recent exploration by Entrée has defined three distinct porphyry-style targets defined by coincident anomalous copper and molybdenum in soils, surface alteration and copper mineralization, and anomalous geophysical (IP) signatures. Four drill holes drilled by Entrée in 2005 provided a preliminary test of these zones. Results included 22 m of 0.33% copper and 12 m of 0.33% copper.