Entree Gold: A Sleeping Copper Giant

Aug.10.11 | About: Entree Gold (EGI)
This is the second in a 10-part metals miner series. Entrée Gold (NYSEMKT:EGI) is a copper and gold exploration company with assets and interests in Mongolia, Nevada, Australia, and Peru. The company currently holds 811 million tons of indicated and inferred copper, ranking it #8 among companies with copper in the ground. In addition, the company holds interests in Yerington Mine, the #1 copper mining district in the US, which had previously produced 1.8 billion pounds of copper from 1918-82. The company’s Lookout Hill property in Mongolia surrounds Ivanhoe Mines’ (IVN) Oyu Tolgoi project, a part of which is subject to a joint venture with Ivanhoe Mines.
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Entrée has recorded 2.25 million ounces of gold, probable and inferred, in the various properties. Rio Tinto (NYSE:RIO) holds 13% of Entrée gold stock while Ivanhoe holds 11%. Management and directors hold 11% as well. Entrée’s treasury is currently $15 million, giving it about one and a half years of cash at current burn rates. Entrée has issued 124 million shares and currently trades at $2.04 per share.
With world markets expected to be half a million tons short of copper demand this year and facing additional demand increases from China and India, Entrée is positioned to become a major player in the copper market. Production is first expected in the Hugo North property in 2016, with production from Heruga expected to follow between 2019-22.
Therefore, this is a long term stock play that may not pay off for several years. But given the large amount of in-ground copper with additional unexplored assets, Entrée should be considered a sleeping giant in the copper miner category.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.