Horizon Copper Achieves Positive Result in Entrée Resources Arbitration Process
Horizon Copper Corp. (TSXV: HCU) (OTCQX: HNCUF) has recently shared good news regarding the arbitration proceedings with Entrée Resources Ltd. Focused on the Joint Venture Agreement (JVA) related to the Oyu Tolgoi copper project in Mongolia, this ruling has instilled greater confidence in the project's future development.
On December 19, 2024, Entrée announced the favorable outcome from the binding arbitration it initiated against its joint venture partner, Oyu Tolgoi LLC (OTLLC), and Turquoise Hill Resources Ltd. An international arbitration tribunal granted a partial award that supports crucial aspects of the JVA between Entrée and OTLLC. This decision concludes that OTLLC must hold its end of the agreement, ensuring clarity and stability as critical development work progresses, particularly in Lift 1 Panel 1.
Entrée and OTLLC have been involved in the Entrée/Oyu Tolgoi JVA, established under the amended 2004 Equity Participation and Earn-in Agreement, since OTLLC fulfilled its earn-in obligations back in 2008. However, the disagreements that led to this arbitration began in May 2022 when Entrée sought specific performance relating to various provisions of the Earn-in Agreement and JVA.
The tribunal's decision is significant and includes several binding declarations. Among them, OTLLC must deliver an executed copy of the JVA to Entrée, based solely on mutual amendments agreed upon. Furthermore, OTLLC is responsible for facilitating and accepting the transfer of the Shivee Tolgoi and Javhlant mining licenses for the joint venture as dictated by the JVA. Importantly, any taxes or fees associated with these transfers are covered under the agreement, with OTLLC covering Entrée’s 20% share as a loan in accordance with Section 10.1 of the JVA.
While this ruling clarifies the framework for collaboration moving forward, some aspects remain unresolved. Entrée's additional claims for specific performance, equitable damages, and associated costs are still pending. The company plans to keep the market updated on these matters as they develop.
In light of this outcome, Horizon Copper, which has a 24% equity stake in Entrée, views this arbitration verdict as a positive step towards increasing certainty within the Oyu Tolgoi project. Horizon's strong portfolio includes a 1.66% net profits interest in the Antamina copper mine and a 30% interest in the copper-gold Hod Maden project. The company actively aims to strengthen its asset base with a dedicated focus on copper projects.
This update serves as a reliever of concerns surrounding project continuity and is crucial for investors monitoring the progress of Horizon Copper and Entrée Resources in the competitive copper production landscape. With the arbitration proceedings behind them, stakeholders can now concentrate on the operational aspects and future milestones of the Oyu Tolgoi project.
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Entrée Resources' official website and view their press release from December 19, 2024. Horizon Copper continues to evolve as an influential player in the mining sector, committed to fostering growth and development within its existing portfolio while forging ahead in new opportunities.