Mr. Stephen Scott reports

ENTRÉE RESOURCES PROVIDES CORPORATE UPDATE

Entree Resources Ltd. has provided an update regarding efforts to transfer the Shivee Tolgoi and Javkhlant mining licences (the JV licences) in Mongolia to the company's joint venture partner, Oyu Tolgoi LLC (OTLLC), and other corporate matters.

Stephen Scott, the company's president and chief executive officer, commented, "Given the critical nature of the transfer of the JV licences to OTLLC, the company wanted to provide an update to shareholders on this and other ongoing issues, including state participation in Entree's interest in the area of the JV licences.

"We are encouraged by the government of Mongolia's commitment to improving the business environment for foreign investors, as evidenced by the Prime Minister's recent statements during the Mongolia Economic Forum and certain resolutions passed at a July 23, 2025, cabinet meeting. Entree is on standby to work with government of Mongolia representatives and agencies to resolve all outstanding issues as quickly as possible to pave the way for resumption of lift 1 panel 1 development work at the Hugo North Extension deposit. The timely restart of work is necessary to avoid economic loss to all parties, including the people of Mongolia."

Transfer of JV licences to OTLLC

On June 6, 2025, the company, OTLLC and Rio Tinto separately announced a pause in lift 1 panel 1 underground lateral development work on the Shivee Tolgoi mining licence until the JV licences have been transferred from the company's wholly owned subsidiary Entree LLC to OTLLC as manager on behalf of the Entree/Oyu Tolgoi joint venture.

In February, 2025, following a partial final award made by the three-member international arbitration tribunal appointed in connection with the company's binding arbitration proceedings against OTLLC, Entree LLC and OTLLC executed licence transfer agreements to govern the transfer of the JV licences. The parties jointly lodged the licence transfer agreements and supporting documentation with the Mongolian tax authority (the MTA) for the assessment of tax on the transfer of the JV licences in accordance with applicable laws of Mongolia. Corporate income tax at a rate of 10 per cent of the value of the JV licences (with certain deductions allowed) will be assessed. The methodology to calculate the value of the JV licences for corporate income tax purposes is set out in decree No. 302 passed by the Minister of Finance on Dec. 31, 2019. The calculations must be confirmed by the MTA and taxes assessed and paid before the documentation necessary to affect the transfer of the JV licences may be submitted to the Mineral Resources and Petroleum Authority of Mongolia (MRPAM) for registration.

The company and OTLLC have actively engaged with the MTA and have provided all materials necessary for the MTA to confirm the calculations of the values of the JV licences in accordance with the methodology. No confirmation has been received from the MTA within the time frame prescribed by law. On May 19, 2025, Entree LLC lodged a formal complaint with the MTA. On July 3, 2025, the MTA advised Entree LLC in writing it cannot confirm the calculations of the values of the JV licences and provide a tax payment certificate until the percentage of State ownership is determined.

On Aug. 1, 2025, Entree LLC filed a claim with the Administrative Court of Mongolia seeking an order for the MTA to review and provide confirmation of the calculations of the values of the JV licences in accordance with applicable laws of Mongolia.

State participation

The Minerals Law of Mongolia provides the state may be an up to 34-per-cent equity participant with any private legal entity in the exploitation of a mineral deposit of strategic importance where proven reserves were determined through funding sources other than the state budget. The parliament of Mongolia may determine that the state receive royalty payments in lieu of an equity interest.

On April 9, 2025, the government of Mongolia adopted resolution No. 170, which establishes the boundaries of certain strategic deposits, including the Oyu Tolgoi group of deposits. The JV licences are included in the boundaries of the Oyu Tolgoi strategic deposit. The Minister of Industry and Mineral Resources is assigned to oversee the implementation of resolution No. 170. No notice or communication has been received by the company with respect to resolution No. 170.

The company has consistently maintained its willingness to fulfil any obligation under Mongolian law to provide the state 34 per cent of the economic benefit that the company derives from its 20-per-cent contractual interest in the area of the JV licences. The state already holds 34 per cent of the economic benefit that OTLLC derives from its 80-per-cent interest by virtue of Erdenes Oyu Tolgoi LLC's shareholding in OTLLC and the 2009 Oyu Tolgoi investment agreement.

The company has been actively attempting to engage with representatives of the government of Mongolia and Erdenes Oyu Tolgoi LLC to resolve issues around state participation. On June 11, 2025, a new Prime Minister of Mongolia was appointed and on June 18, 2025, a new cabinet was appointed.

On July 2, 2025, the Parliament of Mongolia approved a resolution to establish a temporary oversight committee to be chaired by O. Batnairamdal, to conduct a special investigation related to the protection of Mongolia's interests and the enhancement of benefits derived from the exploitation of the Oyu Tolgoi strategic deposit. The scope of the special investigation includes reviewing the determination and valuation of the resources within the area of the JV licences and assessing the basis for determining the percentage of state ownership. No formal notice or communication from the temporary oversight committee has been received by the company.

The company is also aware a resolution was approved by the government of Mongolia at a July 23, 2025, cabinet meeting, instructing relevant government members to conduct negotiations with foreign investors from certain companies including Entree LLC. These negotiations are to be carried out within the framework of the Constitution of Mongolia, international treaties, and applicable laws and regulations. The goal is to finalize draft agreements, develop relevant proposals and conclusions, and present the finalized versions to the cabinet meeting.

Entree is currently seeking to understand the engagement process and will update the market in due course.

Royal Gold agreements to acquire Sandstorm Gold and Horizon Copper

On July 7, 2025, Sandstorm Gold Ltd. and Horizon Copper Corp. announced they had entered into agreements with Colorado-based Royal Gold Inc., pursuant to which Royal Gold will acquire all the outstanding shares of Sandstorm Gold and Horizon Copper in a pair of related transactions. The parties anticipate both transactions will close in the fourth quarter 2025, subject to the parties obtaining necessary regulatory approvals and shareholder votes.

Horizon Copper beneficially owns 50,297,717 common shares, or 24.25 per cent of the outstanding shares of the company and holds non-transferable warrants to purchase 312,601 common shares of the company at a price of $3.00 per share expiring Jan. 23, 2027. The company has an agreement with Sandstorm Gold to use future payments that it receives from its interest in the Entree/Oyu Tolgoi JV property to purchase and deliver gold, silver and copper credits to Sandstorm Gold. Further information in relation to the Sandstorm agreement is available in the company's AIF (annual information form) available at SEDAR+.

Qualified person

Robert Cinits, PGeo, a qualified person as defined by National Instrument 43-101 -- Standards of Disclosure for Mineral Projects, has approved the technical information in this release. For further information on the Entree/Oyu Tolgoi JV property, see the company's technical report, titled "Entree/Oyu Tolgoi Joint Venture Project, Mongolia, NI 43-101 Technical Report," with an effective date of Oct. 8, 2021, available on SEDAR+.

About Entree Resources Ltd.

Entree Resources is a well-financed Canadian mining company with a unique carried joint venture interest on a significant portion of one of the world's largest copper-gold projects -- the Oyu Tolgoi project in Mongolia. The Oyu Tolgoi project comprises the Oyu Tolgoi mining licence, which is held by Entree's joint venture partner OTLLC and the Entree/Oyu Tolgoi JV property, which is a joint venture partnership between Entree and OTLLC. Rio Tinto owns 66 per cent of OTLLC and is the manager of operations at Oyu Tolgoi. Entree has a 20-per-cent or 30-per-cent carried participating interest in the Entree/Oyu Tolgoi JV, depending on the depth of mineralization. Horizon Copper and Rio Tinto are major shareholders of Entree, beneficially holding approximately 24 per cent and 16 per cent of the shares of the company, respectively.

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