entreegold40f.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 40-F

o		REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
OR
x		ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

Commission file number: 001-32570

ENTRÉE GOLD INC.

(Exact Name of Registrant as Specified in its Charter)

British Columbia	1040		N/A
(Province or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code)		(I.R.S. Employer Identification No.)

Suite 1201 - 1166 Alberni Street
Vancouver, British Columbia, Canada V6E 3Z3
( 604) 687-4777
(Address and Telephone Number of Registrant’s Principal Executive Offices)
National Registered Agents, Inc. 1090 Vermont Avenue NW, Suite 910 Washington, DC 20005 (888) 505-5229		Copies to: Kenneth G. Sam Dorsey & Whitney LLP Republic Plaza Building, Suite 4700 370 Seventeenth Street Denver, Colorado 80202 (303) 629-3445
(Name, address (including zip code) and telephone number (including area code) of agent for service in the United States)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class:	Name of Each Exchange On Which Registered:
Common Shares, no par value	NYSE Amex

Securities registered or to be registered pursuant to Section 12(g) of the Act: N/A

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: N/A

For annual reports, indicate by check mark the information filed with this form:

x Annual Information Form x Audited Annual Financial Statements

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: As at December 31, 2009, 97,059,346 common shares of the Registrant were issued and outstanding.

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
o Yes o No

EXPLANATORY NOTE

Entrée Gold Inc. (the “Company” or the “Registrant”) is a Canadian issuer eligible to file its annual report pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on Form 40-F pursuant to the multi-jurisdictional disclosure system of the Exchange Act. The Company is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act. The equity securities of the Company are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3.

FORWARD-LOOKING STATEMENTS

This annual report on Form 40-F and the exhibits attached hereto contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern the Company’s anticipated results and developments in the Company’s operations in future periods, planned exploration and development of its properties, plans related to its business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

Statements concerning reserves and mineral resource estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the property is developed, and in the case of mineral reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements, including, without limitation:

•

risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits;

•

results of initial feasibility, pre-feasibility and feasibility studies, and the possibility that future exploration, development or mining results will not be consistent with the Company’s expectations;

•

mining and development risks, including risks related to accidents, equipment breakdowns, labor disputes or other unanticipated difficulties with or interruptions in production;

•

the potential for delays in exploration or development activities or the completion of feasibility studies;

•

risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses;

•

risks related to commodity price fluctuations;

•

the uncertainty of profitability based upon the Company’s history of losses;

•

risks related to failure to obtain adequate financing on a timely basis and on acceptable terms for the Company’s planned exploration and development projects;

•

risks related to environmental regulation and liability;

•

risks that the amounts reserved or allocated for environmental compliance, reclamation, post-closure control measures, monitoring and on-going maintenance may not be sufficient to cover such costs;

•

risks related to tax assessments;

•

risks related to differences between U.S. and Canadian practices for reporting resources and reserves;

•

risks related to currency fluctuations;

•

risks related to governmental regulations;

•

uncertainty in our ability to obtain and maintain certain permits necessary to our current and anticipated operations;

•

uncertainty relating to our ability to attract and maintain qualified management to meet the needs of our anticipated growth and risks relating to our ability to manage our growth effectively;

•

risks related to our mineral properties being subject to prior unregistered agreements, transfers, or claims and other defects in title;

•

risks related to our history of losses, which we may continue to incur in the future;

•

risks related to increased competition that could adversely affect our ability to attract necessary capital funding or acquire suitable producing properties for mineral exploration in the future;

•

risks related to our officers and directors becoming associated with other natural resource companies which may give rise to conflicts of interests;

•

political and regulatory risks associated with mining development and exploration; and

•

other risks and uncertainties related to the Company’s prospects, properties and business strategy.

This list is not exhaustive of the factors that may affect our forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further in the exhibits attached to this annual report on Form 40-F. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the forward-looking statements. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made, and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by law. Investors are cautioned against attributing undue certainty to forward-looking statements

NOTE TO UNITED STATES READERS-

DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES

The Company is permitted, under the multi-jurisdictional disclosure system adopted by the United States Securities and Exchange Commission (the “SEC”), to prepare this annual report in accordance with Canadian disclosure requirements, which differ from those of the United States.

RESOURCE AND RESERVE ESTIMATES

The Company’s Annual Information Form (“AIF”) filed as Exhibit 1 to this annual report on Form 40-F has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws. The terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. These definitions differ from the definitions in SEC Industry Guide 7 under the United States Securities Act of 1993, as amended (the “Securities Act”). Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.

In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.

Accordingly, information contained in this annual report and the documents incorporated by reference herein contain descriptions of our mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

CURRENCY

Unless otherwise indicated, all dollar amounts in this annual report on Form 40-F are in United States dollars. The exchange rate of Canadian dollars into United States dollars, on December 31, 2009, based upon the noon rate of exchange as quoted by the Bank of Canada was U.S.$1.00 = Cdn.$1.0466.

ANNUAL INFORMATION FORM

The Company’s AIF for the fiscal year ended December 31, 2009 is filed as Exhibit 1 and incorporated by reference in this annual report on Form 40-F.

AUDITED ANNUAL FINANCIAL STATEMENTS

The audited consolidated financial statements of the Company for the years ended December 31, 2009 and 2008, including the report of the independent auditor with respect thereto, are filed as Exhibit 2 and incorporated by reference in this annual report on Form 40-F.

MANAGEMENT’S DISCUSSION AND ANALYSIS

The Company’s management’s discussion and analysis (“MD&A”) is filed as Exhibit 3 and incorporated by reference in this annual report on Form 40-F.

TAX MATTERS

Purchasing, holding, or disposing of securities of the Registrant may have tax consequences under the laws of the United States and Canada that are not described in this annual report on Form 40-F.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

At the end of the period covered by this annual report for the fiscal year ended December 31, 2009, an evaluation was carried out under the supervision of, and the with the participation of, the Company’s management, including its Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based upon that evaluation, the Company’s CEO and CFO have concluded that the disclosure controls and procedures were effective to give reasonable assurance that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles

A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. It should be noted that a control system, no matter how well conceived or operated, can only provide reasonable assurance, not absolute assurance, that the objectives of the control system are met. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate.

Management, including the CEO and CFO, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2009. In making this assessment, management used the criteria set forth in the Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment, management has concluded that, as of December 31, 2009, the Company’s internal control over financial reporting was effective and no material weaknesses in the Company’s internal control over financial reporting were discovered.

The Company is required to provide an auditor’s attestation report on its internal control over financial reporting for the fiscal year ended December 31, 2009. In this annual report, the Company’s independent registered auditor, Davidson & Company LLP, must state its opinion as to the effectiveness of the Company’s internal control over financial reporting for the fiscal year ended December 31, 2009. Davidson & Company has audited the Company’s financial statements included in this annual report on Form 40-F and has issued an attestation report on the Company’s internal control over financial reporting.

Auditor’s Attestation Report

Davidson & Company’s attestation report on the Company’s internal control over financial reporting is included in the audit report filed with Exhibit 2 and is incorporated by reference in this annual report on Form 40-F.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during its fiscal year ended December 31, 2009 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

CORPORATE GOVERNANCE

The Company’s Board of Directors (the “Board of Directors”) is responsible for the Company’s Corporate Governance policies and has a separately designated standing Compensation Committee, Corporate Governance and Nominating Committee, Audit Committees and Technical Committeee. The Board of Directors has determined that all the members of the Compensation, Nominating, and Audit Committees are independent, based on the criteria for independence and unrelatedness prescribed by section 803 of the NYSE Amex Company Guide.

In the year ended December 31, 2009, an additional committee of the Board of Directors was formed to consider transactions which might enhance shareholder value. That committee is comprised of James Harris, Mark Bailey and Michael Howard.

Compensation Committee

The primary objective of the Compensation Committee is to discharge the Board’s responsibilities relating to compensation and benefits of the executive officers and directors of the Company to ensure that such compensation realistically reflects the responsibilities and risks of such positions. In addition, the Compensation Committee makes recommendations for grants made under the Company’s Stock Option Plan, determines the recipients of, and the nature and size of share compensation awards granted from time to time, and determines any bonuses to be awarded from time to time. The Company’s Compensation Committee is comprised of Michael Howard (chairman), Mark Bailey and Peter G. Meredith. The Company’s CEO cannot be present during the Committee’s deliberations or vote.

Corporate Governance and Nominating Committee

The Corporate Governance and Nominating Committee is appointed by the Board of Directors to: (1) assist the Board, on an annual basis, by identifying individuals qualified to become Board members, and to recommend to the Board the director nominees for the next annual meeting of shareholders; (2) to assist the Board in the event of any vacancy on the Board by identify individuals qualified to become Board members, and to recommend to the Board qualified individuals to fill any such vacancy; and (3) to recommend to the Board, on an annual basis, director nominees for each Board committee. The members of the Corporate Governance and Nominating Committee are James L. Harris (chairman), Michael Howard and Peter G. Meredith.

Technical Committee

The Technical Committee consists of Mark Bailey, Lindsay Bottomer and Gregory Crowe, each of whom is a professional geologist. Neither Mr. Crowe, the President and Chief Executive of the Company, nor Mr. Bottomer, the Vice-President, Corporate Development of the Company, is an independent director. The mandate of the Technical Committee is to exercise all the powers of the Board (except those powers specifically reserved by law to the Board of Directors itself) during intervals between meetings of the Board of Directors pertaining to the Company’s mining properties, programs, budgets, and other related activities and the administration thereof.

AUDIT COMMITTEE

The Company has a separately designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Company’s Audit Committee is comprised of:

Mark Bailey:

Mr. Bailey is an exploration geologist with more than 34 years of industry experience. Since 1995, he has been the President and Chief Executive Officer of Minefinders Corporation Ltd. (“Minefinders”), a precious metals mining company whose shares are listed for trading on the Toronto Stock Exchange and the NYSE Amex. Minefinders has discovered more than 4 million ounces of gold and 165 million ounces of silver over the past six years and recently put the Dolores Mine in Mexico into production. Before joining Minefinders, Mr. Bailey held senior positions with Equinox Resources Inc. and Exxon Minerals. Since 1984, Mr. Bailey has worked as a consulting geologist with Mark H. Bailey & Associates LLC. Mr. Bailey is a highly respected industry veteran, renowned for his technical competence and strong ability to maximize exploration programs and budgets. Mr. Bailey is also currently a director of Minefinders, Dynasty Metals & Mining Inc. and Northern Lion Gold Corp.

Michael Howard:

Mr. Howard has been a director of the Company since May 16, 2007 and was appointed non-executive Deputy Chairman on the same day. Mr. Howard, the former leader of the Conservative Party in Britain and a distinguished lawyer, has filled many government posts, including Home Secretary, Secretary of State for Employment and Secretary of State for the Environment. Since leaving office he was Shadow Foreign Secretary and then Shadow Chancellor. He remains a Member of Parliament until the next election. Since 2005, Mr. Howard has been appointed to a number of corporate boards and is currently Chairman of Northern Racing Limited and Luup Ltd,. and director of Helphire plc.

Peter Meredith:

Mr. Meredith has been a director of the Company since November 24, 2004. He was nominated by Ivanhoe Mines as its representative on the Company’s Board, as per the terms of an Equity Participation and Earn-in Agreement effective November 9, 2004, between the Company and Ivanhoe Mines. Mr. Meredith is a seasoned executive with a strong background in corporate management and in key facets of the mining industry, including exploration, mine construction, financing and operations. Mr. Meredith is Ivanhoe Mines' deputy chairman, overseeing the company's business development and corporate relations. Mr. Meredith joined the Ivanhoe Group in 1996 and was chief financial officer of Ivanhoe Mines prior to his appointment as deputy chairman. He is Chairman of SouthGobi Energy Resources. Mr. Meredith is also currently a director of Great Canadian Gaming Corporation, Ivanhoe Energy Inc., Ivanhoe Mines Ltd., and Ivanhoe Australia Ltd. Prior to joining Ivanhoe, Mr. Meredith, a Chartered Accountant and a Certified Management Accountant, was a partner and director of Deloitte & Touche, one of the largest accounting and management consulting firms in the world. Mr. Meredith has over 35 years of experience as a business advisor, specializing in regulatory compliance and corporate finance. He is also a member of the Canadian Institute of Chartered Accountants.

In the opinion of the Company’s Board of Directors, all members of the Audit Committee are independent (as determined under Rule 10A-3 of the Exchange Act and section 803 of the NYSE Amex Company Guide) and are financially literate. The Audit Committee meets the composition requirements set forth by section 803(B)(2) of NYSE Amex Company Guide.

The members of the Audit Committee are appointed or reappointed on an annual basis by the Board of Directors.

The Audit Committee meets with the President, the CEO, the CFO and the Company’s independent auditors to review and inquire into matters affecting financial reporting, the system of internal accounting and financial controls, as well as audit procedures and audit plans. The Audit Committee also recommends to the Board of Directors which independent registered public auditing firm should be appointed by the Company. In addition, the Audit Committee reviews and recommends to the Board of Directors for approval the annual financial statements, the MD&A, and undertakes other activities required by exchanges on which the Company’s securities are listed and by regulatory authorities to which the Company is held responsible.

The full text of the Company’s Audit Committee Charter is attached to the Company’s AIF, filed as Exhibit 1 and incorporated by reference in this Annual Report on Form 40-F.

Audit Committee Financial Expert

The Company’s Board of Directors has determined that Peter Meredith qualifies as a financial expert (as defined in Item 407 of Regulation S-K under the Exchange Act) and is independent (as determined under Exchange Act Rule 10A-3 and section 803 of the NYSE Amex Company Guide).

PRINCIPAL ACCOUNTING FEES AND SERVICES - INDEPENDENT AUDITORS

The following table shows the aggregate fees billed to the Company by Davidson & Company LLP and its affiliates, Chartered Accountants, the Company’s independent registered public auditing firm, in each of the last two years.

	2009		2008
Audit Fees(1)	$	122,189	$	192,775
Audit Related Fees(2)		-		-
Tax Fees(3)		23,704		31,478
All other fees		-		-
Total:	$	145,892	$	224,253

(1)	Audits of the Company’s consolidated financial statements, meetings with the Audit Committee and management with respect of quarterly filings, consulting and accounting standards and transactions, issuance of consent in connection with Canadian and US securities filings.

(2)	Audit-related fees were paid for assurance and related services by the auditors that were reasonably related to the performance of the audit or the review of the Company’s financial statements that are not included in Audit Fees.

(3)	Tax compliance, taxation advice and tax planning for international operations.

PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES PROVIDED BY

INDEPENDENT AUDITORS

The Audit Committee pre-approves all audit services to be provided to the Company by its independent auditors. Non-audit services that are prohibited to be provided to the Company by its independent auditors may not be pre-approved. In addition, prior to the granting of any pre-approval, the Audit Committee must be satisfied that the performance of the services in question will not compromise the independence of the independent auditors. All non-audit services performed by the Company’s auditor for the fiscal year ended December 31, 2009 were pre-approved by the Audit Committee of the Company. No non-audit services were approved pursuant to the de minimis exemption to the pre-approval requirement.

OFF-BALANCE SHEET TRANSACTIONS

The Company does not have any off-balance sheet financing arrangements or relationships with unconsolidated special purpose entities.

CODE OF ETHICS

The Company has adopted a Code of Ethics (the “Code”) for the Company’s Chief Executive Officer, Chief Financial Officer and Controller, which was previously filed with the SEC as Exhibit 14.1 to Form 10-KSB for the year ended December 31, 2004 and is incorporated herein by reference.

A copy of the Code is available to any person, without charge, by written request to the Company at its principal executive office, located at Suite 1201 - 1166 Alberni Street, Vancouver, British Columbia, Canada V6E 3Z3.

During the fiscal year ended December 31, 2009, the Company did not substantively amend, waive or implicitly waive any provision of the Code with respect to any of the directors, executive officers or employees subject to it.

CONTRACTUAL OBLIGATIONS

The following table lists as of December 31, 2009 information with respect to the Company’s known contractual obligations.

	Less than						More than
	1 Year		1-3 Years		3-5 Years		5 Year		Total

Office leases	$	133,547	$	36,012		-		-	$	169,559
Total	$	133,547	$	36,012		-		-	$	169,559

NOTICES PURSUANT TO REGULATION BTR

There were no notices required by Rule 104 of Regulation BTR that the Registrant sent during the year ended December 31, 2009 concerning any equity security subject to a blackout period under Rule 101 of Regulation BTR.

NYSE AMEX CORPORATE GOVERNANCE

The Company’s common shares are listed on the NYSE Amex. Section 110 of the NYSE Amex Company Guide permits the NYSE Amex to consider the laws, customs and practices of foreign issuers in relaxing certain NYSE Amex listing criteria, and to grant exemptions from NYSE Amex listing criteria based on these considerations. A company seeking relief under these provisions is required to provide written certification from independent local counsel that the non-complying practice is not prohibited by home country law. A description of the significant ways in which the Company’s governance practices differ from those followed by domestic companies pursuant to NYSE Amex standards is as follows:

Shareholder Meeting Quorum Requirement: The NYSE Amex minimum quorum requirement for a shareholder meeting is one-third of the outstanding shares of common stock. In addition, a company listed on the NYSE Amex is required to state its quorum requirement in its bylaws. The Company’s quorum requirement is set forth in its Memorandum and Articles. A quorum for a meeting of members of the Company is two persons who are, or who represent by proxy, shareholders who, in the aggregate, hold at least 5% of the shares entitled to be voted at the meeting.

Proxy Delivery Requirement: The NYSE Amex requires the solicitation of proxies and delivery of proxy statements for all shareholder meetings, and requires that these proxies shall be solicited pursuant to a proxy statement that conforms to SEC proxy rules. The Company is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act, and the equity securities of the Company are accordingly exempt from the proxy rules set forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. The Company solicits proxies in accordance with applicable rules and regulations in Canada.

The foregoing are consistent with the laws, customs and practices in Canada.

In addition, the Company may from time-to-time seek relief from NYSE Amex corporate governance requirements on specific transactions under Section 110 of the NYSE Amex Company Guide by providing written certification from independent local counsel that the non-complying practice is not prohibited by our home country law, in which case, the Company shall make the disclosure of such transactions available on the Company’s website at www.entreegold.com. Information contained on its website is not part of this annual report.

UNDERTAKING

The Company undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.

CONSENT TO SERVICE OF PROCESS

The Company filed an Appointment of Agent for Service of Process and Undertaking on Form F-X with the SEC on Form 10-SB on October 12, 2004, with respect to the class of securities in relation to which the obligation to file this annual report on Form 40-F arises.

EXHIBIT INDEX

The following exhibits have been filed as part of the Annual Report:

Exhibit Description

Annual Information

99.1	Annual Information Form of the Company for the year ended December 31, 2009
99.2	The following audited consolidated financial statements of the Company, are exhibits to and form a part of this Report:
	Independent Registered Public Accounting Firm’s Report on Consolidated Financial Statements and Attestation on Internal Control Over Financial Reporting
	Consolidated Balance Sheets as of December 31, 2009 and 2008
	Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2009, 2008 and since inception (July 19, 1995 to December 31, 2009);
	Consolidated Statement of Stockholders’ Equity since the Date of Inception, including Balances as of July 19, 1995, April 30, 1996, April 30, 1997, April 30, 1998, April 30, 2000, April 30, 2001, April 30, 2002, April 30, 2003, December 31, 2003, December 31, 2004, December 31, 2005, December 31, 2006, December 2007, December 31, 2008 and December 31, 2009
	Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and since inception (July 19, 1995 to December 31, 2009);
	Notes to Consolidated Financial Statements
99.3	Management Discussion and Analysis
Certifications
99.4	Certificate of Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act
99.5	Certificate of Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act
99.6	Certificate of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.7	Certificate of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Consents
99.8	Consent of Davidson & Company LLP, Chartered Accountants
99.9	Consent of John Vann, Quantitative Group (QG)
99.10	Consent of Scott Jackson, Quantitative Group (QG)
99.11	Consent of Dean David, AMEC Minproc (AMEC Minproc)
99.12	Consent of Owen Cullingham

SIGNATURES

Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized.

ENTRÉE GOLD INC.

By:	Gregory G. Crowe
Name:	Gregory G. Crowe
Title:	Chief Executive Officer

Date: March 31, 2010

Annual Information Form

DATED MARCH 31, 2010

DATE OF INFORMATION			3
FORWARD LOOKING STATEMENT			3
CURRENCY AND EXCHANGE			4
DEFINED TERMS AND ABBREVIATIONS			4
CANADIAN DISCLOSURE STANDARDS FOR MINERAL RESOURCES AND MINERAL RESERVES			4
CORPORATE STRUCTURE			4

Name, Address and Incorporation			4
Intercorporate Relationships			6

GENERAL DEVELOPMENT OF THE BUSINESS			6

Three Year History			6
Significant Acquisitions in 2009			7

DESCRIPTION OF THE BUSINESS			8

General			8
Environmental Compliance			9
Competition			11
Employees			12

MINERAL PROPERTIES			12

MONGOLIA			12
The Lookout Hill Property			12
Entree-Ivanhoe Joint Venture			13
Investment by Ivanhoe Mines and Rio Tinto in Entrée Gold Inc.			14
Investment by Rio Tinto in Ivanhoe Mines			15
Mongolian Government			15
Property Description and Location - Mongolia			16
Manlai Property, Mongolia			27
OTHER PROJECTS			27
USA			27
China			30
Canada			31

RISK FACTORS			33
DIVIDENDS			42
CAPITAL STRUCTURE			42
MARKET FOR SECURITIES			43
ESCROWED SECURITIES			44
DIRECTORS AND OFFICERS			44
PROMOTERS			50
LEGAL PROCEEDINGS AND REGULATORY ACTIONS			50
INTEREST IN MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS			50
TRANSFER AGENTS AND REGISTRARS			50
MATERIAL CONTRACTS			50
INTEREST OF EXPERTS			52
ADDITIONAL INFORMATION			52

ANNUAL INFORMATION FORM

Unless otherwise specified in this Annual Information Form, the information herein is presented as at December 31, 2009, the last date of the Company’s most recently completed financial year-end.

FORWARD LOOKING STATEMENT

This Annual Information Form (the “AIF”) and documents incorporated by reference herein contain “forward-looking statements” and “forward looking information” (together the “forward looking statements”) within the meaning of securities legislation and the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements are made as of the date of this AIF or, in the case of documents incorporated by reference herein, as of the date of such documents and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable securities laws.

Forward-looking statements include, but are not limited to, the future price of gold and copper, the estimation of mineral reserves and resources, the realization of mineral reserve and resource estimates, the timing and amount of estimated future production, costs of production, capital expenditures, cost and timing of the development of new deposits, success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or “does not expect”, “is expected”, “budget”, “scheduled”, "estimates", “forecasts”, “intends”, “anticipates”, or “does not anticipate” or “believes” or variations of such words and phrases or statements that certain actions, events or results "may", “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. While the Company has based these forward-looking statements on its expectations about future events as at the date that such statements were prepared, the statements are not a guarantee of the Company’s future performance and are subject to risks, uncertainties, assumptions and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such factors and assumptions include, amongst others, the effects of general economic conditions, changing foreign exchange rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations and misjudgments in the course of preparing forward-looking statements. In addition, there are also known and unknown risk factors which may cause the actual results, performances or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, risks related to international operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold and copper; possible variations in ore reserves, grade recovery and rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining government approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled “Risk Factors” in this AIF. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

CURRENCY AND EXCHANGE

The Company’s financial statements are stated in United States dollars and are prepared in conformity with United States Generally Accepted Accounting Principles.

In this AIF, all dollar amounts are expressed in U.S. dollars unless otherwise specified. Because the Company’s principal executive office is located in Canada, many of its obligations are and will continue to be incurred in Canadian dollars (including, by way of example, salaries, rent and similar expenses). Where the disclosure is not derived from the annual financial statements for the year ended December 31, 2009, the Company has not converted Canadian dollars to U.S. dollars for purposes of making the disclosure in this AIF.

DEFINED TERMS AND ABBREVIATIONS

As used in this AIF, the terms "we", "us", "our", “the Company” and "Entrée" mean Entrée Gold Inc. and its wholly-owned subsidiaries Entrée LLC, Entree Resources LLC, Entrée Gold (US) Inc, Beijing Entrée Minerals Technology Company Limited, Entrée Holdings U.S. Inc. and Entree Australia Pty unless otherwise indicated.

CANADIAN DISCLOSURE STANDARDS FOR MINERAL RESOURCES AND MINERAL RESERVES

Canadian disclosure standard for the terms “Mineral Reserve,” “Proven Mineral Reserve” and “Probable Mineral Reserve” are Canadian mining terms as defined in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”), which adopts the definitions of the terms ascribed by the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) in the CIM Standards on Mineral Resources and Mineral Reserves, as may be amended from time to time by the CIM.

The definitions of proven and probable reserves used in NI 43-101 differ from the definitions in the United States Securities and Exchange Commission ("SEC") Industry Guide 7. Under SEC Guide 7 standards, a "Final" or "Bankable" feasibility study is required to report reserves, the three year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.

In addition, the terms "Mineral Resource", "Measured Mineral Resource", "Indicated Mineral Resource" and "Inferred Mineral Resource" are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. "Inferred Mineral Resources" may only be separately disclosed, have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases.

Accordingly, information contained in this report and the documents incorporated by reference herein containing descriptions of our mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

Name, Address and Incorporation

Entrée Gold Inc. is an exploration stage company engaged in the exploration of mineral resource properties located in Mongolia, China, Canada and the USA. The Company’s principal executive office is located at:

Suite 1201 - 1166 Alberni Street

Vancouver, British Columbia, Canada V6E 3Z3

Phone: (604) 687-4777

Website: www.entreegold.com.

Information contained on the Company’s website does not form part of this AIF. The Company’s registered and records office is at 2900-550 Burrard Street, Vancouver, BC, Canada V6C 0A3 and its agent for service of process in the United States of America is National Registered Agents, Inc., 1090 Vermont Avenue NW, Suite 910, Washington, DC 20005.

The Company maintains an administrative office in Ulaanbaatar, the capital of Mongolia, to support Mongolian operations. The address of the Mongolian office:

Ar Mongol Travel Building

Sukhbaatar District, 1st Khoroo,

Ulaanbaatar, Mongolia

Phone: 976.11.318562 / 330953

The Company also maintains an administrative office in Beijing, China, to support China operations. The address of our Beijing office is:

Wanda Plaza, Jianguo Road

Chaoyang District Beijing.

Our Company was incorporated in British Columbia, Canada, on July 19, 1995, under the name Timpete Mining Corporation. On February 5, 2001, we changed our name to Entrée Resources Inc. On October 9, 2002 we changed our name from Entrée Resources Inc. to Entrée Gold Inc. and, on January 22, 2003, we changed our jurisdiction of domicile from British Columbia to the Yukon Territory by continuing our company into the Yukon Territory. On May 27, 2005, the Company changed the governing jurisdiction from the Yukon Territory to British Columbia by continuing into British Columbia under the British Columbia Business Corporation Act.

At inception our Memorandum and Articles authorized us to issue up to 20 million common shares without par value. On September 30, 1997, we subdivided our authorized capital on a two new shares for one old share basis, resulting in authorized capital of 40 million common shares without par value. On February 5, 2001, we subdivided our common shares on a four new shares for one old share basis, thus increasing our authorized capital to 160 million common shares without par value and simultaneously reduced our authorized capital to 100 million common shares without par value. On October 9, 2002 we consolidated our authorized capital, both issued and unissued, on the basis of one new share for each two old shares, resulting in authorized capital of 50 million common shares without par value and simultaneously increased the authorized capital from 50 million common shares without par value to 100 million common shares without par value. On May 20, 2004, we received approval from our shareholders to increase our authorized share capital from 100 million common shares without par value to an unlimited number of common shares, all without par value. This increase became effective June 16, 2004, the date we filed the amendment to our Articles.

The Entrée Shares traded on the TSX Venture Exchange until 24 April 2006. On 24 April 2006, Entrée began trading on the TSX under the symbol “ETG”. The Entrée Shares also trade on the NYSE Amex, formerly the American Stock Exchange, under the symbol “EGI” and on the Frankfurt Stock Exchange under the symbol “EKA”.

Intercorporate Relationships

We have six wholly-owned subsidiary companies:

•

Entrée LLC, a Mongolian limited liability company formed July 25, 2002, which currently holds the Shivee Tolgoi and Javhlant mining licences

•

Entrée U.S. Holdings Inc., a British Columbia corporation organized on December 11, 2006, for the purpose of holding Entrée Gold (US) Inc.

•

Entrée Gold (US) Inc. an Arizona corporation formed on December 22, 2006, for the purpose of conducting our United States operations.

•

Beijing Entrée Minerals Technology Company Limited, a wholly foreign owned enterprise (WFOE) in China formed on May 27, 2008 for the purpose of conducting our China operations.

•

Entrée Resources LLC, a Mongolian limited liability company formed to hold those Mongolian assets outside of the Entrée-Ivanhoe Joint Venture

•

Entrée Australia Pty , an Australian limited liability company formed to effect the proposed Australian Schemes of Arrangement to acquire all of the outstanding shares and options of PacMag Metals Limited

GENERAL DEVELOPMENT OF THE BUSINESS

The Company is actively engaged in looking for properties to acquire and manage, which are complementary to its existing projects, particularly large tonnage base and precious metal targets in eastern Asia and the Americas.

The commodities the Company is most likely to pursue include copper, gold and molybdenum, which are often associated with large tonnage, porphyry related environments. The Company has entered into agreements to acquire these types of targets over the past several months in Nevada, U.S and British Columbia, Canada. Other jurisdictions may be considered, depending on the merits of the potential asset.

Smaller, higher grade systems will be considered by the Company if they demonstrate potential for near-term production and cash-flow. If the Company is able to identify smaller, higher grade bodies that may be indicative of concealed larger tonnage mineralized systems, it may negotiate and enter into agreements to acquire them.

A summary of important milestones/developments that impacted the Company in the last three years is set out in the table below, with reference to further discussion in relevant sections contained within this AIF:

March 2007	The Company announced an updated resource estimate for Hugo North Extension	Pg 22
June 2007	Exercise of warrants by Rio Tinto and Ivanhoe Mines (at a premium to market) resulting in over C$20 million added to the Company’s treasury	Pg 14
August 2007	The Company entered into an option agreement with Empirical Discovery LLC (“Empirical”)	Pg 27
November 2007	The Company completed a short form prospectus offering for gross proceeds of C$30 million (“Treasury Offering”)	Pg 14
November 2007	Rio Tinto and Ivanhoe Mines exercised their pre-emptive rights to maintain ownership resulting in over C$13 million added to the Company’s treasury	Pg 15
November 2007	The Company entered into an agreement with Zhejiang No. 11 Geological Brigade to explore for copper in Zhejiang Province, China	Pg 30
January 2008	The Company entered into a second option agreement with Empirical to explore on licences near Bisbee, Arizona	Pg 28
March 2008	The Company announced the first Heruga resource estimate	Pg 22

- 6 -

June 2008	Ivanhoe Mines completed its earn-in requirements, including expenditures of US$35 million resulting in the formation of a joint venture is formed on portion of Lookout Hill property	Pg 13
August 2008	Discovery of coal at Nomkhon Bohr at Lookout Hill	Pg 25
January 2009	Discovery of porphyry style mineralization at Lordsburg, NM	Pg 28
July 2009	The Company entered into an agreement with HoneyBadger Exploration Inc. (“HoneyBadger”) to option Blackjack Property in Nevada	Pg 29
July 2009	The Company’s agreement with Rio Tinto expired however, Rio Tinto retains pre-emptive right to maintain ownership percentage	Pg 15
September, 2009	The Company entered into an agreement with Bronco Creek Exploration Inc. (now a subsidiary of Eurasian Minerals Ltd., collectively, “Bronco Creek”) to option Roulette Property in Nevada	Pg 29
September 2009	The Company entered into an agreement with Taiga Consultants Ltd. (“Taiga”) to option Crystal Property in central British Columbia	Pg 31
October 2009	Investment Agreement is signed in Mongolia (by Ivanhoe Mines, Oyu Tolgoi LLC and Rio Tinto International Holdings Ltd.) which is subject to 10 conditions precedent to be satisfied before finalized	Pg 16
October 2009	Shivee Tolgoi and Javhlant mining licences received	Pg 16
November 2009	The Company entered into a Scheme Implementation Agreement with PacMag Metals Limited (“PacMag”), to acquire all outstanding shares and options through Australian Schemes of Arrangement	Pg 7
January 2010	The Company returned the Manlai licence to Mongolian government	Pg 27
March 2010	The conditions precedent included in the Investment Agreement are satisfied and the Investment Agreement takes legal effect	Pg 16

Significant Acquisitions in 2009

Under a Scheme Implementation Agreement dated November 28, 2009 between Entrée and PacMag Metals Limited (“PacMag”), Entree and PacMag have agreed to implement Australian Schemes of Arrangement under which Entrée will acquire all of the issued shares and options of PacMag. The consideration payable by Entrée for each PacMag share will consist of 0.01018 Entree Shares and C$0.0415 per PacMag Share. Similar consideration will be payable for each PacMag option as detailed in the Scheme Implementation Agreement. Entrée expects the aggregate consideration payable by Entrée for all of the PacMag shares and options will be approximately 15 million Entrée Shares and C$6,343,500. Closing of the Schemes of Arrangement are subject to a number of customary conditions, including an independent expert’s report concluding that the Share Scheme is in the best interest of PacMag shareholders and that the Option Scheme is in the best interests of Scheme Optionholders, receipt of required approval from regulators and Australian court approvals, as well as approval by PacMag shareholders of the Share Scheme and Scheme Optionholders of the Option Scheme. The Scheme Implementation Agreement also contains provision for payment by either party to the other party in certain circumstances of a break fee of C$350,000. The Scheme Implementation Agreement also provides that the maximum liability of either party to the other party in connection with the Scheme Implementation Agreement is C$350,000.

- 7 -

DESCRIPTION OF THE BUSINESS

The Company is in the mineral resource business. This business generally consists of three stages: exploration, development and production. Mineral resource companies that are in the exploration stage have not yet found mineral resources in commercially exploitable quantities, and are engaged in exploring land in an effort to discover them. Mineral resource companies that have located a mineral resource in commercially exploitable quantities and are preparing to extract that resource are in the development stage, while those engaged in the extraction of a known mineral resource are in the production stage. The Company is in the exploration and development stage.

Mineral resource exploration can consist of several stages. The earliest stage usually consists of the identification of a potential prospect through either the discovery of a mineralized showing on that property or as the result of a property being in proximity to another property on which exploitable resources have been identified, whether or not they are or have in the past been extracted.

After the identification of a property as a potential prospect, the next stage would usually be the acquisition of a right to explore the area for mineral resources. This can consist of the outright acquisition of the land and mineral rights or the acquisition of specific, but limited mineral rights to the land (e.g., a license, lease or concession). After acquisition, exploration would probably begin with a surface examination by a prospector or professional geologist with the aim of identifying areas of potential mineralization, followed by detailed geological sampling and mapping of this showing with possible geophysical and geochemical grid surveys to establish whether a known trend of mineralization continues through un-exposed portions of the property (i.e., underground), and possibly trenching in these covered areas to allow sampling of the underlying rock. Exploration also commonly includes systematic regularly-spaced drilling in order to determine the extent and grade of the mineralized system at depth and over a given area, and in sufficiently-advanced properties, gaining underground access by ramping or shafting in order to obtain bulk samples that would allow one to determine the ability to recover various commodities from the rock. Exploration might culminate in a feasibility study to ascertain if the mining of the minerals would be economic. A feasibility study is a study that reaches a conclusion with respect to the economics of bringing a mineral resource to the production stage.

The Company’s primary property asset is the Lookout Hill property in Mongolia, which is comprised of two mining licences and one exploration licence. The Lookout Hill property completely surrounds Ivanhoe Mines’ Oyu Tolgoi Project, and hosts the Hugo North Extension of the Hugo Dummett North copper-gold deposit and the Heruga copper-gold-molybdenum deposit. These deposits are located within a land area subject to a joint venture between Entrée and Oyu Tolgoi LLC, a subsidiary of Ivanhoe Mines Ltd., formerly known as Ivanhoe Mines Mongolia Inc. (collectively referred to herein as “Ivanhoe Mines”).

Areas of the Lookout Hill property which are outside of the joint venture area are 100% owned by Entrée and are currently under exploration by the Company. A map is provided on page 13 to illustrate the areas of Lookout Hill more clearly and further detail regarding the projects in Mongolia is described under Mineral Properties.

Aside from its activities in Mongolia, Entrée has exploration projects in China, the USA and Canada. The Company is exploring the Huaixi copper project in southeastern Zhejiang Province in China. In North America, Entrée holds options to acquire the Blackjack and Roulette properties in Nevada and the Crystal property in British Columbia through agreements with various third parties. Please see the Mineral Properties section for more information.

The Company's exploration activities are under the supervision of Robert Cann, P.Geo., Entrée's Vice President, Exploration. Mr. Cann is a "qualified person" as defined in NI 43-101. Except where otherwise noted, Mr. Cann is also responsible for the preparation of technical information in this AIF.

All mineral rock samples from our Mongolian properties are prepared and analyzed by SGS Mongolia LLC in Ulaanbaatar, Mongolia. Coal samples from Mongolia have been prepared and analyzed by SGS Mongolia LLC and by SGS-CSTC Standards Technical Services Co., Ltd., Tianjin, China, and more recently by ACTLABS in Ulaanbaatar. Coal check samples were analyzed at Loring Laboratories Ltd. in Calgary, Canada. Samples from Arizona and New Mexico are analyzed at ALS Chemex in Sparks, Nevada, at Skyline Assayer and Laboratories, Tuscon, Arizona and at Acme Analytical Laboratories, Vancouver, British Columbia, Canada. All samples from China are analyzed at ALS Chemex, Guangzhou and at SGS-CSTC Standards Technical Services Co., Ltd., Tianjin. Samples from the Crystal Property, BC are analyzed at Loring Laboratories Ltd. in Calgary, Canada.

Environmental Compliance

The Company’s current and future exploration and development activities, as well as future mining and processing operations, if warranted, are subject to various federal, state and local laws and regulations in the countries in which we conduct our activities. These laws and regulations govern the protection of the environment, prospecting, development, production, taxes, labour standards, occupational health, mine safety, toxic substances and other matters. Company management expects to be able to comply with those laws and does not believe that compliance will have a material adverse effect on our competitive position. The Company intends to obtain all licenses and permits required by all applicable regulatory agencies in connection with our mining operations and exploration activities. The Company intends to maintain standards of compliance consistent with contemporary industry practice.

In Mongolia, work on exploration licences requires filing an annual exploration work plan at the beginning of the year and providing a summary report to the local soum (the local Mongolian equivalent of a township or district). A second report must also be filed upon the conclusion of exploration activities that includes a discussion of environmental impacts. In addition, companies are required to post a bond equal to 50% of the total estimated cost of any anticipated environmental reclamation, which is refunded upon completion of the reclamation work. No work is currently planned in 2010 on the Togoot exploration licence; however, bonds remain in place at Bayan-Ovoo and Khanbogd soums equal to approximately $900 each. These bonds cover environmental reclamation to the end of 2010. These amounts are refundable to the Company on request once all environmental work has been completed to the satisfaction of the local soum.

Work on mining licences requires a similar procedure as for exploration licences, with the difference that a formal environmental plan must be submitted to, and approved by, the Ministry of Nature, Environment and Tourism. A copy of the environmental plan must be delivered to the local soum (but is not approved by the soum) and the environmental bond determined by the Ministry is placed with a soum government account.

Entrée also pays annual fees for water, land and road usage to the local soums.

Lordsburg, New Mexico

Exploration permits issued by the appropriate Federal (Bureau of Land Management - “BLM”) or State (New Mexico Mining and Minerals Division ‘ “NMMD”) are required for all exploration operations that include drilling or result in surface disturbance.

The BLM holds a reclamation bond in the form of a Certificate of Deposit in the amount of $16,828.00 which will be reimbursed with interest once all reclamation work is complete and the agency has signed off on re-vegetation of drill sites and access roads.

All drill holes completed to date have been plugged and abandoned in accordance with applicable Federal and State regulations. Remaining reclamation work at Lordsburg includes backfilling six drill sumps, re-contouring, scarifying and seeding of seven drill sites and re-contouring, scarifying and seeding of four access roads.

Drill sites and access roads will be inspected prior to reclamation operations by NMMD personnel and again by BLM and NMMD personnel prior to the release of the reclamation bond.

Gold Hill, New Mexico

Exploration permits issued by the appropriate Federal (BLM) or State (NMMD) are required for all exploration operations that include drilling or result in surface disturbance. The Company has completed exploration on the property and has dropped its mineral interest at Gold Hill. Remaining work will be limited to completing the required reclamation of drill sites and roads.

The NMMD holds a reclamation bond in the form of a Certificate of Deposit in the amount of $52,740.20 which will be reimbursed with interest once all reclamation work is complete and the agency has signed off on re-vegetation of drill sites and access roads.

All drill holes completed to date have been plugged and abandoned in accordance with applicable Federal and State regulations. Remaining reclamation work at Gold Hill includes backfilling three drill sumps, re-contouring, scarifying and seeding of three drill sites and access roads.

Drill sites and access roads will be inspected prior to reclamation operations by NMMD personnel and again prior to the release of the reclamation bond.

Bisbee, Arizona

Exploration permits issued by the appropriate Federal (BLM) or State (Arizona Department of Land - “ ADL”) are required for all exploration operations that result in surface disturbance or include the use of off-road vehicles.

The BLM holds a reclamation bond in the form of a Certificate of Deposit in the amount of $6,838.00 which will be reimbursed with interest once all reclamation work is complete and the agency has approved closing of the exploration Notice of Intent. The ADL holds a blanket reclamation bond in the amount of $15,000 paid by Empirical Discovery, LLC, Entrée’s partners and the lessee of 12 State of Arizona exploration permits that comprise a portion of the Bisbee property.

No reclamation requirements are expected to remain upon completion of the currently permitted exploration operations as no off-road travel by mechanized vehicles has occurred.

It is anticipated that the BLM will inspect the property prior to releasing the reclamation bond. The blanket bond held by the State of Arizona will remain in place as long as the Company continues to explore the property.

Blackjack, Nevada

Exploration permits issued by the appropriate Federal (BLM) are required for all exploration operations that include drilling or result in surface disturbance.

No reclamation bonds are currently in place and no surface-disturbing or drilling operations have occurred to date. A Notice of Intent to conduct exploration drilling and non-disturbing geophysical surveys to be conducted in 2010 has been filed with the BLM and is in the process of being reviewed. A reclamation bond will be posted with the Nevada State Office of the BLM prior to commencing operations.

Roulette, Nevada

Exploration permits issued by the appropriate Federal (BLM) are required for all exploration operations that include drilling or result in surface disturbance.

No reclamation bonds are currently in place and no surface-disturbing or drilling operations have occurred to date. Bronco Creek Exploration has obtained an approved Notice of Intent to conduct exploration drilling from the BLM. Bronco Creek is working on a modification to the Notice of Intent in order to accommodate changes in the proposed drilling program. A reclamation bond will be posted with the Nevada State Office of the BLM prior to commencing operations.

Crystal, British Columbia

Exploration is strictly controlled by relevant laws and regulations under the Ministry of Energy, Mines and Petroleum Resources and the Ministry of Environment and the Ministry of Forests. Environmental aspects of exploration are principally controlled by the Mines Act and the Health, Safety and Reclamation Code which all aim to minimize land, vegetation, wildlife and water disturbances and to return the environment to its natural state, as much as practically possible, after exploration or mining is complete.

Prior to commencement of exploration a Notice of Work and Reclamation Program must be filed and approved by relevant authorities. This notice provides a detailed description of planned exploration activities and surface disturbance and also a detailed plan and estimated cost and timing for reclamation of any disturbance. A reclamation bond may be required prior to commencement of exploration.

The Mineral Exploration Code requires that all disturbed sites be reclaimed within one year of the cessation of exploration activities unless authorized in writing by an inspector. Pits and trenches are to be backfilled, contoured, seeded and made safe for the long-term; and sites are to be revegetated to a ―self-sustaining state. Reclamation measures and results must be reported to the inspector. Only once the reclamation program has met the requirements of the Code can the owner or manager of the exploration site apply for a refund of the reclamation security deposit.

Environmental aspects of mining and exploration are mainly controlled by the Environmental Protection Law, the Mineral Resources Law , Land Administration Law and by numerous associated regulations. In practise these laws mainly apply to larger development and mining projects and enforcement of environmental regulations applicable to small exploration programs is generally left to local (county and village) officials. Damage to private property and lands must be negotiated and compensated according to a strict schedule.

The mineral exploration, development, and production industry is largely unintegrated. We compete with other exploration companies looking for mineral resource properties and the resources that can be produced from them. While we compete with other exploration companies in the effort to locate and license mineral resource properties, we do not compete with them for the removal or sale of mineral products from our properties, nor will we do so if we should eventually discover the presence of them in quantities sufficient to make production economically feasible. Readily available markets exist world-wide for the sale of gold and other mineral products. Therefore, we will likely be able to sell any gold or mineral products that we are able to identify and produce. Our ability to be competitive in the market over the long term is dependent upon the quality and amount of ore discovered, cost of production and proximity to our market. Due to the large number of companies and variables involved in the mining industry, it is not possible to pinpoint our direct competition.

At December 31, 2009, the Company had twenty-three employees working for us on a full-time or part-time basis. Eleven employees are based in Vancouver, five employees are based in Ulaanbaatar, Mongolia, two employees in our office in Beijing and five employees support our Mongolian and US field programs. During the 2009 field season, the Company also contracted five expatriate geologists, geological technicians, camp support personnel and summer students at the Lookout Hill West project. In addition to the expatriate employees, the Company hires up to 100 local personnel, including geologists, labourers, geophysical helpers, geochemical helpers, cooks, camp maintenance personnel, drivers and translators. These local personnel are hired as needed throughout each field season. The number of local hires fluctuates throughout the year, depending on the workload.

In the United States, the Company’s field operations are headed by a contract geologist who is supported by other contract geologists on an as-needed basis.

None of our employees belong to a union or are subject to a collective agreement. We consider our employee relations to be good.

Entrée is a Canadian mineral exploration company based in Vancouver, British Columbia and focused on the worldwide exploration of gold and copper prospects. Entrée’s expertise is in exploring for deep and/or concealed porphyry deposits.

The Company’s flagship 179,590-hectare Lookout Hill property in Mongolia, includes two mining licences (Shivee Tolgoi and Javhlant) and one mineral exploration licence (Togoot). The Lookout Hill property completely surrounds Ivanhoe Mines’ 8,496-hectare Oyu Tolgoi Project, and hosts the Hugo North Extension of the Hugo Dummett copper-gold deposit and the Heruga copper-gold-molybdenum deposit. These deposits are located within a land area subject to a joint venture between Entrée and Oyu Tolgoi LLC, a subsidiary of Ivanhoe Mines Ltd., (formerly known as Ivanhoe Mines Mongolia Inc. XXK) (“Entrée-Ivanhoe Joint Venture”). See the “Lookout Hill Property” for further details of the Entree-Ivanhoe Joint Venture.

The Company also has active projects in the USA, China and Canada. See “Other Projects” for more information regarding these projects.

The Lookout Hill Property

The beneficial ownership of the Shivee Tolgoi, Javhlant and Togoot licences which comprise Lookout Hill is divided between Entrée and the Entrée-Ivanhoe Joint Venture as described below:

•

The Entrée-Ivanhoe Joint Venture beneficially holds 39,864 hectares consisting of the eastern portion of Shivee Tolgoi and all of Javhlant (“Joint Venture Property”) and is governed by a joint venture agreement between Entrée and Oyu Tolgoi LLC. The Joint Venture Property is contiguous with, and on three sides (to the north, east and south) surrounds, Ivanhoe Mines’ Oyu Tolgoi Project. The Joint Venture Property hosts the Hugo North Extension Deposit and the Heruga Deposit. Ivanhoe Mines is the project manager.

•	The portion of Lookout Hill outside of the Joint Venture Property (“Lookout Hill West”) covers an area of 139,726 hectares and includes the western portion of Shivee Tolgoi which is not subject to the Entrée-Ivanhoe Joint Venture (“Shivee West”) and all of Togoot.

The illustration below depicts the different areas of Lookout Hill:

Entree-Ivanhoe Joint Venture

Entrée entered into an arm’s-length Equity Participation and Earn-In Agreement (the “Earn-In Agreement”) in October 2004 with Ivanhoe Mines Ltd., which holds title to the Oyu Tolgoi mining licence through its subsidiary, Oyu Tolgoi LLC. The Oyu Tolgoi mining licence is located adjacent to and is surrounded by Entrée’s Lookout Hill property. The agreement was subsequently assigned to Oyu Tolgoi LLC.

The Earn-in Agreement provided that Ivanhoe Mines would have the right, subject to certain conditions outlined in the Earn-in Agreement, to earn a participating interest in a mineral exploration project and, if warranted, a development and mining project on a portion of the Lookout Hill property (“Joint Venture Property”). Under the Earn-in Agreement, Ivanhoe Mines would conduct exploration activities in an effort to determine if the Oyu Tolgoi mineralized system extended onto the Joint Venture Property. Following execution of the Earn-in Agreement Ivanhoe Mines undertook an aggressive exploration program, which eventually confirmed the presence of two resources on Lookout Hill within the Joint Venture Property: the Hugo North Extension indicated and inferred resource to the north of Oyu Tolgoi and the inferred resource of the Heruga Deposit to the south of Oyu Tolgoi.

As of June 30, 2008, Ivanhoe Mines had expended a total of $35 million on exploration on the Joint Venture Property and in accordance with the Earn-In Agreement, Entrée and Ivanhoe Mines formed the Entrée-Ivanhoe Joint Venture. As of the year ended December 31, 2009, the Entrée-Ivanhoe Joint Venture expended approximately $2.5 million. Ivanhoe has contributed Entrée’s 20% portion of the expenditures as an advance against future earnings.

By expending over $35 million in exploration and development, Ivanhoe Mines earned an 80% interest in minerals deeper than 560 metres extracted from below the surface on the Joint Venture Property and a 70% interest in minerals above that elevation. The Company can elect to be carried to production by Ivanhoe Mines through debt financing at prime +2% (set by the Royal Bank of Canada) with its share of development costs repaid from 90% of future production cash flow. This stipulation limits dilution of Entrée’s interest as the project progresses.

Certain of Ivanhoe Mines' rights and obligations under the Earn-In Agreement, including a right to nominate one member of our Board of Directors, a pre-emptive right to enable them to preserve their ownership percentage in our Company, and an obligation to vote their shares as our Board of Directors directs on certain matters, expired with the formation of the joint venture. Ivanhoe’s right of first refusal to the remainder of Lookout Hill is maintained with the formation of the Entrée-Ivanhoe Joint Venture.

Management believes that both the initial Earn-in Agreement and the joint venture are of significant benefit to the Company. The Earn-in Agreement enabled us to raise money that the Company used to pursue exploration activities on the balance of the Lookout Hill property and elsewhere. It also enabled the exploration of the Joint Venture Property at little or no cost to the Company, leading to the delineation of indicated and inferred mineral resource estimates for the Hugo North Extension and the discovery and subsequent definition of a significant inferred resource on the Heruga deposit.

A review of the technical work done on the Lookout Hill property is provided in more detail in the Property Description and Location section of this AIF, beginning at page 16, below.

Investment by Ivanhoe Mines and Rio Tinto in Entrée Gold Inc.

Under the terms of the Earn-In Agreement, Ivanhoe Mines purchased 4.6 million shares with a full warrant attached for C$4.6 million, which was a premium to market at the time.

In June 2005, Rio Tinto, through its subsidiary Kennecott Canada Exploration (collectively, “Rio Tinto”), completed a private placement into Entrée, whereby they purchased 5,665,730 units at a price of C$2.20 per unit, which consisted of one Entrée common share and two warrants (one “A” warrant and one “B” warrant). Two “A” warrants entitle Rio Tinto to purchase one Entrée common share for C$2.75 within two years; two “B” warrants entitle Rio Tinto to purchase one Entrée common share for C$3.00 within two years. Proceeds from Rio Tinto’s investment were $10,170,207.

In June 2005, Ivanhoe Mines exercised its unit warrants and purchased 4.6 million shares at C$1.10 per share, resulting in proceeds to Entrée of C$4,069,214, in order to preserve its pre-emptive right to maintain proportionate ownership of Entree shares. Ivanhoe Mines then exercised its pre-emptive right in July 2005 and took part in the private placement, purchasing 1,235,489 units, resulting in further proceeds to Entrée of $2,217,209. Rio Tinto purchased an additional 641,191 units of the private placement to maintain proportional ownership, resulting in further proceeds of $1,150,681.

On June 27, 2007, Rio Tinto exercised its “A” and “B” warrants that were due to expire in order to maintain its percentage ownership of the Company’s shares and the Company issued 6,306,920 common shares for cash proceeds of $17,051,716.

On June 29, 2007, Ivanhoe Mines exercised its “A” and “B” warrants were due to expire in order to maintain its percentage ownership of the Company’s shares and the Company issued 1,235,488 common shares for cash proceeds of $3,340,327.

On November 26, 2007, Entrée closed a short form prospectus offering of 10 million common shares at a price of C$3.00 per share for gross proceeds of C$30 million (the “Treasury Offering”) pursuant to an underwriting agreement between the Company and BMO Nesbitt Burns (the “Underwriter”). The Underwriter received a fee of C$1.8 million, being 6% of the gross proceeds of the Treasury Offering.

On November 26, 2007, in order to maintain its percentage ownership of Entrée’s issued and outstanding shares, Ivanhoe Mines exercised its pre-emptive rights and acquired, concurrently with the closing of the Treasury Offering, an aggregate of 2,128,356 shares of the Company at a price of C$3.00 per share for additional gross proceeds of C$6,385,068.

On November 26, 2007, in order to maintain its percentage ownership of Entrée’s issued and outstanding shares, Rio Tinto exercised its pre-emptive rights and acquired, concurrently with the closing of the Treasury Offering, an aggregate of 2,300,284 shares of the Company at a price of C$3.00 per share for additional gross proceeds of C$6,900,852.

At December 31, 2009, Ivanhoe Mines owned approximately 14.2% of Entrée’s issued and outstanding shares.

At March 31, 2010, Ivanhoe Mines owned approximately 14.2% of Entrée’s issued and outstanding shares.

At December 31, 2009, Rio Tinto owned approximately 15.4% of Entrée’s issued and outstanding shares.

At March 31, 2010, Rio Tinto owned approximately 15.3% of Entrée’s issued and outstanding shares.

Rio Tinto is no longer required to vote its shares as the Company’s board of directors directs on matters pertaining to fixing the number of directors to be elected, the election of directors, the appointment and remuneration of auditors and the approval of any corporate incentive compensation plan or any amendment thereof. Rio Tinto retains the right to preserve its ownership percentage in the Company.

Investment by Rio Tinto in Ivanhoe Mines

In October 2006, Rio Tinto announced that it had agreed to invest up to $1.5 billion to acquire up to a 33.35% interest in Ivanhoe Mines. The proceeds from this investment were targeted to fund the joint development of the Oyu Tolgoi Project. An initial tranche of $303 million was invested to acquire 9.95% of Ivanhoe Mines’ shares. On September 12, 2007, Rio Tinto announced that Rio Tinto will provide Ivanhoe Mines Ltd. with a convertible credit facility of $350 million for interim financing for the Oyu Tolgoi copper-gold project in Mongolia. The credit facility was directed at maintaining the momentum of mine development activities at Oyu Tolgoi while Ivanhoe Mines and Rio Tinto worked towards finalising an Investment Agreement between Ivanhoe Mines and the government of Mongolia, which was completed on March 31, 2010. If converted, this investment could result in Rio Tinto’s owning 46.65% of Ivanhoe Mines.

Rio Tinto and Ivanhoe Mines announced in October 2009 that Rio Tinto intended to complete the Tranche 2 private placement financing (as defined within the agreement from October 2006). With the completion of this financing, which totalled $388 million, on October 29, 2009, Rio Tinto increased its equity ownership in Ivanhoe Mines to 19.7%. In February 2010, Rio Tinto announced that it had agreed to invest, through subsidiaries, a further $232,400,000 to acquire 15,000,000 common shares in satisfaction of the purchase price for key mining and milling equipment for the Oyu Tolgoi mining complex. The investment in February increased Rio Tinto’s ownership, through its subsidiaries, to 22.4% of Ivanhoe outstanding common shares.

Mongolian Government

In August 2009, the Mongolian Parliament approved amendments to four laws, including the insertion of a sunset provision to cancel the three-year-old, 68% windfall profits tax on copper and gold effective January 1, 2011. These amendments allowed the Mongolian government, Ivanhoe Mines and Rio Tinto to conclude the negotiations necessary to finalise an investment agreement (“Investment Agreement”).

On 6 October 2009, Ivanhoe Mines, Oyu Tolgoi LLC and Rio Tinto International Holdings Ltd. signed the Investment Agreement with the Mongolian government. The Investment Agreement regulates the relationship between these parties and stabilises the long term tax, legal, fiscal, regulatory and operating environment to support the development of the Oyu Tolgoi Project. The contract area defined in the Investment Agreement includes the Javhlant and Shivee Tolgoi mining licences, including Shivee West which is 100% owned by Entrée and not currently subject to the Entrée-Ivanhoe Joint Venture. Conditions precedent of the Investment Agreement were satisfied within six months of the signing date, and the achievement of this milestone was announced on March 31, 2010 by Rio Tinto and Ivanhoe Mines.

The Investment Agreement specifies that Ivanhoe Mine’s Oyu Tolgoi licences and Ivanhoe’s interest in the Entree-Ivanhoe Joint Venture Property, as specified in the contract area, will be held by Oyu Tolgoi LLC, a Mongolian subsidiary company that will be owned 34% by the Mongolian government and 66% by Ivanhoe Mines.Entrée is not presently a party to the Investment Agreement. Although Ivanhoe Mines has agreed under the terms of Earn-In Agreement dated 15 October 2004, between Ivanhoe Mines and Entrée, to use its best efforts to cause Entrée to be brought within the ambit of, made subject to and to be entitled to the benefits of the Investment Agreement. In order to become a party to the Investment Agreement, the Government of Mongolia may require Entrée or the Entrée-Ivanhoe Joint Venture to agree to certain concessions, including with respect to the ownership of the Entrée-Ivanhoe Joint Venture or the scope of the lands to be covered by the Investment Agreement.

Property Description and Location - Mongolia

Lookout Hill is located within the Aimag of Omnogovi (also spelled Umnogobi) in the South Gobi region of Mongolia (an 'Aimag' is the local equivalent of a state or province). One of the Company’s wholly-owned Mongolian subsidiaries, Entrée LLC, is the registered owner of the two mining licences (Shivee Tolgoi and Javhlant). The Company’s other wholly-owned Mongolian subsidiary, Entree Resources LLC, is the registered owner of the Togoot mineral exploration licence. All three licences comprise the Company’s Lookout Hill property. The Company owns 100% interest in the portions of the licences outside the Entrée-Ivanhoe Joint Venture Property, and a 20 or 30% interest in the Entrée-Ivanhoe Joint Venture, depending on depth of mineralization.

Mongolian exploration licences are maintained in good standing by payment to the Mineral Resources and Petroleum Authority of Mongolia of set annual fees escalating from $0.10 to $1.50 per hectare over the course of the up to nine year tenure. A property can be reduced in size selectively on application to the Cadastre office of the Mineral Resources and Petroleum Authority of Mongolia (the Cadastre is the central registry for land in Mongolia). Application to convert a Mongolian exploration licence into a mining licence can be made at any time prior to licence expiry. Conversion of a licence to explore for minerals to a license to mine or develop a property in order to exploit minerals is commenced by review and Government approval of a defined mineral resource or reserve and then filing a formal application together with the reserve approval. A mining licence may be granted for up to 30 years, plus two subsequent 20 year terms (cumulative total of 70 years). Conversion of an exploration licence to a mining licence will result in an increase in the yearly fees that we are required to pay to the Mongolian government. After issuance of a mining licence, we will be required to pay to the Mongolian government a licence fee of $15.00 per hectare per year for gold or base metal projects and $5.00 per hectare for coal projects.

The following table is a quick summary of our licences and their renewal status:

Name of Property	License Number	Date Granted1	Renewal Date	Expiration Date1
Javhlant	15225A	October 27, 2009	October 27, 2039	TBD
Shivee Tolgoi	15226A	October 27, 2009	October 27, 2039	TBD
Togoot2	3136X	March 30, 2001	July 2, 2007	March 30, 2010
Manlai	3045X	March 9, 2001	Returned to Mongolian government January, 2010

The Company's Javhlant and Shivee Tolgoi exploration licences were converted to mining licences in October 2009. The total estimated annual fees in order to maintain the Shivee Tolgoi and Togoot mining licenses in good standing are approximately 1.1 million. Approximately C$600,000 of the total is recoverable from the Entrée-Ivanhoe Joint Venture.

The expiry date of the Togoot exploration licence was March 30, 2010. Entree submitted the mining licence application to MRAM prior to the licence expiry date, as required by law. The Minerals Resource Council (which reports to MRAM) has yet to set a meeting date to review and approve the resource estimate. This meeting must occur before the mining licence application process can be completed and a mining licence can be granted. The total estimated annual fees in order to maintain the Togoot licence in good standing would be $0.5 million if all of the Togoot licence is converted to a mining licence.

The following is a summary taken from “NI 43-101 Compliant Technical Report on the Lookout Hill Project, Omnogovi Aimag, Southern Mongolia,” with an effective date of March 30, 2010 (“Technical Report 2010”). This report was prepared in part by two independent consulting groups: Quantitative Group (“QG”) in Perth, Australia, and AMEC Minproc (“Minproc”) in Perth, Australia and a copy is filed on SEDAR at www.sedar.com and is incorporated by reference into this AIF. The Technical Report 2010 forms the basis for the information in this AIF regarding the Lookout Hill property. Portions of the information are based on assumptions, qualifications and procedures, which are not fully described herein. Reference should be made to the full text of the Technical Report 2010.

Entrée Gold Inc.’s (“Entrée” or the “Company”) 179,590 ha Lookout Hill property (“Lookout Hill”) in Mongolia includes 2 mining licences (Shivee Tolgoi ML and Javhlant ML) and 1 mineral exploration licence (Togoot MEL). Lookout Hill completely surrounds the 8,496 ha Oyu Tolgoi Project of Ivanhoe Mines Ltd, and hosts the Hugo North Extension of the Hugo Dummett copper-gold deposit and the Heruga copper-gold-molybdenum deposit. These deposits are located within a land area subject to a joint venture (the “Entrée-Ivanhoe Joint Venture”) between Entrée and Oyu Tolgoi LLC (formerly known as Ivanhoe Mines Mongolia Inc. XXK), a subsidiary of Ivanhoe Mines Ltd.(collectively “Ivanhoe Mines”)

The beneficial ownership of the Shivee Tolgoi, Javhlant and Togoot licences which comprise Lookout Hill is divided between Entrée and the Entrée-Ivanhoe Joint Venture as described below and in Figure 1.1.1:

•

•	The portion of Lookout Hill outside of the Joint Venture Property (“Lookout Hill West”) covers an area of 139,726 ha and includes the western portion of Shivee Tolgoi which is not subject to the Entrée-Ivanhoe Joint Venture (“Shivee West”) and all of Togoot.

Figure 1.1.1

Lookout Hill Property Land Tenure

Oyu Tolgoi is located in the Southern Gobi region of Mongolia. It consists of a series of deposits containing copper, gold, silver and molybdenum, being developed by Oyu Tolgoi LLC. The deposits stretch over 12 km, from the Hugo Dummett North deposit in the north through the adjacent Hugo Dummett South deposit, down to the Southern Oyu deposit and extending to the Heruga deposit in the south (Figure 1.1.2). Hugo Dummett North extends onto the Shivee Tolgoi ML, where it is known as the Hugo North Extension; the Heruga copper-gold-molybdenum deposit is within the Javhlant ML but extends north across the license boundary towards the Southwest Deposit on the Oyu Tolgoi licence.

Idealized Profile of Southern Oyu, Hugo Dummett and Heruga Deposits (Section Looking West)

Entrée entered into an arm’s-length Equity Participation and Earn-In Agreement (the “Earn-In Agreement”) in October 2004 with Ivanhoe Mines Ltd., which holds title to the Oyu Tolgoi mining licence through its subsidiary, Oyu Tolgoi LLC . The Earn-In Agreement was subsequently assigned to Oyu Tolgoi LLC. The Oyu Tolgoi mining licence is located adjacent to and is surrounded by Entrée’s Lookout Hill property.

The Earn-in Agreement provided that Ivanhoe Mines would have the right, subject to certain conditions outlined in the Earn-in Agreement, to earn a participating interest in a mineral exploration project and, if warranted, a development and mining project on a portion of the Lookout Hill property (“Entrée-Ivanhoe Project Property”). Under the Earn-in Agreement, Ivanhoe Mines would conduct exploration activities in an effort to determine if the Oyu Tolgoi mineralized system extended onto the Entrée-Ivanhoe Project Property. Following execution of the Earn-in Agreement Ivanhoe Mines undertook an aggressive exploration program, which eventually confirmed the presence of two resources on Lookout Hill within the Entrée-Ivanhoe Project Property: the Hugo North Extension indicated and inferred resource to the north of Oyu Tolgoi and the inferred resource of the Heruga Deposit to the south of Oyu Tolgoi.

As of June 30, 2008, Ivanhoe Mines had expended a total of $35 million on exploration on the Entrée-Ivanhoe Project Property and in accordance with the Earn-In Agreement, Entrée and Ivanhoe Mines formed the Entrée-Ivanhoe Joint Venture. The Entrée-Ivanhoe Project Property is now known as the Joint Venture Property. During the year ended December 31, 2009, the Entrée-Ivanhoe Joint Venture expended approximately $1.9 million. Ivanhoe has contributed Entrée’s 20% portion of the expenditures as an advance against future earnings.

By expending over US$35 million in exploration and development, Ivanhoe Mines earned an 80% interest in minerals deeper than 560 metres extracted from below the surface on the Joint Venture Property and a 70% interest in minerals above that elevation. The Company can elect to be carried to production by Ivanhoe Mines through debt financing at prime +2% (set by the Royal Bank of Canada) with its share of development costs repaid from 90% of future production cash flow. This stipulation limits dilution of Entrée’s interest as the project progresses.

In August 2009, the Mongolian Parliament approved amendments to four laws, including the insertion of a sunset provision to cancel the three-year-old, 68% windfall profits tax on copper and gold effective January 1, 2011. These amendments allowed the Mongolian government, Ivanhoe Mines and Rio Tinto to conclude the negotiations necessary to finalise the long awaited investment agreement (“Investment Agreement”).

On 6 October 2009, Ivanhoe Mines, Oyu Tolgoi LLC and Rio Tinto International Holdings Ltd. signed the Investment Agreement with the Mongolian government. The Investment Agreement regulates the relationship between these parties and stabilises the long term tax, legal, fiscal, regulatory and operating environment to support the development of the Oyu Tolgoi Project. The contract area defined in the Investment Agreement includes the Javhlant and Shivee Tolgoi mining licences, including Shivee West which is 100% owned by Entrée and not currently subject to the Entrée-Ivanhoe Joint Venture. Satisfaction of conditions precedent within 6 months of the signing date was specified within the Investment Agreement.

The Mongolian government will hold a 34% interest in Oyu Tolgoi LLC, which in turn will hold (as a participant) an 80% interest in the Entrée-Ivanhoe Joint Venture.

In October 2009, Entrée received notice that its application for conversion of the Shivee Tolgoi and Javhlant Mineral Exploration Licences to Mining Licences had been approved by the Mineral Resources Authority of Mongolia and the licences were received on October 27, 2009. Mining licences have a 30-year term with two renewals of 20 years each possible. The conversion has now consolidated a sizeable land position upon which the Oyu Tolgoi mining complex will be established.

The parties to the agreement have been negotiating terms since Ivanhoe Mines Ltd prepared the 2005 Integrated Development Plan (IDP05). During that time, IMMI advanced considerably in its planning for the projects development, its underground shaft and lateral development program and its procurement, construction and detailed capital estimation activities. The Oyu Tolgoi Project has also seen significant growth in its resource base over this period.

The work to finalise the updating of mine plans and analysis is not yet complete to a point at which Ivanhoe is able to release the study. In late 2005 Ivanhoe Mines released IDP05 examining mining and processing on the Oyu Tolgoi Property and this was followed by the Ivanhoe Mines’ January 2006 open pit only mineral reserve. Underground mineral reserves have not been stated for Oyu Tolgoi. Although the overall strategy for the development of Oyu Tolgoi remains the same there have been changes to several key areas which are being addressed in the current study work. The Shivee Tolgoi and Javhlant mineral resources are currently being studied as part of the mine planning work being prepared by Ivanhoe Mines.

Exploration work on Lookout Hill West was undertaken in 2009 by Entree’s technical team, led by Robert Cann and James R. Foster.

This report was prepared in part by three independent consulting groups: Quantitative Group (”QG”) in Perth, Australia, AMEC Minproc Limited (“AMEC Minproc”) in Australia; and Owen Cullingham, an independent coal consultant to Entrée.

1.2 Property Description

Lookout Hill comprises two MLs (Shivee Tolgoi and Javhlant) and one MEL (Togoot), which cover a total of approximately 179,590 ha and completely surround Ivanhoe Mines’ Oyu Tolgoi Project. Lookout Hill is divided into two contiguous Properties: the Entree-Ivanhoe Joint Venture Property and Lookout Hill West.

The Lookout Hill property lies within the Palaeozoic Gurvansayhan Terrane in southern Mongolia, a component of the Altaid orogenic collage, which is a continental-scale belt dominated by compressional tectonic forces. The Gurvansayhan Terrane consists of highly-deformed accretionary complexes and oceanic island arc assemblages. The island arc terrane is dominated by basaltic volcanics and intercalated volcanogenic sedimentary rocks (Upper Devonian Alagbayan Formation), intruded by pluton-sized, hornblende-bearing granitoids of mainly quartz monzodiorite to possibly granitic composition. Carboniferous-age sedimentary rocks (Sainshandhudag Formation) overlie this assemblage.

Major structures in this area include the Gobi-Tien Shan sinistral strike-slip fault system, which splits eastward into a number of splays in the Project area, and the Gobi-Altai Fault system, which forms a complex zone of sedimentary basins overthrust by basement blocks to the north and northwest.

Joint Venture Property

Exploration on the Joint Venture Property has been minimal subsequent to completion of the previous resource calculations on both Hugo North Extension and the Heruga deposits early in 2008. One 721-m diamond hole was drilled in 2008 on Ulaan Khud, that lies northeast of Hugo North Extension, and 11 additional diamond holes were completed on Heruga in 2008 as infill and to test the eastern edge of the deposit. Drilling details are given in Section 11 and form the basis of the current updated Heruga resource. In addition, in late 2008 a detailed magnetometer survey was completed over Heruga and over the Hugo North Extension Deposit areas.

Exploration in 2009 was restricted to deep penetrating ZEUS induced polarization surveys over Hugo North Extension and over Heruga and a single 228 m diamond hole on the Javhlant ML.

The Hugo North Extension Mineral Resource remains material to the property and was reviewed independently for Entrée Gold by Quantitative Group (“QG”) in 2008. The Mineral Resource estimate was produced for the Hugo North Extension in 2007 in conformance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Mineral Resource and Mineral Reserve definitions referred to in National Instrument 43-101, Standards of Disclosure for Mineral Projects (“NI 43-101”). The Mineral Resource estimate was prepared by AMEC and reported in a Technical Report as defined in NI 43-101 and in compliance with Form 43-101F1, “Lookout Hill Project, Mongolia, NI 43-101 Technical Report with an Effective Date 29 March, 2007” (Technical Report 2007). In 2008, Scott Jackson, MAusIMM, QG and John Vann, FAusIMM, QG thoroughly reviewed and independently reproduced this estimate and consider the 2007 estimate is in conformance to NI 43-101. Scott Jackson and John Vann will be acting as QP’s for the Hugo North estimate.

The Hugo North Extension Deposit within the Joint Venture Property contains copper-gold porphyry-style mineralization associated with quartz monzodiorite intrusions, concealed beneath a deformed sequence of Upper Devonian and Lower Carboniferous sedimentary and volcanic rocks.

The high-grade zone at Hugo North Extension comprises relatively coarse bornite impregnating quartz and disseminated in wall rocks of varying composition, usually intergrown with subordinate chalcopyrite. Bornite is dominant in the highest-grade parts of the deposit (with these zones averaging around 3% to 5% Cu) and is zoned outward to chalcopyrite (to zones averaging around 2% Cu for the high-grade chalcopyrite dominant mineralization).

Geological models were constructed by Ivanhoe Mines using lithological and structural interpretations completed in late 2006. QG checked the lithological and structural shapes for interpretational consistency on section and plan, and found them to have been properly constructed.

Resource estimates were undertaken using MineSight® commercial mine planning software. Industry-accepted methods were used to create interpolation domains based on mineralized geology, and grade estimation based on ordinary kriging. The assays were composited into 5 m down-hole composites; block sizes were 20 x 20 x 15 m.

The Mineral Resources were classified using logic consistent with the CIM definitions required by NI 43-101. Inspection of the model and drillhole data on plans and sections showed geological and grade continuity. When taken together with spatial statistical evaluation and investigation of confidence limits in predicting planned annual production, blocks were assigned as Indicated Resources if they fell within the current drillhole spacing, which is on 125 x 70 m centres. Blocks were assigned to the Inferred resource category if they fell within 150 m of a drillhole composite.

The mineralization within the Hugo North Extension Deposit as of 20 February 2007 is classified as Indicated and Inferred Mineral Resource. The total project Mineral Resources are shown in Table 1.3.1, and are reported at copper equivalent cut-off grades of above 0.6%. Mineral Resources are not Mineral Reserves until they have demonstrated economic viability based on a feasibility study or prefeasibility study.

Table 1.3.1 Hugo North Extension Mineral Resources, Based on Drilling Completed to 01 November 2006 (0.6% CuEq Cut-off); Effective Date 20 February, 2007
Category	Tonnage (t)	Cu (%)	Au (g/t)	CuEq (%)	Contained Metal
Category	Tonnage (t)	Cu (%)	Au (g/t)	CuEq (%)	Cu (‘000 lb)	Au (oz)	CuEq ('000 lb)
Indicated	117 000 000	1.80	0.61	2.19	4 640 000	2 290 000	5 650 000
Inferred	95 500 000	1.15	0.31	1.35	2 420 000	950 000	2 840 000
Notes: Copper Equivalent (CuEq) has been calculated using assumed metal prices (US$1.35/pound for copper and US$650/ounce for gold); %CuEq. = %Cu+(g/t Au18.98)/29.76. The equivalence formula was calculated assuming that gold was 91% of copper recovery. The contained gold and copper represent estimated contained metal in the ground and have not been adjusted for the metallurgical recoveries of gold and copper.

The base case copper equivalent cut-off grade assumptions for the Hugo North Extension Deposit were determined using operating cost estimates from similar deposits.

The Heruga Mineral Resource estimate has been updated since Entree's previous Technical Report (March 2008). This estimate was also in conformance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Mineral Resource and Mineral Reserve definitions referred to in National Instrument 43-101, Standards of Disclosure for Mineral Projects (“NI 43-101”). The Mineral Resource estimate was prepared under the supervision of Scott Jackson and John Vann QG - Perth. QG’s scope of work also involved the preparation of this Technical Report as defined in NI 43-101 and in compliance with Form 43-101F1.

The Heruga Deposit within the Joint Venture Property contains copper-gold-molybdenum porphyry-style mineralization hosted in Devonian basalts and quartz monzodiorite intrusions, concealed beneath a deformed sequence of Upper Devonian and Lower Carboniferous sedimentary and volcanic rocks. The deposit is cut by several major brittle fault systems, partitioning the deposit into discrete structural blocks. Internally, these blocks appear relatively undeformed, and consist of southeast-dipping volcanic and volcaniclastic sequences. The stratiform rocks are intruded by quartz monzodiorite stocks and dykes that are probably broadly contemporaneous with mineralization. The deposit is shallowest at the south end (approximately 500 m below surface) and plunges gently to the north.

QG reviewed Ivanhoe Mines’ quality assurance/quality control procedures at site in 2008 and 2009 and found them to be followed and to exceed industry standards.

The database used to estimate the Mineral Resources for the Heruga Deposit consists of samples and geological information from 43 drillholes, including daughter holes, totalling 58,276 m.

The alteration at Heruga is typical of porphyry style deposits, with notably stronger potassic alteration at deeper levels. Locally intense quartz-sericite alteration with disseminated and vein pyrite is characteristic of mineralized quartz monzodiorite. Molybdenite mineralization seems to spatially correlate with stronger quartz-sericite alteration.

Copper sulphides occur at Heruga in both disseminations and veins/fractures. Mineralized veins have a much lower density at Heruga than in the more northerly Southern Oyu and Hugo Dummett deposits.

Modelling of mineralization zones for resource estimation purposes revealed that there is an upper copper-driven zone and a deeper gold-driven zone of copper-gold mineralization at Heruga. In addition, there is significant (100 ppm to 1000 ppm) molybdenum mineralization in the form of molybdenite.

The Mineral Resource estimate for the Heruga Deposit was prepared by Stephen Torr of Ivanhoe Mines under the supervision of Scott Jackson and John Vann of QG. A close-off date of 31 May, 2009 for survey (collar and downhole) data was utilized for constructing the geological domains.

Ivanhoe Mines created three dimensional shapes (wireframes) of the major geological features of the Heruga Deposit. To assist in the estimation of grades in the model, Ivanhoe also manually created three dimensional grade shells (wireframes) for each of the metals to be estimated. Construction of the grade shells took into account prominent lithological and structural features, in particular the four major sub-vertical post-mineralisation faults. For copper, a single grade shell at a threshold of 0.3% Cu was used. For gold, wireframes were constructed at thresholds of 0.3 g/t and 0.7 g/t. For molybdenum, a single shell at a threshold of 100 ppm was constructed. These grade shells took into account known gross geological controls in addition to broadly adhering to the abovementioned thresholds.

QG checked the structural, lithological and mineralized shapes to ensure consistency in the interpretation on section and plan. The wireframes were considered to be properly constructed and honoured the drill data.

Resource estimates were undertaken by Ivanhoe using Datamine® commercial mine planning software. The methodology was very similar to that used to estimate the Hugo North deposits. Interpolation domains were based on mineralized geology, and grade estimation based on ordinary kriging. Bulk density was interpolated using an inverse distance to the third power methodology. The assays were composited into 5 m down-hole composites; block sizes were 20 x 20 x 15 m.

As an independent check, QG also built a model from scratch using the same wireframes and drill data used in the Ivanhoe Mines model. Gold, copper and molybdenum were interpolated using independently generated variograms and search parameters. QG compared the two estimates and consider that they agree well within acceptable limits thus adding additional support to the estimate built by Ivanhoe Mines.

The Mineral Resources for Heruga were classified using logic consistent with the CIM definitions required by NI 43-101. Blocks within 150 m of a drillhole were initially considered to be Inferred. A three dimensional wireframe was constructed inside of which the nominal drill spacing was less than 150 m.

The Mineral Resources estimated within the Heruga Deposit as of EffDate are classified as Inferred, shown in Table 1.3.2, and are reported at a copper equivalent cut-off grade of 0.6%.

Table 1.3.2 Mineral Resource Inventory, Heruga Deposit, 30 March 2010
Cut-off (CuEq%)	Tonnage (‘000 t)	Cu (%)	Au (g/t)	Mo (ppm)	CuEq (%)	Contained Metal
Cut-off (CuEq%)	Tonnage (‘000 t)	Cu (%)	Au (g/t)	Mo (ppm)	CuEq (%)	Cu (‘000 lb)	Au (‘000 oz)	CuEq (‘000 lb)
>1.50	30 000	0.57	1.86	124	1.83	360 000	2 000	1 150 000
>1.25	70 000	0.56	1.45	118	1.55	840 000	3 000	2 340 000
>1.00	190 000	0.57	0.96	155	1.26	2 370 000	6 000	5 260 000
>0.90	290 000	0.56	0.80	160	1.15	3 610 000	8 000	7 450 000
>0.80	450 000	0.54	0.66	160	1.05	5 310 000	10 000	10 320 000
>0.70	660 000	0.51	0.56	151	0.95	7 390 000	12 000	13 780 000
>0.60	910 000	0.48	0.49	141	0.87	9 570 000	14 000	17 390 000
>0.50	1 210 000	0.44	0.44	130	0.79	11 780 000	17 000	21 060 000
>0.40	1 670 000	0.39	0.38	115	0.69	14 430 000	20 000	25 540 000
>0.30	2 180 000	0.35	0.33	102	0.61	16 730 000	23 000	29 470 000

Notes:

•	Based on drilling completed as of 21 June 2009.

•	CuEq was calculated using the formula CuEq = %Cu + ((g/t Au18.98)+(Mo0.01586))/29.76.

•	The contained gold, copper and molybdenum in the tables has not been adjusted for recovery.

•	The 0.6% CuEq cut-off is highlighted as the base case resource for underground bulk mining.

1.	Lookout Hill West Property

Entrée has a 100% interest in the Togoot MEL and the western portion of the Shivee Tolgoi ML, located in Omnogovi Aimag of Mongolia. The title for these licences is held within Entree’s Mongolian subsidiaries: the Togoot MEL is held within Entrée Resources LLC and Shivee West (as part of the Shivee Tolgoi ML) is held within Entrée LLC.

In 2009, work was only carried out on the Togoot MEL.

Exploration in 2009 had four goals: to continue defining the coal resource of the Nomkhon Bohr discovery in advance of a licence conversion application; to explore for coal underneath deep Cretaceous cover on the Coking Flats magnetic anomaly; to explore for coal in the Khar Suul target; and to evaluate a precious metals target generated in 2007 to 2008 (Ukhaa Tolgod) and a precious metals target generated in 2009 (Morinii Takh). Work comprised geological mapping, core drilling (24 holes totalling 3,599 metres), Reverse-Circulation drilling (56 holes totalling 8,034 metres), excavator-assisted trenching, downhole geophysical surveying, and a hydrogeological study of the Nomkhon Bohr target.

The Nomkhon Bohr, Coking Flats and Khar Suul coal targets are hosted by a folded clastic sedimentary sequence, interpreted to be of Permian age. The sequence comprises very fine- to coarse-grained siltstones, sandstones and conglomerates, intruded by intermediate to felsic sills and dykes, and at least two diorite sills. Within this sequence are carbonaceous mudstones and siltstones, sandstones and coal, which do not crop out. At Nomkhon Bohr, this carbonaceous stratigraphy has been traced by trenching and drilling over a strike length of approximately 1 200 metres. Coal is present in a number of narrow seams, 0.3 metre to 4.5 metres apparent thickness, dipping moderately to the north, in close proximity to the northern boundary of the Togoot MEL. Analytical results indicate the coal has a moderate to high ash content (generally exceeding 30% ash) with moderate calorific values, with no potential for metallurgical use. The Coking Flats coal target is covered by thick Cretaceous conglomerates, exceeding 150 metres thickness in some drill holes. Based on limited drilling, it appears to be structurally complex, and open in all directions. Ash contents and calorific values are similar to those of Nomkhon Bohr coal. The Khar Suul coal target is also obscured by Cretaceous sandstones and conglomerates. It comprises carbonaceous mudstones but lacks coal seams.

The Ukhaa Tolgod precious metals target was identified by following up on a sample with anomalous gold taken in 2005. Mineralization is hosted by intermediate to felsic volcaniclastic rocks and high level felsic (dacite to rhyolite) intrusives assigned to the Carboniferous. Two core holes were drilled, but did not return any significant results. Reverse-circulation drilling of the Morinii Takh precious metals target, generated in 2009, also did not return any significant results.

Drilling of the Nomkhon Bohr coal discovery has proceeded to the point where sufficient data exists to apply for conversion of part or all of the Togoot MEL to a mining licence. This is in progress by Oyu Survey LLC, an arm’s length Mongolian consulting group with expertise in Mongolian coal deposits. Additional coal testing work is also recommended, to include petrographic work and trace element geochemistry, which may aid in correlation of individual coal seams at Nomkhon Bohr. Also recommended are additional coal geotechnical tests (agglomeration, agglutination, Hardgrove Grindability Index) and ultimate analyses.

Additional testing of the Coking Flats, Khar Suul, and Toogie West coal targets and the Ukhaa Tolgod and Morinii Takh precious metals targets is not recommended at this time.

Recent Developments - Entree-Ivanhoe Joint Venture Property

In 2009, project operator Ivanhoe Mines completed a deep penetrating ZEUS Induced Polarization (IP) survey covering the Company’s Heruga deposit along with preliminary surveys over the Hugo North Extension deposit. The survey was designed to further test the full extent of the chain of deposits associated with the Oyu Tolgoi mineralized trend, which currently continues along strike for over 12 kilometres.

Ivanhoe interprets the ZEUS survey over the Hugo North and Hugo North Extension deposits to indicate additional potential to depth and along strike to the north. In contrast to the close spatial association with IP anomalies seen at the Central, Southern Oyu and Heruga deposits, the high grade Hugo North and Hugo North Extension deposits occur along the eastern flank of the ZEUS anomaly.

Recent Developments - Lookout Hill West

In 2008, several coal targets were discovered in the northwest portion of the 100%-owned Togoot License; however, to date, the Company does not consider any of these coal discoveries to be material. These targets lie within stratigraphy believed to be similar to that hosting the Tavan Tolgoi metallurgical coal deposit. The prospective area comprises some 38.5 square kilometres, and lies approximately 70 km southeast of Tavan Tolgoi. During 2008, a total of 40 holes totalling 4,979 metres were completed on three separate targets. Twelve of the forty holes were abandoned due to difficult drilling conditions.

The main target, Nomkhon Bohr, is a near-surface discovery in a complex geological environment. Although the zone does not crop out on surface, it has been traced by drilling and trenching over a strike length of 1,200 metres. Analyses to date indicate the Nomkhon Bohr coal is predominantly medium-volatile bituminous in rank with some analyses indicating anthracite coal rank as determined by applying PARR formula. The coal is high in ash with variable sulphur. Coal-bearing horizons in drill holes can be up to 57 metres in apparent thickness; within these, multiple high-ash coal seams are usually present, ranging in apparent thickness from 0.2 metre to 4.35 metres. True thicknesses are uncertain due to possible repetition of the host stratigraphy.

The other two coal targets, Coking Flats and Khar Suul, are blind discoveries underlying Cretaceous conglomerates and sandstones which are up to 130 metres thick. Coal intercepts at Coking Flats are narrower when compared to Nomkhon Bohr, and are of High Volatile Bituminous C rank. Drilling on the Khar Suul target indicates the carbonaceous stratigraphy here has similarities to that of Nomkhon Bohr and Coking Flats, but that no coal seams have been intersected.

Five targets were explored for coal in 2009: Nomkhon Bohr, Coking Flats, Khar Suul, Toogie West, and Central Cretaceous Basin. The first four were known coal targets, or areas where exploration in 2008 indicated a high degree of confidence that Permian stratigraphy was present beneath Cretaceous cover. Scout drilling was done on magnetic anomalies within the Central Cretaceous Basin, to look for Permian stratigraphy below Cretaceous cover where no outcrop is present.

The Nomkhon Bohr target was drilled with 26 R-C holes totalling 3,595 metres and 15 core holes totalling 1,663 metres in 2009. Ten of the R-C holes were also used to install piezometers for a hydrogeological study. The drilling established the continuity of the coal bearing stratigraphy from section to section and downdip to the property boundary. The Nomkhon Bohr deposit is approximately 1200m along strike with a defined down dip extension of approximately 200m at its widest point. Five Seam Series were recognized; from north to south these have been named 100, 300, 500, 700 and 900. A Seam Series comprises one or more coal seams (beds) within carbonaceous mudstones, generally separated from other seam series by carbonaceous mudstone, siltstone and sandstone. With the exception of Series 900, the Nomkhon Bohr Seam Series can be traced from Section to Section and from hole to hole along Section. Within a Seam Series there can be one to several Seams (ie 530, 550, 570) of high-ash coal. Seams can often be separated into lower-ash Plies separated by high- ash intervals, although this was not attempted for the Nomkhon Bohr target. Visually, there are no obvious differences among the coal seams, and no petrographic work has been carried out to aid in correlation from section to section.

Nineteen composite samples from drill core samples collected in 2008 from two drillholes on the eastern portion of Nomkhon Bohr drill core samples collected in 2008 were subjected to washability tests, to determine if ash content could be reduced to produce a potential saleable product. Six samples were composited as specified, and eleven samples were composited improperly; nonetheless the washability tests were carried out on all composites. The washabilities were done on a relatively fine coal fraction (minus 2.36mm) and yields will generally be poorer on a run of mine size coal feed. Results show that Sulphur in the product analyses is around 1% which is generally regarded as the maximum acceptable for export coal without penalty. Free Swell Indices increase to a moderate to strong level in the low specific gravity fractions; however, yield at the lower levels is insufficient to produce a metallurgical (coking) coal product. Froth releases approximately 20% of the fines fraction most of which comes off in the first 30 seconds. Ash is relatively static at the three time intervals used, which shows the froth to be working effectively to release the lower ash coal. Yields are low for a 15% product ash which is the highest ash desirable for export thermal coal.

All data from the Nomkhon Bohr target has been given to a Mongolian consulting group, in support of an application to convert the Togoot MEL to a mining licence.

The Coking Flats target is overlain by a thick sequence of Cretaceous conglomerate, sandstone and mudstone associated with a strong magnetic anomaly. Drilling in 2008 showed that coal seams similar to those at Nomkhon Bohr were present below the cover rocks. Because of the thickness of the Cretaceous, the potential for additional coal seams at depths below the Cretaceous along the axis of the magnetic anomaly was not completely tested in 2008.

The target was tested with nine R-C holes totalling 1,451 metres and seven core holes totalling 1,634.75 metres in 2009. Four of the core holes deepened existing R-C holes - total for recovered core was 968.74 metres. None of the holes intersected new coal seams.

Drilling on the Khar Suul target in 2008 returned no coal intercepts. However, because of its gross similarity with the carbonaceous sedimentary rocks at Nomkhon Bohr, the host stratigraphy is believed to be Permian and was chosen for additional drilling in 2009. Six R-C holes totalling 849 metres were drilled, encountering carbonaceous mudstones in five holes, but no coal.

Nine R-C holes totalling 1,226 metres tested magnetic lows within the Toogie West target in 2009 to look for the continuation of the Khar Suul Permian basement to the western boundary of the licence. The first hole was abandoned in Cretaceous clays; otherwise, all holes encountered Permian stratigraphy beneath the Cretaceous cover, but no coal seams.

The scout drilling of the Central Cretaceous Basin comprised six R-C holes totalling 900 metres. No Permian stratigraphy was encountered, only volcanics which are interpreted to be Carboniferous in age.

Two targets were explored for precious metals in 2009. Ukhaa Tolgod was drilled with two core holes totalling 301.95 metres. Best result was 148 ppb Au and 17.5 ppm Ag over 4.0 metres. The Morinii Takh target comprises several strongly silicified outcrops at the apex of a horseshoe-shaped magnetic anomaly and was recognized in 2009 during preliminary mapping of the Central Cretaceous Basin. Four R-C holes totalling 562 metres were drilled, but did not return any significant gold and/or silver results.

James R. Foster, P.Geo. is the QP responsible for supervising exploration on the Lookout Hill West and for supervising the preparation of the technical disclosure in this section of the AIF. Owen Cullingham, P.Geol. QP for coal, rendered technical advice during the exploration and has contributed to and approved the technical disclosure in this section of the AIF.

Sampling and Analysis

In 2009, all coal samples (738 core samples and 491 R-C samples) were sent to ACTLABS in Ulaanbaatar, an ISO 17025 accredited facility. Sample preparation was carried out using ASTM Method D-2013, with the exception that final crush was done to minus 80 mesh rather than minus 60 mesh. Specific Gravity measurements were done on lump coal according to the method given in ASTM Standard D 167 - 93. Sub-samples were used for the following analyses: proximate analysis (includes moisture, ash, volatiles and fixed carbon -ASTM Standard D-1542), total sulphur % (ASTM Standard D-4239) and calorific value (ASTM Standard D-2015).

Reject material from eighty-seven core samples and forty-seven R-C samples were sent to SGS Mongolia LLC in Ulaanbaatar for check analyses for specific gravity, proximate analysis, fixed Carbon %, total Sulphur %, and calorific value. There was excellent correlation for ash contents and Sulphur % on a dry sample basis between the two labs. Correlation was good for specific gravity determinations, but poor for calorific value.

Manlai Property, Mongolia

No work on the Manlai project was completed in 2009 and the Manlai exploration licence was returned to the Mongolian government in January 2010.

Empirical Discovery Agreement 2007

In July 2007, Entrée entered into an agreement with Empirical Discovery LLC (“Empirical”) to explore for and develop porphyry copper targets in south-eastern Arizona and adjoining south-western New Mexico. Under the terms of the agreement, Entrée has the option to acquire an 80% interest in any of the properties by incurring exploration expenditures totalling a minimum of US$1.9 million and issuing 300,000 Entrée Shares within five years of the anniversary of TSX acceptance of the agreement on 9 August 2007. If Entrée exercises its option, Empirical may elect within 90 days to retain a 20% participating interest or convert to a 2% net smelter return (“NSR”) royalty, half of which may be purchased for US$2 million.

The principals of Empirical have extensive experience in exploration for copper porphyries in the Americas, as well as access to proprietary geophysical interpretation techniques of particular application to large regional datasets. These techniques have been modelled using a number of known deposits, and the criteria developed have been used to identify buried targets from the regional database. Initial targeting resulted in applications for eleven mineral exploration permits in south-eastern Arizona and New Mexico totalling approximately 8.5 square miles (22 square kilometres).

In 2008, geophysical (IP and AMT), geological and geochemical surveys were completed on the Gold Hill, Duncan and Ash Peak porphyry copper targets in Arizona and New Mexico. Drill testing two of the three targets was undertaken in 2009 but no significant mineralisation was found and all three projects were dropped.

Empirical Discovery Agreement 2008

In January 2008, Entrée entered into a second agreement with Empirical to explore for and test porphyry copper targets in a specified area near Bisbee, Arizona. Bisbee is located within a copper district that produced over 8 billion pounds of copper and 3 million ounces of gold in the last century. Entrée intends to use the proprietary geophysical interpretation techniques developed by the principals of Empirical to locate buried porphyry targets. The area of interest covers over 10,800 acres (4,370 hectares). Under the terms of the agreement, Entrée has the option to acquire an 80% interest in any of the properties by incurring exploration expenditures totalling a minimum of US$1.9 million and issuing 150,000 Entrée Shares within five years of the anniversary of TSX acceptance of the agreement. If Entrée exercises its option, Empirical may elect within 90 days to retain a 20% participating interest or convert to a 2% NSR royalty, half of which may be purchased for US$2 million. An approximately nine line-kilometres test AMT survey budgeted at US$43,000 was completed in February 2009.

A $610,000 exploration program is proposed for 2010. Work will include three lines of IP/resistivity designed to test the Dixie and Abbot targets, the possible northern extension of the Freeport McMoRan’s Cochise copper resource located 1.7 kilometres south of the Company’s land holdings. Drill of three RC/diamond drill holes totalling 2,400 meteres to test magnetic anomalies interpreted as possible porphyry-style alteration and mineralization is also planned.

The 2007 Empirical agreement was amended in August, 2009 to include the 1,435 ha (3,545 acre) Oak Grove property, located approximately 45 km northeast of Lordsburg, New Mexico. Work on the Oak Grove property is in the preliminary stages with no results currently available for release.

Lordsburg Property, New Mexico

The Lordsburg claims cover 2,013 ha (4,793 acres) adjacent to the historic Lordsburg copper-gold-silver district, New Mexico, USA. The claims were originally acquired under the 2007 Empirical Discovery agreement.

Month	High	Low	Close	Volume
December 2009	2.69	2.34	2.55	1,842,100
November 2009	2.93	2.46	2.59	2,333,300
October 2009	3.40	2.45	2.63	4,227,300
September 2009	3.18	2.11	3.05	3,865,900
August 2009	2.65	1.32	2.38	3,871,100
July 2009	1.78	1.26	1.36	6,004,700
June 2009	1.35	1.02	1.16	1,843,600
May 2009	1.48	1.05	1.29	1,265,900
April 2009	1.70	1.23	1.26	1,572,100
March 2009	1.60	1.12	1.60	2,513,100
February 2009	1.60	0.91	1.20	2,734,600
January 2009	1.41	0.98	1.04	1,192,500

Number of Options	Exercise Price (CDN$)	Grant Date
50,000	1.07	January 8, 2009
1,730,000	1.32	February 12, 2009
1,842,500	2.60	December 22, 2009

Name and municipality of residence	No. of common shares beneficially owned, directly or indirectly, or controlled(2).	No. of securities held on a fully-diluted basis(1)
Gregory Crowe Bowen Island, British Columbia, Canada	1,427,406	Shares: 1,427,406 Warrants: 0 Stock options:1,100,000 Total: 2,527,406
Mark H. Bailey Bellingham, Washington, U.S.A.	467,922	Shares: 467,922 Warrants: 0 Stock options:980,000 Total: 1,447,922
Lindsay Richard Bottomer North Vancouver, British Columbia, Canada	423,957	Shares: 423,957 Warrants: 0 Stock options:990,000 Total: 1,413,957
James L. Harris West Vancouver, British Columbia, Canada	274,000	Shares: 274,000 Warrants: 0 Stock options:1,010,000 Total: 1,284,000
Peter Meredith Vancouver, British Columbia, Canada	Nil	Shares: 0 Warrants: 0 Stock options:855,000 Total: 855,000
Michael Howard London, UK	103,000	Shares: 103,000 Warrants: 0 Stock options:1,010,000 Total: 1,113,000
Hamish Malkin Bowen Island, British Columbia, Canada	35,664	Shares: 35,664 Warrants 0 Stock options640,000 Total: 675,664
Robert M. Cann Nanaimo, British Columbia Canada	95,197	Shares: 95,197 Warrants: 0 Stock options:715,000 Total: 810,197
Mona M. Forster Vancouver, British Columbia Canada	89,486	Shares: 89,486 Warrants: 0 Stock options:685,000 Total: 774,486

ENTRÉE GOLD INC.
(An Exploration Stage Company)
CONSOLIDATED BALANCE SHEETS
(Expressed in United States dollars)

	December 31,			December 31,
	2009			2008


ASSETS

Current
Cash and cash equivalents	$	40,360,436		$	45,212,815
Receivables		164,255			592,443
Receivables - Ivanhoe Mines		699,293			30,000
Prepaid expenses		811,431			268,518

Total current assets		42,035,415			46,103,776

Deferred costs (Note 14)		375,216			-
Investments (Note 3 )		2,166,597			1,329,568
Equipment (Note 4)		770,562			672,124
Mineral property interests (Note 5)		292,608			-
Other assets		69,568			-
Equity Investment - joint venture (Note 3 and 5)		94,154			-


Total assets	$	45,804,120		$	48,105,468

LIABILITIES AND STOCKHOLDERS' EQUITY

Current
Accounts payable and accrued liabilities	$	1,160,912		$	942,238

Loans payable to Ivanhoe Mines (Note 6)		676,083			326,183


Total liabilities		1,836,995			1,268,421

Commitments (Note 13)

Stockholders' equity

Common stock, no par value, unlimited number authorized, (Note 7)		116,599,651			111,993,990
97,059,346 (December 31, 2008 - 94,560,898) issued and outstanding
Additional paid-in capital		15,905,963			13,772,775
Accumulated other comprehensive income:
Unrealized gain on available for sale securities		563,481			-
Foreign currency cumulative translation adjustment		(480,928	)		(7,410,930	)
Accumulated deficit during the exploration stage		(88,621,042	)		(71,518,788	)

Total stockholders' equity		43,967,125			46,837,047

Total liabilities and stockholders' equity	$	45,804,120		$	48,105,468

ENTRÉE GOLD INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Expressed in United States dollars)

		Year Ended December 31, 2009			Year Ended December 31, 2008			Inception (July 19, 1995) to December 31, 2009

EXPENSES
	Depreciation (Note 4)		156,144			146,703			877,106
	Write-down of equipment		-			123,816			-
	Foreign exchange (gain) loss		141,731			(126,468	)		181,224
	Mineral property interests (Notes 5 and 7)		9,985,963			10,240,770			54,849,586
	General and administrative (Note 5 and 8)		7,046,649			6,626,018			34,498,528
Loss from operations			(17,330,487	)		(17,010,839	)		(90,406,444	)
	Interest income		397,741			1,981,316			4,654,036
	Loss from equity investee (Note 3)		(169,508	)		(366,595	)		(536,103	)
	Fair value adjustment of asset backed commercial paper (Note 3)		-			(1,334,160	)		(2,332,531	)
Net loss		$	(17,102,254	)	$	(16,730,278	)	$	(88,621,042	)

Comprehensive income (loss):
	Net loss	$	(17,102,254	)	$	(16,730,278	)	$	(88,621,042	)
	Unrealized gain on available for sale securities (Note 3)		563,481			-			563,481
	Foreign currency translation adjustment		6,930,002			(12,483,218	)		(480,928	)
Comprehensive income (loss)		$	(9,608,771	)	$	(29,213,496	)	$	(88,538,489	)

Basic and diluted loss per share		$	(0.18	)	$	(0.18	)

Audit Fees	2009	2008
Audits of the Company’s consolidated financial statements, meetings with the Audit Committee and management with respect of quarterly filings, consulting and accounting standards and transactions, issuance of consent in connection with Canadian and US securities filings.	$122,189	$192,775
Audit Related Fees
Tax Fees	23,703	31,478
Tax compliance, taxation advice and tax planning for international operations.	-	-
All other fees	-	-
	$145,892	$224,253

ENTRÉE GOLD INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(Expressed in United States dollars)

	Number of Shares		Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income			Accumulated Deficit During the Exploration Stage			Total Stockholders' Equity

Balance, July 19, 1995 (date of inception)		-	$	-	$	-	$	-		$	-		$	-
Shares issued:
Private placements		4,200,000		60,852		-		-			-			60,852
Acquisition of mineral property interests		3,200,000		147,520		-		-			-			147,520
Foreign currency translation adjustment		-		-		-		(756	)		-			(756	)
Net loss		-		-		-		-			(175,714	)		(175,714	)
Balance, April 30, 1996		7,400,000		208,372		-		(756	)		(175,714	)		31,902
Shares issued:
Private placements		3,880,000		274,718		-		-			-			274,718
Foreign currency translation adjustment		-		-		-		(8,568	)		-			(8,568	)
Net loss		-		-		-		-			(56,250	)		(56,250	)
Balance, April 30, 1997		11,280,000		483,090		-		(9,324	)		(231,964	)		241,802
Foreign currency translation adjustment		-		-		-		(5,216	)		-			(5,216	)
Net loss		-		-		-		-			(33,381	)		(33,381	)
Balance, April 30, 1998		11,280,000		483,090		-		(14,540	)		(265,345	)		203,205
Foreign currency translation adjustment		-		-		-		(3,425	)		-			(3,425	)
Net loss		-		-		-					(40,341	)		(40,341	)
Balance, April 30, 1999		11,280,000		483,090		-		(17,965	)		(305,686	)		159,439
Escrow shares compensation		-		-		41,593		-			-			41,593
Exercise of stock options		1,128,000		113,922		-		-			-			113,922
Foreign currency translation adjustment		-		-		-		(896	)		-			(896	)
Net loss		-		-		-		-			(154,218	)		(154,218	)
Balance, April 30, 2000		12,408,000	$	597,012	$	41,593	$	(18,861	)	$	(459,904	)	$	159,840
			-continued-

ENTRÉE GOLD INC.
(An Exploration Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in United States dollars)

	Year Ended December 31, 2009			Year Ended December 31, 2008			Inception (July 19, 1995) to December 31, 2009

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(17,102,254	)	$	(16,730,278	)	$	(88,621,042	)
Items not affecting cash:
Depreciation		156,144			146,703			877,106
Stock-based compensation		4,183,677			3,672,358			17,656,876
Fair value adjustment of asset backed commercial paper		-			1,334,160			2,332,531
Write-down of equipment		-			123,816			123,816
Escrow shares compensation		-			-			2,001,832
Mineral property interest paid in stock and warrants		22,515			60,941			4,052,698
Loss from equity investee		169,508			366,595			536,103
Other items not affecting cash		22,227			-			72,176
Changes in assets and liabilities:
Receivables		483,554			(110,207	)		(159,397	)
Receivables - Ivanhoe Mines		(607,191	)		(34,603	)		(641,794	)
Prepaid expenses		(454,571	)		132,422			(739,419	)
Accounts payable and accrued liabilities		(212,509	)		525,028			861,525
Net cash used in operating activities		(13,338,900	)		(10,513,065	)		(61,646,989	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of capital stock		2,280,050			856,470			111,991,734
Share issue costs		-			(7,186	)		(3,545,920	)
Loan payable to Ivanhoe Mines		-			376,230			376,230
Net cash provided by financing activities		2,280,050			1,225,514			108,822,044

CASH FLOWS FROM INVESTING ACTIVITIES
Deferred acquisition costs		(77,098	)		-			(77,098	)
Mineral property interest	(38,219		)		-			(38,219	)
Deposits		(69,568	)		-			(69,568	)
Joint venture - Ivanhoe Mines		-			(366,595	)		(366,595	)
Purchase of asset backed commercial paper		-			-			(4,031,122	)
Acquisition of equipment		(141,307	)		(255,959	)		(1,684,085	)
Net cash used in investing activities		(326,192	)		(622,554	)		(6,266,687	)

Effect of foreign currency translation on cash and cash equivalents		6,532,663			(11,983,193	)		(547,932	)
Change in cash and cash equivalents during the period		(4,852,379	)		(21,893,298	)		40,360,436	)
Cash and cash equivalents, beginning of period		45,212,815			67,106,113			-
Cash and cash equivalents, end of period	$	40,360,436		$	45,212,815		$	40,360,436
Cash paid for interest during the period	$	-		$	-
Cash paid for income taxes during the period	$	-		$	-

	2009		2008
Balance, beginning of the year	$	1,329,568	$	3,032,751
Total unrealized gain (loss)		563,481		(1,334,160	)
Total foreign exchange adjustment		273,548		(369,023	)
Balance, end of year	$	2,166,597	$	1,329,568

Restructuring categories	C$ thousands
MAV 2 Notes	Face value		Dec/31, 2009 C$ Fair value estimate*		Dec/31, 2008 C$ Fair value estimate*	Expected maturity date
A1 (rated A)		1,966,529		1,388,866	984,490	12/20/2016
A2 (rated BBB)		1,630,461		826,653	614,952	12/20/2016
B		295,974		50,836	24,034	12/20/2016
C		120,401		1,205	4,713	12/20/2016
Total original investment		4,013,365		2,267,560	1,628,189
* - the range of fair values estimated by the Company varied between C$2.0 million and C$2.5 million - the total United States dollars fair value of the investment at December 31, 2009 is $2,166,597 (2008 - $1,329,568).

			December 31, 2009						December 31, 2008
	Cost		Accumulated Depreciation		Net Book Value		Cost		Accumulated Depreciation		Net Book Value

Office equipment	$	126,873	$	68,095	$	58,778	$	89,886	$	46,819	$	43,067
Computer equipment		533,022		265,491		267,531		340,917		167,852		173,065
Field equipment		472,495		210,987		261,508		402,902		133,449		269,453
Buildings		416,734		233,989		182,745		356,160		169,621		186,539
	$	1,549,124	$	778,562	$	770,562	$	1,189,865	$	517,741	$	672,124


	Year Ended December 31, 2009		Year Ended December 31, 2008		Inception (July 19,1995) - December 31, 2009

MONGOLIA
Lookout Hill		5,735,612		6,547,495		40,528,234
Manlai		19,505		40,766		4,308,930
Total Mongolia		5,755,117		6,588,261		44,837,164

CHINA
Huaixi		1,156,223		626,325		1,782,548
Total China		1,156,223		626,325		1,782,548

USA
Lordsburg		1,597,973		1,167,998		2,765,971
Empirical		418,454		1,358,966		1,881,381
Bisbee		143,988		193,875		337,863
Blackjack		475,417		-		475,417
Roulette		52,361		-		52,361
Total USA		2,688,193		2,720,839		5,512,993

OTHER		386,430		305,345		2,716,881

Total all locations	$	9,985,963	$	10,240,770	$	54,849,586


	Number of Shares	Weighted Average Exercise Price (C$)
Balance at December 31, 2007	9,249,800	1.53
Granted	2,957,000	1.81
Exercised	(958,057)	1.06
Cancelled	(151,943)	1.00
Expired	(445,000)	1.76
Balance at December 31, 2008	10,651,800	1.65
Granted	3,622,500	1.97
Exercised	(2,355,948)	1.23
Cancelled	(289,552)	1.15
Expired	(721,000)	1.60
Balance at December 31, 2009	10,907,800	1.86


Number of Options		Exercise Price (C$)		Aggregate Intrinsic Value (C$)		Expiry Date	Number of Options 0; Exercisable		Aggregate Intrinsic Value (C$)

	50,000		1.19		68,000	March 3, 2010		50,000		68,000
	10,000		2.00		5,500	April 3, 2010		10,000		5,500
	42,000		1.48		44,940	May 24, 2010		42,000		44,940
	2,080,000		1.75		1,664,000	June 9, 2010		2,080,000		1,664,000
	25,000		1.66		22,250	August 25, 2010		25,000		22,250
	20,000		1.85		14,000	September 28, 2010		20,000		14,000
	125,000		1.80		93,750	January 23, 2011		125,000		93,750
	100,000		2.20		35,000	February 8, 2011		100,000		35,000
	20,000		2.34		4,200	March 28, 2011		20,000		4,200
	907,300		1.32		1,115,979	July 10, 2011		907,300		1,115,979
	2,000		1.77		1,560	December 11, 2011		2,000		1,560
	50,000		1.77		39,000	January 22, 2012		50,000		39,000
	200,000		2.16		78,000	April 5, 2012		200,000		78,000
	500,000		2.06		245,000	May 16, 2012		500,000		245,000
	479,500		2.30		119,875	May 31, 2012		479,500		119,875
	5,000		2.58		-	January 9, 2013		5,000		-
	1,509,000		2.00		829,950	April 3, 2013		1,509,000		829,950
	12,500		1.55		12,500	May 21, 2013		12,500		12,500
	125,000		2.02		66,250	July 17, 2013		125,000		66,250
	1,202,500		1.55		1,202,500	September 17, 2013		1,202,500		1,202,500
	1,600,500		1.32		1,968,615	February 12, 2014		1,600,500		1,968,615
	1,842,500		2.60		-	December 22, 2014		1,842,500		-
	10,907,800			$	7,630,869			10,907,800	$	7,630,869


	Number of Options			Weight Average Grant-Date Fair Value (C$)

Non-vested options at December 31, 2007		433,333			1.43
Granted		-			-
Vested		(266,666	)		1.43
Cancellation/forfeited		-			-
Non-vested options at December 31, 2008		166,667			1.43
Granted		-			-
Vested		(166,667	)		-
Cancellation/forfeited		-			-
Non-vested options at December 31, 2009		-			-


	Year Ended December 31, 2009		Year Ended December 31, 2008		Cumulative to December 31, 2009
Consulting fees	$	-	$	-	$	1,794,562
Legal		-		-		287,931
Management fees		2,032,141		2,612,884		8,131,956
Mineral property interests		661,854		854,581		3,235,267
Office and administration		1,236,383		162,960		3,153,783
Stockholder communications and investor relations		253,299		41,933		1,053,377
	$	4,183,677	$	3,672,358	$	17,656,876



	Year Ended December 31, 2009			Year Ended December 31, 2008

Risk-free interest rate		2.04	%		2.93	%
Expected life of options (years)		5.0			5.0
Annualized volatility		81	%		84	%
Dividend rate		0.00	%		0.00	%


	December 31, 2009		December 31, 2008

Identifiable assets
Canada	$	44,269,665	$	46,880,341
Mongolia		906,485		540,508
USA		583,461		217,554
China		44,509		467,065
	$	45,804,120	$	48,105,468


	Year Ended December 31, 2009			Year Ended December 31, 2008

Loss for the period
Canada	$	(7,350,080	)	$	(6,390,938	)
Mongolia		(5,809,346	)		(6,929,082	)
USA		(2,754,431	)		(2,749,260	)
China		(1,188,397	)		(660,998	)
	$	(17,102,254	)	$	(16,730,278	)

	Year ended December 31, 2009			Year ended December 31, 2008
Loss for the year	$	(17,102,254	)	$	(16,730,278	)
Statutory rate		30	%		31	%
Expected income tax recovery		5,130,676			5,186,386
Permanent differences		(766,036	)		(2,181,442	)
Difference in foreign tax rates		(145,825	)		6,389
Change in valuation allowance		(3,925,728	)		(2,588,763	)
Change in enacted tax rates		(293,087	)		(422,570	)
Total income taxes	$	-		$	-

	Year ended December 31, 2009			Year ended December 31, 2008

Future income tax assets:
Non-capital loss carry forward	$	4,695,306		$	2,801,275
Investments		219,538			263,009
Resource expenditures		5,542,989			3,411,969
Equipment		60,765			26,811
Share issue costs		186,638			276,444
		10,705,236			6,779,508
Valuation allowance		(10,705,236	)		(6,779,508	)
Total income taxes	$	-		$	-

Balance at December 31, 2007		7,821,559
Decrease due to current year tax positions		( 3,684,890	)
Balance at December 31, 2008		4,136,669
Decrease due to current year tax positions		(4,136,669	)
Balance at December 31, 2009	$	-

	Year Ended December 31, 2009			Year Ended December 31, 2008			Year Ended December 31, 2007

Depreciation	$	156,144		$	146,703		$	212,819
General and administrative		3,032,286			3,113,663			2,896,364
Interest income		(397,741	)		(1,981,316	)		(1,090,718	)
Stockholder communications and investor relations		634,271			691,926			739,964
Mineral property interests		9,324,109			9,386,189			6,343,777
Fair value adjustment to asset backed commercial paper		-			1,334,160			998,371
Loss from equity investee		169,508			366,595			-
Stock-based compensation		4,183,677			3,672,358			1,732,839
Net loss	$	17,102,254		$	16,730,278		$	11,833,416

Class	CuEq Cut-off	Tonnage (tonnes)	Copper (%)	Gold (g/t)	CuEq* (%)	Contained Metal
Class	CuEq Cut-off	Tonnage (tonnes)	Copper (%)	Gold (g/t)	CuEq* (%)	Cu (‘000 lb)	Au (oz)	CuEq('000 lb)
Indicated	1.0	84,800,000	2.22	0.80	2.73	4,150,000	2,180,000	5,104,000
	0.6	117,000,000	1.80	0.61	2.19	4,643,000	2,290,000	5,649,000

Inferred	1.0	62,200,000	1.39	0.39	1.64	1,906,000	780,000	2,249,000
	0.6	95,500,000	1.15	0.31	1.35	2,421,000	950,000	2,842,000

Cut-off	Tonnage	Cu	Au	Mo	Cu Eq*	Contained Metal
CuEq %	1000's (t)	%	g/t	ppm	%	Cu ('000 lb)	Au ('000 oz.)	CuEq ('000 lb)
>1.00	190 000	0.57	0.96	155	1.26	2 370 000	6 000	5 260 000
>0.60	910 000	0.48	0.49	141	0.87	9 570 000	14 000	17 390 000

	Three Months			Three Months			Three Months			Three Months
	Ended			Ended			Ended			Ended
	December 31,			September 30,			June 30,			March 31,
	2009			2009			2009			2009

Exploration	$	2,406,856		$	2,722,656		$	2,840,854		$	2,015,597
General and administrative		3,591,718			888,319			942,685			1,921,802
Loss from operations		(5,998,574	)		(3,610,975	)		(3,783,539	)		(3,937,399	)
Interest income		62,758			33,142			80,161			221,680
Loss from equity investee		(103,960	)		(43,094	)		(22,454	)		-
Fair value adjustment to asset backed commercial paper		-			-			-			-
Net loss	$	(6,039,776	)	$	(3,620,927	)	$	(3,725,832	)	$	(3,715,719	)

Loss per share, basic and diluted	$	(0.06	)	$	(0.04	)	$	(0.04	)	$	(0.04	)

	Year Ended		Year Ended			Year Ended		Year Ended
	December 31,		December 31,			December 31,		December 31,
	2009		2009			2008		2008
	Shares		Amount			Shares		Amount

Share Issue Costs		-		$	-		-		$	(7,186	)
Exercise of stock options		2,355,948			2,280,050		958,057			856,470
Mineral property interest		142,500			275,122		30,000			60,941
		2,498,448		$	2,555,172		988,057		$	910,225

				/s/ Gregory G. Crowe
Date: March 31, 2010		By:		Gregory G. Crowe Chief Executive Officer (Principal Executive Officer)

				/s/ Hamish Malkin
Date: March 31, 2010		By:		Hamish Malkin Chief Financial Officer (Principal Financial and Accounting Officer)

March 31, 2010		/s/ Gregory G. Crowe
		Gregory G. Crowe Chief Executive Officer (Principal Executive Officer)

March 31, 2010		/s/ Hamish Malkin
		Hamish Malkin Chief Financial Officer (Principal Financial and Accounting Officer