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We like to think that when we deposit a dollar at the bank, it goes into a big vault and we can pull out that same dollar at any time. But that¿s not how the U.S. banking system works. Banks take that money and invest it to make money themselves, so cash gets spread around. This, naturally, leads to a big risk: What happens if those investments go sour? Well, you¿d be out of luck. You can¿t get your dollar back.
The Federal Reserve doesn¿t like that scenario, so it prohibits banks from putting all the cash it has on deposit on the line. In fact, the Fed forces banks to keep a portion of their assets at the Federal Reserve itself, to make sure that some of your assets won¿t get squandered if the bank¿s bets go south. These are called ¿reserves,¿ (hence, Federal Reserve. Got it? Good), and usually amount to 10% of the total cash kept in checking accounts.
These reserves are never exactly 10%, and banks like to keep a little extra in reserve ¿ not, as you might think, to make you more comfortable that they¿re in good financial shape, but rather so they can take that excess and lend it to other banks and make money off it. (They¿re banks, they can¿t help themselves.) The rate at which they make these loans is called the Federal Funds rate, which is set by the Federal Reserve¿s Federal Open Market Committee.
When you hear people chattering about how the Fed cut or hiked interest rates, this is what they¿re talking about: the interest rate banks can charge for lending money from their reserves. This begs the question: If these are essentially loans between banks, why is the Fed Funds rate so important for the rest of the economy?
Well, simply put, because loans make the financial world go round. Bank A lends Bank B $10,000 at a Fed Funds rate of 5%. Bank B then lends out $10,000 to a small business at 7%. The small business then takes that money and expands the business and hires new workers. Now someone is employed, Bank B has made interest off the loan, and Bank A is the richer for making it all happen. It¿s perhaps overly simplistic, but you get the idea. When you want the economy to thrive, you make lending cheaper.
Of course, sometimes you don¿t want the economy to thrive. In fact, you might want it to cool down, mostly to avoid money flooding the system and causing inflation. In that case, the Fed raises interest rates, making it difficult to lend or borrow.
Home / Markets / Industries / Industrials
Monday, May 05, 2008
Entree Budgets $7 Million for 2008 Exploration
Comtex
VANCOUVER, BRITISH COLUMBIA, May 5, 2008 (Marketwire via COMTEX News Network) ----Entree Gold Inc. (TSX:ETG)(AMEX:EGI)(FRANKFURT:EKA) ("Entree" or the "Company") plans to spend approximately $7 million on exploration activities on its projects in the United States, China and Mongolia this year.
"Many public junior resource companies have faced considerable market pressure in the last several months. In contrast, the prices of commodities such as gold and copper have been sustained at near market highs. Entree is committed to advancing our exploration projects as we believe that the long term fundamentals supporting these commodity prices remain intact," noted Entree's President and CEO, Greg Crowe.
Work has begun on a large land position in Arizona and New Mexico, where the Company is seeking buried porphyry targets in the most prolific copper producing district in North America. Entree has recently formed a Wholly Foreign Owned Enterprise ("WFOE") in China and has commenced a mapping program on the Huaixi project. Exploration in Mongolia is planned to commence this spring, once the weather improves in the south Gobi desert.
Arizona and New Mexico
Over the last several months, Entree has assembled a portfolio of promising early-stage projects in Arizona and New Mexico. Through its agreements with Empirical Discovery LLC, Entree has acquired exploration rights to over 24,600 acres (9,995 hectares) located southeast of Safford, Arizona and extending into New Mexico. An additional 10,800 acres (4,370 hectares) has been acquired near Bisbee, Arizona.
Six targets have been identified to date: Duncan, Ash Peak, Dixie and Abbot in Arizona, and Gold Hill and Lordsburg in New Mexico (see map at www.entreegold.com). Geophysical surveying has commenced on Duncan and Gold Hill. Work on the other projects is being scheduled as exploration and environmental permits are approved.
Approximately $2 million has been budgeted for work in Arizona, exclusive of drilling. The current geophysics program includes 95 line kilometres of deep-penetrating induced polarization/resistivity, CSAMT, AMT and Vector IP. Once drill targets have been identified, further funds are expected to be allocated for testing these targets.
China
Entree has recently been advised that its application to form a WFOE in China has been approved. The formation of a WFOE allows Entree to operate as a 100% owned legal entity in China and conduct exploration activities.
A budget of $750,000 has been allocated to fund a preliminary prospecting and mapping program on the Huaixi project and to set up administrative offices in Beijing and Wenzhou. As the season progresses and targets are evaluated, additional funds may be designated for drilling.
Mongolia
A preliminary budget of $2.5 million has been approved for further work on Entree's Lookout Hill property that lies outside of the Entree-Ivanhoe Mines Ltd. agreement area (see map on www.entreegold.com). Pending favourable results, an additional $1.3 million may be made available for drilling.
In-fill drilling is currently underway at the Heruga deposit, located within Entree's Javhlant concession that forms part of the Entree-Ivanhoe Mines agreement area. Ivanhoe Mines is Entree's partner and project operator for this work. An inferred resource estimate for the Heruga deposit of 760 million tonnes grading 0.48% copper, 0.55 g/t gold and 142 ppm molybdenum for a copper equivalent grade of 0.91%, using a 0.60% copper equivalent cut-off grade was recently announced (see news release dated March 12, 2008).
The Mongolian Parliament continues to debate potential changes to the Minerals Law.
Quality Assurance and Quality Control
Robert Cann, P.Geo., Entree's Vice-President, Exploration, a qualified person as defined by National Instrument 43-101 ("NI 43-101"), supervised the preparation of the information in this release.
ABOUT ENTREE GOLD INC.
Entree Gold Inc. is a Canadian mineral exploration company focused on the worldwide exploration and development of gold and copper prospects. Most notably, the Company is a large landholder in Mongolia, where it holds three exploration licences that comprise the 179,590-hectare Lookout Hill property. Lookout Hill completely surrounds the 8,500-hectare Oyu Tolgoi project of Ivanhoe Mines, and hosts the Hugo North Extension of the Hugo Dummett deposit and the newly discovered Heruga deposit.
The Company continues to explore its large landholdings in Mongolia as well as evaluating new opportunities throughout the region and elsewhere in Asia. Entree plans to explore the Huaixi copper project in Zhejiang Province in China, under the terms of an agreement with the No. 11 Geological Brigade. In North America, the Company is exploring for copper-molybdenum porphyry systems in the southwest USA. The Company is also seeking additional opportunities to utilize its expertise in exploring for deep and/or concealed ore deposits.
Ivanhoe Mines and Rio Tinto are major shareholders of Entree, holding approximately 15% and 16% of issued and outstanding shares respectively.
This News Release contains forward-looking statements. Forward-looking statements are statements which relate to future events. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results. Readers are referred to the sections entitled "Risk Factors" in the Company's periodic filings with the British Columbia Securities Commission, which can be viewed at www.SEDAR.com, and with the United States Securities and Exchange Commission, which can be viewed at www.SEC.gov.
SOURCE: Entree Gold Inc.
Entree Gold Inc. Mona Forster VP & Corporate Secretary (604) 687-4777 Email: mforster@entreegold.com Website: www.entreegold.com Primoris Group 1-866-368-7330 Email: info@entreegold.com
Copyright (C) 2008 Marketwire. All rights reserved.
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