EARN-IN RIGHTS AND OBLIGATIONS

Grant of Earn-in Right

3.1 In consideration of the Minimum Expenditure Commitment and Ivanhoe's agreement to participate in the Private Placement, Entree hereby grants to Ivanhoe, with effect as of the Effective Date, the Earn-in Right.

Description of Earn-in Right

3.2 Ivanhoe will have the right (the "Earn-in Right") to earn a Participating Interest in the Project equal to:

(a) fifty one per cent (51%) by incurring, within the Earn-in Period and in accordance with the Earn-in Schedule and the terms of this Agreement, not less than $20,000,000 of aggregate Earn-in Expenditures;

(b) sixty per cent (60%) by incurring, within the Earn-in Period and in accordance with the Earn-in Schedule and the terms of this Agreement, not less than $27,500,000 of aggregate Earn-in Expenditures; and

(c) the percentage interests described in Section 4.5(c), by incurring, within the Earn-in Period and in accordance with the Earn-in Schedule and the terms of this Agreement, not less than $35,000,000 of aggregate Earn-in Expenditures.

Earn-in Period

3.3 The period during which Ivanhoe may exercise the Earn-in Right and thereby earn a Participating Interest in the Project (the "Earn-in Period") will commence on the Effective Date and end on the earliest to occur of the following dates:

(a) subject to Ivanhoe having incurred,

(i) Earn-in Expenditures equal to or greater than the Minimum Expenditure Commitment, and

(ii) any Earn-in Expenditures that it becomes obligated to incur as provided in Section 3.12,

the date upon which Ivanhoe notifies Entrée pursuant to Section 3.10 that Ivanhoe is electing to relinquish the Earn-in Right without having earned a Participating Interest in the Project;

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(b) subject to Ivanhoe having earned a Participating Interest in the Project of at least fifty one per cent (51%), the date upon which Ivanhoe notifies Entrée pursuant to Section 3.11 that Ivanhoe is electing to relinquish the Earn-in Right without having earned the maximum Participating Interest available thereunder;

(c) the date upon which the aggregate Earn-in Expenditures incurred by Ivanhoe equal or exceed the amount of Earn-in Expenditures required in order to earn the maximum Participating Interest available pursuant to the Earn-in Right;

(d) the date following the last day of any of the first three (3) years of the Earn-in Period during which Ivanhoe fails to incur the minimum amount of Earn-in Expenditures required during that year pursuant to the Earn-in Schedule provided that, if the deficiency is less than ten percent (10%) of such minimum amount, the Earn-in Period will end thirty (30) days following Notice by Entrée to Ivanhoe but only if, prior to the lapse of such thirty (30) day period, Ivanhoe fails to satisfy such deficiency by making an equivalent cash payment to Entrée;

(e) if Ivanhoe becomes obligated to incur Earn-in Expenditures pursuant to Section 3.12, the date following the last day by which Ivanhoe was required to incur such Earn-in Expenditures if it fails to do so;

(f) if Ivanhoe is in material default or material breach of any of its covenants or representations and warranties in Part 2, Sections 3.5, 3.6, 3.7, 3.8, 3.9, 3.12, 3.13, 3.14, 4.8, 4.9, 4.10 or 4.11 or Parts 5, 6 or 9 and such material default or material breach,

(i) can be cured, thirty (30) days after Entrée has given Notice to Ivanhoe specifying the material default or material breach unless within that time Ivanhoe demonstrates to Entrée that the material default or material breach has been cured, or

(ii) cannot be cured, immediately after Entrée has given Notice to Ivanhoe specifying the material default or material breach; or

(g) the eighth (8th) anniversary of the Effective Date.

Earn-in Schedule

3.4 Subject to Sections 3.10, 3.11 and 3.12, Ivanhoe will incur the Earn-in Expenditures during the Earn-in Period in accordance with the following schedule (the "Earn-in Schedule"):

(a) not less than $5,000,000 of Earn-in Expenditures on or before the first (1st) anniversary of the Effective Date, in accordance with the Initial Exploration Program and Budget;

(b) not less than $5,000,000 of additional Earn-in Expenditures on or before the second (2nd) anniversary of the Effective Date,

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(c) not less than $5,000,000 of additional Earn-in Expenditures on or before the third (3rd) anniversary of the Effective Date,

(d) not less than $20,000,000 of additional Earn-in Expenditures as soon as reasonably possible after the third (3rd) anniversary of the Effective Date but, in any event, on or before the eighth (8th) anniversary of the Effective Date.

Notwithstanding the foregoing, Ivanhoe may incur Earn-in Expenditures sooner than provided by the Earn-in Schedule. If, despite its best efforts, Ivanhoe is unable to incur sufficient Earn-in Expenditures pursuant to Section 3.4(d) within the time provided in order to earn the maximum Participating Interest available pursuant to the Earn-in Right, Ivanhoe will be entitled to satisfy any deficiency by making an equivalent cash payment to Entrée on or before the date by which such Earn-in Expenditures were required to be incurred.

Initial Exploration Program and Budget

3.5 The Exploration Program and Budget in respect of the first (1st) year of the Earn-in Schedule (the "Initial Exploration Program and Budget") will be prepared by Ivanhoe, as soon as reasonably practicable after the Effective Date, in good faith having regard to the Existing Data and generally accepted mining industry practice and will:

(a) include a Budget of not less than $5,000,000;

(b) allocate a minimum of $3,000,000 (the "Minimum Expenditure Commitment") from the Budget to Exploration in respect of the Northern Extension, of which not less than $2,500,000 will be allocated to not less than ten (10) drill holes, each to a depth from surface of not less than 1500 metres, and $500,000 will be allocated to geophysical Exploration and/or additional drilling; and

(c) allocate sufficient funding from the Budget for the purposes of Exploration and condemnation, in accordance with the requirements of Section 5.3, of the X-Grid.

Prior to implementation, the Initial Exploration Program and Budget will be submitted to the Earn-in Committee for review and approval. Ivanhoe will incur, in accordance with the provisions of this Part 3 including without limitation this Section 3.5, Earn-in Expenditures during the first (1st) year of the Earn-in Schedule equal to or greater than the Minimum Expenditure Commitment.

Subsequent Programs and Budgets

3.6 Each Program and Budget pertaining to subsequent years of the Earn-in Schedule will be prepared by Ivanhoe in good faith having regard to all information available to Ivanhoe in respect of the Project Property, generally accepted mining industry practice and the terms of this Agreement and will be limited to the conduct of Exploration and Development for the sole purpose of determining the economic viability of extracting Products. Prior to implementation, each Program and Budget pertaining to subsequent years of the Earn-in Schedule will be submitted to the Earn-in Committee for review and approval.

Mongolian Subsidiary Involvement

5.8 The parties hereby acknowledge and agree that, in order to fully and effectually enjoy their respective rights, and perform their respective obligations, under this Agreement, it may be necessary or desirable, from time to time, for a party to cause a company incorporated under the laws of Mongolia and controlled by such party (a "Mongolian Subsidiary") such as, in the case of Entrée, the Entrée Subsidiary to do, or refrain from doing, certain acts and things in Mongolia in furtherance of the covenants and agreements of such party in this Agreement. Each party hereby covenants and agrees with the other party that, whenever the performance by that party of an obligation under this Agreement requires any involvement by a Mongolian Subsidiary of that party, such party will cause its Mongolian Subsidiary to promptly execute all such instruments and do all such acts and things as may be necessary or desirable in order for such party's obligations hereunder to be fully and effectually performed on a timely basis. Wherever in this Agreement an obligation is ascribed to a party and such obligation can only be legally and effectually performed by such party's Mongolian Subsidiary, such party will be deemed to have obliged itself, as principal, and its Mongolian Subsidiary, as the Mongolian Subsidiary's authorized agent, to perform such obligation.