Erdene

Company Data | Introduction | Projects in Hand | Management
News Update | Chinese

Company Data

Introduction

Erdene Resource Development is a Canada-based resource company focused on the acquisition, exploration and development of precious and base metals in underexplored and highly prospective Mongolia. The Company has interests in three mining licences and an exploration licence in southwest Mongolia, where exploration success has led to the discovery and definition of the Khundii minerals district.

Investment Highlights

Developing the High-Grade Khundii Minerals District

First mover in an unexplored portion of a World Class Mineral Belt

• Unparalleled discovery potential for large, high-grade gold and copper deposits

High-grade gold development

• Bayan Khundii Gold Project moving to production in mid-2025

Multimillion ounce potential

• Multiple high-grade gold discoveries adjacent to the Bayan Khundii Gold Project and significant exploration upside in district

Powerful Alliance

• Uniting Erdene and Mongolia's leading miner backed by one of the Country's largest conglomerates
  Strategic Alliance with Mongolian Mining Corporation, Mongolia's largest independent miner
• Mongolian Mining Corporation (“MMC”) is the Country's largest publicly traded miner
• Listed on the Hong Kong Stock Exchange (HKEX: 0975)
• ~US$1B Market Cap (Q3 2024)
• MCS Group, one of Mongolia's largest conglomerates, owns 40% of MMC

A sleeping giant

• Zuun Mod Molybdenum-Copper Porphyry Complex is one of Asia's largest undeveloped projects

EXPLORATION

Bayan Khundii Gold Project

The Bayan Khundii gold deposit is located in southwestern Mongolia, within the Khundii Minerals District, approximately 16 kilometres south of the Company's Altan Nar deposit. In August of 2019, Erdene secured a mining license for Bayan Khundii from the Mineral Resource and Petroleum Authority of Mongolia (“MRPAM”). The Bayan Khundii mining license covers 2,309 hectares and, in addition to the Bayan Khundii high-grade gold deposit, includes Erdene's highly prospective 20 sq. km greater Dark Horse prospect area, including the Dark Horse Mane high-grade gold discovery. The mining license is valid for an initial term of 30 years with the ability to extend to 70 years.

The Bayan Khundii Gold Project is a high-grade (4.0 g/t Au), open-pit development that will produce an average of 74,200 ounces of gold annually employing conventional, capital efficient processing methods. Erdene plans to deliver the first gold in 2025.

The Updated Bankable Feasibility Study (Full Study) completed in mid-2023 outlined a Net Present Value using a 5% (NPV5%) discount rate of US$170 million, an Internal Rate of Return (IRR) of 35%, and a payback period of just over two years, using a $1,800/ounce gold price. At current gold prices of approximately $2,000/ounce, the Project's NPV5% rises to US$223 million and the IRR increases to 42%.

Erdene will be the first mining company in Mongolia to use solar power generation and its operation incorporates an integrated waste facility (“IWF”) to reduce the environmental footprint.

Based on the Bayan Khundii Gold Project, the University of British Columbia explored ways to maximize the benefits of resource development for communities and create shared value by working collaboratively with local stakeholders.

• Reached approximately 45% construction progress at Bayan Khundii at September 30, 2024
• Approximately US$70 million of Project expenditures incurred to the end of Q3 2024 – potential cost increases due to logistical and weather delays and minor scope changes are expected to be within available funding
• Process plant, the critical path facility, was ~55% complete at quarter end, with all bulk concrete pours and mechanical equipment installation of the SAG and ball mills complete
• Construction of non-process infrastructure, including camp, 110 kV overhead transmission line, warehouse, workshop, administration building and utilities proceeding well
• Construction expected to be largely complete in Q1 2025 with commissioning in Q2 and first gold production in mid-2025 followed by commercial production in Q3
• Approximately 650 personnel on-site at quarter end achieving ~2,000,000 construction hours without a lost-time or environmental incident
• Advanced community development and local employment stakeholder programs
• Local Cooperation Agreement for 2024 implemented supporting local development programs
• Recruitment and training of Bayan Khundii mine workforce continued with seventh cohort of local residents selected for equipment operator training at MMC's UHG mine, bringing total number of trainees to 140 people to date
• Company supported installation and improvement of three rural water wells to increase water availability for residents

Khundii Minerals District Exploration

• Conducted 1,500 metre Bayan Khundii ore-control drill program
• Drilled 89 shallow holes totaling 1,048 metres focused on high-grade domains, within 15 metres of surface, scheduled to be developed in the first 3-4 months of mining and a further 10 holes totaling 456 metres to assist with future mine planning
• Results confirmed the high-grade domains in the current block model with highlight intersection of 6.61 g/t Au over 12 metres, starting at surface
• Completed 950 metre expansion program on the periphery of the Bayan Khundii planned open pit
• Drilling intersected gold mineralization in all holes, demonstrating the potential for resource growth and pit extension
• Results included the highest-grade drilling results to date in Striker West, adjacent to the Bayan Khundii open-pit, including 7.3 g/t gold over 42 metres, with multiple high-grade metre intersections of 15 to 79 g/t gold (BKD-377)

(See news release dated November 14, 2024)

Management

Peter C. Akerley, President & Chief Executive Officer, Director

Mr. Akerley has over 35 years of experience in mineral exploration, corporate financing, project development and management of publicly listed resource companies. He is one of the founders and principals of Erdene and has held the position of President and Chief Executive Officer of the Corporation since March 2003.

Robert Jenkins, Chief Financial Officer

Mr. Jenkins held a series of progressive finance and operational roles with Canada's leading asset management firm. Mr. Jenkins is a Chartered Professional Accountant.

Michael X. Gillis, Vice President Exploration and Operations

Mr. Gillis has over 25 years of experience in the mineral exploration industry in increasingly senior project and corporate management positions.

Bayarmaa Bagabandi, Chief Administrative Officer

Ms. Bagabandi has been involved in the administrative side of Mongolia's resource industry for over 15 years.

Peter Dalton, Senior Geologist

Mr. Dalton has worked as a geologist for Erdene Resource Development for over 15 years and has been directly involved in the discovery of “Altan Nar”, “Bayan Khundii” and “Dark Horse” projects. Mr. Dalton is a Professional Geologist.

Darryn Broderick, Director of Finance

Mr. Broderick was a Channel Partner for a large US-based software vendor. In 2010, Mr. Broderick helped Erdene implement a new ERP system and has been supporting the Company ever since.

D. Suzan Frazer, Corporate Secretary

Ms. Frazer is a partner of the Halifax office of the law firm, McInnes Cooper. She has been practicing corporate law for over 25 years and is experienced in representing public and private companies in the junior resource sector.

Bilguun Ankhbayar, Chief Executive Officer, Erdene Mongol LLC

Mr. Ankhbayar is a Mongolian mining finance professional, based in Ulaanbaatar, with North American and Mongolian capital markets experience.

Jon Lyons, Chief Development Officer, Erdene Mongol LLC

Mr. Lyons was appointed Vice President, Projects in 2021. Previously, he was with the Global Green Growth Institute as Country Representative to Mongolia.

Layton Croft, Chairman

Mr. Croft is an executive and entrepreneur with 30 years of global experience across increasingly senior roles, from non-profit to mid-tier to mega-cap to micro-cap. He lived and worked full-time in Mongolia for 15 years.

Dr. Anna Biolik, Director

Kenneth MacDonald, Director

Cameron McRae, Director

David Mosher, Director

Hedley Widdup, Director

News Update

December 10, 2024, Erdene Provides Corporate Finance Update

Erdene Resource Development Corp.’s Erdene Mongol LLC (EM) has executed an up to $50-million (U.S.) working capital facility with Trade and Development Bank of Mongolia (TDB). The facility is designed to finance commissioning and ramp-up of the high-grade, open-pit Bayan Khundii gold project, under development with Mongolian Mining Corp. (MMC).

https://erdene.com/site/assets/files/4571/epr.pdf

November 14, 2024, Erdene Announces Q3 2024 Results and Provides Bayan Khundii Gold Project Update

https://erdene.com/site/assets/files/4569/epr.pdf

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