Erdene Announces Conversion of Ebrd Convertible Loan and Provides Bayan Khundii GOLD Project Update
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www.erdene.com [email protected]
ERDENE ANNOUNCES CONVERSION OF EBRD CONVERTIBLE
LOAN AND PROVIDES BAYAN KHUNDII GOLD PROJECT UPDATE
Press Release
Halifax, Nova Scotia
2019.10.13
Erdene Resource Development Corp. (TSX:ERD; MSE:ERDN) ("Erdene" or the "Company") announces that the
European Bank for Reconstruction and Development (“EBRD” or “Bank”) has exercised its conversion
option in respect of its US$5 million convertible loan (“Convertible Loan”) with the Company. Following
conversion of the Convertible Loan, the EBRD owns and controls 30,043,290 common shares representing
approximately 11.2% of the issued and outstanding common shares of the Company.
Erdene is also pleased to provide a project update for its 100%-owned, high-grade, open-pit Bayan Khundii
Gold Project (“Bayan Khundii” or “BK”) in southwest Mongolia.
Quotes from the Company and EBRD:
"The proceeds of the EBRD Convertible Loan provided the funding to complete the recently announced
Bayan Khundii Gold Project Feasibility Study,” said Peter Akerley, Erdene’s President and CEO. “The EBRD’s
conversion, along with the proceeds of the C$20 million equity financing led by a C$15 million strategic
investment from Mr. Eric Sprott position Erdene to secure the project finance required to move Bayan
Khundii rapidly to production. The company is focused on expanding the resources throughout the district
and construction readiness efforts for the Bayan Khundii project as we target first gold in 2022.”
“We were pleased to support the economic, technical and environmental and social studies that have
demonstrated the benefits of the Bayan Khundii Gold Project in southwest Mongolia,” said Eric Rasmussen,
the EBRD Director for Natural Resources. “The conversion of our loan into common equity maintains our
interest in the development of the Bayan Khundii Gold Project and we are pleased to support the
development of this valuable resource for the benefit of all stakeholders.”
EBRD’s Commitment to Mongolia
The EBRD is one of the largest investors in Mongolia. To date, the EBRD has invested over €1.8 billion (C$2.8
billion) in Mongolia’s economy across 113 projects, with almost all investments in the private sector. The
EBRD works in Mongolia to support building a diverse economy by developing the private sector and
supporting infrastructure improvements.
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Financing Update
Under the terms of the Convertible Loan agreement executed October 11, 2019, the EBRD provided US$5.0
million of funding to Erdene by way of a convertible loan. EBRD exercised its conversion option on October
9, 2020 in respect of the entire principal amount of the Convertible Loan, receiving 30,043,290 common
shares of the Company, representing 11.2% of Erdene’s then issued and outstanding common shares.
Additionally, the Company will pay interest costs of US$457, 639 to the Bank in connection with the
extinguishment of the Convertible Loan.
With the conversion of the EBRD Convertible Loan and the completion of the Bayan Khundii Gold Project
Feasibility Study, Erdene will focus on securing funding for the Project. As previously disclosed, the
Company engaged HCF International to act as Project Finance advisor, to secure Project debt as its primary
responsibility. HCF is progressing discussions with financial institutions active in mine finance on the basis
of the Bayan Khundii Feasibility Study results and its strong projected cash flows.
Bayan Khundii Gold Project Update
Construction readiness activities for Bayan Khundii Gold Project commenced in Q3 2020 and are
progressing as outlined below:
• Detailed design and engineering for the Carbon-in-Pulp (“CIP”) Leach processing plant and mine
support infrastructure are progressing on schedule, with expected completion in late Q4 2020.
• Tender and contracting for critical facilities and services has begun with the objective to optimize
the capital budget for construction.
• Constructability, value engineering, and HAZOPS review are also underway.
• Consultations for the statutory Mongolian Detailed Environmental Impact Assessment (“DEIA”) for
the Project are underway and expected to be completed in Q4 2020, subsequent to which the DEIA
will be submitted for approval.
• Detailed technical drawings for key Project facilities have been prepared.
• The general arrangement for the site has been submitted for approval, along with the drawings for
mine support facilities, including offices, mine dry, security guard house, workshop, warehouse,
and permanent camp.
• The balance of the technical drawings are expected to be submitted by Q1 2021, allowing a rapid
construction ramp up beginning Q2 2021.
About Erdene
Erdene Resource Development Corp. is a Canada-based resource company focused on the acquisition,
exploration, and development of precious and base metals in underexplored and highly prospective
Mongolia. Erdene’s deposits are located in southwestern Mongolia’s Edren Terrane, within the Central
Asian Orogenic Belt, host to some of the world’s largest gold and copper-gold deposits. The Company has
been the leader in exploration in the region over the past decade and is responsible for the discovery of
the Khundii Gold District with interests in three mining licenses and two exploration licenses hosting
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multiple high-grade gold and gold/base metal prospects, two of which are being considered for
development: the 100%-owned Bayan Khundii and Altan Nar gold deposits.
Erdene Resource Development Corp. is listed on the Toronto and the Mongolian stock exchanges. Further
information is available at www.erdene.com. Important information may be disseminated exclusively via
the website; investors should consult the site to access this information.
Early Warning Disclosure
Prior to the conversion of the Convertible Loan, the EBRD did not beneficially own or control any common
shares of the Company. Following conversion of the Convertible Loan, the EBRD owns and controls
30,043,290 common shares representing approximately 11.2% of the issued and outstanding common
shares of the Company. The conversion price was C$0.21945 per common share, for aggregate nominal
consideration of US$5,000,000 (equivalent to C$6,593,000, based on the Bank of Canada exchange rate as
of September 18, 2020).
The EBRD holds the common shares for investment purposes. Depending on market conditions and other
factors, the EBRD may from time to time acquire and/or dispose of securities of the Company or continue
to hold its current position.
A copy of the early warning report required to be filed with the applicable Canadian securities commissions
in connection the transaction will be available under the Company’s profile on SEDAR at www.sedar.com
and can be obtained by contacting Khangai Tserenraash at +976 11 317 974. EBRD’s head office is at One
Exchange Square, London EC2A 2JN, United Kingdom.
Forward-Looking Statements
Certain information regarding Erdene contained herein may constitute forward-looking statements within
the meaning of applicable securities laws. Forward-looking statements may include estimates, plans,
expectations, opinions, forecasts, projections, guidance or other statements that are not statements of
fact. Although Erdene believes that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to have been correct. Erdene
cautions that actual performance will be affected by a number of factors, most of which are beyond its
control, and that future events and results may vary substantially from what Erdene currently foresees.
Factors that could cause actual results to differ materially from those in forward -looking statements
include the ability to obtain required third party approvals, market prices, exploitation and exploration
results, continued availability of capital and financing and general economic, market or business
conditions. The forward-looking statements are expressly qualified in their entirety by this cautionary
statement. The information contained herein is stated as of the current date and is subject to change after
that date. The Company does not assume the obligation to revise or update these forward -looking
statements, except as may be required under applicable securities laws.
NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENTS OF THIS RELEASE
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Erdene Contact Information
Peter C. Akerley, President and CEO, or
Robert Jenkins, CFO
Phone: (902) 423-6419
Email: [email protected]
Twitter: https://twitter.com/ErdeneRes
Facebook: https://www.facebook.com/ErdeneResource
LinkedIn: https://www.linkedin.com/company/erdene-resource-development-corp-/
YouTube: https://www.youtube.com/channel/UCILs5s9j3SLmya9vo2-KXoA