Erdene Announces Private Placement to Complete Khundii GOLD Project Pre-Feasibility Study and Launch Step-Out Drill Program
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ERDENE ANNOUNCES PRIVATE PLACEMENT TO
COMPLETE KHUNDII GOLD PROJECT PRE-FEASIBILITY STUDY
AND LAUNCH STEP-OUT DRILL PROGRAM
Press Release
Halifax, Nova Scotia
2019.06.12
Erdene Resource Development Corp. (TSX:ERD; MSE:ERDN) ("Erdene" or the "Company") is pleased to announce
that it intends to issue, by way of a non-brokered private placement, up to 10,000,000 units of the Company (the
“Units”) at a price of $0.20 per Unit (the “Private Placement”), for gross proceeds of up to $2,000,000. Each Unit
will consist of one common share and one-half (½) of one common share purchase warrant (each whole warrant,
a “Warrant”). Warrants are exercisable by the holder into one common share of the Company within two years
of the closing date, at a price of $0.30.
Proceeds of the Private Placement will be used to fund completion of the independent Pre-Feasibility Study
(“PFS”) of the Company's Khundii Gold Project (the “Project”), mining licens e applications for the Project’s
properties, acquisition and exploration , including step-out holes to test continuity of the Bayan Khundii
extension identified in Q2-2019, and for general working capital purposes.
Erdene launched the PFS for the Khundii Gold Project in March 2019. Managed by Tetra-Tech, Inc., with support
from Sustainability East Asia LLC for Environmental and Social Impact studies, and Blue Coast Laboratories, for
Metallurgical analysis, results of the PFS are scheduled to be announced in late Q3-2019.
Results from Erdene’s Q2-2019 drill program (see news release dated May 13, 2019), including the intersection of
112 metres grading 5.9 g/t gold , are amongst the strongest encountered at the Bayan Khundii project and are
expected to contribute positively to the PFS . Erdene intends to use a portion of the proceeds of the Private
Placement for step-out drilling including follow-up on a newly emerging zone of gold mineralization in southern
Bayan Khundii, where Q2-2019 drilling intersected 51.9 g/t gold over one metre.
The Private Placement is expected to close on or about June 26, 2019 and is subject to the Company receiving all
necessary regulatory approvals, including approval of the Toronto Stock Exchange. Securities issued under the
Private Placement will be subject to a four month hold period which will expire four months plus one day from
the closing date of the Private Placement.
Review of the Khundii Gold Project Development
Erdene’s deposits are located in the 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 southwest
Mongolia over the past decade and is responsible for the discovery of the Khundii Gold District comprised of
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 projects. Together, these deposits comprise the Khundii Gold
Project.
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The Company delivered the Project’s maiden mineral resource estimate in Q3 2018 with a combined Measured
and Indicated resource of 751,000 ounces (“oz”) gold within 10.1 million tonnes (“Mt”) at an average grade of 2.3
g/t gold (Table 1). This was followed by a Preliminary Economic Assessment dated February 4, 2019 (“PEA”) which
returned an after-tax Net Present Value of US$99 million, based on a 5% discount rate and a US$1,200/oz gold
price, and an Internal Rate of Return of 56%. The initial development has a life of mine head grade of 3.42 g/t
gold with an average annual gold production of 51,200 oz over an eight- year mine life. Based on the potential
for additional discovery and expansion on the current license areas, the planned development is considered as
a foundation for growth.
Table 1 – Khundii Gold Project Resources
Cut-off Grade Resource Classification Quantity (Mt) Grade (Au g/t) Gold (oz)
Recommended(1) Measured 1.4 3.6 161,000
Indicated 8.7 2.1 590,000
Measured + Indicated 10.1 2.3 751,000
Inferred 5.2 1.8 291,000
(1) RPM Global recommended cut-off grade for Bayan Khundii is 0.6 g/t gold and Altan Nar is 0.7 g/t AuEq in pit and 1.4 g/t AuEq below the same pit shell.
The PEA is by nature, a preliminary economic study, based in part on Inferred Resources. Inferred Resources are
considered too speculative geologically to have the economic considerations applied to them that would enable
them to be categorized as mineral reserves which is required for a prefeasibility or feasibility study. Mineral
resources that are not mineral reserves do not have demonstrated economic viability and there is no certainty
that the PEA will be realized. The PEA , entitled “NI 43 -101 Technical Report for the Preliminary Economic
Assessment of the Khundii Gold Project”, is available on SEDAR under Erdene’s profile.
Peter Dalton, P.Geo. (Nova Scotia), Senior Geologist for Erdene, is a Qualified Person as that term is defined in
National Instrument 43-101 and has reviewed and approved the technical information contained in this news
release.
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.
The Company has interests in four exp loration licenses and a mining license in Southwest Mongolia, where
exploration success has led to the discovery and definition of the Khundii Gold District. Erdene Resource
Development Corp. is listed on the Toronto and Mongolia stock exchanges. Further i nformation is available at
www.erdene.com. Important information may be disseminated exclusively via the website; investors should
consult the site to access this information.
Forward-Looking Statements
Certain information regarding Erdene contained here in 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 , including
statements concerning the anticipated size and closing date of the Private Placement, the intended use of
proceeds from the Private Placement, and the expected impact of drilling results on the PFS . 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 market prices, exploitation and exploration results,
continued availability of capital and financing and general economic, market or business conditions. The
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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
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-/
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