Erdene Announces Q3 2021 Results and Provides Bayan Khundii GOLD Project Update
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www.erdene.com 1 [email protected]
ERDENE ANNOUNCES Q3 2021 RESULTS AND
PROVIDES BAYAN KHUNDII GOLD PROJECT UPDATE
Press Release
Halifax, Nova Scotia
2021.11.10
Erdene Resource Development Corp. (TSX:ERD; MSE:ERDN) ("Erdene" or the
"Company") is pleased to announce operating and financial results for the three months
ended September 30, 2021, and to provide an update on its Bayan Khundii Gold Project
(“Bayan Khundii” or “BK”). This release should be read in conjunction with the Company’s
Q3 2021 Financial Statements and MD&A , available on the Company’s website or
SEDAR.
Highlights:
• Recent exploration results indicate Bayan Khundii, Ulaan, and Dark Horse Mane
are part of the same large-scale, gold mineralized system
o Intersected some of the thickest intervals of gold mineralization in the
Khundii Gold District to date at the recent South Ulaan discovery
o Drill results from follow-up exploration drilling at the Dark Horse Mane are
expected in mid-November
• Advanced the Bayan Khundii Gold Project
o Detailed Environmental Impact Assessment (DEIA) accepted by the
Professional Council of the Mongolian Ministry of Environment and Tourism
on October 5
o Community programs underway following execution of Local Cooperation
Agreement (LCA) with the Bayankhongor Provincial Government
o Detailed design and engineering 90% complete, positioning Erdene to start
early works in coming months
• Closed US$5 million Mongolian Stock Exchange offering on October 8
Quotes from the Company:
“During the third quarter, we executed upon our two strategic objectives of expanding the
Khundii Gold District , while advancing the Bayan Khundii Gold Project towards
development,” said Peter Akerley, Erdene’s President and CEO. “Expansion of the South
Ulaan gold prospect demonstrates the scale potential of the Khundii -Ulaan system
underlying our Khundii Gold District . Erdene has a 3,000-metre program scheduled for
late 2021, in support of our 2 million ounce resource target in 2022.”
“We are also steadily progressing Bayan Khundii towards a construction decision, despite
the uncertainty created by COVID-19,” continued Mr. Akerley. “The Company intends to
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commence preparatory works in Q4 2021, with full construction ramping up in early 2022.
However, the Company is monitoring the impact of COVID-19 on the availability and costs
of key inputs and will provide a more fulsome update on schedule and budget in the
coming months.”
Q3 2021 Highlights and Subsequent Events:
Bayan Khundii Gold Project – 100% Erdene
• Progressed construction readiness activities for the Bayan Khundii Gold Project
• Detailed design and engineering for process and non -process infrastructure
(“NPI”) 90% complete
• Regulatory review of detailed drawings well advanced, with eight facilities fully
approved, including those planned during site establishment
• Baseline scheduling and procurement advanced ahead of expected
commencement of preparatory works in Q4 2021
• Advanced regulatory approvals required for mine development
• Project D etailed Environmental Impact Assessment (“DEIA”) accepted by the
Professional Council of the Ministry of Environment and Tourism on October 5,
2021
• Continued to carry out local community programs
• Implemented initial community initiatives under Local Cooperation Agreement,
focused on COVID-19 response measures
• Completed heavy equipment operation and mine construction training for local
residents
Exploration
• Expanded new gold discovery at South Ulaan, 300 metres west of Bayan Khundii
• Intersected some of the thickest intervals of gold in the Khundii Gold District
▪ UDH-10 – 258 metres of 0.98 g/t gold beginning at 92 metres downhole,
including 3.77 g/t gold over 40 metres, starting at 99 metres downhole
▪ UDH-14 – 217 metres of 1.07 g/t gold beginning 188 metres downhole,
including 3.55 g/t gold over 53 metres
▪ UDH-15 – 364 metres of 0.79 g/t gold beginning 97 metres downhole,
including 1.98 g/t gold over 91 metres
▪ UDH-19 – 190 metres of 0.73 g/t gold beginning 82 metres downhole,
including 12.52 g/t gold over 5 metres
▪ UDH-21 – 77 metres of 3.19 g/t gold beginning 115 metres downhole,
including 8.74 g/t gold over 27 metres
▪ UDH-22 – 152 metres of 1.71 g/t gol d beginning 85 metres downhole,
including 3.11 g/t gold over 65 metres
• Follow-up drill program totaling approximately 3,000 metres planned in Q4 2021
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• Completed follow -up exploration work at the Dark Horse prospect, 3.5 km north of
Bayan Khundii
• Drilled 34 holes and two hole -extensions totaling 2,286 metres during the third
quarter – samples are at the SGS lab in Ulaanbaatar with assay results expected
to be reported by mid-November
• Continued evaluation and interpretation program including geophysics, clay
mineral analysis, petrography, mineralogy, fluid inclusion work and 3-D modelling
Corporate
• Closed US$5 million Mongolian Stock Exchange offering on October 8, 2021
• Received subscriptions from 1,867 institutional and retail Mongolian investors
• Offering was 46% over -subscribed and filled pro -rata to orders as required by
Mongolian securities regulations
• Progressed due diligence for the Bayan Khundii Project financing with Export
Development Canada (EDC) and Mongolian financiers
• EDC mandate letter contemplates a senior secured debt facility of up to US$55
million
• Site visits completed in Q1 2021, and draft technical , and environmental and
social diligence reports received
• Legal term sheet drafted that will form the basis of the EDC loan document
• Due diligence is proceeding in parallel with Mongolian financial institutions on
sub-ordinated debt
• Advanced technical and strategic review of the Zuun Mod/Khuvyn Khar molybdenum-
copper project
• RPMGlobal scheduled to deliver u pdated technical and economic analysis by
mid-November
• Strategic discussions ongoing to optimize the Project’s value through options
including sale, joint venture partnership, or spinout
• Recorded a net loss of $1,935,798 for the three months ended September 30, 2021,
compared to a net loss of $3,871,340 for the three months ended September 30, 2020
• Exploration and evaluation expenditures, including capitalized expenditures,
totaled $3,501,181 for the three months ended September 30, 2021, compared
to $3,547,222 for the period ended September 30, 2020, as a modest reduction
in exploration activity and lower non -cash share based compensation expenses
due to the timing of performance grants were partially offset by increased Mining
studies costs due to additional engineering effort for Bayan Khundii and greater
Stakeholder relations costs following the signing of a Local Cooperati on
Agreement in July 2021
• Corporate and administrative expenses totaled $565,092 for the three months
ended September 30, 2021, compared to $869,876 for the three months ended
September 30, 2020, primarily due to lower non-cash share-based compensation
expenses as a result of the timing of performance grants
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COVID-19 Update
In late January 2020, the Government of Mongolia instituted limitations on public
gatherings, suspended in -person classroom learning, and implemented international
border controls in res ponse to COVID -19. The Canadian Government adopted similar
measures in March 2020, as did most governments globally during 2020. With the first
confirmed cases of community transmission of COVID -19 in November 2020, the
Government of Mongolia further restr icted the movement of people and the delivery of
goods and services. While restrictions were eased in early 2021, precautionary measures
were subsequently reintroduced in late Q1 2021 , following an increase in the number of
reported cases in Mongolia.
In March 2021, Bayankhongor Province, where Erdene’s projects are located, reported
its first confirmed case of community transmission of COVID-19, leading to the imposition
of restrictions on the movement of people within and to/from the province. Furthermor e,
in late June 2021, Bayankhongor province and the sub -province of Shinejinst, the
communities in which Erdene operates, imposed states of emergency due to worsening
community spread of COVID -19 in the area. Although the Company temporarily halted
field work in late June in response, Company staff and contractors returned to site in early
August 2021 to commence follow -up exploration work, which has continued without
interruption since this date. Additionally, Canadian and International staff and consultants
resumed travel to Mongolia in Q3 2021.
Mongolia continues to experience a significant number of COVID -19 cases, which has
led to disruptions at the Country’s land borders with China. Such closures have impacted
the availability and prices of industrial and consumer goods required for the construction
of the Bayan Khundii Gold Project. Although the impact of COVID -19 on the Company’s
operations has been modest to date, COVID-19 has the potential to delay or increase the
costs of the Bayan Khundii Developm ent. The Company is monitoring the situation and
assessing the impact on the Bayan Khundii Gold Project construction schedule and
budget. Erdene does not intend to ramp up to full construction until there is certainty that
people can freely travel, and supplies can readily be imported to Mongolia. The Company
will provide further details on the impact of COVID -19 on its operations and the Bayan
Khundii Gold Project as they become available.
All Erdene employees have received at least two doses of COVID-19 vaccine and many
staff have received a third booster shot. Erdene is working with Mongolian and Canadian
authorities to maintain control measures to protect the health and well-being of its workers
as well as the communities in which the Company operates.
Qualified Person
Peter Dalton, P.Geo. (Nova Scotia), Senior Geologist for Erdene, is the 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.
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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 three
mining licenses and two exploration licenses 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 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.
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 ca utions 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 m aterially 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 o bligation 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-/