ERDENE COMMENCES 18,000 METRE DRILL PROGRAM AT THE KHUNDII GOLD DISTRICT Multiple areas to be drilled as part of ongoing district expansion program Highlights1:
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ERDENE COMMENCES 18,000 METRE DRILL
PROGRAM AT THE KHUNDII GOLD DISTRICT
Multiple areas to be drilled as part of ongoing district expansion program
Highlights1:
• Drilling commenced at Bayan Khundii on Monday, August 17 with a second drill rig scheduled to be operating
the week of August 24
o Phase I includes ~ 8,700 metres of drilling at Bayan Khundii (“BK”) and Dark Horse
§ The first drill rig is focused on BK with drill plans for ~ 4,800 metres in ~30 holes in areas within
the economic pit, outside the economic pit and beyond the boundaries of the pit-constrained
resource outlined in the BK Bankable Feasibility Study
• BK drilling will include follow up in two new shallow, high-grade discovery areas
o Striker SW: BKD-292 intersected 15 metres of 29 g/t gold including one metre of 353
g/t gold
o Midfield SE: BKD-288 results included 5.5 metres of 125.9 g/t, including 1 metre of
581.6 g/t gold
§ The second drill rig will begin a Phase I, 10 hole, 1,200 metre program at the Dark Horse prospect
• Drilling will initially focus on the main structure and areas of recent trench results which
included: 6 metres grading 8.8 g/t gold, including 1 metre of 50.8 g/t gold and 4 metres of
14 g/t gold, including 1 metre of 45.3 g/t gold, in KMT-01 and KMT-03, respectively
• An additional 2,700 metres (~15 holes) following up on initial results, will be drilled at BK
and Dark Horse, completing Phase I by early October
o Phase II Program: ~9,000 metre program scheduled to begin in mid-October
§ Details will be finalized following the review and interpretation of Phase I results from BK and
Dark Horse, and will include Altan Nar and Ulaan drilling where targeting is currently in progress
Press Release
Halifax, Nova Scotia
2020.18.08
Erdene Resource Development Corporation (TSX:ERD | MSE:ERDN) (“Erdene” or the “Company”) is pleased to
announce commencement of drilling at its 100%-owned Khundii Gold Project licenses.
“We are very excited to initiate a major drill program in the Khundii Gold District, following up on the outstanding
near-surface, high-grade gold intersections reported earlier in Q3,” said Peter Akerley, Erdene’s President and CEO.
“Our recent financing, led by Eric Sprott, provides us with the resources to advance our Bayan Khundii Gold Project
towards development and to aggressively explore the broader Khundii Gold District, which offers tremendous
discovery potential as demonstrated by our high-grade gold discoveries to date.”
1 Previous results in this release are stating apparent thicknesses
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“An 18,000 metre drill program is planned to be completed before year-end, with drilling now underway at Bayan
Khundii and a second drill rig scheduled to arrive at Dark Horse next week,” continued Mr. Akerley. “The program is
designed to test new areas in the district, add additional resources adjacent to current deposits and increase
confidence in current resource areas, potentially adding to existing reserves at Bayan Khundii.”
Drilling Highlights & Plans
[See plan view maps below]
The Khundii Gold District provides a multitude of exploration and development opportunities beyond the initial
proposed open-pit development at Bayan Khundii. These opportunities include recent near-surface drilling
successes and expansion opportunities within the Bayan Khundii deposit area, the new Dark Horse gold discovery
and the identification of very high-grade gold in the Discovery Zone at Altan Nar, reported earlier in 2020. A brief
overview of the main target areas and planned program is outlined below.
Bayan Khundii Deposit Area
Midfield SE and Striker SW: Drilling in Q2 2020 discovered very high grade, near-surface gold zones in both Midfield
SE and Striker SW. Midfield SE intersections included 5.5 metres of 125.9 g/t gold, including 1 metre of 581.6 g/t gold
in BKD-288, beginning 11.5 metres downhole, and 15 metres of 25.6 g/t gold including 1 metre of 338 g/t gold
beginning at 14.9 metres downhole in BKD-274, located 40 metres north of BKD-288. In total, 16 of 18 holes drilled at
Midfield SE in Q2 2020 intersected anomalous gold (≥0.2 g/t) mineralization within 25 metres of surface. This
discovery is interpreted as the intersection of the stacked NW trending quartz adularia veins, with a N-S trending
conceptual feeder structure. The Midfield SE structure has been traced over a strike length of at least 200 metres
with Q2 drill testing only the northern 50 metres. The Phase I drill program will target this conceptual feeder
structure’s southeast continuation which remains largely untested. As this area was classified as waste or low-grade
stockpile material in the current resource, it has the potential to have a significant impact early in the project mine
life. The possibility of parallel en-echelon features is demonstrated by another outlier of high-grade gold in BKD-
118 which intersected 1 metre of 159 g/t gold located 200 metres east of Midfield SE and outside of the proposed pit.
At Striker SW, recent drilling intersected anomalous gold (≥ 0.2 g/t) in all 11 holes in a 100m x 50m area within 25
metres of surface. Hole BKD-290 intersected 20 metres of 5.9 g/t gold beginning 8 metres from drill collar, including
one metre of 91.2 g/t gold, and BKD-292 intersected 15 metres of 29 g/t gold beginning 0.9 metres from drill collar,
including one metre of 353 g/t gold. This program established continuity of this very high-grade zone in an area
currently classified predominantly as low-grade or below cut-off grade material, that is scheduled to be mined in
the first year of the Bayan Khundii development. Western continuity and potentially southern extensions of the
Striker SW area will be tested in the current drill program.
Bayan Khundii – Extensions and Exploration Beyond Planned Pit: The Bayan Khundii Mineral Resource2 includes
521,000 ounces of 3.16 g/t gold Measured and Indicated (“M&I”) and 103,000 ounces of Inferred resources at 3.68 g/t
gold. Within the M&I resource, a proven and probable open-pit reserve3 totals 409,000 ounces at 3.7g/t (see the full
press release here). Several mineralized zones and exploration areas peripheral to the planned open-pit at Bayan
Khundii host intervals of exceptionally high-grade (30 to 150 g/t gold intersections over 1 meter) gold-bearing veins.
2 Bayan Khundii Mineral Resource M&I consists of: Measured 171,000 ounces and 350,000 ounces Indicated. For details of the
Mineral Resources see Khundii Gold Project NI 43-101 Technical Report, Tetra Tech December 4, 2019 – SEDAR
3 Bayan Khundii Mineral Reserve consists of 166,000 ounces Proven and 244,000 ounces Probable
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This provides significant potential growth of reserves with the development of the remaining M&I and Inferred
resources and areas beyond the current resources. In addition, the reported resource is an open-pit constrained
resource beyond which drilling has previously intersected significant gold mineralized zones. These areas will also
be the subject of Phase I drilling to evaluate resource expansion.
Striker West and Southern Extension: Located approximately 210 metres west of the planned Bayan Khundii open-
pit, drilling in 2019 confirmed and extended the Striker West target with the best intersection of this deposit area to
date with 3 metres of 40 g/t gold at a vertical depth of 136 metres (BKD-265). Results from this hole also broadened
the mineralized domain at shallow depth and outside the defined resource boundary with a 16-metre interval of 1.1
g/t gold, including 5 metres of 2.7 g/t gold, beginning only 28 metres from the surface. This area is open to the south,
where BKD-266 was drilled in Q2 2019, approximately 250 metres west-southwest of the planned open-pit, and
outside the currently defined resource boundary. This hole intersected a high-grade, one-metre interval of 51.9 g/t
gold at a depth of 264 metres within a broad zone of silica-illite and magnetite altered volcanic tuff, suggesting a
down-dip continuation of high-grade gold mineralization from the currently defined Bayan Khundii pit. The 2020
drill programs will seek to increase confidence in the high-grade core of Striker West and expand this zone to the
south.
Dark Horse (Khar Mori)
The Dark Horse prospect, and by extension, the Altan Arrow prospect, 3.5 km north of the Bayan Khundii gold deposit,
will be the subject of drilling in both the Phase I and II drill programs. The Dark Horse prospect covers an
approximately 1.5 by 3-kilometre area, connected to the northwesterly adjacent Altan Arrow gold prospect. Previous
drilling along the subsidiary structures south of Altan Arrow (within 300 metres of the Dark Horse target area) have
provided the highest-grade intersections to date, including 24 g/t and 70 g/t gold over 2 metres (AAD-03 and AAD-
12) within 75 metres of surface.
Initially, drilling will focus along the main structure at Dark Horse which exhibits a 1.3-kilometre gold in soil anomaly
as well as areas of recent trenching successes which include:
o 6 metres grading 8.8 g/t gold, including 1 metre of 50.8 g/t gold on the main Dark Horse structure in trench
KMT-01
o 4 metres of 14 g/t gold, including 1 metre of 45.3 g/t gold at KMT-03 on a structural intersection zone 850 metres
east southeast of KMT-01
The main Dark Horse structure is characterized by gold in soil anomalism, very high gold grades in rock chip samples,
residual quartz bodies, intense silicification and white mica alteration. The current interpretation of Dark Horse
includes a series of structurally controlled gold mineralized comb quartz stockwork zones situated along or proximal
to the dominant NE trending faults, where the NE structures are intersected by opposing NW trending. The
intersection of these opposing structures may result in dilation zones, creating preferential conduits for fluid flow
and subsequent gold deposition. These are all features characteristic of the Bayan Khundii deposit to the south.
(see attached images).
As a large, untested gold prospect, Dark Horse provides significant discovery potential along strike of the main
structure and at or near NE-NW structural intersections where several isolated but intense gold in soil anomalies
are located, many of which contain high-grade gold in rock chip. The extent of drilling at Dark Horse in Phase II will
be influenced by these initial results.
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Altan Nar Gold Polymetallic Deposit
At Altan Nar, approximately 16 km north of the Bayan Khundii gold deposit, a growing gold and polymetallic resource
provides a significant opportunity for growth. The current Altan Nar Gold resource includes 318,000 ounces of 2.0
g/t gold Indicated and 186,000 ounces of Inferred at 1.7 g/t gold in addition to significant silver and base metal
content.
In early 2020 the company reported a high-grade discovery in the Discovery Zone (“DZ”), one of 18 high-priority
targets along the 5.6-kilometre mineralized trend on its 100% owned Altan Nar project. Results included 23 metres
of 17 g/t gold, 44.7 g/t silver, 0.75 % lead and 1.47 % zinc within a black, sulphide-rich epithermal breccia (TND-135)
which targeted a previously untested area of the DZ high-grade core with additional holes providing further support
for the continuity of high grades within the target zone. This proof of concept opened up multiple areas for targeted
testing along the Altan Nar trend. Only a small portion of the Altan Nar licence has been drill tested, and 90% of the
NI 43-101 Mineral Resource prepared by RPM Global in 2018 is within 150 metres of surface and contained mainly
within 2 of the 18 targets with all zones open along strike and at depth. The Q1 2020 results demonstrate continuity
in size and grade within the high-grade DZ core, providing confidence for future expansion. Wave Geophysics has
recently completed a compilation project for Altan Nar, and interpretation work is underway to develop the next
round of drilling expected to commence in Phase II of the 2020 program.
COVID-19 Precautions:
Throughout the 2020 field season, our team on the ground has worked to deliver an injury-free, effective field
exploration program, rolling out increased preventive measures in response to COVID-19 risk. The Company has kept
in place precautionary measures to protect against the spread of COVID-19. In the field, daily protocols are used to
ensure basic hygiene, and daily briefing, induction and visitor reception procedures continue to include body
temperature checks. Isolation facilities and personal protective equipment for emergency response have been
prepared. Since late January, the Government of Mongolia has implemented a series of preventive measures in
response to COVID-19, including limitations on public gatherings, suspension of in-person classroom learning, and
international border controls. The most recent of these measures are currently in force until at least August 31, 2020.
As of August 18, 2020, Mongolia has reported zero local transmissions of COVID-19 and zero deaths from the disease.
All confirmed and reported cases to date have been amongst repatriated individuals.
Khundii Gold District
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.
The Bayan Khundii Gold Resource1 includes 521,000 ounces of 3.16 g/t gold Measured and Indicated (“M&I”)² and
103,000 ounces of Inferred resources at 3.68 g/t gold. Within the M&I resource, a proven and probable open-pit
reserve totals 422,000 ounces at 3.7 g/t (see the full press release here), providing significant potential growth of
reserves with the development of the remaining M&I and Inferred resources4.
4 For details of the Mineral Resources see Khundii Gold Project NI 43-101 Technical Report, Tetra Tech December 4, 2019 – SEDAR
2 M&I: 171,000 ounces of 3.77 g/t gold Measured, and 349,700 ounces of 2.93 g/t gold Indicated
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In July 2020, Erdene announced the results of an independent Feasibility Study for the Bayan Khundii Gold Project
(press release here). The Feasibility Study results include an after-tax Net Present Value at a 5% discount rate and
a US$1,400/oz gold price of US$100 million and Internal Rate of Return (“IRR”) of 42%. The Feasibility Study envisions
an open-pit mine at Bayan Khundii, producing an average of 63,500 oz gold per year, for seven years, at a head grade
of 3.71 g/t gold, utilizing a conventional carbon in pulp processing plant. Production is expected to commence in
early 2022 based on the current project schedule.
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.
Qualified Person and Sample Protocol
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.
All samples have been assayed at SGS Laboratory in Ulaanbaatar, Mongolia. In addition to internal checks by SGS
Laboratory, the Company incorporates a QA/QC sample protocol utilizing prepared standards and blanks. All
samples undergo standard fire assay analysis for gold and ICP-OES (Inductively Coupled Plasma Optical Emission
Spectroscopy) analysis for 33 additional elements. For samples that initially return a grade greater than 5 g/t gold,
additional screen-metallic gold analysis is carried out which provides a weighted average gold grade from fire assay
analysis of the entire +75 micron fraction and three 30-gram samples of the -75 micron fraction from a 500 gram
sample.
Erdene’s drill core sampling protocol consisted of collection of samples over 1 or 2 metre intervals (depending on
the lithology and style of mineralization) over the entire length of the drill hole, excluding minor post -mineral
lithologies and un-mineralized granitoids. Sample intervals were based on meterage, not geological controls or
mineralization. All drill core was cut in half with a diamond saw, with half of the core placed in sample bags and the
remaining half securely retained in core boxes at Erdene’s Bayan Khundii exploration camp. All samples were
organized into batches of 30 including a commercially prepared standard, blank and either a field duplicate,
consisting of two quarter-core intervals, or a laboratory duplicate. Sample batches were periodically shipped directly
to SGS in Ulaanbaatar via Erdene’s logistical contractor, Monrud Co. Ltd.
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.
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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-/
YouTube: https://www.youtube.com/channel/UCILs5s9j3SLmya9vo2-KXoA
Mining licenses Mineralized trend
Au Cu Ag Mo Pb Zn
0 5 10
kilometers
Exploration licenses
KHUNDII GOLD DISTRICT
Three deposits, multiple greenfield discoveries, limited exploration
Fast tracking to production
Nomin Tal
Altan Nar Deposit (Au, Ag, Zn, Pb)
Oyut Khundii
Altan Arrow
Khar Mori
Khundii
North
Bayan Khundii Deposit (Au)
Zuun Mod Deposit (Cu, Mo)
Khuvyn
Khar
Ulaan
Map 1: KhundiiGold District Mineralized Zones
BAYAN KHUNDII
Phase I Drill Program Q3 2020:
8700m Testing Multiple Prospects On License
Fast tracking to production
DARK HORSE
(KHAR MORI) GOLD PROSPECT
BAYAN KHUNDII
GOLD DEPOSIT
Midfield SE Gold Zone
Striker SW Gold Zone
ROCK CHIP SAMPLE
> 10 g/t
> 5-10 g/t
1-5 g/t
Drill collar
Structure
1570 (max)
Gold in Soil (ppb)
6
Map2:DarkHorseProspect