Erdene Commences Drilling at the Zuun Mod Molybdenum-Copper Porphyry Project
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ERDENE COMMENCES DRILLING AT THE ZUUN MOD
MOLYBDENUM-COPPER PORPHYRY PROJECT
Press Release
Halifax, Nova Scotia
2023.04.12
Erdene Resource Development Corporation (TSX: ERD | MSE: ERDN) (“Erdene” or the
“Company”) is pleased to announce the commencement of drilling at its 100% owned
Zuun Mod molybdenum-copper porphyry project in southwest Mongolia, located within
the Khundii Minerals District, 35 kilometres east of the Bayan Khundii Gold Project.
Quotes from the Company
“We are excited to commence the 2023 drilling program at our Zuun Mod project, one of
the largest undeveloped molybdenum-copper deposits in Asia,” said Peter Akerley,
Erdene’s President and CEO. “We see exceptional opportunities to grow the Project as
the deposit is open in all directions and there are multiple untested copper and
molybdenum prospects within the large Zuun Mod porphyry complex.”
“Mongolia’s strategic location next to the largest resource consumer, as well as its
improving infrastructure should support a robust, long life project that will provide key
inputs for the growing high strength steel industry and the green energy transition,”
continued Mr. Akerley. “With the molybdenum market in a supply deficit and strong copper
demand forecast, it is an ideal time to return to Zuun Mod and continue to build our project
pipeline alongside our flagship Bayan Khundii Khundii Gold Project.”
Zuun Mod Technical Program – Q2 2023
Significant exploration, metallurgical studies, engineering and hydrogeological work has
been completed at Zuun Mod, preparing the project for an economic assessment focused
on the NI 43-101 deposit area. The Q2 program will advance those efforts, providing data
to update the various technical studies with an additional 4,000 metres of diamond drilling.
This first phase of the drill program, targeting 2,500 metres, is designed to identify areas
at the fringes of the currently defined resource , where larger scale expansion drill
programs could materially increase resources. In addition, higher grade areas within the
deposit have not been fully defined in the current reported resource due to the wide
spacing (~100 metres) of drilling and have the potential with closer spacing to increase
grade and therefore total resource. Drilling will also test indications of a preferred
orientation of the increasingly higher grade molybdenum and copper zones at depth with
deeper drilling and oriented core. The second phase of drilling will focus on earlier stage
targets throughout the 16-kilometre circumference, porphyry complex including the
Khuvyn Khar copper discovery area (ZMD-121: 34 metres of 1.3% copper) where limited
drilling has been completed. Results from the Q2 drill program and an update of previous
technical information will be compiled in Q3 to support an independent technical study.
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About the Zuun Mod Molybdenum-Copper Project
The Zuun Mod Molybdenum-Copper Project is located in Bayankhongor Province,
Mongolia, 180 kilometres northwest of a major mining district and the border with China,
the world’s largest copper and molybdenum consumer and steel producer (see attached
maps). The 100% owned 6,041-hectare mining license, underpinning the Project, was
issued in 2011 and is valid for up to an additional 60 years. The Project is located
approximately 35 kilometres east of Erdene’s Bayan Khundii Gold Project.
Erdene acquired the rights to the Project from Gallant Minerals Mongolia Ltd (Gallant) in
2005, as part of an inventory of copper targets in Mongolia. Zuun Mod had been identified
as a large porphyry complex with significant copper-molybdenum-rhenium (Cu-Mo-Re)
mineralization intersected in limited drilling in the southeast and northern portions of the
complex. Erdene undertook a multi-year exploration program outlining the Zuun Mod
molybdenum-copper deposit and multiple copper and molybdenum prospects, within the
outer rim of the 16-kilometre circumference porphyry complex.
In 2011, Minarco-MineConsult (now RPMGlobal) prepared an NI 43-101 resource
estimate for a three-kilometre portion of the porphyry system, hosting the Zuun Mod
deposit. In total, the Zuun Mod molybdenum-copper deposit resource estimate has a
Measured and Indicated (“M&I”) resource of 218 million tonnes (“Mt”) at an average grade
of 0.057% molybdenum (“Mo”), and 0.069% copper (“Cu”) at a cut-off grade (“cog”) of
0.04% Mo. This equates to 273.5 million pounds (“Mlbs”) of contained Mo metal and 330.7
Mlbs of contained Cu metal. In addition, there is a 138 Mt Inferred Resource at an average
grade of 0.052% Mo and 0.065% Cu, equating to a further 157.7 Mlbs of contained Mo
metal and 197.7 Mlbs of contained Cu metal.
Table 1. Zuun Mod Project Mineral Resource Estimate as at June 2011
Cut-off
Grade
Mo%
Resource
Category Quantity Mt Mo %
Contained Mo
Metal Mlbs Cu %
Contained Cu
Metal Mlbs
Measured 55 0.050 61.1 0.060 73
Indicated 260 0.050 287 0.065 373.6
0.03% M&I 315 0.050 348.1 0.064 446.6
Inferred 275.4 0.043 262.1 0.061 373.7
Measured 40 0.056 49.5 0.064 57
Indicated 178 0.057 224 0.070 273.7
0.04% M&I 218 0.057 273.5 0.069 330.7
Inferred 138 0.052 157.7 0.065 197.7
Measured 25 0.063 34.5 0.068 37.5
Indicated 105 0.066 152.5 0.074 171
0.05% M&I 130 0.065 187 0.073 208.5
Inferred 64 0.060 85.0 0.067 94.9
Source: NI 43-101 Technical Report, Zuun Mod Porphyry Molybdenum-Copper Project, Minarco-MineConsult, June 2011
Beyond the Zuun Mod Deposit, the broader license hosts several high-potential copper
and molybdenum prospects. The Khuvyn Khar prospect, located in the northern portion
of the Zuun Mod porphyry complex hosts a large area of disseminated copper
mineralization within several kilometres of phyllic and potassic altered quartz monzonite
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and granodiorite intrusives. Multiple copper mineralized zones have been intersected in
wide-spaced drilling, including 34 metres of 1.3% copper and 9.24 g/t silver from 308 to
342 metres (hole ZMD-121). This zone remains untested at depth and to the southwest
where it trends under andesite cover.
In addition to exploration work, initial metallurgical studies were carried out on Zuun Mod
drill core samples by AMMTEC Limited of Perth Australia including flotation and
comminution testwork. Ore samples have shown that a conventional recovery flowsheet
is suitable for the production of both molybdenum and copper concentrates. Based on an
average grade of 0.06% Mo and similar copper grades it is reasonable to expect that an
overall molybdenum recovery of 85-87% to a concentrate grade of 52% Mo is achievable
and a copper recovery of at least 75% would be expected to a 25% Cu concentrate. The
Q2 program will include the collection of fresh material for future metallurgical study
testing.
Erdene completed a water exploration program to identify a source with the volume
necessary to process ore at Zuun Mod. This program successfully identified, drill tested
and registered a water resource with the Water Authority of Mongolia for a basin 35
kilometres north of Zuun Mod. The additional work required to further define this water
resource and update the permitting will be better defined as the project advances.
Erdene will complete further market, technical and economic studies as well as permitting
work in the coming months, to build upon a conceptual assessment completed by
RPMGlobal in late 2021. Based on the studies, as well as the results from the exploration
program underway, Erdene anticipates preparing a preliminary economic assessment for
the project in the coming months.
About Molybdenum
Molybdenum is a critical component in high strength , anti-corrosion alloys used in
stainless steel, super alloys and as a component of many technologies associated with
the green energy transition as well as oil and gas pipelines. Molybdenum is lightweight,
robust, and extremely resilient to high temperatur es and corrosion while enhancing
strength, hardenability, weldability and temperature strength.
Global molybdenum production was 578 million pounds in 2022, while global usage rose
3% to 631 million pounds from 614 million pounds the previous year. Although
molybdenum output was largely stable for the past 5 years , production cuts at major
mines, delays in commissioning new projects and degrading resource quality in long life
molybdenum assets has led to shortages and a severe increase in the molybdenum price,
reaching all time highs in early 2023. Should the current level of growth be maintained
an additional 50M lbs of shortfall is projected over the next three years. Regional
consumption (China, Japan and Korea) exceeds 50% of the global productio n and
although China is the world’s largest producer, increasing production by 12% in 2022, it
has been unable to meet demand with a shortfall of ~20M lbs in 2022. (IMOA 03/04/23)
In addition, molybdenum is seeing strong demand from both the renewables and
traditional energy sector as its used in multiple clean energy generation and
storage technologies. The World Bank report " Minerals for Climate Action: The
Mineral Intensity of the Clean Energy Transition" named molybdenum as one of the
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six cross-cutting critical minerals needed in all future green technologies (2020),
while the International Energy Agency also named molybdenu m in 2021 as a critical
mineral for the green energy transition.
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 an exploration license in Southwest Mongolia, where exploration
success has led to the discovery and definition of the Khundii Minerals 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
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.
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 a ssume 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]
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Figure 1: Zuun Mod Project Location & Regional Molybdenum Supply & Demand
Figure 2: Gold, Copper & Molybdenum Deposits and Prospects – Khundii Minerals
District
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Figure 3: Khuvyn Khar Porphyry Complex – Zuun Mod Deposit