Erdene Commences Drilling Program at the Khundii GOLD Project
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ERDENE COMMENCES DRILLING
PROGRAM AT THE KHUNDII GOLD PROJECT
Press Release
Halifax, Nova Scotia
2019.09.18
Erdene Resource Development Corp. (TSX:ERD; MSE:ERDN) ("Erdene" or the "Company") is pleased to announce
the commencement of the second phase of the 2019 drill program at its 100%-owned Khundii Gold Project.
“The current drill program will follow up on our Q2 2019 program, which d iscovered high-grade gold in a
previously untested area of the Bayan Khundii deposit and intersected 112 metres grading 5.9 g/t gold at Midfield,
confirming the continuity of high -grade mineralization from near surface in the heart of the Bayan Khundii
deposit,” said Peter Akerley, Erdene’s President and CEO. “Exploration drilling will test the high-priority Khundii
North and CSZ targets, as well as the newly discovered Khundii South zone of the Bayan Khundii Mining License.”
“Resource definition and geotechnical drilling within the Bayan Khundii deposit will support the Bankable
Feasibility Study (“BFS”) which will commence on completion of the Pre-Feasibility Study (“PFS”), anticipated in
early Q4,” continued Mr. Akerley. “With the recent receipt of the Bayan Khundii Mining License, we are working
to fast track development of the high-grade, open-pit gold project, while continuing efforts to grow resources
in this new district.”
Bayan Khundii Gold Project – H2 2019 Drill Program
This campaign is the second phase of the 2019 drill program announced in April 2019. Results from the first
phase included:
• High-grade continuity in the heart of the Bayan Khundii deposit, intersecting 112 metres of 5.9 g/t gold at
Midfield (BKD-261);
• New near surface zone at Midfield, drilling 14 metres of 14 g/t (BKD-262), starting 7 metres from surface;
• Highest grades to date at Striker West, including 3 metres of 40 g/t gold (BKD-265), west of the proposed
pit; and
• Discovery of high-grade gold, 1 metre of 51.9g/t gold (BKD-266), in the previously untested Khundii South
zone.
Planned exploration drilling includes:
• Khundii North: Surface sampling of the Khundii North structure, 4 kilometres northeast of the Bayan Khundii
proposed open-pit, has returned samples containing in excess of 20g/t gold and previous shallow drilling
has intersected a broad zone of quartz breccia and veining with gold ranging up to 2g/t gold, near surface.
Drilling will test this target at a depth of 120-150 metres.
• CSZ: This prospect is located approximately 800 metres northwest of the Bayan Khundii proposed open-pit
boundary. Previous drilling identified a wide , near-surface zone of alteration very similar to the Bayan
Khundii gold deposit but of lower temperature and therefore interpreted to be above a gold bearing horizon.
Drilling will test the zone to a targeted depth of 170 metres.
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• Khundii South: Drilling will target a previously untested area south of the Bayan Khundii deposit where
nearby exploration in Q2 2019 intersected more than 50 g/t gold over 1 metre and geophysical data indicates
altered (silicified) lithologies, typical of the Bayan Khundii deposit continuing at depth. The target begins at
approximately 100 metres depth, under Jurassic cover, similar to Midfield and Midfield North, where younger
cover units overlay the mineralized Bayan Khundii silicified tuffs.
This exploration drilling will be followed by the resource definition drilling outlined below. This will allow for
results to be received and additional drilling considered as a follow -up, later in Q4. The resource definition
drilling program will include drilling to strengthen confidence in high-grade zones in the resource, collect large
diameter whole core for metallurgical and comminution testing, and a series of six geotechnical drill holes to
further define rock strength and slope stability for the proposed Bayan Khundii open pit mine. These drill results
will support the Front End Engineering Design (“FEED”) and Bankable Feasibility (“BFS”) studies that Erdene
expects to commence upon the completion of the PFS. Results of the PFS are scheduled to be announced in Q4-
2019.
• Infill drilling: Approximately 400 metres of infill drilling will be completed in the area between the Striker
and Midfield zones at Bayan Khundii. During the first phase of the 2019 drill program , Erdene identified a
very high-grade zone beginning 7 metres from surface in Midfield, with 14 metres of 14 g/t gold, including 1
metre of 147 g/t gold . Further drilling in this area could improve confidence and allow some inferred
resources to move into reserves in the BFS.
• Metallurgical Testing Samples: A single, large diameter hole will be drilled into the Striker Zone to collect
representative, ore-grade material to carry out process and comminution testing, required to finalize the
design grinding circuit for the Khundii gold processing facility.
• Geotechnical Drilling: Six geotechnical holes will be drilled to better understand rock strength and slope
stability for the proposed Bayan Khundii open pit mine. Engineers have taken a conservative approach in
determining pit slopes in the PFS. However, with additional geotechnical data, pit slopes could be steepened,
resulting in a lower stripping ratio, and therefore overall mining costs.
Background on 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.
The Company delivered the Project’s maiden mineral reso urce 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.
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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 exploration licenses and two mining 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 Mongolia stock exchanges. Further information is avai lable 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 , 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 i n 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
forward-looking statements are expressly qualified in their entirety by this cautionary statement. The
information contained herein is stated as of the cur rent 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]
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