ERDENE EXTENDS ULAAN GOLD DISCOVERY AND PLANS 2022 EXPLORATION PROGRAM Intersects 24 Metres of 2.22 g/t Gold, Including One Metre of 27.39 g/t Gold
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ERDENE EXTENDS ULAAN GOLD DISCOVERY AND PLANS 2022
EXPLORATION PROGRAM
Intersects 24 Metres of 2.22 g/t Gold, Including One Metre of 27.39 g/t
Gold
Press Release
Halifax, Nova Scotia
2022.01.26
Erdene Resource Development Corporation (TSX: ERD | MSE: ERDN) (“Erdene” or the
“Company”) is pleased to provide an update on the 2021 exploration program at the
recent Ulaan Southeast gold discovery, as well as plans for its 2022 Ulaan exploration
program. Ulaan Southeast, located on the 100% owned Ulaan licence, is a growing, blind
top gold discovery, announced in Q3 2021, 300 metres west of the construction -ready
Bayan Khundii Gold Project.
Highlights
• Gold mineralization at Ulaan Southeast has been traced over a 200 x 250 metre area,
to a maximum depth of 460 metres, that is open at depth and to the north and west
o Multiple holes returned wide zones (30 – 75 metres) averaging over 3 g/t gold
o Half of the 22 holes drilled ended in gold mineralization, including up to 22.0 g/t
over 2 metres (UDH-17)
• Q4 2021 drilling intersected thick sequences of gold mineralization, approximately 100
metres southwest of the discovery hole (UDH-10)
o UDH-32: 43 metres of 1.13 g/t gold beginning 79 metres downhole, including
16 metres of 2.03 g/t gold
o UDH-29: 80 metres of 0.86 g/t gold beginning 91 metres do wnhole, including
one metre of 27.39 g/t gold, within 24 metres of 2.22 g/t gold
• The Ulaan discovery bears many similarities to the adjacent Bayan Khundii deposit
o Characterized by a gold bearing, intense quartz ± adularia ± hematite veins and
stockwork zones within a broad halo of silicified, white mica altered volcanics
• Comprehensive exploration program for Ulaan will be finalized in mid-Q1 2022 as part
of a broader Khundii District program
o Will test potential extensions of the Ulaan Southeast Discovery, a 1.5km trend
in the southern portion of Ulaan, and targets in the central and eastern portions
of the license
• Q4 drilling results from the Dark Horse oxide gold discovery expected in mid-Q1
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Quotes from the Company
“The Ulaan Discovery results continue to demonstrate the potential for large-scale, high
grade gold discoveries in the Khundii District,” said Peter Akerley, Erdene’s President and
CEO. “Recent drilling confirms broad zones of gold mineralization continu ing westward,
with surface indications of similar targets over a 1.5km trend in the south of the license.”
“Since acquiring full c ontrol of the Ulaan license, and with modest exploration
expenditures, we’ve made a significant blind discovery and identified two high-priority
targets elsewhere on the Ulaan property,” continued Mr. Akerley. “These results further
support our thesis that the greater Khundii-Ulaan alteration trend, including Dark Horse
and the Bayan Khundii Deposit, is part of a large-scale gold-bearing hydrothermal system
that has the potential to host a multimillion-ounce gold deposit.”
Summary of Drill Results
The most recent Ulaan drill program , completed in December 2021 , was designed to
further define the extent of gold mineralization identified earlier in the year at the Ulaan
Southeast discovery and to test expansion potential to the west. The program consisted
of eight holes totaling 2,900 metres. Drill holes were spaced at 25 to 100 metres and
drilled to an average depth of 362 metres, testing targets over an area of approximately
5 hectares. Highlights from the most recent drill holes are provided below in Table 1, and
a drill hole plan map and section are attached to this release.
Table 1: Ulaan Q4 2021 Drilling Highlights
(Intervals averaging over 0.30 g/t gold)
Hole From To Interval (1) g/t Au
UDH-27 278 296 18 0.36
Incl 282 288 6 0.73
Incl 328 330 2 0.50
UDH-28 282 291 9 0.47
And 306 350(2) 44 0.41
Incl 325 350(2) 25 0.59
UDH-29 91 171 80 0.86
Incl 97 121 24 2.22
Incl 108 109 1 27.39
And 220 260 40 0.37
And 315 316 1 0.46
And 334 336 2 0.33
And 340 342 2 0.38
UDH-30 127 137 10 0.36
UDH-31 88 110 22 0.40
And 135 144 9 0.30
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Hole From To Interval (1) g/t Au
And 252 350(2) 98 0.81
Incl 272 286 14 1.60
Incl 315 323 8 4.54
Incl 320 321 1 25.90
UDH-32 79 122 43 1.13
Incl 84 100 16 2.03
And 168 350(2) 182 0.32
Incl 170 198 28 0.81
UDH-33 84 86 2 0.32
And 145 148 3 0.50
And 202 244 42 0.30
And 342 350(2) 8 1.66
UDH-34 276 300 24 0.57
And 338 342 4 0.32
1. Reported intervals in this release are downhole apparent widths. Continued exploration is required to confirm anisotropy of
mineralization and true thicknesses
2. End of hole
Significant, previously reported intersections include the following (see Table 2):
Table 2: Ulaan 2021 Drilling Highlights (Previously Reported)
Hole ID From To Interval (1) Au g/t
UDH-10 92 350.2(2) 258.2 0.98
Incl 99 139 40 3.77
Incl 103 104 1 39.57
Incl 123 124 1 58.40
UDH-14 106 117 11 3.68
Incl 110 111 1 36.58
And 188 404.6(2) 216.6 1.07
Incl 192 245 53 3.55
Incl 192 226 34 5.43
Incl 202 207 5 19.58
Incl 208 209 1 16.75
UDH-15 97 461.3(2) 364.3 0.79
Incl 124 215 91 1.98
Incl 130 140 10 7.29
Incl 130 131 1 15.13
Incl 138 139 1 49.36
Incl 214 215 1 10.47
UDH-16 65 184 119 0.59
Incl 117 120 3 4.52
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Hole ID From To Interval (1) Au g/t
Incl 119 120 1 11.91
UDH-19 82 272 190 0.73
Incl 87 92 5 12.52
Incl 87 88 1 60.55
UDH-21 115 192 77 3.19
Incl 131 158 27 8.74
Incl 139 140 1 156.54
Incl 155 156 1 20.98
And 209 280 71 0.81
Incl 222 230 8 1.92
Incl 257 271 14 2.79
UDH-22 85 236.7 151.7 1.71
Incl 85 150 65 3.11
Incl 87 94 7 18.50
Incl 93 94 1 119.80
1. Reported intervals in this release are downhole apparent widths. Continued exploration is required to confirm anisotropy of
mineralization and true thicknesses
2. End of hole
Ulaan Southeast Discovery Overview
Results to date have confirmed a significant gold discovery at Ulaan Southeast. Multiple
drill holes have returned hundreds of metres (up to 354 metres) of gold mineralization,
often ending in mineralization, over an area 200 metres by 250 metres. Gold
mineralization begins approximately 80 metres from surface with anomalous gold
intersected as shallow as 4 metres depth (UDH-18) and remains open along strike to the
west/northwest and at depth . Gold grades up to 156 g/t are related to intense quartz ±
hematite veins and stockwork zones enveloped by the same gold bearing silicified, white
mica altered lapilli tuff sequence which hosts Erdene’s Bayan Khundii epithermal gold
deposit, located just east on the Khundii mining license. Structural controls are also
similar with northwest striking, southwest dipping veins hosting the gold and intensifying
adjacent to bounding structure s and/or feeder conduit s typically oriented northeast or
north. Gold mineralization , particularly the low -grade envelope, also appears to be
partially controlled by lithology with low permeability silicified ash tuffs focusing fluid flow
and coarser lapilli tuffs acting as a preferred host to mineralization , stratigraphically
dipping to the northwest.
In general, the highest -grade gold mineralization occurs within intervals of pervasive
silicification combined with adularia and white mica alteration cut by epithermal style,
irregular quartz -hematite, quartz -adularia, quartz -white mica veins and quartz -chlorite-
magnetite veins. In many instances visible gold has been observed finely dissem inated
within the veins.
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Ulaan License Potential
The Ulaan exploration license area geology is characterized by a large ( over 3 kilomtre
diameter) hydrothermal alteration zone which extends easterly across the Khundii mining
license, host to the Bayan Khundii Gold deposit as well as the Dark Horse and Altan
Arrow gold prospects. Geology at Ulaan is dominated by pervasive phyllic or QSP
(Quartz-Sericite-Pyrite) alteration which in some instances has completely obliterated the
primary host rock textures. Several residual vuggy quartz bodies are observed throughout
the license area, as well as volcanoclastic and tuffaceous units exhibiting intense, low to
high temperature clay alteration. Also observed are tourmalin e shingle and crackle
breccias anomalous in gold and copper indicating an active intrusive environment.
Although exploration of the Ulaan license is early -stage, multiple geological indicators
suggest the area w as subjected to an early high temperature por phyry intrusive event
overprinted by a low temperature epithermal gold mineralizing event (Bayan Khundii, SE
Ulaan, Dark Horse). Quartz vein textures and clay compositions indicate a large -scale
epithermal type of gold mineralizing environment existed within the Khundii-Ulaan system
with the tuffaceous lithologies acting as preferred hosts for mineralization.
These discoveries were made by the Erdene technical team, beginning in 2016, with the
first drilling of the Bayan Khundii deposit . In 2021, additional exploration resulted in two
new substantial discoveries, Ulaan Southeast and Dark Horse. The greater Khundii-Ulaan
alteration zone and known gold occurrences are believed to be part of the same, large
scale, gold-bearing hydrothermal system which remains largely under-explored.
The Ulaan exploration license and adjoining Khundii mining license cover nearly 4,000
hectares of the Khundii -Ulaan hydrothermal alteration zone, which extends from Ulaan
over 10 kilometres to the northeast. This alteration trend has a central zone of intense
phyllic alteration and secondary silica with a peripheral halo of sericite alteration, and an
outer zone of white mica, which hosts th e Bayan Khundii gold deposit. This northeast
trending alteration area, which incorporates the Ulaan, Bayan Khundii, Dark Horse, and
other mineralized targets in the area, is associated with a regional structural dilational jog
and associated major volcano-plutonic centre, along a northeast trending transform fault.
The various styles of alteration and mineralization within the Khundii-Ulaan target area
are consistent with a fertile magmatic island arc, with evidence for possible arc migration,
and overlapping or telescoped mineralization along major structures.
To date, the Company has completed detailed surface mapping, geochemical sampling,
and geophysical programs across the broader alteration zone. Except for drilling at Ulaan
Southeast, reported above, which focused on a five hectare zone, Erdene has drilled only
nine wide spaced exploration holes, totaling 1,846 metres in the central and eastern
portions of the 1,780 hectare license . The Company i s currently reviewing exploration
results, with the assistance of technical experts, to develop a comprehensive exploration
plan for 2022.
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Khundii Gold District
Erdene’s deposits are 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 Khund ii Gold District comprised of multiple high -grade gold and
gold/base metal prospects, one of which is currently being developed, the 100%-owned
Bayan Khundii Gold Project, and another which is being considered for development, the
100%-owned Altan Nar Project. Together, these deposits comprise the Khundii Gold
Project.
The Bayan Khundii Gold Resource 1 includes 585,100 ounces of 2.19 g/t gold Measured
and Indicated (“M&I”) 2 and 35,900 ounces of Inferred resources at 2.18 g/t gol d. Within
the M&I resource, a Proven and Probable open-pit reserve totals 409,000 ounces at 3.7
g/t gold3 (press release here), providing significant potential for reserves growth with the
development of the remaining M&I and Inferred resources1.
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 2023 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 informa tion 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
1 For details of the Mineral Resources see Erdene’s Q2/2021 results press release, dated August 16, 2021, and the
Company’s Q2 2021 MD&A, available on the Company’s website or SEDAR.
2 M&I: 232,700 ounces of 2.39 g/t gold Measured and 352,400 ounces of 2.08 g/t gold Indicated
3 P&P: 165,000 ounces of 4.4 g/t gold Proven and 256,000 ounces of 3.4 g/t gold Probable; For details of the Mineral
Reserves see Khundii Gold Project NI 43 -101 Technical Report, Tetra Tech December 4, 2019 available on the
Company’s website or SEDAR
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technical information contained in this n ews 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 geologica l 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.
Reported intervals are apparent thicknesses, i.e. downhole widths. The current Ulaan drill
holes are all dipping at 85 degrees and oriented to intersect SW dipping WNW trending
gold bearing veins. Additional study is required to confirm true widths. Reported grades
for intervals are weighted averages based on length of sampling intervals. No top cut has
been applied; however, all intervals greater than 10 g/t gold are reported individually for
clarity
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.
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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-/