Erdene Initiates Strategic Review of Khuvyn Khar Molybdenum-Copper Project
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ERDENE INITIATES STRATEGIC REVIEW OF
KHUVYN KHAR MOLYBDENUM-COPPER PROJECT
Press Release
Halifax, Nova Scotia
2021.07.15
Erdene Resource Development Corporation (TSX: ERD | MSE: ERDN) (“Erdene” or the
“Company”) has initiated a strategic review of its 100%-owned 1 Khuvyn Khar Molybdenum-
Copper Project (“Project”) in southwest Mongolia, located 30 kilometres east of the Khundii
Gold District. The Khuvyn Khar license hosts the Zuun Mod Molybdenum-Copper deposit,
one of the largest undeveloped molybdenum-copper resources in Asia, as well as multiple
copper and molybdenum prospects.
Project Highlights
Erdene holds a 100% interest in the 6,041-hectare Khuvyn Khar mining license, with
a remaining term of up to 60 years.
The license contains a large-scale porphyry system, hosting Zuun Mod, one of Asia’s
largest undeveloped molybdenum-copper projects, as well as multiple copper
prospects.
Zuun Mod contains an NI 43-101 Measured and Indicated Resources of 273.5 million
pounds molybdenum and 330.7 million pounds copper, and Inferred Resources of
157.7 million pounds molybdenum and 197.7 million pounds copper2.
Drilling 2.2 kilometre northwest of Zuun Mod has intersected 34 metres of 1.3% copper
and 9.2 g/t silver – the majority of the license area remains under explored.
The Project is situated 180 kilometres northwest of China, the world’s largest copper
and molybdenum consumer and steel producer.
Quotes from the Company
“With the recent increase in demand for copper and molybdenum, and the positive longer
term outlook for these commodities, Erdene has initiated a strategic review of its Khuvyn Khar
Project,” said Peter Akerley, President and CEO of Erdene. “As one of the largest
undeveloped molybdenum-copper projects in Asia, with significant potential to expand
resources, the Company sees several paths to unlock the value of the Project for our
shareholders. This strategic review will consider multiple avenues to optimize the Project’s
value, including a sale, joint venture partnership, or spinout.”
1 Khuvyn Khar Project is subject to a net smelter royalty of 1.5%, subject to a buy-down provision.
2 NI 43-101 Technical Report, Zuun Mod Porphyry Molybdenum-Copper Project, Minarco-MineConsult, June 2011
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About Khuvyn Khar Molybdenum-Copper Project
The Khuvyn Khar Molybdenum-Copper Project is located in Bayankhongor Province,
Mongolia, approximately 180 kilometres north of the Mongolia-China border and the Nariin
Sukhait coal mine complex. The 6,041-hectare Khuvyn Khar mining license, underpinning the
Project, was issued in 2011 and is valid for up to an additional 60 years. The Project is located
approximately 30 kilometres east of Erdene’s Bayan Khundii Gold Project.
Exploration work on the property began in 2002, with a joint venture between WMC Resource
Project Ltd (WMC) and Gallant Minerals Mongolia Ltd (Gallant). This work identified 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. After
acquiring the rights to the Project from Gallant in 2005, 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 kilometer 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 ("M lbs") of contained Mo metal and 330.7 M lbs 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 M lbs of contained Mo metal and 197.7 M lbs 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
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Beyond the Zuun Mod Deposit, the broader Khuvyn Khar 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 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.
Khuvyn Khar Molybdenum-Copper Project Strategic Review
Since the discovery of the Khundii Gold District, Erdene has focused on the exploration and
development of precious metals deposits in the region. However, in light of recent
developments, Erdene has initiated a process to reevaluate the molybdenum and copper
potential of the Khuvyn Khar license for the following reasons:
Copper and molybdenum prices have increased significantly over the past year and
are forecast to remain strong for the foreseeable future;
China is more reliant on molybdenum imports owing to a 24% increase in internal
demand since 2017 and an 8% decline in internal molybdenum supply during the
same period;
o Net molybdenum imports increased to 100 million pounds in 2020 from 1.4 million
pounds in 2019; and
o Molybdenum imports are sourced from South America, Armenia and North
America.
Improved infrastructure in southwest Mongolia and northwest China;
o Expanded blacktop highway near the Mongolian and Chinse borders; and
o Rail projects have been announced with planned routes in close proximity to the
Zuun Mod Project.
About Molybdenum
The global molybdenum market in 2020 totaled 546 million pounds with an estimated value
at today’s price of US$10.2 billion3. Molybdenum is classified as a minor metal and is a ductile
and malleable metallic element primarily used in alloy steels to increase hardness, strength,
corrosion resistance and electrical conductivity. Engineering steel, stainless steel and
chemicals sectors account for approximately 75% of molybdenum demand.
Molybdenum extraction is highly concentrated with the top five producing countries (China,
Chile, United States, Peru and Mexico) accounting for greater than 90% of global production
in 2020. North and South America account for 22.9% and 29.3%, respectively, and China is
the largest producer accounting for 40% of 2020 global supply.
3 Source: Macquarie Group Limited and the London Metal Exchange
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China is also the largest molybdenum consumer. In 2020, China’s net imports of molybdenum
surged to 100 million pounds from only 1.4 million pounds in 2019. China’s molybdenum
deficit has been sourced from the United States, Peru and Armenia.
About Erdene
Erdene Resource Development Corporation is a Canada-based resource company focused
on the acquisition, exploration, and development of precious and base metals in
underexplored and highly prospective Mongolia. Erdene’s deposits are located in
southwestern Mongolia’s 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 the region over the past decade and is responsible for the discovery of the
Khundii Gold District with interests in three mining licenses and two exploration licenses
hosting multiple high-grade gold and gold/base metal prospects, one of which is being
developed: the 100%-owned Bayan Khundii Gold Project.
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 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]
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
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Figure 1: Zuun Mod Project Location & Eurasian Molybdenum Supply & Demand
Figure 2: Erdene – Gold, Copper & Molybdenum Deposits and Prospects – SE Edren
Terrane
Three Deposits and Five Priority Areas
For Growth on 100% owned 17,000 ha
License Holdings
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Figure 3: Khuvyn Khar Porphyry Complex