Erdene Intersects 5.5 Metres of 126 G/T GOLD Including 1 Metre of 582 G/T GOLD at New Bayan Khundii Zone and 15 Metres of 26 G/T GOLD Including 1 Metre of 338 G/T GOLD
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ERDENE INTERSECTS 5.5 METRES OF 126 g/t GOLD
INCLUDING 1 METRE OF 582 g/t GOLD AT NEW BAYAN KHUNDII ZONE
AND 15 METRES OF 26 g/t GOLD INCLUDING 1 METRE OF 338 g/t GOLD
Press Release
Halifax, Nova Scotia
2020.07.07
Erdene Resource Development Corporation (TSX:ERD | MSE:ERDN) (“Erdene” or the “Company”) is pleased
to announce drilling results from the Midfield Southeast zone of the Company’s 100%-owned Bayan
Khundii Gold Project (“Project”).
“We are exceptionally pleased with drill results from the new Midfield Southeast zone, including one metre
of 582 g/t gold within an intersection of 5.5 metres grading 126 g/t gold, in a near-surface region of the
Bayan Khundii deposit,” said Peter Akerley, Erdene’s President and CEO. “A second intersection, 40 metres
north of 15 metres of 26 g/t gold, including one metre grading 338 g/t gold, confirms the existence of a new
high-grade zone in an area that is currently classified as waste or low-grade m aterial that could add
meaningfully to resources during the early stages of the Project.”
“While we are rapidly advancing the Bayan Khundii development, with results of the Project’s Bankable
Feasibility Study anticipated in the coming weeks, over the past six months we have demonstrated the
potential of the Khundii Gold District, with high-grade intersections at Bayan Khundii and Altan Nar , and
the discovery of the Dark Horse prospect ,” continued Mr. Akerley. “Further results are forthcoming from
recent work at Striker and Dark Horse, where multiple instances of visible gold were encountered. We are
developing follow -up drilling campaigns for these exciting targets, prioritizing near mine expansion
opportunities at Bayan Khundii that are expected to add to our established resource base.”
Highlights:
• Discovered very high-grade gold zone at surface, southeast of the main Midfield orebody:
o Intersected 5.5 metres of 125.9 g/t, including 1 metre of 581.6 g/t gold, in BKD-288, beginning 11.5
metres down hole
o Drilled 15 metres of 25.6 g/t including 1 metr e of 338 g/t gold beginning at 14.9 metres in BKD-
274, 40 metres north of BKD-288
o Intersected anomalous gold mineralization in 16 of 18 holes, all within 25 metres from the surface
o Interpreted as the intersection of the stacked NW trending quartz adularia veins , with a N -S
trending conceptual feeder structure
o Target area classified as waste or low-grade stockpile material in the current resource
o Projected to be mined in year-one of the current mining schedule
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Table 1. Midfield Southeast Drilling Highlights
Hole From (m) To (m) Interval (m)* g/t Gold
BKD-272 3.5 24 20.5 3.53
Incl 3.5 12 8.5 5.72
Incl 11 12 1 21.25
BKD-273 19 23 4 2.99
Incl 21 22 1 10.38
BKD-274 14.9 30 15.1 25.59
Incl 18 23 5 74.34
Incl 21 22 1 338.26
Incl 22 23 1 12.04
BKD-275 3.7 8 4.3 4.58
Incl 6 7 1 10.59
And 23 30 7 1.05
BKD-276 27 29 2 0.75
BKD-277 30 35 6 0.18
BKD-278 1.4 12 10.6 3.12
Incl 6 7 1 21.53
And 12 27 15 0.17
BKD-279 0 9 9 0.60
And 23 32 9 0.34
Incl 26 27 1 1.61
BKD-281 26.6 34 7.4 2.03
BKD-282 15 31 16 1.16
Incl 18 24 6 2.46
BKD-283 42 50 8 0.15
BKD-284 27.7 32 4.3 4.78
Incl 31 32 1 11.63
And 35 36 1 1.55
BKD-285 18 30 12 0.10
BKD-286 0 8 8 0.81
And 15 23 8 0.15
BKD-287 1 6 5 0.57
And 13 15 2 0.46
And 19 21 2 0.36
BKD-288 11.5 17 5.5 125.90
Incl 11.5 12 0.5 202.34
Incl 12 13 1 581.63
And 17 35 18 0.27
BKD-289 0 5 5 8.38
Incl 1 2 1 28.56
And 5 30 25 0.39
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*Reported intervals are downhole widths. Drill holes were oriented to intersect the SW dipping WNW trending gold veins normal
to their orientation and therefore reported width are very close to true widths. However, the veins in this area may be related
to a N-S trending structure which could affect vein orientation locally. Additional study will be required to confirm this concept.
Drill Program Summary - Midfield Southeast (MFSE) (See attached figures for reference)
The Midfield SE drilling program was designed to test for mineralization in zones currently classified as
waste or low -grade stockpile material , identified as having the potential to add significant value at the
earliest stages of mining. Previous drilling (BKD-262) identified a high-grade intersection within 10 metres
of surface that returned 3 metres* of 52.9 g/t gold but was relatively isolated . The results of the current
drill program cover an area of approximately 50 metres by 50 metres south and east of BKD -262. The 18
holes in the current program total 645 metres with all holes drilled (azimuth 030 and dip -45) to intersect
the dominant vein orientation perpendicular, except two holes (BKD-273 and 276) drilled at -60 degree dip.
Drilling intersected anomalous gold mineralization in 16 of 18 holes, with eight holes containing metre wide
intervals ranging from 10 g/t to 582 g/t gold, all within 25 metres of surface. The two holes without gold
mineralization are located at the northern and eastern extent of the drill program . They remained in
Jurassic cover sediments (BKD -271 and 280) and did not penetrate to the unit hosting the gold
mineralization. Three other holes (BKD-273, 276 and 283) also tested the eastern periphery of the target
area and remained largely in unmineralized Jurassic units with anomalous gold in host rock at the bottom
of these holes.
From the northern extent of the mineralized zone (intersection in BKD -262), the target area is now
expanded to a total strike length of 200 metres and is untested beyond this point. The program has tested
the northern 50 metres, and the southern 50 metres was partially tested by previous trenching and drilling,
leaving approximately 100 metres in the centre untested. Reported intersections on the southern 50 metres
include 1 metre* of 55.6 g/t gold within 3 metres* of 18 g/t gold in trench BKT-06 and 35 metres* of 5.7 g/t
gold including 1 metre* of 194 g/t gold in drill hole BKD-10. One additional hole drilled along the target
structure (BKD-45) intersected fault breccia with anomalous gold near the surface but was not designed to
test the newly identified mineralization zone.
The high gold grades reported today are hosted in quartz adularia veins, quartz stockwork, fault-related
breccia and in the iron oxide cement of these breccias. This new target area is located at the intersection
of two structures, the dominant NW trending SW dipping gold mineralized stacked quartz adularia vein set
and a north trending, NNE verging fault, characterized by dominant hematite and quartz stockwork breccias.
This intersection connects through the centre of the new high-grade zone, and can be traced to the south
through a number of high-grade intervals and potentially through the very high-grade core of the Midfield
orebody to the north.
The current interpretation is that the N-S structure is part of a series of en-echelon faults as a sub-set of
a NW trending extensional fault zone corridor that introduced the gold-bearing fluids into the first order
N-E trending transfer structures that bound the SW dipping structural setting hosting the stacked veins of
the Bayan Khundii deposit. This interpretation would support higher grades at the intersection of the N-S
and NW trending structures. The identification of this conceptual feeder zone and importance of the
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intersecting structures can be used to test for extensions and higher grades in multiple location s
surrounding the existing reserves for which programs are now being designed. The possibility of parallel
en-echelon features is demonstrated by another outlier of high -grade gold, 1 metre of 157 g/t gold, 200
metres east and outside of the proposed pit, which now needs to be tested with this new concept.
As per our standard assaying procedures, s creen metallic analys es have been completed confirming all
values greater than 5 g/t gold.
*Previous results in this release are stating apparent thicknesses
Bayan Khundii Striker Zone Drilling and Dark Horse Trenching Program
An 11 hole, 280 meter drill program has been completed near-surface, southwest of the main Striker ore
zone. This area previously produced visible gold in trenching, although not reflected in the limited drilling
completed. However, on the eastern side of the target area, higher grade samples were previously returned
from trenching and drilling. The objective of this program is to extend these high-grade zones to the west
in the upper 40 metres from surface. Visible gold has been observed in four new drill holes.
At Dark Horse, 3.5 km north of the Bayan Khundii gold deposit, a program consisting of detailed mapping,
higher density soil and rock ship sampling an d a series of th ree trenches totaling 180 metres were
completed in June of this year. Visible gold has been observed in two of the three trenches.
Samples from this exploration work have been transferred to SGS Laboratory in Ulaanbaatar with results
anticipated in late July. Follow up programs will be designed to expand on any success.
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 develop ment: the 100% -owned Bayan Khundii and Altan Nar projects. Together, these deposits
comprise the Khundii Gold Project.
The Bayan Khundii Gold Resource 1 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
resources1.
1 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 October of 2019, Erdene announced the results of an independent Technical Report for the Khundii Gold
Project (press release here), which included a Pre -feasibility Study (“PFS”) for the Bayan Khundii deposit
and an updated Preliminary Economic Assessment (“PEA”) for the Altan Nar deposit. The PFS and the
updated PEA results include an after-tax Net Present Value at a 5% discount rate and a US$1,300/oz gold
price of US$97 million and US$24 million, Internal Rate of Return (“IRR”) of 42% and 90% for Bayan Khundii
and Altan Nar deposits, respectively. The PFS envisions an open-pit mine at Bayan Khundii from Years 0-7,
producing an average of 61,000 oz gold per year at a head grade of 3.73 g/t gold, and an open-pit operation
at Altan Nar during Years 7 -10, for an average annual production of 48,000 oz gold at an average head
grade of 3.46 g/t gold, utilizing a conventional carbon in pulp processing plant at the Bayan Khundii mine.
Erdene has secured a mining license for the Bayan Khundii deposit in August of 2019 and plans to start
producing gold at Bayan Khundii in late 2021. The Altan Nar PEA is by nature, a preliminary economic study,
based in part on Inferred Resources. Inferred Resource s 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 pre-feasibility 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.
Erdene Resource Development Corp. is a Canada -based resource company focused on the acquisition,
exploration, and development of precious an d base metals in underexplored and highly prospective
Mongolia. The Company has interests in three mining licenses and three exploration licenses in Southwest
Mongolia, where exploration success has led to the discovery and definition of the Khundii Gold D istrict.
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 protoco l
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 E rdene’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
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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, guida nce 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 ma terially 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 obl igation 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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