Erdene Intersects High-Grade Gold at Bayan Khundii Project Confirming Resource Expansion Potential
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Erdene Intersects High-Grade Gold at
Bayan Khundii Project Confirming Resource Expansion Potential
Press Release
Halifax, Nova Scotia
2020.01.10
Erdene Resource Development Corporation (TSX:ERD | MSE:ERDN) (“Erdene” or the “Company”) announces the
conclusion of and the initial results from the first phase of its 18,000 metre Khundii Gold District drill program.
Highlights:
• Phase I Drilling complete, totaling over 10,000 metres on the Bayan Khundii License:
• 49 holes including 4 extension holes at Bayan Khundii for 8,435 metres
• 11 holes at Dark Horse for 1,574 metres
• Results from the first twelve expansion holes (2,016 metres) at Bayan Khundii include:
• Midfield North: Expansion drilling on both the western and eastern sides of the proposed economic pit
returned high-grade mineralized intersections:
o BKD-302 – Eastern flank extension: 3.9 g/t gold over 22.4 metres, including 2 metres of 27.5 g/t gold
beginning 127 metres down hole (vertical 115m)
o BKD-304 – Western flank extension: 3.9 g/t gold over 12 metres, including 1 metre of 38.9 g/t gold
beginning 206 metres down hole (vertical 144m)
• Striker SW: At the southern end of the economic pit, expanded shallow areas of high-grade mineralization
beyond the economic pit and outside of the current resource:
o BKD-310 – 4.0 g/t gold over 10 metres, including 1 metre of 24.5 g/t gold beginning 14 metres down
hole, and 44 metres of 1.0 g/t gold, including 1 metre of 16.2 g/t starting 64 metres down hole
o BKD-312 – 20.8 g/t gold over 3 metres, including 1 metre of 51.7 g/t gold beginning 13 metres down
hole
• Assays are pending for 48 holes totaling 7,945 metres at Midfield Southeast, Striker West, Northeast Bayan
Khundii and Dark Horse
• Visible gold reported in 10 holes (see details below)
Quotes from the Company:
“We are encouraged by the early results from the first phase of the drill program, including high-grade gold
intersections in multiple holes and visible gold in 10 drill holes with pending assays, in areas peripheral to the Bayan
Khundii Gold Project economic open-pit,” said Peter Akerley, Erdene’s President and CEO. “These results
demonstrate the high probability of resource expansion for the Bayan Khundii Gold Project beyond that outlined in
the Feasibility Study delivered in August 2020.”
“The second phase of the 2020 drilling program will include further expansion drilling at Bayan Khundii and Altan
Nar, as well as exploratory drilling at the Dark Horse, Altan Arrow and the Ulaan prospects,” continued Mr. Akerley.
“We have a full pipeline of prospects to grow our resource base in advance of initial production at the Bayan Khundii
Gold Project, expected in 2022.”
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Drilling Summary & Plans
[See plan view maps below]
The company has completed the 10,000 metre first phase of an 18,000 metre drill program within the Khundii Gold
District which has the following objectives:
1. Bayan Khundii Expansion:
a. Deliver expansion areas and increased continuity and confidence expanding ore zones beyond the
boundaries of economic pit in the Midfield North, Midfield Southeast and Striker SW areas.
b. Further define and upgrade the Striker West resource as a potential area for major pit expansion.
2. Explore for new resources North and Northeast of the BK deposit, and at the Dark Horse, Altan Arrow and
Ulaan prospects.
3. Complete initial stages of condemnation drilling over proposed processing plant and mining operation
footprints.
4. Continue expansion drilling and exploration within the Altan Nar gold deposit trend.
Indications of Bayan Khundii deposit resource expansion potential have been received with the initial assay results
and the visible gold reported in drill core from Midfield North, Midfield Southeast, Striker SW and Striker West, which
should prove beneficial to the scale and economics of the Bayan Khundii Gold Project.
Bayan Khundii Gold Deposit: Extensions Beyond Economic Pit
The current drill program has the potential to upgrade current resources to reserves expanding the economic open
pit and expanding resources beyond the current boundaries. The economic pit defined in the Bayan Khundii
Feasibility Study hosts 409,000 ounces of gold at 3.7 g/t gold however, significant resources exist, inclusive of
reserves, totalling 521,000 @ 3.2 g/t gold M&I and 103,000 @ 3.7 g/t gold Inferred. Those resources excluded from
the economic pit are in the peripheral areas of the planned open pit where there exists strong potential for a portion
of these to be upgraded in continuity, confidence, and grade and in conjunction with a higher gold price, brought
into a revised economic pit as the development advances towards first production. Several gold mineralized zones
peripheral to the current economic open-pit host exceptionally high-grade (30 to 150 g/t gold intersections over 1
meter) gold-bearing veins and broad intervals of mineralization. In addition, the Bayan Khundii resource is an open-
pit constrained resource beyond which drilling has previously intersected significant gold mineralized zones which
require further exploration drilling. The following sections describe the areas tested in the current drill program.
North Midfield
North Midfield is the most northerly portion of the Bayan Khundii Deposit. Five holes (BKD-301 to BKD-305) were
drilled in the current program in this area to test for extensions of gold mineralization beyond the boundaries of
the currently modelled economic pit. These specific drill targets represent zones where continuity of high-grade
domains are interpreted to extend beyond the currently modelled pit wall. Four of the five holes intersected
anomalous gold mineralization (≥ 0.2 g/t gold) outside the economic pit.
Two of these holes, BKD-302 and BKD-304, intersected high-grade gold mineralization outside of the economic pit.
BKD-302, located on the east side of North Midfield zone, intersected 22.4 metres of 3.9 g/t gold followed by a thick,
39 metre mineralized interval averaging 0.38 g/t gold. Relatively wide drill spacing east and west of BKD-302 provides
considerable room for possible expansion of this high-grade zone. BKD-304, located on the west side of North
Midfield, intersected 12 metres of 3.9 g/t gold, including 1 metre of 38.5 g/t gold within an interval located proximally
below and outside of the economic pit. BKD-302 and BKD-304 successfully demonstrate the potential for continuity
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of wide, high grade zones of similar tenor to existing reserve grade outside of the current pit wall boundary. Further
testing and identification of these zones may positively impact the minable reserves of Bayan Khundii should the
economic pit be expanded to encompass these new extension zones.
Hole From(m) To(m) Interval(m)* g/t Gold
BKD-301 87.9 170 82.1 0.60
Incl 107 139 32 1.17
Incl 108 109 1 21.15
BKD-302 126.6 149 22.4 3.90
Incl 126.6 140 13.4 6.02
Incl 133 135 2 27.50
And 161 200 39 0.38
Incl 162 177 15 0.62
BKD-303 No significant mineralization
BKD-304 119.2 132 12.8 1.30
And 142 196 54 0.56
Incl 144 159 15 1.35
And 206 218 12 3.87
Incl 210 211 1 38.56
BKD-305 148.5 176 27.5 0.23
And 200 203 3 1.81
Striker Southwest Extension
Several drill holes have been completed both within and outside the economic pit boundary at the southern
perimeter of the economic pit. These holes have returned intervals of intense quartz stockwork, quartz hematite and
quartz adularia veining and at least one instance of visible gold. Results to date (up to BKD-311 and the upper portion
of BKD-312) confirm a new zone of shallow, high-grade mineralization south of the economic pit boundary, continuing
beyond the permitter of existing resources . Initial results from BKD-312 indicate shallow, high grade gold
mineralization with 3 metres of 20.8 g/t gold at only a 10 metre vertical depth.
Initial results for the Striker SW area are displayed below, with multiple assays pending. These results have the
potential to expand the economic pit boundary to the south and southwest to encompass these new zones of high
grade mineralization.
Hole From(m) To(m) Interval(m)* g/t Gold
BKD-306 48 53 5 0.32
And 138 161 23 0.50
BKD-307 8 12 4 1.77
And 68 88 20 0.29
BKD-308 56 60 4 0.36
And 66 69 3 0.31
* Reported intervals are downhole widths. Drill holes were oriented to intersect SW dipping WNW trending gold veins, normal
to their orientation and therefore reported widths are very close to true width. However, geologic parameters near BKD-312
may affect local vein orientations in this hole. Additional study will be required to confirm.
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And 83 94 11 0.31
And 100 103 3 0.40
And 153 156 3 0.68
BKD-309 No significant mineralization
BKD-310 10.7 30 19.3 2.33
Incl 14 24 10 4.02
Incl 14 15 1 24.52
And 64 108 44 1.01
Incl 66 68 2 16.15
BKD-311 28 37 9 0.66
And 107 124 17 0.34
BKD-3121 13 16 3 20.79
Incl 14 15 1 51.70
Midfield Southeast (MFSE)
Drilling in Q2 2020 discovered very high grade, near-surface gold zones in Midfield SE, with intersections of 5.5 metres
of 125.9 g/t gold, including 1 metre of 581.6 g/t gold in BKD-288, beginning 11.5 metres downhole, and 40 metres to
the north, 15 metres of 25.6 g/t gold including 1 metre of 338 g/t gold beginning at 14.9 metres downhole in BKD-274.
In total, 16 of 18 holes drilled at Midfield SE in Q2 2020 intersected anomalous gold (≥0.2 g/t gold) mineralization
within 25 metres of surface. This discovery is interpreted as the intersection of the stacked NW trending quartz
adularia veins, with a N-S trending conceptual feeder structure. The Midfield SE structure has been traced over a
strike length of at least 200 metres with the Q2 drilling testing only the northern 50 metres.
Eight holes have been drilled in MFSE in the current drill program targeting the conceptual feeder structure’s
southeast continuation. Although results are pending, visible gold has been logged in four of the eight holes, in
association with quartz adularia veining, hematite breccias and quartz vein material within conglomerate. Other
holes from current drilling in the MFSE target area contain intervals of intense quartz–hematite and white mica
veining, both indicators of gold mineralization in the Bayan Khundii system. These preliminary logging results
confirm the MFSE zone as a new area of interest within the Bayan Khundii deposit to be further defined for high-
grade gold mineralization potentially related to a feeder structure. As this area is classified as waste or low-grade
stockpile material in the current resource, confirmation of mineralization has the potential to have a significant
impact on early mine life economics.
Striker West
Striker West is located approximately 210 metres west of the defined Bayan Khundii open pit and contains the largest
portion of resources outside the economic pit. Drilling in 2019 confirmed and extended the Striker West target with
the best intersection within this deposit area to date with 3 metres of 40 g/t gold at a vertical depth of 136 metres
(BKD-265). Results from this hole also broadened the mineralized domain at shallow depth and outside the defined
resource boundary with a 16-metre interval of 1.1 g/t gold, including 5 metres of 2.7 g/t gold, beginning only 28 metres
from the surface. The Striker West area has received relatively little drilling compared to the main Bayan Khundii
deposit area and remains open to the south, where BKD-266 was drilled in Q2 2019, approximately 250 metres west-
southwest of the planned open-pit, and outside the currently defined resource boundary. This hole intersected a
1 Complete assay results and screen metallic gold values for BKD-312 are pending.
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high-grade, one-metre interval of 51.9 g/t gold at a depth of 264 metres within a broad zone of silica -illite and
magnetite altered volcanic tuff, suggesting a down-dip continuation of high-grade gold mineralization from the
currently defined Bayan Khundii pit.
Phase 1 drilling in the Striker West area includes 14 holes which aim to provide resource definition within the core
of the Striker West zone and resource expansion around the perimeter of the known gold mineralization. Although
assay results are pending, multiple logged intervals containing visible gold have been recorded in association with
intense and in some cases thick intervals of quartz adularia and quartz hematite veins.
Dark Horse (Khar Mori)
The Dark Horse prospect, and by extension, the Altan Arrow prospect, 3.5 kilometres north of the Bayan Khundii gold
deposit, are included in the drill program. The Dark Horse prospect covers an approximately 1.5 by 3-kilometre area,
connected to the northwesterly adjacent Altan Arrow gold prospect. Trenching and rock chip sample results have
returned very high gold grades over a large target area at Dark Horse. Previous drilling along the subsidiary
structures south of Altan Arrow (within 300 metres of the Dark Horse target area) have provided the highest-grade
intersections to date, including 24 g/t gold and 70 g/t gold over 2 metres (AAD-03 and AAD-12) within 75 metres of
surface. A series of eleven holes have been completed at Dark Horse with results pending. These reconnaissance
holes will provide support for additional drilling in Q4 to establish highest priority targets in this large prospect area.
Altan Nar Gold Polymetallic Deposit
At Altan Nar, approximately 16 km north of the Bayan Khundii gold deposit, a growing gold and polymetallic resource
provides a significant opportunity for resource expansion. The current Altan Nar Gold resource includes 318,000
ounces of 2.0 g/t gold Indicated and 186,000 ounces of Inferred at 1.7 g/t gold in addition to significant silver and
base metal content. The second phase of the drill program will target this highly prospective license for resource
expansion and new discoveries.
COVID-19 Precautions
Throughout the 2020 field season, Erdene has worked to deliver an injury-free, effective field exploration program,
rolling out increased preventive measures in response to COVID-19. The Company has kept in place precautionary
measures to protect against the spread of COVID-19. In the field, daily protocols are used to ensure basic hygiene,
and daily briefing, induction and visitor reception procedures continue to include body temperature checks. Isolation
facilities and personal protective equipment for emergency response have been prepared. Since late January, the
Government of Mongolia has implemented a series of preventive measures in response to COVID -19, including
limitations on public gatherings and international border controls. As of September 30, 2020, Mongolia has reported
no cases of local transmission of COVID-19 and zero deaths from the disease. All confirmed and reported cases to
date have been related to repatriated citizens.
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 development: the 100%-
owned Bayan Khundii and Altan Nar projects. Together, these deposits comprise the Khundii Gold Project.
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The Bayan Khundii Gold Resource1 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 409,000 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 resources2.
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
early 2022 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 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 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 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 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.
2 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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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 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 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]
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
Bayan
Khundii
Proposed Economic Pit
Bayan Khundii
Extension and Exploration Zones
Q3-2020 Drilling Update
500m
North Midfield High-Grade
Extensions Beyond Economic Pit
See Results Table
Striker West
Visible Gold
Results Pending
Midfield Southeast
Visible Gold
Results Pending
Striker SW Extension Zone
Visible Gold
Results Pending
Q3-2020 Drilling
High-Grade Gold Domain
Low-Grade Gold Domain
Exploration-Expansion Zone