Erdene Provides Notice to Buyback Sandstorm Gold’s Khundii Gold Project Royalty
Erdene Provides Notice to Buyback Sandstorm Gold’s Khundii Gold
Project Royalty
Halifax, Nova Scotia – March 26, 2019 - Erdene Resource Development Corp. (TSX:ERD ;
MSE:ERDN) ("Erdene" or the "Company") is pleased to announce its intention to repurchase a 1%
net smelter return royalty (“NSR”) from Sandstorm Gold Limited (“Sandstorm”) on its Khundii Gold
Project in southwest Mongolia by April 14, 2019 for C$1.2 million.
“Considering the results of our recent Preliminary Economic Assessment and the exploration potential
of the Khundii Gold Project licen se area, the fair value of the 1% NSR is well in excess of the
repurchase price. Buying back the NSR will create significant value for our shareholders ”, said Peter
Akerley, Erdene’s President and CEO . “We would like to acknowledge Sandstorm’s support during
the formative stages of the Khundii Gold Project and look forward to continuing to work with them as
we move toward production.”
As announced on April 21, 2016, Erdene completed a transaction granting Sandstorm a 2% NSR
royalty on a select area that include d the Khundii Gold Project as part of a C$2.5 million financing
transaction. This transaction provided Erdene with a three-year option to buy back 50% of the 2% NSR
Royalty for C$1.2 million. Erdene will fund the repurchase from cash on hand.
Review of 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.
Together, these deposits comprise the Khundii Gold Project (the “Project”).
The Company delivered the Project’s maiden mineral resource estimate in Q3 2018 with a Measured
and Indicated (“M&I”) resource of 751,000 ounces (“oz”) gold at an average grade of 2.3 g/t gold and
an Inferred resource of 291,000 oz gold at an average grade of 1.8 g/t gold (cut-off grade of 0.7 g/t
gold). This was followed by a National Instrument 43-101 Standards of Disclosure for Mineral Projects
(“NI 43-101”) Preliminary Economic Assessment in December 2018 which returned an after-tax Net
Present Value at a 5% discount rate (“NPV5%”) and a US$1,200/oz gold price of US$99 million and
Internal Rate of Return (“IRR”) 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 licen se areas the planned
development is considered as a foundation for growth.
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 a mining licen se 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 available 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, 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 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
Ken W. MacDonald, Vice President and CFO
Phone: (902) 423-6419
E-mail: [email protected]
Website: www.erdene.com
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