Erdene Provides Update ON Strategic Alliance with Mongolian Mining Corporation
TSX: ERD | MSE: ERDN
www.erdene.com [email protected]
ERDENE PROVIDES UPDATE ON STRATEGIC ALLIANCE
WITH MONGOLIAN MINING CORPORATION
Press Release
Halifax, Nova Scotia
2023.10.18
Erdene Resource Development Corp. (TSX:ERD; MSE:ERDN) ("Erdene" or the "Company")
is pleased to provide an update on its Strategic Alliance with Mongolian Mining Corporation
(“MMC”) for the development of it s high-grade, open-pit Bayan Khundii Gold Project (“Bayan
Khundii”, “BK” or "Project”) in southwestern Mongolia.
Strategic Alliance with MMC
On January 10, 2023, Erdene executed a Strategic Alliance Agreement (“SAA”) with MMC to
develop the Bayan Khundii Gold Project (see press release here). Highlights of the SAA include:
• MMC is Mongolia’s largest internationally traded mining company, listed on the main board
of the Hong Kong Stock Exchange (HKEx: 975).
• MMC to invest US$40 million for a 50% equity interest in Erdene’s Mongolian subsidiary,
Erdene Mongol LLC (“EM”), holding the Khundii and Altan Nar mining licenses and the
Ulaan exploration license through a three -stage transaction, based on achievement of
milestones.
• Erdene retains a 50% equity interest in EM and a 5.0% Net Smelter Return (“NSR”) royalty
on all production from the Khundii, Altan Nar and Ulaan licenses, as well as any properties
acquired within 5 kilomet res of these licenses, beyond the first 400,000 ounces gold
recovered.
• The first two stages of the transaction were completed in January 2023 and May 2023, with
MMC investing US$10 million to finance technical studies, including the FS, early
construction works and exploration for the Project.
• The third stage of the transaction will see MMC invest a further US$30 million, providing
equity capital for the Bayan Khundii Gold Project.
• Erdene maintains a 100% interest in its large Zuun Mod Molybdenum-Copper deposit and
Khuvyn Khar Copper project, located approximately 30 kilometres east of Bayan Khundii,
and adjacent to a planned railway development.
On August 30, 2023, Erdene and MMC amended the S AA and MMC advanced US$15M of the
US$30M third stage to continue early works in the form of a convertible note. On October 12 ,
2023, Erdene and MMC executed a second amendment, and on October 15, 2023 MMC
advanced the final US$15M of the US$30M third stage payment to allow the parties to progress
the Project and to secure customary approvals.
Concurrently, international financial institutions are conducting due diligence on the updated FS
and are expected to provide the Project’s debt financing. These institutions are active in Mongolia,
as major funders to the Oyu Tolgoi Copper-Gold project. It is anticipated that senior debt financing
could comprise as much as 65% of the total financing package, with financial close anticipated in
late 2023.
TSX: ERD | MSE: ERDN
www.erdene.com [email protected]
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 three mining licenses and an
exploration license in Southwest Mongolia, where exploration success has led to the discovery
and definition of the Khundii Minerals Dis trict. 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 di sseminated 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, 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 informati on 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
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