Erdene Receives Tax Stabilization Certificate FOR Bayan Khundii GOLD Project
TSX: ERD | MSE: ERDN
www.erdene.com 1 [email protected]
ERDENE RECEIVES TAX STABILIZATION CERTIFICATE FOR BAYAN
KHUNDII GOLD PROJECT
Press Release
Halifax, Nova Scotia
2022.01.10
Erdene Resource Development Corporation (TSX:ERD | MSE:ERDN) (“Erdene” or the
“Company”) is pleased to announce that it has received a Tax Stabilization Certificate for
the Bayan Khundii Gold Project from the Mongolian Government’s National Development
Agency (NDA), effective December 21, 2021.
Quotes from the Company
“We are very pleased to receive a Tax Stabilization Certificate which protects the Bayan
Khundii Gold Project’s economics from potential statutory tax or royalty increases,” said
Peter Akerley, Erdene’s President and CEO . “The Tax Stabilization Certificate
demonstrates the Government of Mongolia’s commitment to regulatory stability and
promotes foreign direct investment in projects like Bayan Khundii, which benefit local
stakeholders and Erdene’s shareholders, including thousands of Mongolian investors.”
Stabilization Certificate – Mongolia’s Investment Law
Mongolia’s Investment Law guarantees fair, stable and globally competitive tax treatment
for investors through Stabilization Certificates, which fix the taxation rates applicable to
qualifying investments at the lower of those in place at the date investment and those
currently enacted.
The Tax Stabilization Certificate fixes the statutory tax rates applicable to Erdene’s Bayan
Khundii Gold Project until December 21, 2030 , at no less favorable than those
incorporated into the Bankable Feasibility Study, including:
• Gold Royalties: 5% of net revenues
• Corporate Income Tax: 25% of taxable income
• Value-added Tax (“VAT”): 10% of all goods and services
• Customs Duty: 5% for all process equipment, materials and consumables sourced
internationally
The Tax Stabilization Certificate is valid for nine (9) years, and may be extended for up
to half of the initial term, if certain conditions are met.
Receipt of the Tax Stabilization Certificate was contingent upon the approval of Erdene’s
Detailed Environmental Assessment, which was announced on December 7, 2021 (press
release here).
TSX: ERD | MSE: ERDN
www.erdene.com 2 [email protected]
Khundii Gold District
Erdene’s deposits are 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 c onsidered for development: the
100%-owned Bayan Khundii and Altan Nar projects. Together, these deposits comprise
the Khundii Gold Project. The Company also has a 100% interest in the Khuvyn Khar
license which hosts the large Zuun Mod molybdenum-copper deposit and multiple copper
and molybdenum porphyry targets, 30 kilometers east of the Khundii gold district.
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 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 resources1.
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, prod ucing 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 2023 based on the
current project schedule.
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 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.
Forward-Looking Statements
Certain information regarding Erdene contained herein may constitute forward -looking
statements within the meaning of applicable securities laws. Forward-looking statements
1 For details of the Mineral Resources see Erdene’s Q2/2021 results press release, dated August 16, 2021, and the
Company’s Q2 2021 MD&A, available on the Company’s website or 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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www.erdene.com 3 [email protected]
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 cautio ns 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 mater ially 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 cond itions. 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 oblig ation 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-/