Erdene Renews Local Cooperation Agreement and Provides Environmental, Social and Governance Update
TSX: ERD | MSE: ERDN
www.erdene.com 1 [email protected]
ERDENE RENEWS LOCAL COOPERATION AGREEMENT AND
PROVIDES ENVIRONMENTAL, SOCIAL AND GOVERNANCE UPDATE
Press Release
Halifax, Nova Scotia
2022.10.18
Erdene Resource Development Corporation (TSX: ERD | MSE: ERDN) (“Erdene” or the
“Company”) is pleased to announce the execution of an updated Local Co operation
Agreement (“LCA”) for its 100% owned Bayan Khundii Gold Deposit, within the Khundii
Minerals District (the “District”) in southwest Mongolia , and to provide an update on
Environmental, Social and Governance (“ESG”) initiatives.
Quotes from the Company
“For nearly two decades, Erdene has been the leading explorer and developer in
Bayankhongor Province. Our commitment to sharing benefits with local stakeholders has
been unwavering and increasingly evident as we move towards production in this exciting
new district,” said Peter Akerley, Erdene’s President and CE O. “The execution of the
renewed Local Cooperation Agreement will see Erdene contribute US$1.2M (4.1 billion
MNT) to local deve lopment projects over the next two years , in addition to the US$1M
(3.4 billion MNT) invested over the past twelve months. I would like to thank the people
of Bayankhongor Province for their support, particularly Governor Munkhsaikhan, who
has been instrumental in reaching these agreements.”
“The development of the Khundii Minerals District has the potential to positively transform
the economy of Southwestern Mongolia,” continued Mr. Akerley. “With the expansion of
rail and road networks, ideal conditions for renewable power generation, and the
identification of large-scale precious and base metals deposits, including Erdene’s Bayan
Khundii Gold, Altan Nar Polymetallic and Zuun Mod Copper-Molybdenum deposits, the
region shows the potential to become an industrial powerhouse for the nation.”
Local Cooperation Agreement and Community Development
Erdene is pleased to announce the renewal of its LCA, effective through December 31,
2024. According to Mongolia’s Mineral s Law, the LCA is a mandatory arrangement
between mineral license holders and local governments , including Provinc ial and Sub-
Provincial administrations. In addition to the Company, t he parties to the LCA are as
follows:
• Bayankhongor Province: Governor, Mr. D. Munkhsaikhan
• Bayan-Undur Sub-Province: Governor, Mr. B. Idermunkh
• Shinejinst Sub-Province: Governor, Mr. B. Bat-Erdene
Bayankhongor Province is the fourth largest in Mongolia , covering 116,000 square
kilometers. Erdene’s licenses are located within the sub -provinces of Bayan-Undur and
Shinejinst, with sub-provincial centres located 110km and 90km, respectively, from the
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Bayan Khundii Gold Project site . Bayankhongor is one of the least densely populated
provinces in Mongolia and the sub-provinces of Bayan-Undur and Shinejinst have a total
population of approximately 5,000 residents. No permanent dwellings are located in the
vicinity of the Bayan Khundii Project site; however, approximately a dozen families have
historically grazed livestock within 10km of the site.
In this context, healthcare and infrastructure are critical community needs, accentuated
by the vast distances between homes and services, and have been a focus of investment
under the LCA.
The renewed LCA builds upon the initial agreement in July 2021 and commits Erdene
and local governments to soci al development in Southwestern Mongolia . Erdene has
invested US$1M (3.4 billion MNT) on such projects to date and has committed a further
US$1.2M (4.1 billion MNT) under the renewed LCA. Approximately 60% of LCA funding
is directed to Provincial initiatives and the remaining 40% is directed to programs in the
Sub-Provinces. The LCA is managed by a non-profit organization, led by representatives
of Erdene and local constituents , that receives, screens, approves, and ultimately
evaluates the performance of initiatives financed under the LCA.
Given the impact of the COVID pandemic over the past two years, 32% of funding under
the previous LCA was directed to investments in public health. Erdene’s support enabled
the supply of testing and diagnostic equipment, the procurement of personal protective
equipment for medical personnel and volunteers, and access to treatments and
medicines to ensure safety and well-being. Additionally, the Company supported training
to improve mental health and promote fitness in the Province and Sub-Provinces.
The Company also contributed approximately US$450,000 for local infrastructure
development projects and local livelihoods support in the Province and Sub -Provinces
over the past year under the LCA. Infrastructure initiatives including rehabilitation of public
park facilities in the Province centre, installation of air quality improvement equipment on
the central heating station, and supply of emergency livestock feed.
The remaining 20% of recent LCA funding was directed towards youth development and
public education. A key project provided local schools with equipment and training to
support remote learning during the pandemic . Additionally, support for local
commemorative and sporting events helped stakeholders build relationships and
celebrate culture.
In addition to the LCA funding, our Company invests commercially in the local economy.
Pre-construction activities at the Bayan Khundii Project site included programs to employ
and train local residents, initially focused on construction and environmental roles. Over
100 residents completed employment readiness and/or vocational training, of whom
nearly 30 were employed at site in 2022. As the Bayan Khundii Gold Project advances
towards production, Erdene will continue prioritizing local employment.
The Bayan Khundii Gold Project is forec ast to be the largest taxpayer in Bayankhonger
Province upon reaching commercial production. Nationally, one -quarter of public
revenues are derived from the minerals sector.
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Environment
The Company continues to implement key elements of the environmental management
measures detailed in its statutory Mongolian Detailed Environmental Impact Assessment
(“DEIA”) and independent Environmental and Social Impact Assessment (“ESIA”). A
copy of the ESIA is available in English and Mongolian languages on the Company’s
website.
Erdene seeks to minimize the environmental impacts of its operations by identifying
potential risks prior to carrying out business activities and mitigating unavoidable impacts.
Environmental management measures are reviewed on a continual basis and evolve over
the life of a given minerals project. Potential impacts are measu red across multiple
domains, including water, waste, landscape, energy, and others.
In Q3 2022, Erdene initiated a participatory environmental monitoring program, with an
initial focus on water resources. As a result , local residents are invited to accompany
Erdene personnel to check water levels at selected points on the project site and within
the surrounding Sub -Province territory. Additionally, the Company is com mitted to
improving water access for l ocal families by rehabilitat ing and improving existing water
sources.
Currently, waste management activities at the Project site are focused on the reduction
and recycling of refuse generated from the Company’s roughly 150-bed accommodation
camp. As part of the future mine development, as described in the Bayan Khundii Project
Feasibility Study , DEIA, and ESIA, Erdene plans to manage mineral waste in an
integrated waste facility (“IWF”). The IWF will contain filtered dry cake tailings within mine
waste rock, reducing environmental risks during operations and closure and significantly
reducing the Project’s total land disturbance. The detailed design for the IWF recently
received full regulatory approval, the first of its nature and scale in Mongolia.
Similarly, Erdene has continued to progress its technical studies and assessment of the
Project’s energy requirements. Approval of the Project’s statutory power study earlier this
year reinforced the potential benefits of the planned hybrid power generation, consisting
of conventional and renewable sources. Over 20% of the mine’s power is expected to
come from an on-site solar farm.
By their nature, mineral exploration and mining operations require temporary land
disturbances. Erdene’s operations follow procedures through which potential
disturbances are assessed and planned to minimize adverse impacts and maximize
potential benefits. Beyond such mitigation measures, Erdene carries out additional
activities to restore and protect biodiversity within and outside of the Project site.
The Company has completed its first growing season of expanded planting trials at its
purpose built, 2-ha vegetation area at the Bayan Khundii site . The first season tested a
range of plants, including seeding 10,000 trees, as part of the Company’s one million tree
commitment in support of the of the Mongolian President’s Billion Trees Program.
Off-site, Mongolia’s comprehensive environmental protection rules stipulate the design
and implementation of biodiversity off -sets for mining projects. Although mining at
Erdene’s Projects has not yet commenced, the Company has provided su pport to
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rehabilitate approximately 14 ha of land damaged by illegal gold mining within the Ikh
Bogd Special Reserve Area—an important provincial park located in a mountainous area
approximately 170km from the Bayan Khundii Project.
Taken together, the Company is on track to achiev e a significa ntly increased
environmental management program by the end of 2022 – a cornerstone commitment for
advancing the development of the Bayan Khundii Project.
Corporate Governance
As the Company’s operations grow, Erdene remains commi tted to a culture of acting
ethically and responsibly. Our team works to build relationships with stakeholders and
make positive contributions to the communities within which we operate.
All personnel, including directors of the Board and senior management, receive training
and commit annually to Erdene’s Code of Ethics and Business Conduct . In addition,
Erdene’s board maintains a Corporate Governance Committee comp rised of th ree
independent Directors : Anna Biolik (Canada’s First Ambassado r to Mongolia), Layton
Croft (a mining industry professional with 25 years of experience in Mongolia), and John
Byrne (Erdene’s longest standing independent board member). The Committee ensures
that an environment of honesty, integrity and transparency is in place across the
organization. The Company has recently signed onto the Integrity Declaration with the
Canadian Government, a further reinforcement of Erdene’s commitment to transparency.
Erdene has been recognized by the G overnment of Mongolia and Mongolian industry
associations as a valuable partner with leading performance for nearly two decades. Our
CEO was awarded the Order of the Polar Star, Mongolia's highest civilian honour, for his
contribution to the country's development , and the Company has received various
accolades for its contribution to the development of Mongolia’s mining industry.
Erdene is the first and currently only foreign listed company to cross-list on the Mongolian
Stock Exchange (“MSE”). Listing on the MSE has the combined effect of enhancing
access to the Company’s shares amongst Mongolian investors as well as increasing
transparency and disclosure about the company’s operations . Approximately 5,000
Mongolian investors own shares in the Company, and all of Erdene’s publi c disclosure
documents are made available in English and Mongolian languages.
Health and Safety
Erdene believes that working safely is both a corporate obligation and an individual
responsibility. During the 2022 field season, Erdene introduced an expanded hazard
identification program as part of pre -construction, resulting in a series of preventive
measures to ensure workplace safety. The Company remains LTI -free in 2022 to date.
The Company is establishing the essential Health and Safety management system s
ahead of future mine development.
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Sustainability
ESG performance is a core part of Erdene’s commitment to create value for all
stakeholders through the discovery and development of world -class resource projects.
Building and maintaining relations with key stakeholder groups is paramount to th is
process. Since 2017, Erdene has collaborated with the University of British Columbia
(UBC) to facilitate research and analysis of the Company’s approach to stakeholder
engagement and local cooperation. Our unique industry-academia partnership with UBC
has resulted in multiple publications, including most recently in the September 2022 issue
of the peer -reviewed journal Business Strategy and Development . Copies and links for
the publications can be found on the UBC website.
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 license s a nd an exploration license 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 inform ation 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, guidance, or
other sta tements t hat 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 th ose
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 f orward-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 revi se 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
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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-/