Erdene Signs Local Cooperation Agreement with Bayankhongor Provincial Government FOR Bayan Khundii GOLD Project
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ERDENE SIGNS LOCAL COOPERATION AGREEMENT WITH
BAYANKHONGOR PROVINCIAL GOVERNMENT FOR BAYAN KHUNDII
GOLD PROJECT
Press Release
Halifax, Nova Scotia
2021.08.05
Erdene Resource Development Corporation (TSX: ERD | MSE: ERDN) (“Erdene” or the
“Company”) is pleased to announce the execution of a Local Cooperation Agreement
(“LCA” or “Agreement” ) with the Bayankhongor Provincial Government , the host
community for its 100%-owned Bayan Khundii Gold Project and all exploration and mining
licenses within the Khundii Gold District.
Quotes from the Company
“Executing the Local Cooperation Agreement is a significant milestone for the B ayan
Khundii Gold Project,” said Peter Akerley, Erdene’s President and CEO. “Having worked
in the community for over a decade we are very pleased to be in a position to advance
our projects to the point where significant benefits can begin to flow to our local
stakeholders. We look forward to working closely with the local leadersh ip members to
ensure the development of a mutually beneficial relationship over the long term.”
Quotes from the Governor of Bayankhongor Province
“We are pleased to execute a comprehensive Local Cooperation Agreement with Erdene
Resource Development Corporation, establishing the terms of cooperation for the Bayan
Khundii gold project,” said Governor D. Munkhsaikhan. “Erdene has operated responsibly
in Bayankhongor province for over a decade , establishing strong relations with local
stakeholders. The Bayan Khundii Gold Project will bring significant benefits and create
many new jobs for local residents. I look forward to supporting the Project.”
Key Terms of the Agreement
• Investments in local communities by Erdene tied to permitting, project
development, and first production milestones, as well as annual payments during
production;
• Establishment of a non -governmental organization comprised of Company and
Community members to administer local investments; and
• Training, employment, and local procurement commitments.
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Local Community Engagement
Erdene held its most recent community consultation s in late June 2021, where the
Company presented the Bayan Khundii Gold Project development plans at an official
meeting of local residents. In this meeting, local community members had the opportunity
to ask questions and provide feedback on the Project. As part of this exercise, community
leaders collected a formal survey with the majority of residents supporting the Project’s
development. This meeting is part of the Company’s ongoing initiative of local
consultations, which is an important component of Erdene’s commitment to operating
ethically and considering all stakeholder interests.
In June 2020, Erdene completed an independent E nvironmental and Social Impact
Assessment (“ESIA”) in accordance with the performance requirements of the European
Bank for Reconstruction and Development (“EBRD”), a strategic investor in the Company.
The study was led by Sustainability East Asia LLC, in consortium with Eco Trade LLC
and Ramboll Australia Pty Ltd. The ESIA followed a comprehensive four -stage process,
including impacts scoping, impacts assessment, devel opment of impact mitigation
measures, and consideration of cumulative impacts , all through consultation with local
community members. Management commitments to ensure impacts are avoided or
mitigated are included in the ESIA Management Plans which details Erdene’s
commitment to develop and operate the Bayan Khundii Gold Project in accordance with
leading industry practices.
The ESIA Report and its Non-Technical Summary are available on the company’s website
through the following links:
ESIA Report (ENG): https://bit.ly/Khhundii_Gold_Project_ESIA
Non-Technical Summary (ENG): https://bit.ly/Khundii_Gold_Project_ESIA_Non-
Technical_Summary
ESIA Report (MNG): https://bit.ly/Khundii_Gold_Project_ESIA_mon
Non-Technical Summary (MNG): https://bit.ly/Khundii_Gold_Project_ESIA_Non-
Technical_Summary_Mon
Concurrently, the Mongolian statutory Detailed Environmental Impac t Assessment
(“DEIA”) for the Project has been prepared by Eco Trade LLC in accordance with the
applicable national standards. Following the recent community consultations, which
incorporated the local resident’s feedback, the Company expects to submit its statutory
DEIA to the Ministry of Environment and Tourism of Mongolia for approval in Q3-2021.
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
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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 Proje ct. The company also has a 100% interest in the Khuvyn Khar
licence 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 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 resources1.
In July 2020, Er dene 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 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 informa tion 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 stat ements 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
1 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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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 tho se
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 fo rward-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 revis e 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-/