Erdene Closes Second Stage of Strategic Alliance With Mongolian Mining Corporation and Reports Q1 2023 Results - Seite 2

• Commenced 4,000-metre drill program at ZM in April 2023
  • 2,500-metre first phase will test areas adjacent current resource to assess expansion potential
  • Results expected to be announced in late Q2
• Carried out desktop and field orientation work in advance of a 11,000-metre gold exploration program
  • Program will prioritize the greater Dark Horse area
  • Drilling will test high priority targets to expand resources and conduct infill drilling to increase confidence in currently reported inferred resources

Corporate

• Entered Strategic Alliance with MMC and closed the first two tranches receiving US$10 million of funding
  • MMC to invest US$40 million for a 50% equity interest in Erdene’s Mongolian subsidiary that holds the Khundii and Altan Nar mining licenses and the Ulaan exploration license
  • Erdene retains 50% of EM and a 5.0% NSR royalty on production from the Khundii, Altan Nar and Ulaan licenses, as well as any properties acquired within 5 kilometres, beyond the first 400,000 ounces of gold recovered, as well as 100% interest in ZM
  • Closed the first stage of the Alliance in January 2023 and the second stage in early May 2023

• Progressed BK Project Finance with EDC and other international financial institutions
  • EDC due diligence complete pending review of 2023 FS update, anticipated in mid-2023 and key loan terms agreed
  • Discussions are proceeding in parallel with Mongolian and International financiers for the balance of capital
• Recorded a net loss of $1,138,937 for the three months ended March 31, 2023, compared to a net loss of $1,231,156 for the three months ended March 31, 2022
  • Exploration and evaluation expenditures, including capitalized expenditures, totaled $1,437,182 for the three months ended March 31, 2023, compared to $2,904,572 for the comparative prior year period as reduced field activity and design and engineering work, as well as the payment of a deposit on the elution circuit in early 2022, and the timing of payments under the local cooperation agreement more than offset current period expenditures to update the FS
  • Corporate and administrative expenses totaled $580,111 for the three months ended March 31, 2023, compared to $445,446 for the three months ended March 31, 2022, with the year on year increase primarily due to expenditures associated with the negotiation and announcement of the MMC Strategic Alliance as well as higher administrative salaries due to cost of living adjustments

Update on Strategic Alliance with MMC