Erdene Announces $20 Million Financing Led by $15 Million Strategic Investment From Eric Sprott

Financing Will Support Exploration and Development of the Khundii Gold District

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HALIFAX, Nova Scotia, July 23, 2020 (GLOBE NEWSWIRE) -- Erdene Resource Development Corporation (TSX:ERD | MSE:ERDN) (“Erdene” or the “Company”) is pleased to announce a non-brokered private placement of approximately C$20 million (“Private Placement”), led by a $15 million strategic investment from Mr. Eric Sprott. Paradigm Capital acted as lead financial advisor to Erdene on the transaction. Haywood Securities acted as co-advisor.

“We are very pleased to have Mr. Sprott as a significant shareholder of Erdene,” said Mr. Peter Akerley, Erdene’s President and CEO. “His investment is a strong endorsement of Erdene’s high-grade Bayan Khundii Gold Project and the prospectivity of our 100% owned Khundii Gold District. Funds from this financing will be used to initiate early construction works at Bayan Khundii and continue exploration to expand our high-grade resources.”

The Private Placement will consist of the sale of 33,333,333 subscription receipts (“Subscription Receipts”) at a price of $0.45 per Subscription Receipt, to an entity controlled by Mr. Eric Sprott and the concurrent sale of up to 11,111,111 units of the Company (“Units”) at a price of $0.45 per Unit. Each Subscription Receipt will be convertible into Units, and each Unit consists of one common share and one Warrant (“Warrants”), with each Warrant exercisable into one common share of the Company within two years of the closing date, at a price of $0.60 per share.

Proceeds of the Private Placement will be used by the Company to advance exploration and development of the Bayan Khundii Gold Project (“Project”), as well as for working capital and general corporate purposes. Proceeds from the sale of Subscription Receipts will be placed in escrow on the closing date, to be released to Erdene on the receipt of all necessary shareholder and regulatory approvals, and the approval of the European Bank for Reconstruction and Development (the “Approvals”). Upon receipt of the Approvals, each subscription receipt will automatically convert into a Unit, for no additional consideration. In the event that the Approvals are not obtained by October 31, 2020, each Subscription Receipt will be cancelled, and the subscription funds will be returned. Mr. Sprott currently does not own any securities of the Company.