Erdene Announces Conversion of EBRD Convertible Loan and Provides Bayan Khundii Gold Project Update

HALIFAX, Nova Scotia, Oct. 13, 2020 (GLOBE NEWSWIRE) -- Erdene Resource Development Corp. (TSX:ERD; MSE:ERDN) ("Erdene" or the "Company") announces that the European Bank for Reconstruction and Development (“EBRD” or “Bank”) has exercised its conversion option in respect of its US$5 million convertible loan (“Convertible Loan”) with the Company. Following conversion of the Convertible Loan, the EBRD owns and controls 30,043,290 common shares representing approximately 11.2% of the issued and outstanding common shares of the Company.

Erdene is also pleased to provide a project update for its 100%-owned, high-grade, open-pit Bayan Khundii Gold Project (“Bayan Khundii” or “BK”) in southwest Mongolia.

Quotes from the Company and EBRD:

"The proceeds of the EBRD Convertible Loan provided the funding to complete the recently announced Bayan Khundii Gold Project Feasibility Study,” said Peter Akerley, Erdene’s President and CEO. “The EBRD’s conversion, along with the proceeds of the C$20 million equity financing led by a C$15 million strategic investment from Mr. Eric Sprott position Erdene to secure the project finance required to move Bayan Khundii rapidly to production.   The company is focused on expanding the resources throughout the district and construction readiness efforts for the Bayan Khundii project as we target first gold in 2022.”

“We were pleased to support the economic, technical and environmental and social studies that have demonstrated the benefits of the Bayan Khundii Gold Project in southwest Mongolia,” said Eric Rasmussen, the EBRD Director for Natural Resources. “The conversion of our loan into common equity maintains our interest in the development of the Bayan Khundii Gold Project and we are pleased to support the development of this valuable resource for the benefit of all stakeholders.”

EBRD’s Commitment to Mongolia

The EBRD is one of the largest investors in Mongolia. To date, the EBRD has invested over €1.8 billion (C$2.8 billion) in Mongolia’s economy across 113 projects, with almost all investments in the private sector. The EBRD works in Mongolia to support building a diverse economy by developing the private sector and supporting infrastructure improvements.

Financing Update

Under the terms of the Convertible Loan agreement executed October 11, 2019, the EBRD provided US$5.0 million of funding to Erdene by way of a convertible loan. EBRD exercised its conversion option on October 9, 2020 in respect of the entire principal amount of the Convertible Loan, receiving 30,043,290 common shares of the Company, representing 11.2% of Erdene’s then issued and outstanding common shares. Additionally, the Company will pay interest costs of US$457,639 to the Bank in connection with the extinguishment of the Convertible Loan.