Erdene Adds Second Rig and Commences Drilling Ulaan Gold Target Adjacent Bayan Khundii Gold Deposit - Seite 2

Further supporting this hypothesis, in 2020, prior to the issuance of the Khuren Tsav license to Erdenes Alt LLC, the Mongolian National Geological Survey conducted diamond drilling on the portion of license situated between Erdene’s Bayan Khundii and Ulaan licenses. Though details of this drilling have not been publicly announced, in early 2021 Erdenes Alt LLC announced plans to undertake further drilling and geologic work on the property. Erdene has been in discussions with Erdenes Alt LLC since the company was granted the license on opportunities to develop the property in the best interests of all stakeholders.

The Company has established a series of drill targets in the southern portion of the Ulaan license. Initial drilling will be wide spaced, testing targets over an approximately 2 kilometre strike length to a maximum depth of 350 meters. The target area (see maps below) is underlain by the same lithologic units associated with the Bayan Khundii gold deposit, namely, Carboniferous volcanic tuffs and intrusive rocks (syenites and monzonite). These units display similar alteration styles as at Bayan Khundi, silicification and clay (illite/sericite) alteration with gold bearing quartz veins (up to 13 g/t gold in grab samples) observed along the western extent of the area. Approximately 50% of the target area is covered by recent sediments or younger lithologies, however, there is strong gold in soil anomalism in the target area.

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 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 Project.

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.