Erdene Commences Construction at the High-Grade Bayan Khundii Gold Project and Finalizes Strategic Alliance With Mongolian Mining Corporation

HALIFAX, Nova Scotia, Jan. 29, 2024 (GLOBE NEWSWIRE) -- Erdene Resource Development Corp. (TSX:ERD; MSE:ERDN) ("Erdene" or the "Company") is pleased to announce the commencement of full construction at the high-grade, open-pit Bayan Khundii Gold Project (“Bayan Khundii”, “BK” or "Project”) in southwestern Mongolia and the close of the investment by Mongolian Mining Corporation (“MMC”) as part of the Strategic Alliance Agreement (“SAA”) to develop the Khundii Minerals District.

Peter Akerley, Erdene’s President and CEO stated, “We are extremely pleased to announce the formal commencement of construction at the Bayan Khundii gold project and the close of our Strategic Alliance with MMC, Mongolia’s leading publicly traded mining company. The Bayan Khundii gold mine is one of the highest grade, open pit gold mines under development globally and will be Mongolia’s largest gold primary producer when it reaches full production.”  

Mr. Akerley continued, “The Bayan Khundii Gold Project is the foundation for the development of the Khundii Minerals District, located in a rapidly emerging mining region in southwest Mongolia. Our stakeholders benefit from tremendous exploration opportunities in an under-explored, world-class gold and copper belt with an established pipeline of high-quality projects, including high-grade gold satellite deposits to Bayan Khundii, the large Altan Nar gold-polymetallic deposit and the vast Zuun Mod molybdenum-copper porphyry resource. MMC is the ideal partner to develop the Khundii Minerals District with its experience in large scale mining, expertise in construction, power supply, transportation and logistics, and national and international relationships. Together, we will unlock new opportunities for the Mongolian mining sector, increase the industry’s contribution to the national economy and create long-term value for Erdene shareholders.”

Strategic Alliance with MMC

On January 10, 2023, Erdene executed a Strategic Alliance Agreement (“SAA”) with MMC to develop the Bayan Khundii Gold Project (see press release here). On January 23, 2024, the parties formally closed the SAA by issuing shares in Erdene Mongol LCC (“EM”) to MMC representing a 50% equity ownership. Details of the SAA include:

• MMC is Mongolia’s largest internationally traded mining company, listed on the main board of the Hong Kong Stock Exchange (HKEx: 975).
• MMC has invested US$40 million in EM, Erdene’s Mongolian subsidiary holding the Khundii and Altan Nar mining licenses and the Ulaan exploration license.
• Erdene retains a 50% equity interest in EM and a 5.0% Net Smelter Return royalty on production from the Khundii, Altan Nar and Ulaan licenses, as well as any properties acquired within a 700km² area of interest, beyond the first 400,000 ounces gold recovered.
• Erdene maintains a 100% interest in its large Zuun Mod Molybdenum-Copper deposit and Khuvyn Khar Copper project, located approximately 30 kilometres east of Bayan Khundii, and adjacent to a planned railway development.

Bayan Khundii Construction