Erdene Secures Debt Financing for Bayan Khundii Gold Project From Strategic Partner

HALIFAX, Nova Scotia, Feb. 08, 2024 (GLOBE NEWSWIRE) -- Erdene Resource Development Corp. (TSX:ERD; MSE:ERDN) ("Erdene" or the "Company") is pleased to announce the execution of debt finance agreements for up to US$80 million with Mongolian Mining Corporation (“MMC”) to fund construction of the high-grade, open-pit Bayan Khundii Gold Project (“Bayan Khundii”, “BK” or "Project”) in southwestern Mongolia.

Peter Akerley, Erdene’s President and CEO stated, “We are very pleased to close the financing for the Bayan Khundii Gold Project with our strategic partner MMC, Mongolia’s leading publicly traded mining company. With first gold scheduled in 2025, Bayan Khundii will be one of the highest grade, open pit gold mines globally and Mongolia’s largest primary gold producer when it reaches full production.”

Mr. Akerley continued, “The strengthening of our relationship with MMC through this financing supports our goal of creating a major new mining district in southwestern Mongolia. With MMC’s experience in large scale mining, expertise in construction, power supply, transportation and logistics, and national and international relationships, the Bayan Khundii Gold Project will form a strong foundation for future growth in the Khundii Minerals District. Together we will grow the Mongolian mining sector, increase the industry’s contribution to the national economy and create value for our shareholders.”

Bayan Khundii Financing

On February 8, 2024, Erdene executed financing documents with MMC to develop the Bayan Khundii Gold Project. The financing has been structured as a shareholder loan from MMC to Erdene Mongol LLC (“EM”), the entity co-owned by Erdene and MMC that holds the Bayan Khundii mining license, as well as the Altan Nar mining license and highly prospective Ulaan exploration license.

The shareholder loan is for US$50 million providing the funding for construction of the Bayan Khundii gold mine and processing complex.   The loan may be drawn in up to five tranches, in multiples of at least US$5 million. The loan will mature five years from the date of first draw, and accrue interest at a rate of 13.8%, paid quarterly in arrears. EM has the option to capitalize the first four interest payments. The loan will be repayable in full upon maturity. A further US$30 million, under the same terms, is available at MMC’s discretion. EM is also in discussions with Mongolian commercial banks on financing for up to $30 million.