Erdene Resource Development Corporation (TSX:ERD | MSE:ERDN)
(“Erdene” or the “Company”) is pleased to provide a drilling update
for the Company’s 100%-owned Khundii Gold Project. “The current
drill program has confirmed continuity of a new near-surface gold
zone, southeast of the main Midfield orebody, with multiple
intersections containing visible gold,” said Peter Akerley,
Erdene’s President and CEO. “The success of this drilling program
demonstrates the potential for isolated gold intersections adjacent
to the existing reserves to be expanded, which could add very-high
grade resources in the near-surface. Samples have been collected
and shipped to SGS Laboratories for analysis, with results expected
early in Q3. Results will be used to plan future drill
programs.”
Drill Program Summary (See attached
figures for reference)
The current drilling program is designed to test
for mineralization in zones classified as waste or low-grade
stockpile material identified as having the potential to add
significant value at the earliest stages of mining. The first area
tested is southeast of the main Midfield orebody where previous
drilling (BKD-262) identified a high-grade intersection within 10
metres of surface that returned 3 metres* of 52.9 g/t gold but was
relatively isolated. This intersection is located at the northern
corner of the current eighteen-hole drill program designed to cover
an area of approximately 50 metres by 50 metres south and east of
BKD-262.
Drilling has intersected two parallel veins and
alteration zones beginning within 5 metres of surface and
continuing to the maximum vertical depth of the target area tested
during this drill program, approximately 30 metres, and along a
strike length of approximately 50 metres where it remains
open. Visible gold has been observed in multiple holes hosted
in quartz adularia veins, fault related breccia and in the iron
oxide cement of these breccias (secondary enrichment (supergene)).
The near north-south orientation of this zone is oblique to the
general strike of the main ore zones (NE-SW) and remains open to
the south.This target area is interpreted as a cross structure with
gold in quartz adularia veins that have been subjected to post
mineralization faulting and secondary enrichment. This quartz rich
zone appears to be a resistive ridge on a paleo erosional
surface. This has resulted in a reinterpretation of this
erosional surface, or unconformity, and has extended the potential
gold bearing zone. The visible gold zone follows the contour of the
Jurassic unconformity and can now be traced through largely
untested near-surface areas to the south along the eastern edge of
the Striker orebody. From the northern extent of the
mineralized zone (intersection in BKD-262), the target area is now
expanded to a total strike length of 200 metres. The northern 50
metres has been tested by the current drilling program, and the
southern 50 metres was partially tested by previous trenching and
drilling, leaving approximately 100 metres in the centre untested.
Reported intersections on the southern 50 metres include 1 metre*
of 55.6 g/t gold within 3 metres* of 18 g/t gold in trench BKT-06
and 35 metres* of 5.7 g/t gold including 1 metre* of 194 g/t gold
in drill hole BKD-10. One additional hole drilled along the target
structure (BKD-45) intersected fault breccia with anomalous gold
near the surface, but was not designed to test the newly identified
zone of mineralization.Samples have been transferred to SGS
Laboratory in Ulaanbaatar with results anticipated in July.
Drilling has now shifted to a near-surface target at the
south-western corner of the Striker zone. Additional drilling
will be planned on receipt of drill results.*Previous results in
this release are stating apparent thicknesses
Khundii Gold District
Erdene’s deposits are located 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
422,000 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 resources. 1
In October of 2019, Erdene announced the results
of an independent Technical Report for the Khundii Gold Project
(press release here), which included a Pre-feasibility Study
(“PFS”) for the Bayan Khundii deposit and an updated Preliminary
Economic Assessment (“PEA”) for the Altan Nar deposit. The PFS and
the updated PEA results include an after-tax Net Present Value at a
5% discount rate and a US$1,300/oz gold price of US$97 million and
US$24 million, Internal Rate of Return (“IRR”) of 42% and 90% for
Bayan Khundii and Altan Nar deposits, respectively. The PFS
envisions an open-pit mine at Bayan Khundii from Years 0-7,
producing an average of 61,000 oz gold per year at a head grade of
3.73 g/t gold, and an open-pit operation at Altan Nar during Years
7-10, for an average annual production of 48,000 oz gold at an
average head grade of 3.46 g/t gold, utilizing a conventional
carbon in pulp processing plant at the Bayan Khundii mine. Erdene
has secured a mining license for the Bayan Khundii deposit in
August of 2019 and plans to start producing gold at Bayan Khundii
in late 2021. The Altan Nar PEA is by nature, a preliminary
economic study, based in part on Inferred Resources. Inferred
Resources are considered too speculative geologically to have the
economic considerations applied to them that would enable them to
be categorized as mineral reserves, which is required for a
pre-feasibility or feasibility study. Mineral resources that are
not mineral reserves do not have demonstrated economic viability,
and there is no certainty that the PEA will be realized.
1 For details of the Mineral Resources see
Khundii Gold Project NI 43-101 Technical Report, Tetra Tech
December 4, 2019 – SEDAR
2 M&I: 171,000 ounces of 3.77 g/t gold
Measured and 349,700 ounces of 2.93 g/t gold Indicated
Erdene Resource Development Corp. is a
Canada-based resource company focused on the acquisition,
exploration, and development of precious and base metals in
underexplored and highly prospective Mongolia. The Company has
interests in three mining licenses and three exploration licenses
in Southwest Mongolia, where exploration success has led to the
discovery and definition of the Khundii Gold District. Erdene
Resource Development Corp. is listed on the Toronto and the
Mongolian stock exchanges. Further information is available at
www.erdene.com. Important information may be disseminated
exclusively via the website; investors should consult the site to
access this information.
Qualified Person and Sample
Protocol
Peter Dalton, P.Geo. (Nova Scotia), Senior
Geologist for Erdene, is the Qualified Person as that term is
defined in National Instrument 43-101 and has reviewed and approved
the technical information contained in this news release. All
samples have been assayed at SGS Laboratory in Ulaanbaatar,
Mongolia. In addition to internal checks by SGS Laboratory, the
Company incorporates a QA/QC sample protocol utilizing prepared
standards and blanks. All samples undergo standard fire assay
analysis for gold and ICP-OES (Inductively Coupled Plasma Optical
Emission Spectroscopy) analysis for 33 additional elements. For
samples that initially return a grade greater than 5 g/t gold,
additional screen-metallic gold analysis is carried out which
provides a weighted average gold grade from fire assay analysis of
the entire +75 micron fraction and three 30-gram samples of the -75
micron fraction from a 500 gram sample.
Erdene’s drill core sampling protocol consisted
of collection of samples over 1 or 2 metre intervals (depending on
the lithology and style of mineralization) over the entire length
of the drill hole, excluding minor post-mineral lithologies and
un-mineralized granitoids. Sample intervals were based on meterage,
not geological controls or mineralization. All drill core was cut
in half with a diamond saw, with half of the core placed in sample
bags and the remaining half securely retained in core boxes at
Erdene’s Bayan Khundii exploration camp. All samples were organized
into batches of 30 including a commercially prepared standard,
blank and either a field duplicate, consisting of two quarter-core
intervals, or a laboratory duplicate. Sample batches were
periodically shipped directly to SGS in Ulaanbaatar via Erdene’s
logistical contractor, Monrud Co. Ltd.
Forward-Looking Statements
Certain information regarding Erdene contained
herein may constitute forward-looking statements within the meaning
of applicable securities laws. Forward-looking statements may
include estimates, plans, expectations, opinions, forecasts,
projections, guidance or other statements that are not statements
of fact. Although Erdene believes that the expectations reflected
in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct.
Erdene cautions that actual performance will be affected by a
number of factors, most of which are beyond its control, and that
future events and results may vary substantially from what Erdene
currently foresees. Factors that could cause actual results to
differ materially from those in forward-looking statements include
the ability to obtain required third party approvals, market
prices, exploitation and exploration results, continued
availability of capital and financing and general economic, market
or business conditions. The forward-looking statements are
expressly qualified in their entirety by this cautionary statement.
The information contained herein is stated as of the current date
and is subject to change after that date. The Company does not
assume the obligation to revise or update these forward-looking
statements, except as may be required under applicable securities
laws.
NO REGULATORY AUTHORITY HAS APPROVED OR
DISAPPROVED THE CONTENTS OF THIS RELEASE
Erdene Contact Information
Peter C. Akerley, President and CEO, or Robert
Jenkins, CFO
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(902) 423-6419 |
Email: |
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info@erdene.com |
Twitter: |
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https://twitter.com/ErdeneRes |
Facebook: |
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https://www.facebook.com/ErdeneResource |
LinkedIn: |
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https://www.linkedin.com/company/erdene-resource-development-corp-/ |
YouTube: |
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https://www.youtube.com/channel/UCILs5s9j3SLmya9vo2-KXoA |
Photos accompanying this announcement are
available
at:https://www.globenewswire.com/NewsRoom/AttachmentNg/1b214373-c222-4094-a6fc-f23c331232abhttps://www.globenewswire.com/NewsRoom/AttachmentNg/edd7e26f-653a-4b07-b79a-a23b8dcfd66dhttps://www.globenewswire.com/NewsRoom/AttachmentNg/3d806014-4dc8-4329-bd96-1e3046aef18ehttps://www.globenewswire.com/NewsRoom/AttachmentNg/649ca395-6122-4ca6-b5a5-57ffc0fbd5c3https://www.globenewswire.com/NewsRoom/AttachmentNg/cb65aff2-f38b-4605-b667-1f200e248ebc
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