Quotes from the Company:
“Development activities at the
“With the finalization of the updated Bayan Khundii Project Feasibility Study, we are working to lock in the project financing in advance of a formal construction decision,” continued
Early Works and Site Establishment
Erdene executed an early works contract with
The early works contract scope includes final design and engineering works, establishment of temporary construction facilities, including camp, fuel station, aggregate crushing and concrete batch plant, and bulk earthworks. Work is largely complete under this contract, with aggregate and concrete batch plants established, construction office and accommodations erected, bulk earthworks, including site levelling and process plant footing excavation well progressed, and off-site and on-site road improvements largely complete. In aggregate, the early works phase of the project represents approximately 5% of the total construction effort. Pictures of early works progress are attached to this release. Approximately 80,000 work hours have been recorded at the Bayan Khundii Project Site under the early works contract without lost time incidents or environmental infractions.
Building upon the success of the early works phase, Erdene is in negotiations with MCSP on an Engineering, Procurement and Construction contract for the balance of the build, targeting execution in Q4-2023. Additionally, Erdene is negotiating with a Mongolian power producer to secure the Project’s energy needs.
Bayan Khundii NI 43-101 Feasibility Study Update
On
Highlights of the FS are included below (
- Base Case after-tax Net Present Value of
US$170 million (NPV5%) and 35.3% Internal Rate of Return (IRR), increasing toUS$196 million and 38.95% IRR, respectively, at current gold price ofUS$1,900 /oz - Life of Mine Earnings Before Interest, Taxes and Depreciation of
US$451 million , increasing toUS$495 million at aUS$1,900 /oz gold price - Total recovered gold of 476,000 ounces, a 25% increase compared to the 2020 Feasibility Study from an average gold recovery rate of 93%
- All-in sustaining cost (“AISC”) of
US$869 per ounce and upfront capital costs ofUS$88 million , plus a 12% contingency, and$2 million of pre-production costs - Measured and Indicated Resources of 674,700 ounces gold at an average grade of 2.6 g/t gold, and 319,000 ounces silver at an average grade of 1.38 g/t silver
- Proven and Probable Reserves of 513,700 ounces gold at an average grade 4.0 g/t gold, and 220,500 ounces silver at an average grade of 1.7 g/t silver
- Average annual gold production of 86,900 ounces during years 2 through 5 – Life of Mine annual average production of 74,200 ounces gold
- Eight-year project, comprising one-year pre-production, six and three quarter-year operating life and one-year mine closure period
- Adjacent high-grade resources and recent discoveries provide high probability growth options
- Significant benefits to
Mongolia , including Life of Mine royalties and taxes ofUS$143 million and approximately 500 new jobs inBayankhongor Province
On
- MMC is Mongolia’s largest internationally traded mining company, listed on the main board of the
Hong Kong Stock Exchange (HKEx: 975). - MMC to invest
US$40 million for a 50% equity interest in Erdene’s Mongolian subsidiary,Erdene Mongol LLC (“EM”), holding the Khundii andAltan Nar mining licenses and the Ulaan exploration license through a three-stage transaction, based on achievement of milestones. - Erdene retains a 50% equity interest in EM and a 5.0% Net Smelter Return (“NSR”) royalty on all production from the Khundii,
Altan Nar and Ulaan licenses, as well as any properties acquired within 5 kilometres of these licenses, beyond the first 400,000 ounces gold recovered. - The first two stages of the transaction were completed in
January 2023 andMay 2023 , with MMC investingUS$10 million to finance technical studies, including the FS, early construction works and exploration for theBayan Khundii Gold Project . - The third stage of the transaction, expected to close once EM has reached a construction decision, will see MMC invest a further
US$30 million , providing equity capital for the Bayan Khundii Gold Project. - Erdene will appoint EM’s Chief Executive and Chief Development Officers, and MMC will appoint EM’s Chief Operating and Chief Financial Officers.
- 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.
On
Two international financial institutions are conducting due diligence on the updated FS and are expected to provide the Project’s debt financing. These institutions are active in
Next Steps
In addition to project financing, over the coming months, development work will be focused on:
- Completing early works construction;
- Executing the Engineering, Procurement and Construction contract for the Project;
- Concluding the Project’s Power Purchase Agreement;
- Optimizing the project execution schedule and completing value engineering;
- Securing approval of Erdene and MMC’s Boards of Directors to begin construction; and
- Exploring in the
Khundii Minerals District to expand mineralization and convert resources to reserves.
Qualified Person and Sample Protocol
The information in this press release that relates to the financial models for the Bayan Khundii Feasibility Study is based on information compiled and reviewed by
All samples have been assayed at
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,
About Erdene
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
Phone: | (902) 423-6419 |
Email: | info@erdene.com |
Twitter: | https://twitter.com/ErdeneRes |
Facebook: | https://www.facebook.com/ErdeneResource |
LinkedIn: | https://www.linkedin.com/company/erdene-resource-development-corp-/ |
YouTube: | https://www.youtube.com/channel/UCILs5s9j3SLmya9vo2-KXoA |
Photos accompanying this announcement are available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/baa4891b-fc69-481b-a871-2c5006de9543
https://www.globenewswire.com/NewsRoom/AttachmentNg/73aea655-56e2-4ad9-afa8-d51ca00200e8
https://www.globenewswire.com/NewsRoom/AttachmentNg/fa76cb75-fd63-4924-aad1-71b568fb396f
https://www.globenewswire.com/NewsRoom/AttachmentNg/bf2c7c6a-530c-4504-be78-874b54352d33
Bayan Khundii Gold Project - Site Plan
650,000 TPA CIP Plant Designed to Produce ~85,000 oz Au Annually
Bayan Khundii Gold Project
1,800 tpd CIP Process Plant
Bayan Khundii Gold Project
Process Plant Early Works Construction
Bayan Khundii Gold Project
Earthworks and Temporary Construction Infrastructure
2023 GlobeNewswire, Inc., source