Erdene: Bayan Khundiihas 751,000 ounces of indicated gold reserves

Erdene Resource Development, a mining company dual-listed on the Toronto Stock Exchange and the Mongolian Stock Exchange (MSE), announced the maiden mineral resource estimate for its wholly owned Bayan Khundii deposit in Bayankhongor Province. According to the company’s estimate, the deposit hosts 751,000 ounces of measured and indicated or proven gold reserves at an average grade of 2.3 grams per ton and 291,000 ounces of inferred or probable gold reserves at an average grade of 1.8 grams per ton.

The mineral resource estimate was prepared by RPMGlobal in accordance with the definition standards of National Instrument 43-101, a national instrument for the Standards of Disclosure for Mineral Projects in Canada. The Mineral Resource incorporated 255 diamond drill holes totaling 42,656 meters, completed between the fourth quarter of 2015 and the second quarter of 2018.

The encompassing Khundii Gold Project includes the company’s high-grade Bayan Khundii and Altan Nar deposits, located 16 kilometers apart. The deposits are shallow and high-grade, outcropping and located within the newly discovered Khundii Gold District.

Erdene said that a higher cut-off grade of 1.4 grams per ton, the Khundii gold project contains 642,000 ounces of measured and indicated gold reserves at an average of 3.7 grams per ton and 357,000 ounces gold at an average grade of 5.2 grams per ton at the Bayan Khundii deposit. In addition, the Khundii project includes 886,000 ounces of proven gold equivalent (AuEq) at an average grade of 2.7 grams per ton and 382,000 ounces of inferred AuEq reserves at an average grade of 2.3 grams per ton.

Following the mineral resource estimate, the company has commenced work on the Preliminary Economic Assessment for the Khundii Gold Project, expected to be announced in the fourth quarter of 2018.

“With the results of the maiden Bayan Khundii resource estimate, we have met our initial resource target for the Khundii Gold Project at grades significantly higher than the global average of producing open pit gold mines,” said Peter Akerley, Erdene’s President and CEO.

“The Bayan Khundii and Altan Nar deposits provide synergies for our company and represent a compelling development opportunity given their high-grades, proximity to surface and favorable metallurgy. We will incorporate these two resource estimates into a Preliminary Economic Assessment for the Khundii Gold Project by year-end and expect to submit mining license applications for both deposits in early 2019. At the same time, we continue our regional exploration program with drilling currently underway testing multiple targets, designed to expand current resources and discover new deposits in this newly discovered gold district,” Akerley added.

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. Although epithermal gold and porphyry copper-gold deposits are well documented across the border in China and along the Belt’s westward trend, exploration in Mongolia was limited until the mid-1990’s, when the country returned to democracy and opened its’ doors to foreign exploration. Exploration since that time in southeast Mongolia led to the discovery of the world-class Oyu Tolgoi gold-copper deposit. Erdene has been active in exploration in Mongolia’s southwest over the past decade and is responsible for the discovery of the Khundii Gold District. The Khundii Gold District is comprised of multiple high- grade gold and base metal prospects, two of which are being considered for development: Bayan Khundii and Altan Nar. In addition, the company discovered and defined a large molybdenum-copper resource on its Zuun Mod project, 40 kilometers to the east.

Outside of its Bayan Khundii and Altan Nar projects, the company said it continues its regional, district-scale exploration program. The broader district, although still in its infancy, hosts the full spectrum of arc-related base and precious metal systems, including copper-gold porphyries, Erdene said.