Khundii Gold Project receives positive preliminary economic assessment

Canada-based Erdene Resource Development Corporation announced on Tuesday the results of an independent preliminary economic assessment (PEA) for its 100 percent owned Khundii Gold Project in southwest Mongolia.

The PEA was prepared in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects by RPMGlobal Asia Limited (RPM). It incorporates the maiden resource estimate for the Bayan Khundii gold project announced in September 2018, and the updated resource estimate, completed in May 2018, for the company’s Altan Nar gold project, located 16 kilometers northwest of Bayan Khundii.

“Today (December 18)’s PEA confirms that the Khundii Gold Project is a high-return, low-capital and low-operating cost project that will form the cornerstone development in the emerging Khundii Gold District,” said the company’s President and CEO Peter Akerley.

“The Khundii Gold Project has the potential to provide strong returns to investors, bring industry and employment to a remote area of Mongolia and add to national gold reserves. We have a long history of operating responsibly in the country and we look forward to creating value for all stakeholders as we continue to develop this exciting project.”

The PEA includes 2.7 million mineable tons from the Bayan Khundii resource at an average head grade of 3.65 g/t gold, of which 98 percent are measured and indicated resources. The Altan Nar deposit for the PEA contributes 1.9 million mineable tons at an average head grade of 3.11 g/t gold, of which 70 percent are measured and indicated resources. These deposits are being developed as a single project – Khundii Gold Project.

The PEA envisions a high-grade, open-pit mine beginning at the Bayan Khundii Striker Zone, expanding into adjacent zones within Bayan Khundii, prior to incorporating resources from the Altan Nar deposit. The development incorporates a conventional gravity separation circuit and a carbon in pulp plant with processing capacity of 1,800 tons per day. The base case assumes a gold price of 1,200 USD per ounce.

The PEA study assumes processing of ROM material via a conventional gravity separation circuit and a carbon in pulp plant. The ore-processing plant will be located adjacent to the Bayan Khundii open pit and throughput will target 600,000 tons per year, nominally 1,800 tons per day. Total mineralized material processed in the plant over the course of the mine life is 4.6 million tons at an average diluted head grade of 3.42 g/t gold.

Using an estimated mill recovery of 82 percent, the total recovered gold over the project life is 412,000 ounces. Ore from the Bayan Khundii deposit is free-milling with an average recovery of 92 percent while the Altan Nar deposit, which includes arsenopyritic ore locally with associated low recoveries, will only include the free-milling portions of the resource with an average recovery of 62 percent.

“Next steps include a pre-feasibility study carried out in parallel with mining license, construction and operating permit applications in early 2019,” said Akerley. “In addition, we will continue efforts to add resources through follow-up drilling on the Khundii licenses and with further exploration in the highly prospective surrounding district. We will also opportunistically acquire additional licenses in the region as they become available.”