The Asia Miner

JAN-MAR 2019

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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Page 23 of 51

the asia miner • volume 16 • issue 1 22 REGIONAL FOCUS: Central Asia & Mongolia Positive results of PEA for Erdene's Khundii Gold Project Following the compleঞon of an independent Preliminary Economic Assessment (PEA) study for its 100 per cent owned Khundii Gold Project in southwest Mongolia, Erdene Resource Development Corp. reveals that the project is a high-return, low-capital and low-operaঞng cost project that will form the cornerstone development in the emerging Khundii Gold District. Peter Akerley, Erdene's President and CEO said that the project has the potenঞal to provide strong returns to investors, bring industry and employment to a remote area of Mongolia and add to naঞonal "Next steps include a Pre-Feasibility Study carried out in parallel with mining license, construcঞon and operaঞng permit applicaঞons in early 2019," commented Mr. Akerley. "In addiঞon, we will conঞnue efforts to add resources through follow-up drilling on the Khundii licenses and with further exploraঞon in the highly prospecঞve surrounding district. We will also opportunisঞcally acquire addiঞonal licenses in the region as they become available." PEA OVERVIEW The PEA incorporates the maiden resource esঞmate for Erdene's Bayan Khundii gold project announced in September 2018, and the updated resource esঞmate – completed in May 2018 – for the Company's Altan Nar gold project,16 kilometres northwest of Bayan Khundii. The PEA includes 2.7 million mineable tonnes from the Bayan Khundii resource at an average head grade of 3.65 g/t gold, of which 98 per cent are Measured and Indicated Resources. The Altan Nar deposit for the PEA contributes 1.9 million mineable tonnes at an average head grade of 3.11 g/t gold, of which 70 per cent are Measured and Indicated Resources. These deposits are being developed as a single 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 incorporaঞng resources from the Altan Nar deposit. The development incorporates a convenঞonal gravity separaঞon circuit and a carbon in pulp plant with processing capacity of 1,800 tonnes per day. The base case assumes a gold price of US$1,200/oz. MINING The PEA is based on an open-pit mining operaঞon targeঞng 600,000 tonnes per year of feed material for the process plant. The total mineable mineralised plant feed is 4.6 million tonnes at an average diluted head grade of 3.42 g/t gold and strip raঞo of 10.5:1 (waste tonne: plant feed tonne). Mineralisaঞon starts at surface and 70 per cent of mineable resources are located within 115 metres of surface. The deposit structure, grades and depth suggest selecঞve open cut mining will be uঞlised. Underground mining below the current open cut pit is not within the PEA scope of work but will be examined in future study. Mining will use hydraulic excavators in backhoe configuraঞon. Drilled and blasted material will be loaded into haul trucks, with waste rock deposited in engineered dumps adjacent to the pits, and ore hauled to a crusher or run-of-mine ("ROM") pad adjacent to the processing plant. At Altan Nar the esঞmated 19-kilometre road distance to the processing plant means that ore hauled from the pit will Erdene's Khundii Gold Project. Image ©Edene Resource Development Corp.

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