The Asia Miner

OCT-DEC 2016

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

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30 | ASIA Miner | Volume 13 • Issue 4 | 2016 DRILLING has resumed at Erdene Resource Development Corp's Bayan Khundii gold and Altan Nar gold-polymetallic projects in southwest Mongolia . Erdene has been carrying out extensive stud- ies in the past few months on the styles and controls of gold min- eralisation at the projects, as well as various studies and projects related to the anticipated development of the district . Bayan Khundii (Rich Valley) and Altan Nar (Golden Sun) are near-surface, high-grade gold discoveries made by the company within the Tien Shan Gold Belt of southwest Mongolia. The projects are about 19km apart with gold mineralisation traced over 6km at Altan Nar and 1 . 7km at Bayan Khundii . The technical work program included structural mapping studies, hyperspectral analysis of core and surface samples, evaluation by an expert in epithermal gold systems, geophysical interpretation and development of a 3D model . Through this combined evalua- tion, the company aims to develop the ideal approach to drilling in regards to both exploration targeting and eventual resource cate- gorisation for both projects. This process has seen Erdene contract RungePincockMinarco to provide an independent review of all results to date with an objective of recommending optimal drill hole spacing in advance of future resource definition drilling at Bayan Khundii. The company also contracted Okhi-Us LLC, an experienced Mongolian hydrogeological consulting firm, to complete a prelimi- nary hydrogeologic study in the vicinity of the projects. Although a water resource was previously defined in association with a study of the company's Zuun Mod molybdenum-copper deposit, 35km to the east of Bayan Khundii, this program is targeting basins more proximal to the current target areas . Initial surveying and water testing has iden- tified two areas that will now be the subject of geophysical surveying and drilling to determine water volume, recharge and quality . The results of the various technical studies will be evaluated by Erdene's technical team with additional exploration and drilling pro- grams designed accordingly . Drilling was set to resume at Bayan Khundii in September and is expected to continue throughout the quarter . It includes a drill program at Altan Nar . A review of the Altan Arrow high-grade dis- covery on the Khundii licence, 3 . 5km north of Bayan Khundii, is also planned . Erdene also continues to evaluate copper-gold opportunities throughout the Edren Terrane of southwest Mongolia through its alli- ance with Teck Resources . Field evaluations are under way focused on geochemical surveys and satellite interpretation . CIMIC Group mining services provider Thiess, in joint venture with Mongolian contractor Khishig Arvin, has secured the first under- ground decline project at Turquoise Hill Resources' Oyu Tolgoi (OT) Copper-Gold Project. The contract will generate total revenue of approximately $130 million, of which Thiess' share is 80% . The work was due to commence in July and is scheduled for completion in 2020 . It will include construction of a box cut and development of twin declines, incorporating both a service and a conveyor tunnel . CIMIC executive chairman and CEO Marcelino Fernández Verdes said, "This project is key to unlocking OT's potential and is a great addition to Thiess' diverse mining portfolio . " Thiess managing director Michael Wright said, "The combination of our underground development expertise and ability to leverage our experienced Mongolia-based team provides us with the foun- dations for success . "We are proud to facilitate the growth of a world-class copper and gold operation and deliver long-term solutions at OT . Building local capability is integral to our approach and, with the assistance of our partnership with Khishig Arvin, more than 90% of our workforce will be Mongolian personnel . " Meantime, open pit production at OT is on target to meet the 2016 production guidance of 175,000 to 195,000 tonnes of cop- per in concentrates and 255,000 to 285,000 ounces of gold . The project is operated by Oyu Tolgoi LLC, which is 66%-owned by Turquoise Hill with the Mongolian Government holding the re- mainder. Turquoise Hill is majority owned by Rio Tinto. Turquoise Hill's chief executive officer Jeff Tygesen said, "Oyu Tol- goi's second quarter production was as planned reflecting reduced mining in Phase 2 of the open pit, which included higher grades of both copper and gold . In the second half of 2016, lower gold pro- duction is expected as mining occurs in areas with reduced grades . "The concentrator continues to perform well with throughput ex- ceeding nameplate capacity . " In the June quarter concentrator throughput was broadly consis- tent with the previous quarter, resulting in average daily throughput of approximately 105,000 tonnes . Copper production in the quarter declined 10 . 3% over the March quarter to 517,000 tonnes reflecting lower grades from reduced mining in Phase 2 and lower recovery from Phase 6 ore . As expect- ed, gold production in the second quarter declined approximately 52% to 1440,000 ounces over the first quarter due to lower grades from reduced mining in Phase 2 . OT decline contract awarded to Thiess Mineralised core samples from Erdene Resource Development Corp's Altan Nar Gold-Polymetallic Project in southwest Mongolia. Erdene resumes drilling Erdene resumes drilling in southwest in southwest

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