Erdene Resource - Gold Developer On Track for First Production in 2025

• Erdene Resource Development is building its first gold mine in Mongolia with partner Mongolian Mining Corporation (MMC) and is nearing 15% completion, expecting to reach commercial production in early 2025.
• MMC contributed $40 million for a 50% stake in Erdene's gold assets subsidiary, with Erdene retaining a 5% NSR royalty.
• Erdene is focused on the Bayan Khundii mine initially but sees the potential for a multi-mine district over time with its additional discoveries.
• Erdene expects to put in place $75-80 million in senior debt financing from various sources in the next 60 days.
• The share price has remained relatively stable compared to peers; Erdene sees further re-rating potential as they de-risk towards first gold.

About Erdene Resource Development Corp.

Erdene Resource Development, a Canada-based mineral exploration and development company focused on Mongolia, is steadily advancing the construction of its Bayan Khundii (BK) gold project in southwestern Mongolia. Together with its strategic partner, Mongolian private company Mongolian Mining Corporation (MMC), Erdene has completed approximately 12-13% of construction at the BK site as of November 2023. The company remains on track to deliver its first gold production in early 2025.

Interview with President & CEO, Peter Akerley

Strategic Partner Providing Funding, Expertise

In bringing project developer MMC on board as a strategic partner in early 2023, Erdene gained an essential funding and development boost. As Peter Akerley, President and CEO of Erdene, explained:

"They contributed USD$40 million to the project. They bring excellent expertise in construction and operations, and they bring great national relationships and several affiliated companies that are involved in the mining industry construction expertise."

Leveraging MMC's extensive mining industry connections and project development capability has enabled Erdene to accelerate Bayan Khundii's build phase. MMC affiliate MCSP is serving as the engineering, procurement, and construction (EPC) contractor for the project. Further support comes from additional MMC subsidiaries that will provide hybrid power solutions and staff training.

Solid Economics Underpin Modest Initial Mine

The Bayan Khundii mine that Erdene and MMC are constructing is modest in scale - designed to produce an average of 61,000 oz/year gold during its initial phase. However, with all-in-sustaining costs estimated at just $870/oz and head grades averaging 4 g/t Au, the project offers robust economics at current gold prices.

Erdene anticipates generating approximately $60 million in after-tax free cash flow annually from Bayan Khundii at a $1,800/oz gold price assumption. This positions the company to self-fund further exploration and development of the broader Khundii Gold District, where multiple additional discoveries have already been made.

Exploration Upside Across District

While focused intently on bringing Bayan Khundii into production on schedule, Erdene continues to see significant resource expansion potential across its Khundii District licenses. Adjacent discoveries at Dark Horse and Dark Horse Extension exhibit high grades at the surface that appear amenable to open-pit mining. Meanwhile, the Altan Nar project, located just 16 km north of Bayan Khundii, hosts more than 500,000 oz of gold resources and remains open.

"We're talking about a maximum of 2.5 kilometers from the existing plant. So this is just one big feeder system and we'll continue to explore that area - a long-term discovery trend."

Once Bayan Khundii reaches commercial production and begins throwing off a substantial free cash flow of $60 million per year, Erdene expects to ramp up exploration efforts across the district dramatically. This encompasses expanded drilling around Bayan Khundii and Altan Nar, as well as new regional targets. The company will also assess options for developing satellite deposits like Altan Nar.

The Investment Thesis for Erdene Resource Development

• Bayan Khundii’s low AISC of $870/oz provides a profitability buffer even if gold prices decline.
• Strategic partnership with MMC de-risks construction and funding.
• Near-term cash flow will allow self-funded exploration and expansion.
• Additional discoveries close to Bayan Khundii can extend mine life.
• Altan Nar presents a second potential development project in the district.
• New regional targets may provide further long-term growth.

With Bayan Khundii's construction proceeding steadily towards a 2025 production start, Erdene Resource Development offers investors near-term cash-flowing gold production combined with extensive exploration upside across a nascent Mongolian gold district. Strategic backing from prominent local partner MMC additionally de-risks funding and development plans. As milestones towards production are achieved, Erdene’s shares appear positioned for market re-rating.