Erdene Resource Quarterly Report - September 30 2025

• Bayan Khundii achieved first gold production on 14 September 2025, with commercial production expected by end of Q4 2025
• Processing plant commissioned with nameplate capacity of 650,000 tonnes per annum, targeting 85,000 ounces annual gold production
• Cash and cash equivalents of C$5.4 million with working capital of C$4.7 million as at 30 September 2025
• Zuun Mod measured and indicated molybdenum resources increased 22% to 333 million pounds, copper resources up 16% to 384 million pounds
• Option agreement executed for Tereg Uul copper-gold prospect, located 10 kilometres from Oyu Tolgoi deposit

Erdene Resource Development Corporation (TSX: ERD) is a Canadian mineral exploration and development company operating in Mongolia. The company holds a 50% equity interest in Erdene Mongol LLC, which owns the Bayan Khundii Gold Mine and exploration properties within the Khundii Minerals District. Erdene retains a 5% net smelter return royalty on production after the first 400,000 ounces of gold are recovered.

Bayan Khundii Gold Mine Production and Commissioning

The Bayan Khundii Gold Mine achieved first gold production on 14 September 2025. The processing plant completed commissioning during September and operated at an average throughput rate of 53 tonnes per hour, equivalent to 65% of its designed capacity of 650,000 tonnes annually. Management expects the operation to achieve nameplate capacity by end of 2025.

Mining operations moved 2.1 million tonnes of material during the quarter, consisting of 1.8 million tonnes of overburden and 133,000 tonnes of ore. As at 30 September 2025, 111,000 tonnes of ore sat on the run-of-mine pad at an estimated average grade of 2.30 grams per tonne gold. Erdene Mongol sold 342 ounces of gold and 96 ounces of silver at weighted average prices of US$3,805 per ounce and US$44 per ounce respectively.

Project expenditures through 30 September totalled approximately US$159 million. Direct construction costs reached US$114 million, within approximately 10% of the project budget. The project logged 4.4 million person-hours with a total recordable injury frequency rate of 0.2 per 200,000 person hours for 2025.

Khundii Minerals District Exploration Activities

In October 2025, Erdene released an updated mineral resource estimate for its Zuun Mod molybdenum-copper project. The measured and indicated resource increased to 271 million tonnes at 0.056% molybdenum and 0.064% copper, containing 333.5 million pounds of molybdenum and 384.2 million pounds of copper. The inferred resource expanded to 269 million tonnes at 0.051% molybdenum and 0.059% copper, containing 300 million pounds of molybdenum and 350.7 million pounds of copper.

The company scheduled 9,300 metres of drilling across the Khundii licence for Q4 2025. The programme includes 3,800 metres of resource confirmation and expansion drilling near the Bayan Khundii Mine, 4,100 metres at Dark Horse Mane, and 1,400 metres at Altan Arrow to test near-surface oxide mineralisation.

In July 2025, Erdene entered an option agreement to acquire up to 80% of the Tereg Uul exploration licence, located approximately 10 kilometres southwest from Oyu Tolgoi. Under the agreement, Erdene committed to invest US$300,000 in exploration expenditures within twelve months and made an initial payment of US$200,000. Surface mapping, geophysical surveys and geochemical sampling commenced in Q3 2025.

Financial Performance

For the three months ended 30 September 2025, Erdene recorded a net loss of C$2.7 million compared to C$1.7 million in Q3 2024. Exploration and evaluation expenses totalled C$579,333, up from C$215,903 in the prior year quarter. Corporate and administrative expenses reached C$864,892 compared to C$582,089 in Q3 2024.

The company's loss from its investment in associate totalled C$1.3 million for the quarter compared to C$918,649 in the prior year period, reflecting higher interest expenditures by Erdene Mongol to finance construction at Bayan Khundii. The carrying value of Erdene's investment in its associate stood at C$46.5 million as at 30 September 2025.

As at 30 September 2025, Erdene held cash and cash equivalents of C$5.4 million with working capital of C$4.7 million. For the nine months ended 30 September 2025, the company recorded a net loss of C$11.4 million compared to C$6.2 million in the prior year period.

Outlook

Erdene's near-term priorities include achieving commercial production at Bayan Khundii by the end of 2025. The company will advance its exploration programme with 9,300 metres of drilling planned for Q4 2025 at Bayan Khundii, Dark Horse Mane and Altan Arrow. Technical studies and drilling at Zuun Mod will continue through mid-2026. At Tereg Uul, geophysical surveys and geochemical sampling will be completed in Q4 2025 with drilling expected to commence in 2026.

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