New Drill Results Confirm Further Expansion of Racetrack Deposits
HALIFAX, NOVA SCOTIA, Sep 11, 2008 (MARKET WIRE via COMTEX) — Erdene Resource Development Corp. (“Erdene”) (CA:ERD: news, chart, profile) , a diversified resource company, today provided a progress update on the Company’s wholly owned Zuun Mod molybdenum project in Mongolia. Extensive metallurgical, engineering and design work, as well as additional drilling, have been underway since the release of a resource estimate in May 2008.
“Our progress has proven Zuun Mod to be a large metals deposit, one which continues to expand with each round of drilling, which provides us greater flexibility in the mine design and optimization,” said Peter Akerley, President and CEO.
“Results of the expanded drilling will be incorporated in the preliminary assessment currently underway, which upon completion will form the basis for a decision to advance to feasibility level studies. We also believe the new drilling results released today, along with additional results pending, will have a significant impact on the current Zuun Mod resource estimate.”
The Zuun Mod molybdenum project is located 200 kilometres from China’s border. Based on 2007 drilling results, the initial resource estimate was issued by Minarco-MineConsult in May 2008. The resource averages 0.05% Mo which includes 272 million pounds of Mo in the Measured and Indicated category and a further 51 million pounds of Mo in the Inferred category.
2008 Drilling Campaign
The three objectives of Erdene’s 2008 drilling campaign at Zuun Mod are:
1. determine whether the high-grade molybdenum zones have continuity at depth;
2. explore targets peripheral to the current deposit; and
3. better define high grade zones, particularly those nearest surface, to facilitate the most economic pit design.
Drilling is now complete for the first two objectives. Results for extension of high-grade zones at depth are summarized in Table 1. Results indicate that the mineralized zone extend 100 to 200 metres below previous drilled depths (up to 550 metres) suggesting a deposit with a thickness of at least 400 metres. Although analytical results for the drilling in the areas adjacent to the deposit areas (objective 2) are pending, intense alteration and stockwork veining similar to that of the deposit with associated molybdenum and copper sulfide mineralization was observed. This program included five step-out holes over a 500 metre strike length west/southwest of drill hole ZMD-24 which intersected 373 metres of 0.064% Mo. Testing of near surface high-grade zones (objective 3) is currently underway with drilling expected to be complete by mid-October.
The results displayed in Table 1 are from the seven holes spaced at 250 metres or greater over a 1.7 -kilometre strike length of the Racetrack Deposit and represent portions of the deposit where pit planning design could be impacted by continuity of higher grade molybdenum mineralization at depth. Italicized numbers indicate new or extended zones.
Zuun Mod Project Appointments
Erdene is pleased to announce the appointments of Mr. Jerry Jergensen and Mr. John Lyons to the Zuun Mod project team. Mr. Jergensen has been appointed to assist in the completion of the preliminary assessment study and future feasibility studies, while Mr. Lyons has joined the Zuun Mod project as the Community Relations Officer.
Mr. Jergensen has extensive project development experience in the copper and molybdenum industries including the primary molybdenum operations at Climax and Henderson and the secondary molybdenum operations at the Freeport Sierrita operation in Arizona as well as the Kennecott Utah Copperton concentrator. He is also familiar with the mines and traditions of Mongolia having participated in the development, commissioning, and operation of the Erdmin hydrometallurgical copper plant at Erdenet. He was most recently based in the country as Senior Vice President, Technical Business Operations, for Mongolian Energy Corporation’s coal project in western Mongolia.
Mr. Lyons joins Erdene from ADRA, where he worked as Economic Development Coordinator in Mongolia and China where he helped design local development programs, managed outreach and micro-finance services and carried out participatory planning and evaluation with relevant stakeholders. He holds a B.A. summa cum laude from Wheaton College MA, U.S.A, is fluent in Mongolian and Russian and has worked extensively in Central Asia. Mr. Lyons will work closely with the Zuun Mod Community Liaison Committee. This committee was established to ensure that local communities are kept informed of the company’s activities and to facilitate two-way communication between the community and the Company on its community development program which to date has focused on health and education.
Preliminary Assessment Study
Minarco-MineConsult was commissioned by Erdene to complete a Preliminary Assessment Study (“PAS”) following the release of the initial resource estimate in May of 2008. This work is being completed to the point where many aspects of the study are near pre-feasibility confidence level which will provide for a fairly rapid transition into the more advanced work. Many elements of the study are complete including initial metallurgical studies which confirmed that Zuun Mod compares favorably with other primary molybdenum deposits under development globally. Currently the PAS work is targeting further definition of the higher grade zones in the Racetrack deposits and considering various development scenarios prior to developing a mine plan. These higher grade zones are the subject of current drilling. It is anticipated that the significant new drilling results announced today, along with additional results still pending, will result in the issuance of a revised resource estimate for the Zuun Mod deposit. The revised resource estimate will be incorporated in the forthcoming PAS.
Qualified Person and Sampling Protocol
All samples were prepared at the SGS Laboratory in Ulaanbaatar, Mongolia and analyzed at ALS Chemex Laboratory in China. In addition to internal checks by ALS Chemex, Erdene implements a QA/QC sample protocol utilizing prepared standards, sample splits and duplicates. Erdene’s QA/QC protocol is described in detail in the report prepared for Erdene by Minarco-MineConsult entitled “Zuun Mod, Porphyry Molybdenum-Copper Project, South-Western Mongolia, Mineral Resource Estimates” dated May 28, 2008, which is filed on SEDAR. J. C. (Chris) Cowan, P.Eng., VP — Asia of Erdene, is the qualified person who is supervising Erdene’s Zuun Mod Project. Mr. Cowan has reviewed and approved this news release and has verified the technical data disclosed herein, including the sampling, analytical, and test data underlying the information. About
Erdene Resource Development Corp.
Erdene (formerly Erdene Gold Inc.) is a diversified resource development company with multiple projects at various stages of development from exploration to production all focused on high-growth commodities. Erdene has a strong portfolio of exploration properties in Mongolia where it has a strategic alliance with Xstrata Coal to develop its coal properties and a strong focus on base metals (copper and molybdenum), precious metals (gold) and energy (coal). In addition, Erdene has near-term cash flow opportunities in its North American assets, which include a 25% interest in the Donkin Coal Alliance with Xstrata Coal, agreements with KaMin LLC (formerly J.M. Huber Corporation) and Ready Mix USA as operators and developers in the southeast U.S. for its kaolin clay and construction aggregate projects, respectively. Erdene has a cash position of approximately $21.1 million with 89.2 million common shares issued and outstanding and a fully diluted share position of 98.6 million common shares.