HALIFAX, NOVA SCOTIA, Nov 17, 2008 (MARKET WIRE via COMTEX) — Erdene Resource Development Corp. (“Erdene”) (CA:ERD: news, chart, profile) , today provided an update on the Company’s principal projects in conjunction with the release of its third quarter financial results.
– Cash and cash equivalents as of September 30, 2008 totaled $20.6 million compared with $8.7 million at December 31, 2007
– Advanced Donkin coal project, managed by Xstrata Coal, with the continuous miner feasibility study slated for completion in the fourth quarter 2008
– Resource delineation drilling completed at the Zuun Mod molybdenum project; announced extension of mineralization
– Formation of a majority owned, producing industrial minerals company through the reverse takeover of TSX Venture listed Beta Minerals Inc. (“Beta”) anticipated in fourth quarter
– Completed drilling programs of multiple coal projects in Mongolia under fully-funded Xstrata Coal alliance
“The past several weeks have been one of the most turbulent times in the history of capital markets,” said Peter Akerley, President and CEO. “Until we gain some clarity in regards to this near term outlook our company will be balancing the current economic conditions with our long term outlook and strategy. Erdene has committed to immediate expenditure reductions by decreasing administrative overhead and reducing or postponing early stage or grassroots programs. Current economic conditions notwithstanding, the world is growing and industrializing at a faster pace than ever before and demand for commodities will grow accordingly. Erdene remains focused on creating value by prudently advancing its core commodity projects. Our strong cash position will enable the company to fully fund its projects through 2011 and guided by a strong management team remain opportunistic in this period of uncertainty.”
Zuun Mod Molybdenum Project
The Zuun Mod molybdenum project was established as one of the largest and most advanced pre-development molybdenum projects in the North Asia region during 2008. The initial resource, reported in May 2008, averaged 0.05% Mo and includes 272 million pounds of Mo in the Measured and Indicated category and a further 51 million pounds of Mo in the Inferred category.
A resource expansion and definition drill program was completed in the fourth quarter of 2008. Several holes drilled to test the central area of the deposit indicated a deposit thickness of at least 400 metres averaging 0.06% Mo with multiple higher grade zones including 70 metres of 0.11% Mo in the north eastern portion of the deposit. Mineralization has now been traced over a three kilometer strike length and comes within 22 metres of surface. Zuun Mod continues to provide tremendous potential for additional expansion and discovery. With the 2008 drilling campaign now complete, Erdene anticipates that the final analytical results will be received by mid December and a revised resource estimate is expected to be completed in the first quarter of 2009. With the revised resource estimate in hand, Minarco MineConsult (“Minarco”) will revise the Zuun Mod mine plans and develop financial models around various scenarios to determine the economics in a new pricing environment. During 2009 the project will be advanced at a pace reflecting the current environment with limited studies focused on moving the project to a mining licence stage. During this period Erdene will continue to assess the market to determine at which point the project should be accelerated towards feasibility and, at the same time, will be evaluating options to secure a strategic partner.
Zuun Mod is the most significant new metals discovery in Mongolia since Oyu Tolgoi and perhaps one of the largest new primary molybdenum discoveries globally in the past two decades. The size and continued growth of the deposit provides for greater flexibility in varying the grade mined reflecting the price of molybdenum at any given time. Although molybdenum prices have recently decreased significantly, the long-term fundamentals for growth have remained the same. In fact, the delay of a number of advanced molybdenum projects and the curtailing of production in some existing mines will accelerate the supply-demand imbalance as the industry exits the current downturn. Based on historic growth rates of approximately 4%, the world will require one new major molybdenum mine annually. Zuun Mod, located on the doorstep of the world’s largest steel producing and fastest growing molybdenum consuming region, is uniquely positioned to take advantage of this future growth.
Industrial Minerals Spin-out
Erdene controls through it’s wholly owned U.S. subsidiary, Erdene Materials Corporation (“EMC”), a unique kaolin resource in central Georgia, USA along with significant real estate holdings and an industrial mineral laboratory. Mining of EMC’s deposits is currently being carried out by KaMin LLC which processes the raw kaolin into a high performance coating clay for high brightness papers. On July 17, 2008, Erdene announced it entered into a binding letter agreement with Beta and Deepstep Kaolin LLC whereby Erdene will exchange all of its outstanding common shares of EMC, for common shares of Beta, giving Erdene controlling interest in Beta. The objective of this transaction is to create a focused public vehicle to develop specialty products from these unique primary kaolins ultimately resulting in a boutique industrial minerals business with several high quality product lines.
For additional information visit Erdene’s website at www.erdene.com or contact the company via email at email@example.com