Erdene Resource Development Corporation

Erdene Resource Development Corporation

February 10, 2010 08:00 ET

Erdene Announces New Partner for its Granite Hill Aggregate Project Development Underway

HALIFAX, NOVA SCOTIA--(Marketwire - Feb. 10, 2010) - Erdene Resource Development Corp. ("Erdene") (TSX:ERD) today announced the completion of agreements that will result in a new development partner for the Corporation's Granite Hill construction aggregate project and an acceleration of the development of the project.

Through the acquisition of Ready-Mix USA and Aggregates USA, the operation of the Granite Hill Project will now be under the control of SPO Partners, a private California based investment company. SPO is the controlling shareholder of Plum Creek Timber Co. and is the third largest shareholder of Martin Marietta Materials, Inc. As a result of the acquisition, Aggregates USA (Sparta), LLC ("AUSA") is now party to the lease agreement with Erdene in the place of Ready-Mix USA. AUSA has advised Erdene that SPO is planning to make the Granite Hill project one of its top priority new developments. The Granite Hill site preparation has recently expanded from an area of approximately 19 acres for the pit to approximately 43 acres, which also includes the plant, compound, and rail access areas. Site development is underway and Erdene has been advised that projections are for mine development to begin by mid 2010 with production commencing late in 2011.

Granite Hill Construction Aggregate Project

Erdene's Granite Hill project is a former producing granite aggregate quarry located in east-central Georgia. Erdene owns the 342-acre property which holds an estimated reserve of approximately 90 million tonnes situated on an existing rail line. Through a lease agreement with Erdene, AUSA holds an exclusive right to mine, process, and sell aggregate from the Granite Hill property. The sale of all aggregate from the property is subject to an industry-competitive royalty payable to Erdene.

AUSA's quarry development plan provides for an estimated start-up production rate of one million tons of granite aggregate per year, with an initial design capacity of up to three million tons. Based on current production projections, the Granite Hill quarry will have an estimated lifespan in excess of 30 years. AUSA has designed a quarry mining plan, processing plant and facilities, and has prepared an environmental impact plan. AUSA has also acquired additional land adjacent to the Granite Hill property to secure rail access to the site. The construction phase now underway is expected to be complete by mid to late 2011 when production is expected to commence. All required operating permits have been received. AUSA is in the process of clearing the site and access roads to the quarry are near completion. AUSA is responsible for fully funding the development and operating program.

Construction Aggregate Market-Other Activities

Erdene continues to evaluate several opportunities in the construction aggregate sector in eastern Canada and the southeastern U.S. Erdene is positioning itself with projects in the Caribbean and in Atlantic Canada where tidewater prospects continue to have competitive advantages due to lower freight rates for shipping, versus the ever increasing rail and truck hauls faced by inland U.S. producers. The long term growth projections are positive given the U.S. economic stimulus package that is anchored in "rock and steel".

About Erdene

Erdene Resource Development Corp. is a diversified resource company with multiple projects at various stages of development from exploration to production, all focused on high-growth commodities. Erdene currently has cash and marketable securities of approximately $13.3 million, with 89,230,877 common shares issued and outstanding and a fully diluted position of 93,354,877 common shares.

Forward-Looking Statements

Certain information regarding Erdene contained herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although Erdene believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Erdene cautions that actual performance will be affected by a number of factors, most of which are beyond its control, and that future events and results may vary substantially from what Erdene currently foresees. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration results, continued availability of capital and financing and general economic, market or business conditions. The forward-looking statements are expressly qualified in their entirety by this cautionary statement. The information contained herein is stated as of the current date and subject to change after that date.

Contact Information

  • Erdene Resource Development Corp.
    Peter C. Akerley - President and CEO
    Ken W. MacDonald - Vice President Business Strategy and CFO