Erdene Gold Inc.

Erdene Gold Inc.

October 03, 2007 09:16 ET

Xstrata Coal Canada Limited Increases Erdene Ownership

HALIFAX, NOVA SCOTIA--(Marketwire - Oct. 3, 2007) - Erdene Gold Inc. (TSX:ERD) today announced that Xstrata Coal Canada Limited ("Xstrata Coal") has subscribed for one million common shares of Erdene Gold Inc (Erdene). The Closing is subject to the fulfillment of typical conditions precedent, including receipt of regulatory approval, and will occur on the day ("Closing Date") which is 16 full trading days on the Toronto Stock Exchange following the earlier of: (a) the filing by the Corporation on SEDAR of the Norwest Report ("Report") or extracts or relevant information from the Report; and (b) the issuance of a news release(s) by the Corporation announcing the findings of the Report, or at such other time as the Corporation and the Subscriber may mutually agree. The Report, prepared by Norwest Corporation, is a "preliminary assessment" as defined by National Instrument 43-101 and forms part of the ongoing pre-feasibility study at Donkin. The Report is expected to be available for release prior to the end of October 2007.

The subscription price per share will be the volume weighted average trading price per common share on the TSX for the five full trading days immediately preceding the Closing Date. Following the completion of the private placement it is anticipated that Xstrata Coal will own approximately 6% of the Corporation's outstanding common shares.

About Erdene Gold Inc.

Erdene is a diversified mineral company with exploration properties focused on high-growth commodities and near-production assets. The Company has a strong portfolio of exploration properties in Mongolia focused on base metals (copper and molybdenum), precious metals (gold and palladium) and energy (coal and uranium). Erdene has strategic alliances with Xstrata Coal to develop its coal properties in Mongolia. In addition, Erdene has near-term cash flow opportunities in its North American assets, which includes its 25% interest in the Donkin Coal Alliance in Nova Scotia with Xstrata Coal Donkin Limited and agreements with J.M. Huber Corporation and Rinker Materials as operators and developers in the southeast U.S. for its kaolin clay and aggregate projects, respectively. Erdene has a current cash and equivalent position of approximately $8.8 million with 65,806,439 common shares issued and outstanding and a fully diluted share position of 75,330,852.

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 Gold Inc.
    Peter C. Akerley
    President and CEO
    Erdene Gold Inc.
    Ken W. MacDonald
    Vice-President North America and CFO