Erdene Gold Inc.

Erdene Gold Inc.

March 25, 2008 13:32 ET

Erdene Announces Appointment of Xstrata Coal's Frankcombe to Board

Provides Donkin Coal Project Pre-feasibility Update

HALIFAX, NOVA SCOTIA--(Marketwire - March 25, 2008) - Erdene Gold Inc. (TSX:ERD) ("Erdene" or "Corporation") is pleased to announce the appointment of Jamie Frankcombe to its Board of Directors. Mr. Frankcombe brings 28 years of experience in the mining industry, most recently as the General Manager of the Americas for Xstrata Coal. The Corporation is also pleased to report that the in-seam drilling program for the Donkin Coal Project pre-feasibility study is nearing completion.

"Mr. Frankcombe's extensive experience in the coal industry will be a tremendous asset to the Corporation's Board of Directors," stated Peter Akerley, President and CEO. "We are fortunate to have gained his commitment to our success and look forward to working with Jamie and utilizing his strength and experience, in particular in advancing our Donkin Coal Project in Cape Breton, Nova Scotia."

Jamie M. Frankcombe

Mr. Frankcombe is the General Manager of the Americas for Xstrata Coal and is responsible for the Donkin Coal Project in Nova Scotia, Canada and general business development opportunities in the Americas. In addition, Mr. Frankcombe is the Xstrata shareholder representative for the Carbones del Cerrejón Limited ("Cerrejón") coal mining operation in Colombia and a board member of the FutureGen Industrial Alliance, Inc. project. The FutureGen Industrial Alliance public-private partnership intends to design, build, and operate the world's first coal-fueled, near-zero emissions power plant utilizing clean coal technology. During Mr. Frankcombe's 28 years in the mining industry he has held various operational and management positions in open cut and underground coal mining operations. Mr. Frankcombe has been the General Manager of the Americas for Xstrata Coal since August 2007 and, prior to this, he was the Vice President of Production for Cerrejón. Mr. Frankcombe is a qualified Mining Engineer and holds an MBA from Deakin University of Melbourne, Australia.

Erdene also announced today the resignation of Mr. Jeff Gerard as a Director of the Corporation effective March 17, 2008. Mr. Gerard has been transferred by Xstrata Coal from the position of Chief Operating Officer ("COO") of the Americas to COO South Africa. "On behalf of the Corporation and the Board I would like to thank Jeff Gerard for his significant interest in the growth of our company and his valuable contribution to the Erdene Board," stated Peter Akerley, President and CEO.

Donkin Coal Project Update

Erdene holds a 25 per cent interest in the Donkin Coal Alliance with Xstrata Coal Donkin Ltd., a subsidiary of Xstrata PLC, owning 75 per cent. The targeted Harbour seam of the Donkin Coal Resource Block comprises an indicated resource of 101 million tonnes and an inferred resource of 115 million tonnes and is classified as high volatile-A bituminous, high-sulphur, medium ash coal. The Harbour seam was accessed in late 2007 following the dewatering and refurbishment of the twin 3.5 kilometre long tunnels. A positive independent preliminary assessment into the business case for a coal mine at Donkin was completed in November, 2007 by Norwest Corporation of Calgary, Alberta.

A series of studies continue as part of the pre-feasibility evaluation for the Donkin Coal Project located in eastern Canada. In-seam drilling is currently underway at Donkin which will result in a determination of the methane liberation rate, an important factor in ventilation systems design work. The coal seam samples are being analyzed to determine the best mining horizon and coal treatment to meet market requirements. In addition, market evaluations for both thermal and metallurgical coal grades, and surface and underground infrastructure design studies are continuing. The studies are expected to be delivered to the Alliance during the second quarter followed by compilation and interpretation to enable the anticipated release of the formal pre-feasibility study by the end of the second quarter.

Incentive Stock Options Granted

On March 17, 2008, the Corporation granted an aggregate of 850,000 incentive stock options to its ten directors and officers. Each option entitles the holder to acquire one common share of Erdene at $0.94 per share during the period ended March 17, 2013. The Corporation also authorized the grant of up to 350,000 options to its employees and consultants.

About Erdene Gold Inc.

Erdene is a diversified resource development company with multiple projects at various stages of development from exploration to production all focused on high-growth commodities. The Corporation 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). Minarco-MineConsult, of Sydney, Australia, is currently carrying out a National Instrument 43-101 compliant independent resource estimate for the Zuun Mod molybdenum project. In addition, Erdene has near-term cash flow opportunities in its North American assets, which include agreements with 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 $8.6 million with 70,530,877 common shares issued and outstanding and a fully diluted share position of 80,577,352 common shares.

About Xstrata Coal

Xstrata Coal is the world's largest exporter of thermal coal and one of the largest producers of hard coking coal. Headquartered in Sydney, Australia, Xstrata Coal has interests in more than 30 operating coal mines throughout Australia, South Africa and the Americas. Xstrata Coal is a wholly owned subsidiary of Xstrata Coal Pty Limited, one of the Xstrata plc group of companies. Xstrata plc is a global diversified mining group, listed on the London and Swiss Stock Exchanges, with its headquarters in Zug, Switzerland. Xstrata's businesses maintain a meaningful position in seven major international commodity markets: copper, coking coal, thermal coal, ferrochrome, nickel, vanadium and zinc, with additional exposures to platinum group metals, gold, cobalt, lead and silver, recycling facilities and a suite of global technology products, many of which are industry leaders. The Group's operations and projects span 19 countries: Argentina, Australia, Brazil, Canada, Chile, Colombia, the Dominican Republic, Germany, New Caledonia, Norway, Papua New Guinea, Peru, the Philippines, Republic of Ireland, South Africa, Spain, Tanzania, the USA and the UK. Xstrata employs approximately 56,000 people, including contractors.

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.

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