Erdene Gold Inc.

Erdene Gold Inc.

August 09, 2007 14:28 ET

Erdene Intersects 112 metres of 0.08% Molybdenum and Commences Phase II Drilling Program at Zuun Mod

Gregory J. Leonard, BSc, Appointed Exploration Manager

HALIFAX, NOVA SCOTIA--(Marketwire - Aug. 9, 2007) - Erdene Gold Inc. (TSX:ERD) announced today that the 28 hole, Phase I drill program has now been completed at the Company's wholly owned Zuun Mod molybdenum project located in southwestern Mongolia. Based on the encouraging results to date, Erdene is advancing to a 100 metre spaced Phase II drill program over a distance of 2.5 kilometres. The objective of the Phase II drill program is to identify a National Instrument 43-101 compliant molybdenum resource for the Zuun Mod project.

Zuun Mod Project Highlights

(Please visit to view a map of our drill plan and results to

- Recent results from two new holes have extended the Racetrack Zone east
(ZMD-22) and west (ZMD-24) of the central mineralized area.

- ZMD-22 contained a 96 metre intersection of 0.071% Mo within 188
metres grading 0.053% starting at 62 metres and continuing to the end
of the hole; and,

- ZMD-24 contained a 112 metre intersection of 0.081% Mo within 168
metres grading 0.06% starting at 93 metres and continuing to the end
of the hole.

- Molybdenum mineralization in the central Racetrack has identified
thicknesses up to 380 metres averaging 0.05% Mo (ZMD-13).

- The central Racetrack remains open at depth and to the west under
volcanic cover.-- The northern extension (ZMD-29) of the Racetrack
contains higher grade zones beginning at 46 metres depth (80 metres of
0.073% Mo) and remains open to the north.

- The Phase I program has identified molybdenum mineralization of greater
than 0.05% Mo beginning at 18 metres depth and continuing for 198 metres.

- The mineralizing event is believed to be partially controlled by a
lithologic/ structural contact (andesite sub-volcanic roof pendant) which
remains untested over an area greatly exceeding the area tested to date.

The analytical results for all 17 of the 200 metre spaced Phase I drill holes (ZMD-18 to ZMD-34) have been received. Preliminary results for five of these holes (ZMD-18, 20, 26, 28 and 29) were reported in a news release dated June 14, 2007. Results for the expanded Phase I drill program (holes ZMD-35 to ZMD-45) will be reported on receipt of analysis. As reported on June 14 and confirmed by the additional assay results reported below, the initial Phase I drill program has significantly expanded the area of molybdenum mineralization in the area of the Racetrack Zone at Zuun Mod.

The results from the Phase I program have outlined a central mineralized zone characterized by greater than 0.06% Mo over thicknesses ranging from 58 to 194 metres with many holes open at depth. This zone ranges up to 300 metres in width over a minimum strike length of 1.4 kilometres with results pending over a total distance of 2.5 kilometres. The mineralization remains open to the north, at depth and to the west where it is overlain by volcanic cover. The central mineralized zone has been intersected over a thickness of 380 metres (ZMD-13, 0.05% Mo) and comes within 18 metres of surface (ZMD-29). Included within the larger molybdenum zones are higher grade zones proximal to surface:

- ZMD-11 and ZMD-13 indicate continuity over a 25 metre thick zone grading 0.10% Mo within 80 metres of surface; and,

- ZMD-29 intersected 28 metres of 0.11% Mo beginning at 84 metres depth.

All samples from the initial 17 drill holes, including those from the previously reported five holes were sent to Chemex's laboratory in Vancouver, Canada so that the analysis of rhenium (Re) could be carried out in addition to molybdenum (Mo). (See "About Rhenium" below). Highlights from the Chemex analyses of the Phase I drill samples are included in Table 1 with all of the reported holes ending in mineralization.

Table 1 -- Highlights of Initial Phase I Drill Results
Hole # From To Width (m) Re (g/t) % Mo
ZMD-18 108 286 178 0.18 0.051
Including 118 276 158 0.19 0.053
Including 118 128 10 0.30 0.098
Including 202 260 58 0.26 0.073
ZMD-20 34 252 218 0.16 0.040
Including 34 78 44 0.21 0.051
Including 194 252 58 0.23 0.053
ZMD-22 62 250 188 0.23 0.053
Including 154 250 96 0.30 0.071
Including 208 220 12 0.35 0.102
Including 230 244 14 0.50 0.103
ZMD-23 164 250 86 0.20 0.040
Including 178 226 48 0.25 0.050
Including 190 204 14 0.42 0.092
ZMD-24 93 261 168 0.25 0.060
Including 139 251 112 0.33 0.081
Including 181 215 34 0.42 0.101
Including 193 215 22 0.51 0.121
Including 227 251 24 0.40 0.101
ZMD-25 104 250 146 0.21 0.043
Including 162 226 64 0.27 0.051
ZMD-26 198 250 52 0.16 0.041
ZMD-28 52 249 197 0.16 0.050
Including 52 202 150 0.17 0.055
Including 80 96 16 0.24 0.073
Including 156 198 42 0.23 0.082
Including 188 198 10 0.29 0.108
ZMD-29 18 249 231 0.22 0.045
Including 18 216 198 0.25 0.050
Including 46 126 80 0.34 0.073
Including 82 112 30 0.49 0.114

Phase II Program

The drill program has now advanced to Phase II to test the 2.5 kilometre strike length identified in the Phase I program at 100 metre spacing. Two drill rigs are currently operating on site.

Appointment of Exploration Manager

Gregory J. Leonard (BSc Geology) has been appointed Exploration Manager of Erdene's Mongolian operations. Gregory joined Erdene as a senior project geologist in 2005 in conjunction with the acquisition of Gallant Minerals. Mr. Leonard was Exploration Manager of Gallant Minerals' exploration programs in search of precious and base metal deposits hosted within porphyry, epithermal, intrusion related, orogenic, sediment hosted, and VMS type systems. In addition, Mr. Leonard has represented corporate and industry interests at state government level meetings and has been involved in marketing projects to potential business partners. Mr. Leonard has 18 years experience in the minerals exploration industry that includes work as a senior geologist in Indonesia for Newcrest Mining Ltd. on the Gosowong Gold deposit and with Viceroy Gold Corporation carrying out exploration at Castle Mountain.

Qualified Person

This press release has been prepared under the supervision of J. C. (Chris) Cowan, P.Eng., who serves as the qualified person under National Instrument 43-101. All samples have been assayed at Chemex Laboratory in Vancouver, Canada. In addition to internal checks by Chemex Laboratory, the company incorporates a QA/QC sample protocol utilizing prepared standards, sample splits and duplicates.

About Rhenium

Commercial rhenium is extracted from molybdenum roaster-flue gas obtained from molybdenum-copper-sulfide ores. Total world production is between 40 and 50 tons/year; the main producers are in Chile, USA and Kazakhstan. This element is used in platinum-rhenium catalysts which in turn are primarily used in making lead-free, high-octane gasoline and in high-temperature super alloys that are used to make jet engine parts.

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 $11 million with 65,706,439 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