Erdene Resource Development Corporation
TSX : ERD

Erdene Resource Development Corporation

August 19, 2009 08:50 ET

Erdene Receives Updated NI 43-101 Compliant Resource Estimate for the Zuun Mod Molybdenum Project

Measured and Indicated Resources of 134 million pounds of Mo at 0.062% Mo and an Inferred Resource of 97 million pounds of Mo at 0.060% Mo

HALIFAX, NOVA SCOTIA--(Marketwire - Aug. 19, 2009) - Erdene Resource Development (TSX:ERD) today announced it has updated its National Instrument 43-101 ("NI 43-101") compliant resource estimate for the Company's Zuun Mod Molybdenum Project in Mongolia. The new resource estimate was prepared by Minarco-MineConsult, part of Runge Limited.

"Our goal for Zuun Mod was to expand on resources in the range of 0.06% Mo and to better define higher grade domains within the deposit for the initial mining phases." said Peter Akerley, President and CEO. "We have achieved this with a significant increase in total resource for that grade range and also defining a higher grade domain within the South and North Racetrack deposits continuing to indicate the deposit is one of the largest and most advanced pre-development molybdenum projects in the North Asia region".

The Zuun Mod molybdenum deposit has a Measured and Indicated ("M&I") Resource of 98 million metric tonnes ("Mt") at an average grade of 0.062% molybdenum ("Mo"), at a cut-off grade ("cog") of 0.05% Mo equating to 133.8 million pounds ("Mlbs") of contained Mo metal. In addition, there is a 73 Mt Inferred Resource at an average grade of 0.060% Mo equating to a further 97.1 Mlbs of contained Mo metal. The resource identified two higher grade zones within the South and North Racetrack deposits, which contain 95% of the M&I Resource at the higher 0.06% Mo cut-off which totals 44 Mt and averages 0.071% Mo.

Located in south-western Mongolia, Erdene's wholly owned Zuun Mod property is within 180 kilometres of China's border. The project is 215 kilometres from the railhead transporting metallurgical and thermal coal into China from the Ovoot Tolgoi and Nariin Sukhait coal mines.

While exploration to date has identified significant Mo, copper ("Cu") and rhenium ("Re") mineralization at Zuun Mod, the work has been primarily focused within the South Corridor, a NE-SW trending structurally controlled zone approximately 3.6 kilometres long by 800 metres wide. The remainder of the Zuun Mod porphyry complex has undergone only limited exploration consisting of surface survey and widely spaced drill holes. These programs have identified significant anomalous mineralization and the entire Zuun Mod property is considered to be highly prospective for the discovery of additional potentially economic Cu and Mo mineralization.

Resource Estimate

Minarco-MineConsult, part of Runge Limited, has prepared the Zuun Mod mineral resource estimate and will file a Technical Report, as an independent technical review of the geological model, methodologies and the resource estimate for the Zuun Mod project consistent with Canada's National Instrument 43-101, Standards of Disclosure for Mineral Projects. The table below provides a summary of the Mo, Cu and Re mineralization for the Zuun Mod deposit by mineral resource category using a range of cut-off grades.

Cut-off GradeResourceResourcesMo %ContainedCu %ContainedRe ppmContained
Mo%CategoryMtMo MetalCu MetalRe Metal
   MlbsMlbslbs (000's)
0.04%Measured370.056460.063510.2218
Indicated1430.0541690.0652040.2372
M&I1800.0542150.0642550.2390
Inferred1850.0512080.0662700.25101
0.05%Measured250.061340.066360.2413
Indicated730.0621000.0681090.2844
M&I980.0621340.0671450.2757
Inferred730.06970.0651050.3251
0.06%Measured110.068170.067170.266
Indicated330.072520.07510.3425
M&I440.071690.069680.3231
Inferred290.069440.067430.3623

Resources Estimate Notes:

  • Effective Date: July 2009.
  • 1 tonne = 2204.64lbs
  • Mineral Resource estimates are not precise calculations.
  • Estimates are rounded to appropriate significant figures.
  • M&I means the sum of Measured and Indicated Resources
  • Grade modeling using ordinary kriging methodology within resource wireframes based on geology and veining intensity as well as variable cut off grades. A detailed NI 43-101 compliant Technical Report for the July 2009 estimate has been provided on SEDAR.

Resource Estimate Discussion

The objectives for the program were to add tonnage at the 0.06% Mo range and firm up a higher grade zone.

Compared with the inaugural Zuun Mod resource estimate of May 2008, the July 2009 resource estimate has seen a slight decrease (11%) in M&I Resource at a 0.05% Mo cut-off from 110 Mt to 98 Mt but a major (460%) increase in Inferred Resource from 13 Mt to 73 Mt. Both have seen a slight increase in grade to an average of 0.062% Mo overall, which met our drilling program objectives.

In addition, a higher grade zone has been identified within the South and North Racetracks deposits grading 0.07% Mo with 44 Mt M&I Resource and 29 Mt of Inferred Resource. The lower overall M&I Resource tonnage is due in part to the use of geological wireframes in the estimate. The previous Multi Indicator Kriging estimate was run predominantly unconstrained. The Measured Resource tonnage has decreased with a proportional increase in Indicated Resource. This is predominantly due to the slightly greater variability noticed in the recent 50 metre by 100 metre drill spacing and the inability of the current variography to clearly identify mineralization trends observed on site such as vein and mineralization orientation. The major increase in inferred resources is a result of additional resources being defined peripheral to the previous deposit limits, at depth and as a result of in-fill drilling.

Zuun Mod remains a relatively new discovery with significant room for expansion and further definition of higher grade zones reflected in these results based on a relatively small drill program.

Future Plans

The company is currently completing field reconnaissance programs in the vicinity of the Zuun Mod deposit to determine prospectivity of several targets in the area. This information will provide necessary information to plan future drilling as well as provide definition of the eventual mining licence property boundaries.

AMC LLC an independent, Mongolian mining consulting company is lead consultant on the Company's preparation of necessary information for its mining licence application. This includes deposit composition and technical features, hyrdo-geology, mineral resources, mining conditions, environmental reporting and production of a scoping level report for submission to the Mongolian regulators for review of the application.

Minarco-Mineconsult with the completion of the new Zuun Mod resource estimate is now initiating a pit optimization and scheduling study to combine with the previously completed work under the Preliminary Assessment Study initiated in 2008. Following completion of this work in the 3rd quarter of this year it is anticipated that the information will be applied to determine fleet operating hours and numbers to create a financial model on which to base decisions on advancing the project to the prefeasibility level.

Qualified Person

The Mineral Resource estimates was prepared under the supervision and based on information compiled by Philippe Baudry, who is an employee of Minarco-Mineconsult. Philippe Baudry is also a Qualified Person within the meaning of such term under NI 43-101 and a Member of the Australian Institute of Geoscientists (Membership No 3721). Philippe Baudry consents to the inclusion in this release of the matters based on his information in the form and context in which it appears. The grade model was prepared using Datamine and Surpac software, with a regular block model. Molybdenum (Mo) and copper (Cu) grades were estimated using ordinary kriging. Rhenium (Re) grades were estimated using a combination of ordinary kriging and regression based on the Mo grades. Geological data verification and QA/QC of the drill-hole results has been completed and is included in the NI 43-101 compliant Technical Report prepared by Minarco-MineConsult.

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 has a current working capital position of approximately $16.3 million, including that of its controlled subsidiary APM, with 89,230,877 common shares issued and outstanding and a fully diluted position of 94,208,377 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
    902-423-6419

    or

    Erdene Resource Development Corp.
    Ken W. MacDonald
    Vice President Business Strategy and CFO
    902-423-6419
    info@erdene.com
    www.erdene.com