Erdene Gold Inc.

Erdene Gold Inc.

September 04, 2007 09:48 ET

Erdene Strengthens Industrial Minerals Division

Appoints Mark Davies as Vice President of Erdene Materials

HALIFAX, NOVA SCOTIA--(Marketwire - Sept. 4, 2007) - Erdene Gold Inc. ("Erdene") (TSX:ERD) today announced plans to significantly expand their efforts in the construction aggregates sector. This new focus will be overseen by Mr. Mark Davies, PGeo, who joins Erdene after being responsible for aggregate development at Rinker Materials. One of the largest aggregate and concrete producers in the south-eastern U.S., Rinker Materials was recently acquired by Cemex S.A.B. de C.V. ("Cemex"). Mr. Davies will serve as Vice President of Erdene Materials Corporation ("Erdene Materials"), formerly Sparta Kaolin Corporation, a wholly owned subsidiary of Erdene. Erdene Materials' efforts will include expanding its southeast U.S. activity where current interests include the Granite Hill (Maddox) aggregate project and advancing efforts in eastern Canada which have been underway since late 2005.

"Erdene's strategy is two-fold. We remain committed to providing our shareholders benefits of China's growth by discovering high impact mineral deposits in Mongolia through our exploration efforts such as the Zuun Mod molybdenum project. Secondly, we believe that the U.S. eastern seaboard provides exceptional opportunities for the import of bulk mineral commodities with our focus on construction aggregate and coal. We believe this strategy provides a stable balance for our investors with tremendous upside in both areas of focus," said Peter Akerley, President and CEO. "Mark Davies brings a wealth of experience having served as the Aggregate Development Manager for one of the largest construction aggregate companies in the U.S. Mr. Davies' knowledge of the industry will enable Erdene to build and strengthen our materials division."

Davies Appointment - Vice President Erdene Materials

Mr. Davies brings over 20 years of experience in the construction aggregate business, most recently focused in the growing south-eastern U.S. market. Mr. Davies experience includes having permitted aggregate reserves in seven different U.S. states. His expertise is in the areas of exploration (both domestic and international), permitting, design, operations, contract negotiations and environmental compliance. Mr. Davies is a certified professional geologist, graduating from the University of South Carolina with a B.Sc. Geology and an MBA, from Florida Atlantic University. Mr. Davies will be based in West Palm Beach, Florida, where Erdene will maintain a satellite office.

South-Eastern U.S. Construction Aggregate Opportunities

Erdene has significant land holdings in Georgia and a substantial geologic database for Georgia and South Carolina. Erdene is evaluating multiple construction aggregate opportunities as well as developing, through an agreement with Rinker Materials, the company's 100%-owned Granite Hill (Maddox) project. The Granite Hill project is being permitted by Rinker Materials who are fully funding the development through a lease agreement that entitles Erdene to a royalty on gross sales. The project is being developed as a Class "A" granite aggregate quarry, primarily to serve the south-eastern U.S. markets by rail. Mine permitting is ongoing and has entered the final approval stages. Issuance of final mining permits is expected within the fourth quarter, 2007.

Eastern Canadian Construction Aggregate Opportunities

Erdene has been evaluating construction aggregate opportunities in Atlantic Canada since 2005. Erdene has identified multiple sites with aggregate potential to sustain a bulk tonnage operation on deep water for export via Panamax vessels to the growing U.S. eastern seaboard market. In the past decade major tidewater quarries have been constructed in the United Kingdom and the Yucatan peninsula which now each generate in excess of 5 million tonnes per year for European and U.S. construction markets, respectively. A multi-million tonne tidewater aggregate quarry can result in hundreds of direct and indirect jobs, increased tax base for local governments and provide extensive spin-off opportunities.

U.S. Construction Aggregate Market

The demand for construction aggregate in the U.S. is approaching 3 billion tons per year with substantial price increases in recent years due to increased demand and declining opportunity for new operations due to resource depletion and urban sprawl. Population growth in the U.S. is projected to be 100 million by 2050 with the majority of this growth taking place along the southern coastal areas. Florida provides a good example of the demands on the construction aggregate sector with consumption of 143 million tons each year, it is the third largest on a per state basis. Based on present consumption and population growth, a supply deficiency of in-state aggregate is anticipated to reach 40 million tons within the next 20 years (Lampl Herbert Consultants, 2007). Florida presently imports aggregate from international sources including Nova Scotia, but demand will require imports to play a much larger role in the near future.

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 current cash and equivalent position of approximately $10.3 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
    Ken W. MacDonald
    Vice-President North America and CFO