Erdene Gold Inc.
TSX : ERD

Erdene Gold Inc.

June 14, 2007 09:34 ET

Erdene's Step-out Drilling Triples Size of Molybdenum Discovery at Zuun Mod

Reports most significant molybdenum mineralization results to date; 198m of 0.05% Mo from 18m depth including 80m of 0.07% Mo from 46m

HALIFAX, NOVA SCOTIA--(Marketwire - June 14, 2007) - Erdene Gold Inc. (TSX:ERD) announced today that it has completed the planned Phase I drilling program at its wholly owned Zuun Mod molybdenum project in Mongolia. Results received from drill holes ZMD-28 and ZMD-29 confirm that the molybdenum mineralization previously demonstrated to be up to 380 metres thick (ZMD-13, 0.05% Mo) in the Racetrack Zone continues over a minimum strike length of 1.4 kilometres and comes to within 18 metres of surface. This effectively triples the previous known extent of this zone and suggests possible continuity along the entire 3.2 kilometre long South Corridor of the Zuun Mod porphyry complex.

"The significant extension of strike length, locally high molybdenum grades, wide intersections and molybdenum mineralization coming much closer to surface are very exciting developments for the Zuun Mod project, greatly enhancing the economic and resource potential," said Peter Akerley, President and CEO. "With the pending development of major metal and energy projects across Mongolia's Gobi region, Zuun Mod is well located to benefit from the associated infrastructure and service build-up as well as its proximity to China's processing centres and molybdenum markets."

Phase I Results

The Phase I drilling program included 17 core holes totaling 4,074 metres predominantly located on a 200-metre spaced grid; 12 holes within the Racetrack Zone, two holes in the Stockwork Zone and three in the Intersection Zone (see map and core photos at www.erdene.com). To date, analytical results from five of the Racetrack Zone holes have been received from SGS laboratory. Results for these five holes are included in the table below. Additional results for the other drill holes will be provided once they are received.

Highlights of Racetrack Zone drilling

Two holes, ZMD-28 and ZMD-29 have demonstrated that significant molybdenum mineralization in the Racetrack Zone extends an additional 1000 metres (500 metres in both the northeast and southwest directions) indicating a minimum 1.4 -kilometre strike length Hole ZMD-29 returned the shallowest mineralization discovered to date which commenced at 18 metres and averaged 0.05% Mo to 216 metres, a 198 metre interval Hole ZMD-29 included the widest high-grade molybdenum intersection reported to date, 30 metres (82 metres to 112metres) of 0.10% Mo The two holes returned multiple intersections of greater than 0.07% Mo up to 80 metres thick The significant molybdenum mineralization identified in hole ZMD-29 remains open to the northeast Phase I drilling demonstrates that molybdenum mineralization remains open to the southwest and continues under andesite porphyry cover to the west opening significant additional strike length potential

The following table includes results from the five holes in the Racetrack Zone that averaged greater than or equal to 0.04% Mo over a minimum of 10 metres.




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Hole # From To Metres % Mo
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ZMD-18 108 286(i) 178 0.04
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Including 122 276 154 0.05
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Including 118 128 10 0.08
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Including 202 260 58 0.06
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ZMD-20 34 252(i) 218 0.04
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Including 34 78 44 0.05
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Including 194 252 58 0.05
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ZMD-26 208 250(i) 42 0.04
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ZMD-28 52 249(i) 197 0.04
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Including 52 202 150 0.05
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Including 80 96 16 0.07
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Including 156 198 42 0.07
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Including 188 198 10 0.09
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ZMD-29 18 249(i) 231 0.04
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Including 18 216 198 0.05
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Including 46 126 80 0.07
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Including 82 112 30 0.10
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(i) end of hole


Zuun Mod Porphyry Complex

The Racetrack Zone is one of three mineralized zones outlined within the southeastern portion of the Zuun Mod porphyry complex. This area, known as the South Corridor, is defined by northeast trending faults along which granodiorite has intruded quartz monzonite, syenite and andesite porphyry. The South Corridor is part of an alteration zone, 5 kilometres in diameter, characterized by phyllic and tourmaline alteration, localized quartz flooding and veining, and surface molybdenum and copper geochemical soil and rock anomalies. Molybdenum mineralization within the South Corridor has been traced through drilling over a 3.2 -kilometre strike length and remains open.

Next Phase of Drilling

In response to the very encouraging results from this drilling program the Company has decided to significantly expand the Phase I (200 metre spaced) drilling program. This program will ensure full coverage of the enlarged mineralized area that remains open both to the northeast and southwest and is potentially continuous over a 3.2 kilometre strike length. The expanded Phase I drilling program will resume at Zuun Mod upon completion of our Biger Project drilling anticipated in late June. A Phase II program will be designed on completion of the expanded Phase I program. The overall objective is to define a resource estimate based on 100 metre spaced drill holes to a depth of approximately 350 metres. The goal is to identify a minimum of 250 million tonnes with an average grade greater than or equal to 0.05% Mo.

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 SGS Laboratory in Ulaanbaatar. In addition to internal checks by SGS Laboratory, the company incorporates a QA/QC sample protocol utilizing prepared standards, sample splits and duplicates.

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. Xstrata Coal is a significant Erdene shareholder with a 4% ownership of the company's common shares and has representation on its board of directors. 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 $14 million with 65,631,565 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
    902-423-6419
    info@erdene.com
    www.erdene.com