Mr. Peter Akerley reports

ERDENE FURTHER DEFINES AND EXPANDS HIGH-GRADE GOLD ZONE AT THE BAYAN KHUNDII GOLD PROJECT, INCLUDING 80 METRES OF 6.0 G/T GOLD AND 56 METRES OF 6.1 G/T GOLD

Erdene Resource Development Corp. has released initial results from the company's 2017 drill program at its 100-per-cent-owned Bayan Khundii gold project in southwest Mongolia. The company has also made changes to its management team in Mongolia.

Highlights

• Drilling confirms that the Midfield zone continues down dip to the south, potentially connecting with the Striker zone;
• Drilling establishes presence of wider, higher-grade quartz adularia feeder veins at the Midfield zone;
• Confirms greater depth potential south of the Midfield zone;
• Improves confidence in continuity of the high-grade zones within Midfield;
• Second drill rig now operating and testing the previously announced high-grade intersection in the discovery zone at the company's neighbouring Altan Nar gold-polymetallic project;
• Company strengthens management team in Mongolia.

      HIGHLIGHTS FOR HOLES DRILLED WITHIN MIDFIELD ZONE 
 
Drill hole      From         To      Interval (1)        Gold
                  (m)        (m)              (m)        (g/t)

BKD-98            39      170.5            131.5         3.86
Including         42        122               80         6.03
Including         86         87                1         11.1
Including        111        119                8         51.0
Including        112        114                2          192
BKD-99            53      158.4            105.4         3.55
Including         56        112               56         6.13
Including         87         91                4         69.0
Including        111        112                1         12.9
BKD-101           54      200.4            146.4         0.84
Including        134      144.1             10.1         4.84
Including        139      144.1              5.1         8.70
Including        142      144.1              2.1         19.1
Including        182        185                3         4.28
BKD-102            0         20               20         0.40
Including         44      183.2            139.2         0.74
Including        131        163               32         2.06
Including        142        146                4         7.40
Including        145        146                1         16.2

(1) Reported intervals are not true width. At this 
time, there are insufficient data with respect to the 
shape of the mineralized system to calculate true 
orientations in space. They represent drill intersection 
widths from holes drilled at a dip of minus 45 degrees 
to minus 55 degrees and oriented to the north-northeast. 
The Bayan Khundii mineralization is interpreted to be 
moderately dipping (approximately 40 degrees to 
50 degrees to the southwest).

2017 drill program update

Since the beginning of the 2017 program, drilling at Bayan Khundii has been focused in the area between, as well as west of, the Midfield and Striker zones, with 11 drill holes completed and three additional hole extensions. The company has also commenced drilling with a second drill rig at its Altan Nar gold-polymetallic project, 16 kilometres northwest of Bayan Khundii, where three holes have been completed targeting the high-grade gold zone intersected in the fourth quarter of 2016 within the discovery zone (hole TND-101).

Results reported in this press release are from the first six new holes at Bayan Khundii, including: two holes drilled within Midfield; two holes testing the downdip extension of Midfield toward the Striker zone; one hole west of Midfield; and one hole testing a geophysical target outside of the main northeast trend. The five holes completed within the Striker-Midfield area (BKD-98 to BKD-102) were drilled on 20-metre to 40-metre centres and with a dip between minus 45 degrees and minus 55 degrees oriented toward the north-northeast to intersect the mineralized zones approximately perpendicular to their interpreted orientation (dipping approximately 45 degrees to the southwest). The reconnaissance hole was drilled at minus 85 degrees to the north.

The drilling results for Midfield are significant in that they have extended the area of gold mineralization down dip to the south. They have also begun to confirm that gold mineralization continues within the approximately 170 metre untested area between Striker and Midfield, the two most prominent gold mineralized zones identified to date within the two-kilometre-by-1.8-kilometre Bayan Khundii prospect area. The results also strengthen the continuity of the high gold grades reported previously in the central Midfield area, and support the observation that this area contains the most intense hydrothermal activity and the most pervasive gold mineralization at Bayan Khundii. This observation is now supported by the repeated intersection of up-to-eight-metre-wide, high-grade gold zones centred on quartz-adularia veins (BKD-98: 111 metres to 119 metres; 51.0 grams per tonne gold). Hole BKD-100 tested the western edge of Midfield and intersected intrusive syenite at shallower depths than expected, truncating the downdip western extension in that area. However, drilling farther west intersected anomalous gold in Devonian volcanics at greater depths, suggesting the intrusive bodies are relatively restricted in extent.

Current drilling also confirmed that gold mineralization continues at greater depths to the south of Midfield. The intrusion intersected in previous drilling at Midfield is deepening to the south, where up to 162 metres (vertical thickness) of altered and mineralized Devonian volcanic units have been intersected.

The Midfield zone is located under younger, postmineralization cover and has provided some of the highest grades and longest, continuously mineralized intervals intersected to date. It is located approximately 200 metres north of the original discovery area, which includes the Striker and Gold Hill zones, where gold mineralization is exposed at surface. An additional mineralized zone is located 600 metres northeast of the Midfield zone, where limited exploration has been completed (Northeast zone), with the area between covered by younger Cretaceous (postmineralization) units.

The reconnaissance hole drilled in the northwest portion of Bayan Khundii is one of many holes that will test targets outside the main trend of mineralization in the coming months. These holes are designed to test new concepts but also to provide data to support the company's broader understanding of the alteration and mineralizing event. This hole was drilled 400 metres west of the Northeast zone and 300 metres north of the Midfield zone. While not hosting anomalous gold values, it did intersect a sequence of weak to moderately altered tuffaceous rocks and dacite intrusions, starting at 12 metres depth beneath younger cover. Locally, zones of intense silicification, mica and magnetite alteration were encountered, confirming that hydrothermal fluids did penetrate this far from the known mineralized zones. Similar indications have been observed at the bottom of the westernmost hole (BKD-75), 300 metres west of Midfield, where the hole encountered higher gold values at the end of the hole (vertical depth of 185 metres), up to 0.5 gram per tonne gold over two metres.

Dr. Jeffrey Hedenquist and other renowned experts, including Imants Kavalieris and Dr. Khashgerel Bat-Erdene, will be visiting the project again in the coming months to continue to assist the Erdene technical team in improving its understanding of the controls on mineralization which will be used, in part, to direct the company's reconnaissance drilling program.

2017 drill plans

The initial phase of 2017 drilling includes the completion of a series of holes in the untested areas around the original discovery areas at Bayan Khundii in order to expand and increase confidence in the continuity of the following areas: between Striker and Midfield, north of Midfield, west and northeast of Striker, and between Gold Hill and Striker. As that work progresses, the second rig, which commenced drilling in late April, will complete a series of holes at the discovery zone at Altan Nar (16 kilometres north of Bayan Khundii) and the new Altan Arrow gold discovery (3.5 kilometres north of Bayan Khundii) before joining the drill program at Bayan Khundii in mid-May. The second rig will then begin systematically testing geophysical targets throughout the two-kilometre-by-1.8-kilometre Bayan Khundii area, while the first rig commences more detailed infill work around the new and existing high-grade zones at Midfield, Striker and Gold Hill. As the field season progresses and results are received, the program will be refined and expanded where necessary to concentrate additional drilling around the highest-priority targets at Bayan Khundii, Altan Nar and Altan Arrow. A follow-up second-phase program will be defined and implemented early in the fourth quarter of 2017, based on the results from the second quarter/third quarter exploration program.

Mongolia management team strengthened

On May 1, 2017, the company made several changes to its management team in Mongolia, including the hiring of Jon Lyons as vice-president, regulatory affairs and strategy. The changes are aimed at preparing the company for a transition into permitting- and development-related work in the coming months and years. The appointments include the following.

Bayarmaa Bagabandi

Ms. Bagabandi has been appointed chief administrative officer for Erdene Mongol LLC, the company's main Mongolian subsidiary, responsible for overseeing all financial, legal and human resource responsibilities. Ms. Bagabandi earned an MSc in international economics from Korea's Sogang University and has been employed with the company for the past 12 years. Ms. Bagabandi has been involved in the administrative side of Mongolia's resource industry for the past 17 years.

Jon M.L. Lyons

Mr. Lyons will take on the role of vice-president, regulatory affairs and strategy, responsible for managing the various government permitting processes required to advance Erdene's mineral exploration and mining projects. Mr. Lyons will also be responsible for oversight of health, safety, environment and community areas for the company, especially to ensure compliance and cultivate shared value for all stakeholders. Most recently, Mr. Lyons was with the Global Green Growth Institute as country representative to Mongolia. Mr. Lyons has lived and worked intermittently in Mongolia and the region, including a previous posting with the company, since 2001. Mr. Lyons earned an MBA from Maastricht University and the EuroMBA consortium and a BA (summa cum laude) in physics and anthropology from Wheaton College, Massachusetts, and is fluent in Mongolian and Russian.

Bilguun Ankhbayar

Mr. Ankhbayar has been appointed vice-president, business development, responsible for assisting the company's chief executive officer in advancing Erdene's projects to development, including economic evaluations, strategic market analysis, investor and other stakeholder relations and business development in the local communities. Mr. Ankhbayar graduated from Saint Mary's University in Halifax, Nova Scotia, in 2007 with a BComm in finance. He worked in the resource investment industry in Toronto, Canada, before returning to Mongolia to become chief executive officer of the Mongolian International Banking Group (MIBG). Mr. Ankhbayar became a strategic adviser to Erdene in 2016 and is now taking on increased responsibilities.

Erdenebileg Pagva

Mr. Pagva has been appointed senior representative for Bayankhongor, the province that hosts the company's Bayan Khundii, Altan Nar and other projects. Mr. Pagva's responsibilities include managing the company's stakeholder relations in Bayankhongor and ensuring alignment of the company's business activities with local and regional development trends. Mr. Pagva has worked in Mongolia's mineral exploration and gold mining sector for nearly 25 years and holds a BSc in geology and mine engineering from the Mongolian University of Science and Technology.

Background on Bayan Khundii gold project

In the second quarter of 2015, Erdene conducted an initial exploration program on the southern portion of the company's 100-per-cent-owned Khundii exploration licence in southwest Mongolia. An early rock-chip sampling program revealed multiple very high-grade surface quartz veins that returned up to 4,380 grams per tonne gold, leading to a comprehensive exploration program that has included: geological mapping; soil geochemical surveys; additional surface rock-chip sampling; a ground magnetic survey; gradient array and dipole-dipole induced polarization surveys; and the completion of 11,300 metres of drilling in 96 drill holes (as of the fourth quarter of 2016). In addition to this work, a series of detailed follow-up studies have also been completed, predominantly on drill core and minor surface outcrop, including: petrographic and mineralogical analyses; a fluid inclusion study; SEM (scanning electron microscope) gold composition analysis; short-wave infrared analysis (SWIR); structural analysis; and overall petrogenetic analysis. Drilling has revealed the presence of very high gold grades, with up to 306 grams per tonne gold over one-metre intervals, within broad mineralized envelopes, with up to 65 metres averaging 6.3 grams per tonne gold, including 12 metres of 29 grams per tonne gold. Detailed studies indicate the mineralized zones can be characterized as low-sulphidation, quartz-sericite-adularia-type (illite) mineralization that was formed in a back-arc extensional environment.

In the first quarter of 2016, the company concluded preliminary metallurgical test work at Bayan Khundii, indicating that gravity concentration and cyanidation of the gravity tails yielded very good overall gold recoveries for both high-grade and low-grade composites: 99-per-cent gold recovery from the high-grade composite (24.9 grams per tonne gold) and 92-per-cent gold recovery from the low-grade composite (0.7 gram per tonne gold). Additional metallurgical work is under way with completion anticipated in the third quarter of .

The Bayan Khundii licence has a 2-per-cent net smelter return royalty in favour of Sandstorm Gold Ltd., with a buyback option to reduce the net smelter return royalty to 1 per cent.

Qualified person and sample protocol

Michael MacDonald, PGeo (Nova Scotia), vice president, exploration, for Erdene, is the qualified person as that term is defined in National Instrument 43-101, and he has reviewed and approved the technical information contained in this news release. All samples have been assayed at SGS Laboratory in Ulan Bator, Mongolia. In addition to internal checks by SGS Laboratory, the company incorporates a quality assurance/quality control sample protocol utilizing prepared standards and blanks.

Erdene's sampling protocol for drill core consisted of collection of samples over one-metre or two-metre intervals (depending on the lithology and style of mineralization) over the entire length of the drill hole, excluding minor postmineral lithologies and unmineralized granitoids. Sample intervals were based on metreage, not geological controls or mineralization. All drill core was cut in half with a diamond saw, with half of the core placed in sample bags and the remaining half securely retained in core boxes at Erdene's Bayan Khundii exploration camp. All samples were organized into batches of 30 samples, including a commercially prepared standard, blank, and either a field duplicate (consisting of two one-quarter core intervals) or a laboratory duplicate. Sample batches were periodically shipped directly to SGS in Ulan Bator by Erdene's logistical contractor, Monrud Co. Ltd.

About Erdene Resource Development Corp.

Erdene is focused on the acquisition, exploration and development of base metals and precious metals in underexplored and highly prospective Mongolia. In addition to Bayan Khundii and Altan Nar, the company has three other exploration licences and a mining licence in southwest Mongolia. In addition, the company has an alliance with Teck Resources Ltd. on regional copper-gold exploration in the prospective Trans-Altai region of southwest Mongolia.

We seek Safe Harbor.