Mr. Peter Akerley reports

ERDENE PROVIDES EXPLORATION UPDATE ON SOUTHWEST MONGOLIA GOLD EXPLORATION; CONTINUES TO EXPAND WESTERN GOLD ZONE AT BAYAN KHUNDII

Erdene Resource Development Corp. is providing additional assay results from the company's 2017 drill program at its 100-per-cent-owned Bayan Khundii gold project in southwest Mongolia.

"We are now at the midpoint of the initial 2017 drill campaign in the Bayan Khundii region and thus far have defined several new areas that will require definition drilling, particularly west and east of Striker, the Northeast zone, and importantly north and west of Midfield. It is very encouraging to continue to intersect broad zones of gold mineralization along the margins of the established 1.3-kilometre-by-500-metre mineralized trend," said Peter Akerley, Erdene's president and chief executive officer. "As we continue to expand outward from that area in Q3 we will be testing six new target areas up to one kilometre from the original discovery at Striker zone. In addition, as drilling progresses through Q3, we will move into the untested 3.5-kilometre-long gold-in-soil anomaly that continues north to Altan Arrow and ultimately return to drilling at our Altan Nar project, 16 kilometres to the northwest."

Highlights

• Success from stepout drilling and geophysical surveys leads to an expanded target area at Bayan Khundii;
• Drilling west of the Striker and Midfield zones returns multiple, high-grade, one-metre intervals between 10 grams per tonne and 22 g/t gold;
• Drilling up to 150 metres west of the Striker zone returns multiple gold mineralized intersections over a 250-metre-by-200-metre area, including 28 metres of 1.4 g/t gold (BKD-172);
• Drilling west of Midfield zone returns 36 metres of 1.1 g/t gold (BKD-166);
• Upcoming Q3 drilling of five untested targets and continued definition of new targets north and east of the Midfield and Striker zones with closer-spaced drilling;
• Regional structural analysis and detailed structural analysis of Bayan Khundii and Altan Nar projects will be undertaken during Q3;
• Drill results to continue throughout Q3.

Western extension of Striker and Midfield zones

Hole BKD-166, located west of the Midfield zone, intersected a thick package of the host Devonian volcanic tuff and returned 36 metres of 1.1 g/t gold commencing at 120 m depth (86 m vertical depth) (see table). This hole was drilled 50 metres west of previously reported drill hole BKD-100, drilled in Q2 2017 along the western edge of the Midfield zone. BKD-100 did not return significant gold mineralization as the hole intersected a syenite intrusion at shallower depths than expected and was speculated to truncate the western extension of Midfield. However, hole BKD-166 suggests the syenite encountered in BKD-100 may be relatively restricted in extent and that the Midfield mineralization continues west of BKD-100. Additional drilling will be required to confirm the true extent of the mineralization in this area.

A series of holes was completed south of BKD-166, to the west of the Striker zone and covering a 250-metre-by-200-metre area, and returned multiple gold mineralized intersections under younger, postmineralization cover. Results included five metres of 4.5 g/t gold within 28 metres of 1.4 g/t gold in hole BKD-172, located 130 metres west of the westernmost drilling in the Striker zone (see table).

The results west of Midfield and Striker have established multiple targets that justify additional closer-spaced drilling in Q3 2017.

                       BAYAN KHUNDII DRILL HIGHLIGHTS

Drill hole       From (m)    To (m)       Interval (m) (1)  Gold (g/t)

BKD-166              120       156                 36            1.07
incl                 120       121                  1            13.5
BKD-172               93       159                 66            0.70
incl                 123       151                 28            1.43
incl                 145       150                  5            4.52
incl                 149       150                  1            10.7
and                  188       206                 18            0.34
BKD-173               27        84                 57            0.17
and                  130       136                  6            3.04
incl                 133       134                  1            11.4
BKD-175              110       131                 21            0.25
and                  136       146                 10            0.56
and                  177       181                  4            5.66
incl                 179       180                  1            22.2
BKD-176              112       133                 21            0.49
and                  164       195                 31            0.42
and                  203       221                 18            0.22

(1) Reported intervals are not true widths. 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 to minus 
85 degrees and oriented to the north-northeast. The Bayan Khundii 
mineralization is interpreted to be moderately dipping (approximately 
40 to 50 degrees to the southwest).

For a complete table of results for all drilling by Erdene at Bayan Khundii in 2015, 2016 and to date in 2017, including the holes released today, please visit the company's website.

Southern extension of Northeast zone

Six, 80-metre-spaced holes were completed over an area south and southwest of the Northeast zone (BKD-160 to BKD-165). All holes except one (BKD-160) intersected the host silicified volcanic tuffs that are typical for Bayan Khundii, with four holes returning low-grade gold mineralization, including 0.1 to 0.3 g/t gold over six to 28 m intervals. A closer-spaced (40 m) drill program will be completed in this area during Q3 2017 to evaluate continuity of mineralization from the Northeast zone southwest to the Midfield zone.

Hole BKD-122, located on the southern boundary of the Northeast zone (reported on June 8, 2017), is located 100 metres northeast of the six holes discussed above, and returned 14 metres of 0.75 g/t gold from surface and 21 metres of 0.72 g/t gold at 63 m vertical depth. In addition, two rock-chip samples collected a further 600 metres to the northeast of BKD-122 (NE extension prospect) returned gold assay values of 6.9 g/t and 0.4 g/t gold. The company will complete additional drilling in this area in Q3 2017.

Going forward -- Q3 2017 drill program

The Q3 drill program at Bayan Khundii will focus on follow-up drilling around newly discovered, high-grade mineralization encountered in Q2 to Q3 exploration and on exploring a series of geophysical and geological targets within the two-kilometre-by-1.8-kilometre Bayan Khundii target area. In advance of this drilling, additional geophysical work was completed in Q2 to Q3 2017, including induced polarization dipole-dipole and ground magnetic surveys that have further defined these new target areas. Approximately 10,000 metres of drilling remain in the current 24,000 m program. In addition to the continuing Bayan Khundii drill program, the company will also complete regional drilling between Bayan Khundii and Altan Arrow, and a follow-up drill program at its neighbouring Altan Nar gold-polymetallic project, 16 kilometres northwest of Bayan Khundii. This work will have two objectives: 1) to follow up on the high-grade silver-gold-lead-zinc mineralization intersected during the Q4 2016 and Q2 2017 drill programs; and 2) to test targets generated from an expanded Q2 2017 geophysical survey that included a high-resolution ground magnetic survey that provides increased magnetic detail including areas of low magnetic response interpreted as altered mineralized zones where hydrothermal fluids resulted in magnetite destruction within host lithologies, and results from a six-line, 12-kilometre, induced polarization dipole-dipole survey centred on the Discovery zone.

In addition to the drilling work outlined above, the company will also be conducting both regional structural analysis and detailed structural analysis of Bayan Khundii and Altan Nar projects. Petrographic analysis will also be completed on a suite of samples to provide additional information pertaining to the petrogenesis of the company's projects. Additional interpretation of geophysical data, especially induced polarization and magnetic surveys results, will also be conducted by third party consultants using recently generated physical property data for a representative suite of samples from the Bayan Khundii project.

Background on Bayan Khundii gold project

In Q2 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 where an early rock-chip sampling program revealed multiple very high-grade surface quartz veins that returned up to 4,380 g/t gold. Since that time, drilling has revealed the presence of very high gold grades, with up to 306 g/t gold over one m intervals, within broad mineralized envelopes, with up to 131 metres of 3.9 g/t gold, including 80 m of 6.0 g/t gold. The company has completed a comprehensive exploration program at Bayan Khundii 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 to date of 25,988 m of drilling in 177 drill holes. In addition to this work, a series of detailed follow-up studies has also been completed, predominantly on drill core and minor surface outcrop, including: petrographic and mineralogical analyses; a fluid inclusion study; SEM gold composition analysis; shortwave infrared analysis (SWIR); structural analysis; and overall petrogenetic analysis. Detailed studies indicate the mineralized zones can be characterized as low-sulphidation, quartz-illite-adularia-type mineralization that was presumably formed in a back-arc extensional environment.

In Q1 2016, the company concluded preliminary metallurgical test work at Bayan Khundii, indicating that gravity concentration and cyanidation of the gravity tails yield very good overall gold recoveries for both high-grade and low-grade composites, yielding 99-per-cent gold recovery from the high-grade composite (24.9 g/t gold) and 92-per-cent gold recovery from the low-grade composite (0.7 g/t gold). Additional metallurgical work is under way with completion anticipated in Q3.

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

Qualified person and sample protocol

Michael MacDonald, PGeo (Nova Scotia), vice-president of exploration for Erdene, is the qualified person as that term is defined in National Instrument 43-101, and 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 m or two m 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 via Erdene's logistical contractor, Monrud Co. Ltd.

About Erdene Resource Development Corp.

Erdene Resource Development is a Canadian-based resource company focused on the acquisition, exploration and development of base and precious metals in underexplored and highly prospective Mongolia. The company has four exploration licences and a mining licence in southwest Mongolia. In addition to the Bayan Khundii and Altan Nar projects, other deposits and prospects within these licences include: Khuvyn Khar -- an early-stage, copper-silver porphyry project with multiple drill targets and significant copper intersections; Nomin Tal -- a narrow, high-grade copper-gold discovery; Zuun Mod -- a large molybdenum-copper porphyry deposit; and Altan Arrow -- an early-stage gold-silver project. In addition to the above properties, the company has an alliance with Teck Resources Ltd. on regional copper-gold exploration in the prospective Trans Altai region of southwest Mongolia.

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