Mr. Peter Akerley reports

ERDENE CONTINUES TO DEFINE NEW ZONE NORTH OF MIDFIELD; INTERSECTS 120 METRES OF 1.14 G/T GOLD INCLUDING 3 METRES OF 33 G/T GOLD AT BAYAN KHUNDII GOLD PROJECT

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

Highlights

• High-grade zone continues to be defined between Midfield and Striker zones with 128 metres of 1.14 grams per tonne gold including 22 metres of 3.3 g/t gold (BKD-194);
• North Midfield zone continuity being established with 120 metres of 1.14 g/t gold including three metres of 33 g/t gold (BKD-188);
• Testing for continuity of new zone west of Striker returns 25 metres of 1.4 g/t gold including three metres of 7.8 g/t gold (BKD-198);
• Striker zone continues to provide high-grade mineralization with up to one metre of 43 g/t gold within 22 metres of 2.4 g/t gold (BKD-196);
• Hole extension in Striker zone intersects new zone, with 58 metres of 1.2 g/t gold including 16 metres of 2.8 g/t gold (BKD-30ext);
• Continuity of gold mineralized zone established in most eastern extension, with six metres of 2.7 g/t gold (BKD-197);
• Continuing Q3/Q4 drill program to include testing of target areas in the broader two- by 1.8-kilometre Bayan Khundii prospect area, as well as continued definition of recently discovered targets north of Midfield zone and west of Striker-Midfield zones with closer-spaced drilling;
• Three drill rigs continue to operate, including one rig conducting a hydrogeologic program, with drill results to continue throughout Q3 and Q4 2017.

Sixteen holes (BKD-183 to BKD-198) and one hole extension (BKD-30ext), totalling 3,074 metres, were drilled throughout the Bayan Khundii project area in mid-Q3 and are included in this update. The attached table includes highlights of the drill results with a discussion expanding on those results below.

           BAYAN KHUNDII DRILL HIGHLIGHTS

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

BKD-183           129   146             17          0.26
and               165   180             15          0.18
BKD-188           110   230            120          1.14
incl.             176   179              3          33.1
BKD-193         100.3   149           48.7          0.71
incl.             119   135             16          1.16
and               164 218.6           54.6          0.20
BKD-194            49 177.3          128.3          1.14
incl.              88    89              1          11.9
incl.             115   137             22          3.33
incl.           123.9   125            1.1          43.5
BKD-196            42    84             42          0.39
and               112   134             22          2.36
incl.             118   119              1          43.1
BKD-197           130   136              6          2.69
BKD-198            55    60              5          0.35
and               144   169             25          1.37
incl.             145   148              3          7.81
incl.             147   148              1          16.0
BKD-30ext (2)      59   117             58          1.22
incl.              87   103             16          2.80
incl.              95    96              1          21.9
 
(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 to minus 65 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).

(2) Previously reported, May 24, 2016, 59 m to 85 m (end 
    of hole), 26 m of 0.76 g/t gold.                                                                                                                                                                                                                                                                                                                                                      

Discussion of drill results

The following is a summary of the areas tested, the objectives for each and a discussion of results.

Midfield -- Striker Gap definition

Drilling continues to result in improved confidence and continuity in the area between the Midfield and Striker zones. Prior to the 2017 season limited drilling had taken place in a 200-metre-wide zone separating Striker from Midfield. Hole BKD-194 is the latest in a series of holes confirming strong continuity between these two high-grade zones. This hole returned 22 metres of 3.3 grams per tonne gold within 128 metres of 1.14 g/t gold.

North-northeast-trending structure -- potential controls on mineralization

A series of mostly shallow holes tested a prospective north-northeast-trending area characterized by a subvertical intrusive that parallels the trend of the high-grade Bayan Khundii mineralization through the North Midfield area and along the western side of the Northeast zone (BKD-184, 185, 186 and 192). The syenite intrusive was intersected at relatively shallow depths in three of the holes, between 48-metre and 110-metre depth after intersecting Cretaceous in the top of the holes. However, the most northerly of the four holes did intersect a thick package of altered Devonian volcanics to the end of the hole at 200 metres. Locally anomalous gold, arsenic and antimony with up to two metres of 1.3 g/t gold within zones of intense alteration enhances the potential of this northern extension for future drill testing.

West of Midfield zone

Three holes tested potential continuity of gold mineralization west of the Midfield zone (BKD-183, 189 and 190), an area that has received limited drilling to date. Two holes immediately west of Midfield (BKD-189 and 190) intersected deep zones of moderately altered Devonian volcanics with locally anomalous gold (six metres of 0.4 g/t) but not of the alteration intensity of Striker or Midfield. Hole BKD-183, one of the more northwesterly holes drilled to date, at 250 metres northwest of the Striker zone, had similar characteristics but did exhibit zones of increased alteration with anomalous gold (seven metres of 0.4 g/t). Interestingly, given this hole is in the direction of the company's recently acquired Ulaan copper prospect, it did exhibit zones of anomalous copper with up to 0.17 per cent copper over two metres.

Potential northeast of Striker zone

Two holes were completed to the northeast of the Striker zone (BKD-187 and 197) testing for continuity in the area of previously completed hole BKD-118. BKD-118 returned 10 metres of 12.8 g/t gold earlier this year. Hole BKD-187, 74 metres northeast of BKD-118, did not intersect significant mineralization however, hole BKD-197, drilled 35 metres down dip of BKD-118, intersected six metres of 2.7 g/t gold. One hole (BKD-195) also tested a shallow (50-metre depth) target located one kilometre east of Midfield to test a near-surface resistivity anomaly intersecting Cretaceous basalt. Additional drilling will be completed in the area northeast of Striker in Q4 2017.

West of Striker zone

The western edge of the Striker zone, between Striker and the newly developing western zone, had limited drilling previously due to poor results in shallow drilling. However, with the results from the Midfield-Striker connection zone indicating deeper mineralization potentially plunging under these shallow holes, two holes were completed to test this theory and were successful. The extension of previously completed hole BKD-30 was extended from its previous 85-metre depth to 163-metre depth and intersected 58 metres of 1.2 g/t gold including 16 metres of 2.8 g/t gold, and BKD-196 also returned 22 metres of 2.4 g/t gold.

New Western gold zone

A single hole (BKD-198) was drilled in the undercover area 130 metres west of the Striker zone to test the down-dip potential of previously completed hole BKD-32 which returned a broad zone of low-grade mineralization during 2016 drilling (115 metres of 0.4 g/t gold). BKD-198 has confirmed higher grades at depth with 25 metres of 1.4 g/t gold and individual one-metre samples up to 16 g/t gold.

Going forward -- Q3 to Q4 2017 drill program

The company has completed a total of 19,386 metres in 2017 at Bayan Khundii (102 new drill holes and five extended drill holes), for a total of 30,728 metres (198 drill holes) since the first drill hole in Q4 2015. For the remainder of Q3, and into Q4, the company's drilling program at Bayan Khundii will be focused on testing a series of geophysical and geochemical targets within the larger two- by 1.8-kilometre Bayan Khundii prospect area. Planning for additional drilling is under way and expected to include further delineation of newly discovered high-grade mineralization encountered during the Q2 to Q3 2017 exploration program and increasing confidence in the ultrahigh-grade domains.

In addition to the continuing Bayan Khundii drill program, the company will complete regional exploration and drilling between Bayan Khundii and its Altan Arrow gold-silver project, located 3.5 kilometres north of Bayan Khundii. The company also has a follow-up drill program under way at its neighbouring Altan Nar gold-polymetallic project, located 16 kilometres northwest of Bayan Khundii. This program includes testing of newly defined geophysical targets and completion of stepout drilling in areas adjacent to its previously reported National Instrument 43-101 mineral resource estimate at Altan Nar (see Erdene news release dated March 31, 2015). Based on upcoming Q3/Q4 2017 drill results, and on drilling completed at Altan Nar in 2015 and 2016, it is anticipated that a revised resource estimate at Altan Nar will be completed in 2018 in addition to a maiden resource estimate for Bayan Khundii.

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-metre intervals, within broad mineralized zones, with up to 131 metres of 3.9 g/t gold, including 80 metres of 6.0 g/t gold. In addition to the drilling discussed above, 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. 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; short-wave 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 an 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 2017.

The Bayan Khundii licence has a 2-per-cent net smelter returns royalty (NSR 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 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-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 via Erdene's logistical contractor, Monrud Co. Ltd.

About Erdene Resource Development Corp.

Erdene Resource Development is a Canada-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, a mining licence and a recently optioned exploration licence, in southwest Mongolia. In addition to the Bayan Khundii and Altan Nar projects, other deposits and prospects within these licences include: Altan Arrow -- an early-stage gold-silver project; Ulaan -- a recently acquired (option to earn 100-per-cent ownership) copper porphyry and gold epithermal project immediately west of Bayan Khundii and Altan Arrow; 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; and Zuun Mod -- a large molybdenum-copper porphyry deposit. 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.

We seek Safe Harbor.