Mr. Peter Akerley reports

ERDENE EXPANDS BAYAN KHUNDII MINERALIZATION WITH 43M OF 1.8 G/T GOLD EAST OF MIDFIELD, INCLUDING 1M OF 45 G/T GOLD, AND 20M OF 2.8 G/T GOLD WEST OF STRIKER, INCLUDING 1M OF 51 G/T GOLD

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

"Today's results further demonstrate the growth potential at Bayan Khundii with holes west of Striker and east of Midfield providing the widest gold-mineralized intersections in those areas to date, along with some of the very high grades observed in Striker and Midfield," said Peter Akerley, Erdene's president and chief executive officer. "In addition to the Bayan Khundii drilling program and those at the neighbouring Altan Nar project, surface exploration programs have been successfully generating new targets elsewhere within an area up to eight kilometres north of Bayan Khundii and along the six-kilometre-long trend of gold prospects at Altan Nar. Over the next two months, we will continue drilling at Bayan Khundii and Altan Nar, continuing to test the perimeters of the main mineralized areas and improving confidence in the ultrahigh-grade zones at Bayan Khundii, within which almost 20 per cent of our holes have returned intersections of 30 grams per tonne to 300 grams per tonne gold."

Summary of results

Twenty holes (BKD-199 to BKD-218) and five hole extensions (BKD-27, BKD-29, BKD-68, BKD-85 and BKD-176), totalling 4,355 metres, were drilled throughout the Bayan Khundii project area in the middle of the third quarter and are included in this update. For reference, see the attached table.

Highlights:

• Expansion east of Midfield zone: While most of the drilling in Midfield has focused on pushing the northern limits of the gold mineralized zone toward the Northeast zone, hole BKD-210, located 80 metres east of Midfield's eastern boundary, returned 43 metres of 1.8 grams per tonne gold (BKD-210) and included gold values up to 44.8 grams per tonne, establishing a new eastern extension to the Midfield zone that justifies further follow-up drilling.
• Multiple mineralized intersections west of Striker zone: The area west of Striker continued to be a focus of the recent expansion drilling program, with new holes returning the widest and highest-grade intersections to date in this area, justifying further follow-up drilling. Hole BKD-216, located along the western portion of the target area, 240 metres west of the Striker zone, returned a 20-metre intersection of 2.8 grams per tonne gold, including up to 50.5 grams per tonne gold over one metre, and hole BKD-211, located 200 metres west of the Striker zone, returned 63 metres of 1.1 grams per tonne gold. In addition, three new holes and two extension holes (BKD-204, BKD-205, BKD-212; extensions BKD-68 and BKD-176) were drilled in this area returning multiple zones of lower-grade gold mineralization.
• Striker zone -- extensions at depth toward Midfield: Recent drilling in the northwest Striker area, where early, shallow holes had not intersected significant mineralization, returned an extension of mineralization below previous drilling with 58 metres of 1.2 grams per tonne gold, including 16 metres of 2.8 grams per tonne gold (extension BKD-30) (see Sept. 12, 2017, news release). Today's results include three additional hole extensions in this area: BKD-27, BKD-29 and BKD-85. Extension hole BKD-27 returned 55 metres of 1.2 grams per tonne gold from 109 metres to 164 metres, followed by 20 metres of 0.74 gram per tonne gold to a depth of 222 metres with the other two extension holes intersecting wide zones of highly anomalous gold, further confirming the extension of gold mineralization at depth between Striker and Midfield. These extended holes also continue to support the downdip extension of mineralization from Midfield toward the west side of Striker.
• Further continuity in area north of Midfield zone: Five holes were completed in this area and continue to support continuity of the gold mineralization in this zone discovered earlier in 2017, north of the Midfield zone (BKD-199, BKD-200, BKD-209, BKD-217 and BKD-218). These holes were spaced at approximately 40-metre intervals and provided a number of wide gold-mineralized intersections, including hole BKD-199, which intersected a thick sequence of mineralized volcanics, returning 88 metres of 1.1 grams per tonne gold at a depth of 74 metres. Hole BKD-217 also intersected a thick sequence of altered tuffs with an 18-metre-wide zone averaging 0.74 gram per tonne gold. Hole BKD-218, drilled 80 metres northeast of BKD-217, intersected an 81-metre-wide zone that returned 0.65 gram per tonne gold and included a 20-metre zone that averaged 1.5 grams per tonne gold. These results confirm continuity within this zone north of Midfield, extending it closer to the Northeast zone.
• Reconnaissance drilling in Northeast zone demonstrates continuity: A series of reconnaissance holes were drilled north and northeast of the main Bayan Khundii trend with one of these stepout holes, BKD-214, located 130 metres east of the Northeast zone and 650 metres northeast of the Midfield zone, returning an altered volcanic sequence with anomalous gold intersections, including 31 metres of 0.24 gram per tonne gold at a depth of 48 metres. The result, although low grade, is important as it provides evidence of continuity of the gold-mineralizing fluids beyond the areas defined to date.

The attached table includes drill result highlights of the holes discussed herein.

         BAYAN KHUNDII DRILL HIGHLIGHTS 

Drill hole      From     To   Interval (1)      Gold
                  (m)    (m)           (m)      (g/t)
East of 
Midfield zone            
BKD-210           89  131.8          42.8       1.75   
Including        105    118            13       4.89   
Including        106    107             1       44.8   
West of 
Striker zone          
BKD-204           70     87            17       0.89   
Including         74     81             7       1.70   
BKD-205           12     15             3       0.70   
And              107    131            24       1.21   
Including        120    127             7       3.59   
Including        122    123             1       12.7   
And              159    196            37       0.57   
Including        183    195            12       1.34   
BKD-211          100    163            63       1.09   
Including        101    114            13       3.99   
Including        101    102             1       17.9   
And              106    107             1       12.2   
BKD-216           29     50            21       0.48   
And              153    173            20       2.83   
Including        153    163            10       5.52   
Including        156    157             1       50.5   
BKD-68 
extension        128    130             2       20.5   
North of 
Midfield zone           
BKD-199           74  162.3          88.3       1.08   
Including        148    149             1       15.2   
And              153    154             1       16.6   
BKD-200        110.4    190          79.6       0.64   
Including      110.4    136          25.6       1.18   
And            210.7  223.5          12.8       0.47   
BKD-209        136.5    153          16.5       0.62   
BKD-217          179    197            18       0.74   
Including        189    197             8       1.58   
BKD-218          141    222            81       0.65   
Including        202    222            20       1.46   
Striker 
zone hole 
extensions        
BKD-27 
extension (2)    109    164            55       1.21   
And              202  222.3          20.3       0.74   
BKD-29 
extension        175    191            16       0.31   
Including        175    181             6       0.51   
BKD-85 
extension        148    170            22       0.34   
And              177  213.4          36.4       0.47   
Including        182    195            13       0.84   
Northeast 
zone               
BKD-214           48     79            31       0.24   

(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 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) This was previously reported in 2016: 
57 metres to 85 metres (end of hole) 
-- 28 metres of 0.51 gram per tonne gold.

Going forward -- Q4 2017 drill program at Bayan Khundii

Since the beginning of the year, the company has completed a total of 22,710 metres with 122 new drill holes and 10 extended drill holes at Bayan Khundii and is expected to reach over 26,000 metres by year-end. Since the first drill hole in Q4 2015, the company has drilled a total of 35,085 metres in 218 drill holes.

For the remainder of Q4, the company's drilling program at Bayan Khundii will be focused on further defining boundaries and increasing confidence through a series of holes across the Bayan Khundii mineralized area including Striker, Midfield, and the areas north of Midfield and west of Striker. The Q4 drill program is expected to include an additional 4,000 metres, to be completed at Bayan Khundii and at the company's Altan Nar gold-polymetallic project 16 kilometres northwest. There will also be some additional reconnaissance drilling in target areas within both licences over the next two months. Those targets are still being defined as exploration results are continuing to be evaluated.

Ultrahigh-grade areas

Bayan Khundii has a very significant high-grade component with over 20 per cent of the 218 reported drill holes having one or more intersections of 30 grams per tonne to 300 grams per tonne gold. These 50-plus intersections have an average grade of 78 grams per tonne gold and their contribution to the eventual resource will be very significant. Therefore, ensuring these zones are well defined with sufficient data to provide accurate levels of influence and control for any proposed capping of these grades is of primary importance to the quality of the eventual resource estimate. Higher-definition drilling of these ultrahigh-grade zones has been recommended by an independent technical consultant and will be designed to assist in resource modelling.

Regional district exploration programs

In addition to drilling at Bayan Khundii, significant work has been completed in a series of projects within the larger developing district, including detailed geological mapping, soil geochemical sampling, rock-chip geochemical sampling and geophysical programs over the entire Khundii licence, north of the Bayan Khundii project. Final results are pending, but several areas of intense alteration with associated anomalous gold in rock-chip samples have been identified, including a zone along trend from Bayan Khundii, three kilometres to the northeast. It is anticipated that, the priority targets generated will be identified and drilled in Q4 2017 or early 2018.

2018 resource estimate

During Q1 2018, the company's technical team will assess the 2017 program and determine what additional drilling may be required prior to an independent resource evaluation. Timing of the eventual resource studies for both Bayan Khundii and Altan Nar will be influenced by that determination; however, it is anticipated that the studies will be completed between Q2 and Q3 2018.

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 grams per tonne gold. Since that time, 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 zones, with up to 131 metres of 3.9 grams per tonne gold, including 80 metres of 6.0 grams per tonne gold. In addition to the drilling discussed herein, the company has completed a comprehensive exploration program at Bayan Khundii, which has included geological mapping; soil geochemical surveys; additional surface rock-chip sampling; a ground magnetic survey; and gradient array and dipole-dipole induced polarization surveys. 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 gold composition analysis; short-wave infrared (SWIR) analysis; 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 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 Q3 2017.

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 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/quuality 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 Resource Development Corp.

Erdene is a Canada-based resource company focused on the acquisition, exploration and development of base metals 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).

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