Mr. Peter Akerley reports

ERDENE PROVIDES UPDATE ON STRATEGIC ALLIANCE WITH MONGOLIAN MINING CORPORATION

Erdene Resource Development Corp. has provided an update on its strategic alliance with Mongolian Mining Corp. (MMC) for the development of its high-grade, open-pit Bayan Khundii gold project in southwestern Mongolia.

Strategic alliance with MMC

On Jan. 10, 2023, Erdene executed a strategic alliance agreement (SAA) with MMC to develop the Bayan Khundii gold project. Highlights of the SAA include:

• MMC is Mongolia's largest internationally traded mining company, listed on the main board of the Hong Kong Stock Exchange.
• MMC to invest $40-million (U.S.) for a 50-per-cent equity interest in Erdene's Mongolian subsidiary, Erdene Mongol LLC (EM), holding the Khundii and Altan Nar mining licences and the Ulaan exploration licence, through a three-stage transaction, based on achievement of milestones.
• Erdene retains a 50-per-cent equity interest in EM and a 5-per-cent net smelter return (NSR) royalty on all production from the Khundii, Altan Nar and Ulaan licences, as well as any properties acquired within five kilometres of these licences, beyond the first 400,000 ounces gold recovered.
• The first two stages of the transaction were completed in January, 2023, and May, 2023, with MMC investing $10-million (U.S.) to finance technical studies, including the feasibility study, early construction works and exploration for the project.
• The third stage of the transaction will see MMC invest a further $30-million (U.S.), providing equity capital for the Bayan Khundii gold project.
• Erdene maintains a 100-per-cent interest in its large Zuun Mod molybdenum-copper deposit and Khuvyn Khar copper project, located approximately 30 kilometres east of Bayan Khundii, and adjacent to a planned railway development.

On Aug. 30, 2023, Erdene and MMC amended the SAA and MMC advanced $15-million (U.S.) of the $30-million (U.S.) third stage to continue early works in the form of a convertible note. On Oct. 12, 2023, Erdene and MMC executed a second amendment, and on Oct. 15, 2023, MMC advanced the final $15-million (U.S.) of the $30-million (U.S.) third-stage payment to allow the parties to progress the project and to secure customary approvals.

Concurrently, international financial institutions are conducting due diligence on the updated FS and are expected to provide the project's debt financing. These institutions are active in Mongolia, as major financiers to the Oyu Tolgoi copper-gold project. It is anticipated that senior debt financing could comprise as much as 65 per cent of the total financing package, with financial close anticipated in late 2023.

About Erdene Resource Development Corp.

Erdene Resource Development is a Canada-based resource company focused on the acquisition, exploration and development of precious and base metals in underexplored and highly prospective Mongolia. The company has interests in three mining licences and an exploration licence in southwestern Mongolia, where exploration success has led to the discovery and definition of the Khundii minerals district. Erdene Resource Development is listed on the Toronto and the Mongolian stock exchanges.

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