Mr. Peter Akerley reports

ERDENE SECURES DEBT FINANCING FOR BAYAN KHUNDII GOLD PROJECT FROM STRATEGIC PARTNER

Erdene Resource Development Corp. has executed debt finance agreements for up to $80-million (U.S.) with Mongolian Mining Corp. (MMC) to finance construction of the high-grade, open-pit Bayan Khundii gold project in southwestern Mongolia.

Peter Akerley, Erdene's president and chief executive officer, stated: "We are very pleased to close the financing for the Bayan Khundii gold project with our strategic partner MMC, Mongolia's leading publicly traded mining company. With first gold scheduled in 2025, Bayan Khundii will be one of the highest-grade, open-pit gold mines globally and Mongolia's largest primary gold producer when it reaches full production."

Mr. Akerley continued: "The strengthening of our relationship with MMC through this financing supports our goal of creating a major new mining district in southwestern Mongolia. With MMC's experience in large-scale mining, expertise in construction, power supply, transportation and logistics, and national and international relationships, the Bayan Khundii gold project will form a strong foundation for future growth in the Khundii minerals district. Together we will grow the Mongolian mining sector, increase the industry's contribution to the national economy and create value for our shareholders."

Bayan Khundii financing

On Feb. 8, 2024, Erdene executed financing documents with MMC to develop the Bayan Khundii gold project. The financing has been structured as a shareholder loan from MMC to Erdene Mongol LLC (EM), the entity co-owned by Erdene and MMC that holds the Bayan Khundii mining licence, as well as the Altan Nar mining licence and highly prospective Ulaan exploration licence.

The shareholder loan is for $50-million (U.S.) providing the financing for construction of the Bayan Khundii gold mine and processing complex. The loan may be drawn in up to five tranches, in multiples of at least $5-million (U.S.). The loan will mature five years from the date of first draw, and accrue interest at a rate of 13.8 per cent, paid quarterly in arrears. EM has the option to capitalize the first four interest payments. The loan will be repayable in full upon maturity. A further $30-million (U.S.), under the same terms, is available at MMC's discretion. EM is also in discussions with Mongolian commercial banks on financing for up to $30-million.

The shareholder loan will be secured by a 50-per-cent guarantee by Erdene and Erdene's interests in the project, including its shares of EM and NSR interest, as well as preferential rights over the Khundii, Altan Nar and Ulaan licences. For so long as the loan is outstanding, MMC will be granted priority voting rights under the strategic alliance agreement between the parties and a right of first refusal over Erdene's Zuun Mod project. Additionally, Erdene has the right to purchase 50 per cent of the loan and participate as a lending shareholder on the same terms as MMC.

This financing follows the investment of $40-million (U.S.) by MMC for a 50-per-cent equity interest in EM as part of the strategic alliance agreement (see press release on-line). In total, MMC will finance up to $120-million (U.S.) into the development of the Bayan Khundii gold project. Highlights of the strategic alliance include:

• MMC is Mongolia's largest internationally traded mining company, listed on the main board of the Hong Kong Stock Exchange (HKEx: 975).
• MMC has invested $40-million (U.S.) in EM, Erdene's Mongolian subsidiary holding the Khundii and Altan Nar mining licences and the Ulaan exploration licence.
• Erdene retains a 50-per-cent equity interest in EM and a 5.0-per-cent net smelter return (NSR) royalty on production from the Khundii, Altan Nar and Ulaan licences, as well as any properties acquired within a 700-square-kilometre area of interest beyond the first 400,000 ounces gold recovered.
• 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.

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 southwest 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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