Mr. Peter Akerley reports

ERDENE ANNOUNCES YEAR-END RESULTS AND PROVIDES BAYAN KHUNDII PROJECT UPDATE

Erdene Resource Development Corp. has released its operating and financial results for the year ended Dec. 31, 2023, provided an update on progress at its Bayan Khundii (BK) gold project. This release should be read in conjunction with the company's 2023 financial statements, and management's discussion and analysis (MD&A), available on the company's website and SEDAR+.

Peter Akerley, Erdene's president and chief executive officer, stated, "The past year was a transformative period for Erdene with the striking of our strategic alliance with Mongolian Mining Corp. (MMC), Mongolia's leading publicly traded mining company, the commencement of construction at the Bayan Khundii gold project and continued exploration success across the Khundii minerals district."

He continued: "The Bayan Khundii gold mine is one of the highest-grade, open-pit gold mines under development globally and will be Mongolia's largest primary gold producer when it reaches full production. With early works complete, project finance secured, long-lead orders now arriving to site and the 2024 construction season under way, we are on track to produce first gold at Bayan Khundii in Q2 2025."

Mr. Akerley concluded: "Exploration during the 2023 field season further expanded mineralization in our Khundii minerals district, located in an underexplored, world-class gold and copper belt. We have established a pipeline of high-quality projects, including high-grade gold satellite deposits to Bayan Khundii, the large Altan Nar gold-polymetallic deposit and the vast Zuun Mod molybdenum-copper porphyry resource. We plan to work with our strategic partner MMC to build upon our exploration success to unlock new opportunities for the Mongolian mining sector, increase the industry's contribution to the national economy and create long-term value for Erdene shareholders."

Two thousand twenty-three highlights and significant subsequent events:

• Bayan Khundii gold project:
  • Announced formal construction decision for Bayan Khundii on Jan. 15, 2024:
    • Awarded the project's engineering, procurement and construction (EPC) services contract to MCS Property LLC (MCSP), a leading Mongolian construction firm and affiliate of MMC;
    • Entered a power purchase agreement (PPA) with MCS International LLC (MCSI), a long-standing energy services and power generation company, and affiliate of MMC;
    • Construction ramp-up starting in February, 2024, with substantial completion scheduled for end of 2024 -- commissioning scheduled for Q1 2025 and first gold planned in Q2 2025.
  • Completed early works, site establishment and major procurement for the Bayan Khundii gold mine:
    • Early works and site establishment, including installation of temporary facilities, and process plant civils and footings complete -- represents approximately 12 per cent of total project construction;
    • Approximately 330 employees and contractors on site during peak -- no lost time incidents;
    • Long-lead and critical equipment orders on target with first deliveries received in late Q4 2023.
  • Delivered Bayan Khundii National Instruemnt 43-101 feasibility study (FS) update ($1,800 (U.S.)/ounces (oz) gold price, unless noted):
    • Base case after-tax NPV (net present value) at a 5-per-cent disoucnt of $170-million (U.S.) and internal rate of return (IRR) of 35 per cent increasing to $223-million and 42 per cent, respectively, at gold price of $2,000 (U.S.)/oz;
    • Life of mine earnings before interest, taxes and depreciation of $451-million (U.S.), increasing to $540-million (U.S.) at a $2,000 (U.S.)/oz gold price;
    • Total recovered gold of 476,000 ounces, a 25-per-cent increase compared with the 2020 FS with an average gold recovery rate of 93 per cent;
    • All-in sustaining cost (AISC) of $869 (U.S.) per ounce and upfront capital costs of $88-million (U.S.), plus a 12 per cent contingency, and preproduction costs of $2-million (U.S.);
    • Measured and indicated resources of 674,700 ounces gold at an average grade of 2.6 grams per tonne (g/t) gold, and 319,000 ounces silver at an average grade of 1.38 g/t silver;
    • Proven and probable reserves of 513,700 ounces gold at an average grade four g/t gold and 220,500 ounces silver at an average grade of 1.7 g/t silver;
    • Average annual gold production of 86,900 ounces during years two through five -- life of mine annual average production of 74,200 ounces gold;
    • Adjacent high-grade resources and recent discoveries provide high-probability growth options.
  • Delivered on increased community and stakeholder commitments:
    • Conducted equipment operator training for 80 residents of Bayankhongor province, the majority of which entered full-time operator employment at MMC to gain further experience before deploying to Bayan Khundii for the start of operations planned in 2025;
    • Completed community support projects, including the installation of a municipal potable water treatment facility, public education sanitation facilities and herder livelihoods support initiatives;
    • Remitted 2023 annual planned donations to local government development programs, in accordance with the statutory local co-operation agreement.
• Khundii minerals district exploration:
  • Conducted 2023 gold exploration program at the Greater Dark Horse prospect:
    • Drilled 1,040 metres intersecting anomalous gold and/or indicator elements in 16 of 18 holes;
    • Executed IP (induced polarization) survey over nine-square-kilometre area identifying several targets for follow-up.
  • Completed approximately 500-metre trenching program testing near-surface supergene oxide targets similar to those intersected at Dark Horse Mane, returning anomalous mineralization in several areas;
  • Completed 4,100-metre drill program at Zuun Mod molybdenum-copper deposit:
    • Expanded mineralization on periphery of current National Instrument 43-101 mineral resource;
    • Intersected high-grade mineralization in a stepout hole, located 1.7 km north of the deposit, demonstrating the potential to expand resources.
• Corporate:
  • Closed strategic alliance with MMC on Jan. 23, 2024, to advance construction of the BK project:
    • MMC invested $40-million (U.S.) for a 50-per-cent equity interest in EM, the company holding the BK project;
    • Erdene retains a 50-per-cent equity interest in EM as well as a 5-per-cent net smelter return (NSR) royalty on production from the Khundii district after the first 400,00 ounces of gold production and a 100-per-cent interest in Zuun Mod.
  • Secured BK finance from strategic partner MMC:
    • Up to $80-million (U.S.) shareholder loan to EM;
    • Five-year bullet maturity, bearing interest at 13.8 per cent, payable in arrears.
  • Recorded a net income of $522,043 for the year ended Dec. 31, 2023, compared with a net loss of $5,986,237 for the year ended Dec. 31, 2022:
    • Exploration and evaluation expenses totalled $847,010 for the year ended Dec. 31, 2023, compared with $3,798,676, with the year-on-year change primarily due to the reporting of EM's activity as an investment in associate in the current year due to the loss of the control of the subsidiary following the strategic alliance with MMC, partially offset by regional exploration work incurred by Erdene.
    • Exploration and evaluation expenditures, including capitalized expenditures, totalled $7,266,375 for the year ended Dec. 31, 2023, compared with $11,770,631 for the prior year, primarily due to lower drilling activity during the current year as well as reduced spending on engineering and design work for the Bayan Khundii gold project following the commencement of early construction works:
      • Corporate and administrative expenses totalled $3,137,736 for the year ended Dec. 31, 2023, compared with $2,218,984 for the year ended Dec. 31, 2022, with the year-on-year change primarily due to an increase in the allocation of management effort to corporate activities following the strategic alliance with MMC, inflationary salary adjustments, and increased marketing, professional fees, non-cash share-based compensation and travel costs.
    • Non-cash gain on loss of control of subsidiary of $6,544,863 and loss from investment in associate of $2,278,370 due to the change in the basis of accounting for Erdene's investment in EM to equity accounting following the signing of the strategic alliance and investment agreements with MMC in January, 2023.

Qualified person

Peter Dalton, PGeo (Nova Scotia), senior geologist 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.

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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