Erdene Enters Strategic Alliance with Mongolia's Largest Copper-Molybdenum Producer

Announces Exploration Results from Property Adjacent to Erdenet Mine 

HALIFAX, June 6 /CNW/ - Erdene Gold Inc. (TSXV:ERD) today announced it
has entered into an agreement with Erdenet Mining Corporation (EMC),
Mongolia's largest mining company and operator of the Erdenet copper-
molybdenum mine. The agreement forms the basis for a strategic alliance and
joint exploration program now underway immediately west of the mine site,
where today Erdene reported encouraging results from its Phase I exploration
program. The objective of this new alliance is to explore for and develop new
porphyry-style copper deposits or extensions of mineralization in areas
adjacent to EMC's current mining operations.
"This relationship is an obvious fit for our two companies. Erdenet is an
existing mining, producing and marketing company, and the leader in Mongolian
open pit copper-molybdenum mining. They bring the expertise and the facilities
to quickly develop any new discoveries on our adjoining properties," said Mr.
Peter Akerley, President and Chief Executive Officer of Erdene Gold. "As
evidenced by initial results from the Phase I exploration program, the Erdenet
area remains a very prospective environment for the discovery of additional
porphyry copper-molybdenum deposits. It is an exciting period for our company
adding further value to our existing uranium, copper, molybdenum and gold
projects."
EMC is a Mongolian-Russian joint venture, with 51 per cent ownership by
the Mongolian Government and 49 per cent by the Russian Government. The
processing plant and the city of Erdenet are connected by rail to both Russia
and China via the Trans-Mongolian Railway. EMC's mine, located 220 kilometres
northwest of Mongolia's capital of Ulaanbaatar, began operation in 1978. The
main deposit lies within a larger mineralized porphyry system estimated to
cover an area 22 kilometres long and five kilometres wide. The main products
are copper and molybdenum flotation concentrates with reported annual copper
production of 450 to 480 thousand tonnes of copper concentrate (27% copper)
and over 2,800 tonnes of molybdenum concentrate (50% molybdenum). Additional
information on EMC is available at: www.emc.erdnet.mn.
Erdene controls a significant land position immediately surrounding the
EMC deposit, the second largest porphyry copper deposit in Central Asia and
one of the world's largest producing copper mines. Erdene's exploration
licences are located to the east, west and north of EMC's current open pit
operation. Favourable geology and alteration suggests good potential for the
discovery of new porphyry copper mineralization or near surface extensions of
the mineralization being currently mined by EMC.

Exploration Update: Ikh Tal - Erdenet West

Erdene controls five exploration licences covering 16,580 hectares
adjacent to the Erdenet Mine. The Phase I exploration program, currently in
progress, is being carried out in an area covering approximately 3,000
hectares immediately west of EMC's open pit mining operation. Exploration to
date includes surface sampling, geological mapping and geophysical surveying.
Preliminary results have returned anomalous copper, molybdenum and gold
concentrations in rock samples coincident with geophysical anomalies outlined
by the current survey which are interpreted to be related to a buried
mineralized porphyry system.
The geology in the target area is dominated by granodioritic intrusives
and local alteration which is characterized by weak potassic feldspar
development and localized quartz-sericite veining. Rock geochemical samples
have returned multiple anomalous results from the area. Nine rock samples were
collected and returned copper values ranging from 75ppm to 10,300ppm (four
samples ranging from 0.2% to 1.03% copper), molybdenum values from detection
limit to 0.02% and gold values from detection limit to 0.15g/t.
The induced polarization (IP) geophysical survey included 69.3 line
kilometres over a grid approximately seven kilometres by three kilometres.
This survey identified near surface coincident IP chargeability and
resistivity anomalies, approximately 1.5 kilometres long by 0.5 kilometres
wide, along an east-west trend in an area where previous satellite imagery and
surface geochemistry returned anomalous values. The target area has been
further strengthened by an IP dipole-dipole survey that has outlined
coincident chargeability and resistivity anomalies, which indicate the surface
geophysical signatures extend to depth. Porphyry copper systems are
characterized by high concentrations of sulfide minerals, predominantly pyrite
with lesser chalcopyrite in association with quartz veins or stockwork veining
systems. It is these two characteristics that the geophysical programs are
designed to identify, therefore high chargeability and resistivity reflect a
valid target particularly when supported by surface geochemical samples that
confirm elevated copper, molybdenum and gold values.
Four initial drill targets have been selected to test the coincident
geochemical and geophysical anomalies identified to date. Drilling is expected
to commence in the next two weeks.

Agreement Details
The agreement provides for joint funding by Erdene and EMC of an initial
exploration program to complete the surface work and initial diamond drilling.
The agreement also provides for the mutual exchange of all data relating to
Erdene-controlled licences surrounding the mining operation. Erdene also
agreed to commence exclusive negotiations with EMC on a definitive co-
operative agreement for future exploration and development on Erdene's
exploration properties adjacent to the Erdenet Mine. It is contemplated that
specifics of such an agreement will be determined over the next 90 days.

Qualified Person

This press release has been prepared under the supervision of Michael
Corey, P.Geo., who serves as the qualified person under National Instrument  
43-101. All samples are assayed at SGS Laboratory in Ulaanbaatar, Mongolia. In
addition to SGS Laboratory internal checks, Erdene Gold incorporates a QA/QC
sample protocol utilizing prepared standards, sample splits and duplicates.

About Erdene Gold Inc.

Erdene Gold Inc. is a mineral exploration company focused on Mongolia
with over 20 precious and base metal projects that include 47 licences
covering in excess of 840,000 hectares, as well as 19 uranium licenses and
applications covering more than 1.3 million hectares. Erdene is well funded
with a current working capital position of approximately CDN$6.6 million.
Erdene has 26,232,135 common shares issued and outstanding and a fully diluted
share position of 30,828,910 common shares. Erdene Gold Inc. trades on the TSX
Venture Exchange under the symbol ERD. For additional information please visit
www.erdene.com

Forward-Looking Statements

Certain information regarding the Company contained herein may constitute
forward-looking statements within the meaning of applicable securities laws.
Forward-looking statements may include estimates, plans, expectations,
opinions, forecasts, projections, guidance or other statements that are not
statements of fact. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. The Company
cautions that actual performance will be affected by a number of factors, many
of which are beyond the Company's control, and that future events and results
may vary substantially from what the Company currently foresees. Factors that
could cause actual results to differ materially from those in forward-looking
statements include market prices, exploitation and exploration results,
continued availability of capital and financing and general economic, market
or business conditions. The Company's forward-looking statements are expressly
qualified in their entirety by this cautionary statement. The information
contained herein is stated as of the current date and subject to change after
that date. Erdene disclaims any intention to update or revise this statement
of forward-looking information, whether as a result of new information, future
events or otherwise.

For additional information visit Erdene's website at www.erdene.com or
contact the company via email at info(at)erdene.com

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responsibility for the adequacy or accuracy of this news release.