Erdene Resource Development Corporation · TSX:ERD
Erdene Resource Development — Investor Presentation (November 2010)
39 slides from Erdene Resource Development's investor presentation, November 2010
Slide 1: Corporate Overview Project Update November 2010
Corporate Overview Project Update November 2010
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS Certain information regarding Erdene ("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, guidan
Slide 3: Presentation Outline
PRESENTATION OUTLINE Corporate Overview Donkin Coal Project Zuun Mod Molybdenum Project Metals & Coal Exploration, Mongolia Industrial Minerals, North America Summary 3
Slide 4: Overview: Diverse Mid-Tier Resource Exploration & Development Company
OVERVIEW Mongolia Canada U.S. Aggregate Coal Coal Molybdenum DIVERSE MID-TIER RESOURCE EXPLORATION & DEVELOPMENT COMPANY 44
Slide 5: Erdene Market Facts
ERDENE MARKET FACTS (as of Nov 1st, 2010) Trading Info: Shares Working Capital: Market Cap: Outstanding: TSX:ERD 89.23 M Cdn ~$9.8 M Cdn ~$50 M 1 year history compared to TSX/S&P Global Mining Index 5
Slide 6: Donkin Coal Project
DONKIN COAL PROJECT ALLIANCE: JV Erdene– Xstrata Coal: 25%/75% COMMODITY: Thermal & Met Coal, 227Mt Indicated & 254Mt Inferred Positive Characteristics (washed product) – high energy (12,000-14,000 btu/lb), medium sulphur low ash, low phosphorus, high CSN & fluidity PRIORITY MARKETS: Global Export M
Slide 7: Donkin Coal Project: Local Infrastructure
DONKIN COAL PROJECT Local Infrastructure No. 26 Colliery 7
Slide 8: Atlantic Seaborne Coal Transportation Costs
DONKIN COAL PROJECT Atlantic Seaborne Coal Transportation Costs DONKIN Rotterdam $2.25/t $15/t Appalachia U.S.A. Cerrejon $7.50/t Colombia Average Transportation Costs (3Q 08) ($USD) From Rail - $0.08 / ton-mile South Africa Ship - $0.01 / ton-mile $17/t 8
Slide 9: Donkin 2010 Activity
DONKIN 2010 Activity Civil works- Site development has commenced with the completion of the 2.5km-long access road in mid-July 2010 Engineering Mine Design & Pre-feasibility – Initiated studies to add a CHPP wash plant, design the transportation system, complete marketing report and prepare pre-feas
Slide 10: Donkin Update
DONKIN UPDATE Prefeasibility being completed by Xstrata Coal and Marston Delivery expected in 4th quarter (pending AME marketing report) Production plans are for 2.75Mt of washed met coal per annum, Market - Global met coal markets as a semi-soft blend product (current price ~$140 - $170) Plans incl
Slide 11: Donkin Project Funding
DONKIN -Project Funding $100M previously spent by the federal government to construct twin tunnels which extend for 3.5km from surface Additionally, the JV has spent approximately $25M Donkin Management Meetings – 4th Qtr: on delivery of prefeasibility Xstrata will present 2011-12 budgets and plans
Slide 12: Donkin Coal Project Valuation
DONKIN COAL PROJECT Valuation Source: Norwest Preliminary Assessment Nov. 07 Base Case Sensitivity Sensitivity Sensitivity Sensitivity $52/Mt Price Price Start-up Discount Discount Factor 2015 Start-up 10% Discount ($57/Mt) (2012) (8%) and Price NPV ERDENE $49M $68M $66M $78M $106M (25%) (US$) Erden
Slide 13: Donkin Development Timeline
DONKIN COAL PROJECT Development Timeline 2009 2010 2011 2012 2013 2014 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Pre-Production/Approval Period Staged Development Phase Underground Development (single CM unit) Pre-feasibility Feasibility Production (two CM units) Production (
Slide 14: Zuun Mod Mo-Cu Project
ZUUN MOD MO-CU PROJECT Metals: Molybdenum & Copper RESOURCE: >180,000 tonnes(>400Mlbs) of contained moly at >0.05%, with similar copper content MARKET: Asia-Pacific region ~35% of Mo world consumption and fastest growing PROJECT: Zuun Mod: Wholly owned; ~ 200km from China border, advanced stage; ope
Slide 15: Regional Moly Consumption & Steel Production
ZUUN MOD MO-CU PROJECT Regional Moly Consumption & Steel Production Gas Pipeline 22 Mlbs Mo World’s Largest Steel Producing Region China’s Largest Molybdenum Producing Regions 15
Slide 16: Zuun Mod Contoured Mo in Rock
Zuun Mod – Contoured Mo in Rock Red Contour Zone > 30ppm Mo Max >1000ppm Mo 16
Slide 17: Zuun Mod Project Status
ZUUN MOD MO-CU PROJECT Project Status 410m of 0.057% Mo Incl 96m of 0.095% Mo 399m of 0.055% Mo Incl 36m of 0.088% Mo 428m of 0.060% Mo Incl 172m of 0.091% Mo 373m of 0.063% Mo Incl 94m of 0.084% Mo Mineralization in holes highlighted begins 22m to 150m from surface 17
Slide 18: South Racetrack Molybdenum Grade Contour
0.08% Mo 0.06% Mo 0.04% Mo South Racetrack Looking West – Molybdenum Grade Contour 18 18
Slide 19: Phased Drilling Program
PHASED DRILLING PROGRAM Deposits Racetrack North Racetrack South Stockwork Zone 19
Slide 20: June 2009 NI 43-101 Resource Estimate
ZUUN MOD Mo-Cu PROJECT June 2009 NI 43-101 Resource Estimate Cut-off Resource Category Resources Contained Grade Mo% Mt Cu% Mo% Mo Metal Mlbs 0.04% Total Measured 180 0.064 0.054 215 & Indicated 0.04% Total Inferred 185 0.066 0.051 208 20
Slide 21: Zuun Mod High Grade Zones
ZUUN MOD Mo-Cu PROJECT High Grade Zones Resource Resources Contained Contained Contained Cut-off Category Mt Mo Metal Cu Metal Re Metal Grade Mo% Mo% Mlbs Cu% Mlbs Re ppm lbs (000's) 0.06% Measured 11 0.068 17 0.067 17 0.26 6 Indicated 33 0.072 52 0.07 51 0.34 25 M&I 44 0.071 69 0.069 68 0.32 31 Inf
Slide 22: Minarco Preliminary Assessment - Project
ZUUN MOD Mo-Cu PROJECT Minarco Preliminary Assessment - Project 22
Slide 23: Program Highlights
Program - Highlights Identified high-grade zones within the North and South Racetrack deposits 23 drill holes in 2008-09 increased the 0.06% Mo resource by 40% Metallurgy (Flotation – non-optimized bench scale): Molybdenum Recovery 85.8% to 86.7% Copper Recovery 81.8% Concentrate Grade 55% Molybdenu
Slide 24: Zuun Mod Timeline
ZUUN MOD Timeline 2010 2011 2012 2013 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Resource Definition Mining License Application Preliminary Assessment Study Prefeasibility Strategic Partner Evaluation Feasibility Development Start-up - Production 24
Slide 25: Zuun Mod Peer Group Comparison
Zuun Mod – Peer Group Comparison (As of Nov 1st, 2010) ERD General Moly Creston Moly Moly Mines PROJECT Zuun Mod Mt. Hope Creston Spinifex Ridge M+I RESOURCE 134 Mlbs Mo 1,531Mlbs Mo 264 Mlbs Mo 562 Mlbs Mo @ 0.062% @ 0.07% @ 0.077% @ 0.060% INF RESOURCE 97 Mlbs Mo 265.7 Mlbs Mo 15.3 Mlbs Mo 30 Mlbs
Slide 26: Zuun Mod Summary
ZUUN MOD SUMMARY Strong steel demand expected to drive moly demand and price One of the largest molybdenum deposits in Asia On the doorstep of the world’s largest steel producing region Established >400 Mlbs of molybdenum resource Targeting 2014 Start-up 26
Slide 27: Mongolia Metals – 100% ERD
MONGOLIA METALS – 100% ERD Target: World Class Copper-Gold- Molybdenum Porphyry Deposits Exploration Programs: Multi-million dollar program in South Gobi exploring for porphyry copper, gold, moly systems over 5 years, >$1M in regional Exploration 2009 and 2010 2010 Program: Exploration underway on n
Slide 28: Metals Exploration Mongolia
METALS EXPLORATION MONGOLIA Active 2009-10 Cu-Au-Mo Program 2009-10 Porphyry Exploration Program New Kazakh Mongol Arc ZUUN MOD MO DEPOSIT >400M lbs of Mo and Cu 79 billion lbs of copper and 45 million ounces of gold 28
Slide 29: Khuvyn Khar North Cu Zone / Zuun Mod Mo/Cu Deposit
Khuvyn Khar North Cu Zone Zuun Mod Mo/Cu Deposit 29
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Slide 31: Nomin Copper-Gold Project
Nomin Copper-Gold Project Ancient mining pit workings Hosted within Paleozoic . felsic volcanics and granodiorite Average Grades: Au 1.7 g/t, Cu 2.2% Secondary ancient mining pit Average Grades: Au 1.15g/t, Cu1.6% 31
Slide 32: Mongolia Coal Xstrata Alliance
MONGOLIA COAL XSTRATA ALLIANCE PRIORITY TARGETS: High Quality Thermal & Coking (open pit, <5:1, 200Mt+, >5800 kcal/kg GAR) XSTRATA TERMS: •Option to earn up to 75% of any coal opportunity in Mongolia •Must fund all work through to completion of feasibility study 2010 Program: $1.6M field program to
Slide 33: Erdene's 2009-10 Coal Activity
ERDENE’S 2009-10 COAL ACTIVITY Irkutsk Chita Project due- diligence Ovoot Extent of ERD’09- South Gobi Coal Basin 10 Regional Tenement & Tender Mapping Program Evaluation / Budget Uneet Tavan Tolgoi Tender Olon Bulag Bid Preparation (data collection & digitization) Zarman Basin Tavan Ovoot Tolgoi 40
Slide 34: Industrial Minerals: Kaolin
INDUSTRIAL MINERALS Kaolin Interests: Majority ownership of TSX-V listed Advanced Primary Minerals Commodity: Kaolin used for paper coating and ceramics Objectives: Develop company into North America’s leading specialty kaolin producer 34
Slide 35: APM Corporation Overview
APM CORPORATION Overview TSX Venture listing (TSXV:APD) ERD controls ~ 60% of issued common shares (opportunity to increase to 66%) GOAL - Become North America’s leading specialized primary kaolin producer 22.9 million tons of premium quality NI 43-101 compliant primary kaolin resource Current marke
Slide 36: APM Corp. New Processing Plant - Dearing, GA
APM CORP. New Processing Plant - Dearing, GA. 36
Slide 37: Industrial Minerals: Aggregate
INDUSTRIAL MINERALS Aggregate Interests: • Royalty arrangement with Aggregates USA, spending $35M to develop site • East Coast and Caribbean Evaluations COMMODITY: • Crushed stone for construction uses targeting eastern U.S. predominantly Florida Market Objectives: • At full production receive royal
Slide 38: ERD Summary-2010
ERD SUMMARY-2010 Coal Global export quality coking coal resource moving towards development in close proximity to deep ocean port in Atlantic Region Advancing opportunities in Mongolia with Xstrata Metals One of the largest molybdenum deposits in Asia located 200km from China, the leading steel prod
Slide 39: Sustaining Growth, Value Creation
Sustaining Maintaining GROWTH STABILITY VALUE C R EATI O N 39
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