Slide 1: Company Presentation 1st Quarter 2011
Company Presentation 1st Quarter 2011
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: Commodity & Geographic Focus
COMMODITY & GEOGRAPHIC FOCUS Mongolia Canada U.S. Ind Minerals Coal Coal Metals DIVERSE MID-TIER RESOURCE EXPLORATION & DEVELOPMENT COMPANY 33
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS Donkin Project (25% ERD / 75% Xstrata) Prefeasibility pending on 2.75Mt/annum coking coal project located near a deep water port in eastern Canada Zuun Mod Molybdenum-Copper Project Advancing very large molybdenum-copper deposit located on Chinese-Mongolia border; New copper di
Slide 5: Market Facts
MARKET FACTS (As of March-01, 2011) Capital Structure Share Performance (May 10 – March 11) Trading Info TSX: ERD 2 Shares Outstanding 90.3 M 13.6 11.8 Shares Fully Diluted 93 M 1.5 10 Working Capital CDN ~$7.6 M 8.2 1 6.4 52 Week High/Low CDN $0.26 / $1.84 4.6 0.5 (1) Market Cap CDN ~$99 M 2.8 1 0
Slide 6: Management Team
MANAGEMENT TEAM Peter C. Akerley President, CEO & Director Previously provided exploration and managerial services for projects in Canada, the U.S.. Mexico, Guyana, the Philippines and Mongolia to junior and senior exploration and mining companies. Projects discovered under Mr. Akerley’s management
Slide 7: Directors
Directors William B. Burton Over 30 years of experience in exploration and operating junior resource companies. Currently President and CEO of MagIndustries Corp. Previously Vice-President of Exploration for International Pursuit Corporation, evaluating gold properties in Asia, including Mongolia, a
Slide 8: Donkin Coal Project
DONKIN COAL PROJECT 25% Erdene / 75% Xstrata Coal (Manager) Large – Long Life Resource High Quality (Coking and Thermal) Proximal to Deep Water Significant Infrastructure Low Operating and Transportation Costs Experienced Workforce 8
Slide 9: Donkin Coal Project: History
DONKIN COAL PROJECT History Pre-1980s 1990s 2005 340 Mt coal mined DEVCO Xstrata Donkin in Cape Breton over seals the tunnels JV successful in 300 year period. and shuts securing DEVCO spends down coal mining, government >$100M to advance due to downturn in tender for the Donkin project, world coal
Slide 10: Donkin Coal Project: History 2006-2009
DONKIN COAL PROJECT History 2006 - 07 2008 2009 Tunnel dewatering & Xstrata’s CM Mining lease refurbishment, in- Feasibility study granted June; 33 seam drilling, completed in yrs + 20 yr option engineering studies, September CM 500,000 tonne - & longwall Environmental Industrial Approval preliminar
Slide 11: Donkin Coal Project: Recent History
DONKIN COAL PROJECT Recent History Q1-10 Q3-10 Q4-10 Xstrata announced NSPI commences Prime Minister 3.5 Mt ROM, 2.75 purchase of Cape Stephen Harper Mt saleable coking- Breton - Harbour announces federal coal project seam coal support (~$19M) for carrying out (Pioneer Coal’s dredging Sydney extensi
Slide 12: Resources & Coal Quality
DONKIN COAL PROJECT Resources & Coal Quality Harbour Seam - Processed High volatile-A bituminous, medium sulphur, very low ash, high CSN & fluidity Seam Indicated Inferred Product: Semi-soft to semi-hard Name (Mt) (Mt) Lloyd Cove 53 82 Hub 73 57 Harbour 101 115 Total 227 254
Slide 13: Development Options
DONKIN COAL PROJECT Development Options Continuous Miner Development Currently permitted for 0.5 Mt ROM tonnes Continuous Miner Longwall 2.75 Mt Product 4 Mt Product Coking Coal Project Coking and Thermal Prefeasibility Coal Project 13
Slide 14: Continuous-Miner & Longwall Mining Plan
DONKIN COAL PROJECT Continuous-Miner & Longwall Mining Plan
Slide 15: Site Development Plan
DONKIN COAL PROJECT Site Development Plan Rail Option: 31km total to International Pier (24km new line) Marine Option: 12,000 and 15,000 tonne barges loading off the Donkin peninsula
Slide 16: Local Infrastructure
DONKIN COAL PROJECT Local Infrastructure No. 26 Colliery 16
Slide 17: Distance to Port Comparables
DONKIN COAL PROJECT Distance to Port Comparables 1,400 1,200 1,000 Kilometers 800 600 400 200 0 ERDENE CLINE GRANDE CACHE WESTERN DISTANCE TO PORT (KM) 17
Slide 18: Operating & Transport Cost Comparison
DONKIN COAL PROJECT Operating & Transport Cost Comparison $120 $100 $80 $USD $60 $40 $20 $0 ERDENE CLINE GRANDE CACHE WESTERN OPERATING COST / TONNE TRANSPORT/PORT / TONNE * assumes Norwest 2007 opex inflated 5% annually, 30% increase for CM vs. longwall and 30% increase as study was +/- 30% 18
Slide 19: Capex Peer Group Comparison
DONKIN COAL PROJECT Capex Peer Group Comparison $300 $250 $USD M $200 $150 $278 $272 $260 $100 $50 $0 CLINE COMPLIANCE WESTERN (1.2 Mt) (0.9 Mt) (2.1 Mt) 19
Slide 20: Atlantic Seaborne Coal Transportation
DONKIN COAL PROJECT Atlantic Seaborne Coal Transportation DONKIN Rotterdam Appalachia U.S.A. Cerrejon Colombia From South Africa 20
Slide 21: Global Coal Supply: Low Seaborne Freight Costs
GLOBAL COAL SUPPLY Low Seaborne Freight Costs Rus 30mt 81mt 16mt 27mt 6mt W Eur E Eur 106mt 33mt USA 16mt Jpn, Kor, China USA 14 / Taiwan 15mt 114mt 259mt India Vtn 75mt 20mt Colum 105mt 115mt 68mt Indo 275mt Aus S Afr 141mt 66mt Exporter Importer Source: GTIS, Macquarie Research, Feb 2011 China imp
Slide 22: Current Global Coal Supply Constraints
GLOBAL COAL SUPPLY Current Global Coal Supply Constraints Elga, Russia Challenging infrastructure, much Tavan Tolgoi, Mongolia delayed project Govn’t ownership, much delayed project, market restricted Appalachia Increasing costs, Shanxi, China regulations, Dangerous, high-cost Western Canada Declini
Slide 23: Coal Market in Maritime Canada
DONKIN COAL PROJECT Coal Market in Maritime Canada 2009 IMPORTS Nova Scotia: 2,117,000 t New Brunswick: 805,600 t NOVA SCOTIA PRODUCTION Pioneer Prince Mine: 250,000 – 350,000 t Pioneer Stellarton Mine: 200,000 – 400,000 t
Slide 24: Going Forward
DONKIN COAL PROJECT Going Forward 2011 2012 / 13 2014 Pre-feasibility Complete Feasibility Full Production report delivered & Permitting 2.75 to 4 Mtpy Feasibility/Initial Continuous Miner Development ROM sales Financing Xstrata contributes Erdene’s initial $10M Erdene in discussions with various fi
Slide 25: Donkin Production Comparison
DONKIN PRODUCTION COMPARISON Market Value vs Annual Production Projected (~3 yrs) vs Donkin LW $400 $350 $300 $250 $200 $150 $100 $50 $0 ERD (1.1M) CLINE (3M) GRANDE CACHE (3M) SOUTH GOBI (8M) Jan 2011 25
Slide 26: Zuun Mod Mo-Cu Project: Highlights
ZUUN MOD MO-CU PROJECT Molybdenum and Copper Highlights Located on China border Image/map... Large Mo-Cu resource Sexy shot of ZM perhaps New copper discovery Access to lower capex plant and equipment Growing local infrastructure and skilled labour force 26
Slide 27: Regional Moly & Steel Industry
ZUUN MOD MO-CU PROJECT Regional Moly & Steel Industry World’s Largest Steel Producing Region China’s Largest Molybdenum Producing Regions 27
Slide 28: Project History
ZUUN MOD MO-CU PROJECT Project History ($14M invested to date) 2003 - 2009 2003 - Discovery Drilling (WMC – Gallant Minerals JV) 2005 – Erdene Acquires Mohamed Al-Fayed’s Gallant Minerals 2006 – 2009 – Resource Definition Drilling >40km’s 2009 – Resource Estimate (43-101) and Engineering Studies 201
Slide 29: Property / Deposit Map
ZUUN MOD MO-CU PROJECT Property / Deposit Map UB Khuvyn Khar Zuun Mod Mo-Cu Deposits Direction of View 29
Slide 30: June 2009 NI 43-101 Resource Estimate
ZUUN MOD MO-CU PROJECT June 2009 NI 43-101 Resource Estimate 0.050% Mo 0.050% Mo 0.052% Mo 0.048% Mo 0.060% Mo 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 30
Slide 31: 2010 Drill Program – New High Grade Zone
ZUUN MOD MO-CU PROJECT 2010 Drill Program – New High Grade Zone ZMD-51 ext 432 m 1km 0.061% Mo / 0.072% Cu Incl:118m 0.106% Mo / 0.098% Cu ZMD-115 300 m 0.071% Mo / 0.11% Cu Incl: 66m 0.108% Mo / 0.129% Cu ZMD-116 336 m New or Extended Hole 2010 0.062% Mo / 0.071% Cu Previously Drilled Hole Incl: 78
Slide 32: New Results Expand Previous Resource
ZUUN MOD MO-CU PROJECT New Results Expand Previous Resource 32
Slide 33: Khuvyn Khar Copper Prospect
ZUUN MOD MO-CU PROJECT Khuvyn Khar Copper Prospect Cu in Soil Anomaly 118m @ 0.08% Cu ZMD-08 ZMD-121 373m @ 0.19% Cu KKMD-13 (34m @ 1.3% Cu) Drill Hole 152m @ 0.16% Cu (32m of 0.22% Cu) 33
Slide 34: Khuvyn Khar Cu Prospect
KHUVYN KHAR CU PROSPECT ZMD-121 (34m of 1.3 % Cu and 9 g/t Ag) 3.9% Cu and 25 g/t Ag 310-312m Chalcopyrite in Breccia Zone 4.1% Cu and 21 g/t Ag 316-318m Chalcopyrite in Quartz Breccia Zone 4.1% Cu and 27 g/t Ag 334-336m Chalcopyrite & Pyrite in Monzonite Breccia 34
Slide 35: Pending Pre-Feasibility Study
ZUUN MOD MO-CU PROJECT Pending Pre-Feasibility Study (PFS) Components of PFS Initiated; Mine Planning / Pit Optimization Environment Baseline Study / Community Relations Geotechnical Review Hydro-geology / Water Resource Identification Metallurgical Testing Marketing Study Infrastructure Review 35
Slide 36: Timeline
ZUUN MOD MO-CU PROJECT Timeline 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 Pre-feasibility Strategic Partner Evaluation Feasibility Khuvyn Khar Development Cu Drilling Start-up / Production 36
Slide 37: Molybdenum Supply & Demand
ZUUN MOD MO-CU PROJECT Molybdenum Supply & Demand New supply needed, > 300 Mlbs; Equivalent of 1-2 additional world class mines each year Mlb Mo 750 575 Consumption trend Need for new sources Improved recoveries China expansions Recycling Existing mines Consumption 400 2009 2010 2011 2012 2013 2014
Slide 38: Summary
ZUUN MOD MO-CU PROJECT Summary Large Molybdenum - Copper deposit Significant exploration upside Next door to China New Copper discovery 38
Slide 39: Market Cap Peer Group Comparison
ERDENE RESOURCE DEVELOPMENT Market Cap Peer Group Comparison Donkin Zuun Mod < 2 Mtpy met coal producer > 15Mlbs/y primary Mo producer $1,000 $400 $800 $300 $600 $200 $400 $200 $100 $0 $0 Erdene Corsa Cline Grande Erdene Avanti Creston General Moly Cache Moly Moly Mines 39
Slide 40: The Land of Blue Sky
THE LAND OF BLUE SKY Feb 15, 2001: Jul 17, 2001: IVANHOE IVANHOE MINES MINES DISCOVERS EXPANDS DISCOVERY NEW PORPHYRYOF LARGE February GOLDCOPPER/GOLD 1, 2011: AND COPPERPORPHYRY Erdene Discovers SYSTEM AT TURQUOISE ZONE IN MONGOLIA….Ivanhoe's New Copper HILL first Zone deep at Zuun PROSPECT diamond
Slide 41: 41
41
Slide 42: Erdene Resource Development Corp
Erdene Resource Development Corp Corporate Office 99 Wyse Road, Suite 1480 Dartmouth, Nova Scotia Canada B3A 4S5 Tel 902-423-6419 Fax 902-423-6432 NA Toll Free 800-261-1422 Email info@erdene.com www.erdene.com