39 slides from Erdene Resource Development's shareholder meeting presentation, June 2016
Slide 1: Developing a New Gold District in Southwest Mongolia
DEVELOPING A NEW GOLD DISTRICT IN SOUTHWEST MONGOLIA Erdene Resource Development Corp.
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, guida
Slide 3: Investment Highlights
Investment Highlights Discovering and Developing a New Gold District in the Tian Shan Mineral Belt High-Grade Gold Discovery in 2015 at Bayan Khundii Project (100% Owned) Advancing the High-Grade Altan Nar Gold-Polymetallic Project (100% Owned) Recent Financing and Royalty Transaction with Sandstorm
Slide 4: Erdene in Mongolia
Erdene in Mongolia Focused on the Discovery of World Class Copper & Gold Projects § Erdene listed on the TSX in 2004 to focus on Mongolia § Principals working in Mongolia since 1996 § Acquired Gallant Minerals (Mohamed Al-Fayed co.) in 2005 § Partnered with Xstrata for coal exploration in 2006 §
Slide 5: Erdene Board and Executive
Erdene Board and Executive Board of Directors Executive Chris Cowan, Chairman Peter Akerley, CEO & Director 27 years international mining industry experience. Mining executive/engineer with 40+ years in senior industry positions, Geologist with extensive experience in foreign including 28 years with
Slide 6: Erdene Management Team
Erdene Management Team Canada Office Mongolia Office Peter Akerley Mike Gillis Ganzorig Enkhbaatar CEO & President Director of Operations GIS Technician Ken MacDonald Bayarmaa Bagabandi Gansukh Yakhuu CFO Administrative Manager Geologist Assistant Mike MacDonald Bat-Erdene Gendenjamts Bilguun Ankhba
Slide 7: Corporate Snapshot
Corporate Snapshot Stock Symbol ERD (TSX) Shareholder Summary Share Price (June 10) $0.35 12.5% 52 Week Range $0.11 - $0.55 10.8% Market Capitalization $41 M Shares Outstanding 121 M 4.1% 61.3% Shares Fully Diluted 132 M 11.3% Cash & Securities $3 M Debt nil 5.9 M Warrants; Avg. Value: $1.1 M $0.19
Slide 8: Sandstorm & Teck Financings Q2-2016
Sandstorm & Teck Financings Q2-2016 Sandstorm Gold Ltd. - A Leading Royalty and Streaming Company § $2.5M financing and royalty sale completed in April 2016 § Comprised of $1.5M in common shares of Sandstorm, and $1.0M cash through equity financing (18 month hold) § Sandstorm granted 2% NSR Royal
Slide 9: Mongolia Highlights
Mongolia Highlights Market Capitalization Re-Rating, YOY Mongolia Highlights $100 § Q4 2015 - National Bank of Canada buys 10.5% stake in one of Mongolia’s top banks $90 § Q1 2016 - Canadian Government-funded mining focussed development projects approved $80 § Q1 2016 - Centerra Gold’s Gatsuurt s
Slide 10: Regional Gold Developments
Regional Gold Developments CSH, China Boroo Gold Mine, Mongolia, China Gold International Centerra 5Moz open pit, heap leach. Producing 140 kt/yr Now reclaimed. Produced 1.5 Moz at approx. @ 0.5 g/t Au grade @ $700/oz cash cost. $500/oz cash cost. Jinfeng Mine, China, Kumtor Mine, Kyrgyzstan, Eldora
Slide 11: Strong Gold Fundamentals
Strong Gold Fundamentals Global Gold Discoveries Declining 1 Global Gold Mine Supply Declining 2 Mln Oz Tonnes 150 3,200 125 100 3,000 75 2,800 50 25 2,600 0 2,400 1990 1991 1992 1993 1995 1996 1997 1998 1999 2000 2001 2002 2003 2005 2006 2007 2008 2009 2010 2011 2012 2013 1994 2004 2010 2011 2012 2
Slide 12: Giant Porphyry-Epithermal Gold Terranes and Deposits
Giant Porphyry-Epithermal Gold Terranes and Deposits Prolific Tian Shan Gold Belt Includes some of the largest economic gold accumulations in the world second only to Witwatersrand in South Africa for known gold resources 12
Slide 13: Tian Shan Gold Belt
Tian Shan Gold Belt Gold Production from TSX listed Companies > 2 Moz Polymetal buys Bayan Airag: First Centerra Gold advances Kinross’s Kupol mine Bakyrchik Gold gold production in 1.6 Moz Gatsuurt gold produces 758,000 oz Projects: US$618M Q2-2014 deposit AuEq in 2015 Erdene Eldorado sells three T
Slide 14: Southern Mongolia Infrastructure
Southern Mongolia Infrastructure Mining Activity & Regional Build-Up Major Infrastructure Development With Access to Equipment & Manufacturing 14
Slide 15: Southwest Mongolia
Southwest Mongolia Gold & Copper Exploration (2009 to 2016) § Extensive exploration by Erdene since 2009 - Gold discoveries 2010 to 2015 - Created copper exploration alliance with Teck in 2013 - Excludes gold projects: Altan Nar and Bayan Khundii § Alliance with Teck Resources (2013-16) - Objectiv
Slide 16: Erdene Projects - Emerging Gold District
Erdene Projects - Emerging Gold District High Grade Gold: 18 targets along 5.6 km mineralized trend, 2 deposits High grade copper-gold discovery Copper discovery Large alteration zone, including up to 31.4 g/t gold in trenching Late 2015 high-grade gold discovery; Q2-2016 Drill Highlight - 63 m of 5
Slide 17: Altan Nar Gold Project - Highlights
Altan Nar Gold Project - Highlights Extent of Initial 1Q15 Resource Ownership - 100% Erdene Union North (UN) Multiple Targets - 18 targets over 5.6 km trend Shallow - Average drilling depth of 105 metres Discovery Zone (DZ) Resource - Only 2 of 18 targets included High-Grade - 2015 drilling: 19 m of
Slide 18: Altan Nar Gold Project - Discovery Zone
Altan Nar Gold Project - Discovery Zone Intensely Mineralized Gold-Polymetallic Deposit High-Grade, Near-Surface, Steeply Dipping Zones, and Open at Depth Plan Map N 100m @ 1.1 g/t AuEq 19m @ 7.8 g/t AuEq 51m @ 2.5 g/t AuEq Cross-section 16m @ 7.1 g/t AuEq 100 m NI 43-101 Resource - Near Surface - D
Slide 19: Altan Nar Gold Project
Altan Nar Gold Project Significant Potential at Depth Epithermal Deposit Comparison Highlighting Expansion Potential at Depth Average Depth of Altan Nar Drilling High Grade Gold 19
Slide 20: Altan Nar Gold Project - Union North
Altan Nar Gold Project - Union North Multiple Mineralized Structures Open in All Directions Drill and Trench (T) Result 30 m @ 1.4 g/t AuEq 6 m @ 6.7 g/t AuEq (T) 28 m @ 2.5 g/t AuEq (T) - Q3 2015 5 m @ 7.7 g/t AuEq 12 m @ 5.4 g/t AuEq 19 m @ 15.2 g/t AuEq (T) 12 m @ 5.3 g/t AuEq - Q3 2015 9 m @ 7.6
Slide 21: Altan Nar Gold Project
Altan Nar Gold Project Initial Resource Estimate on First 2 of 18 Targets Extent of Initial § Shallow resource established for initial starter 1Q15 Resource pits on first 2 of 18 priority targets § 90% of mineral resource is <150 m of Union North (UN) surface; all zones open along strike and at de
Slide 22: Bayan Khundii Gold Project
Bayan Khundii Gold Project Q3 2015 - Multi-Ounce Gold Surface Samples Initial Surface Sampling - up to 4,380 g/t Gold Striker Gold Hill Westridge Stockwork 22
Slide 23: Bayan Khundii Gold Project
Bayan Khundii Gold Project Drill-Trench Plan Map 500 m STRIKER WEST STRIKER WESTRIDGE GOLD HILL 23
Slide 24: Bayan Khundii Gold Project
Bayan Khundii Gold Project Looking Northeast from Westridge 24
Slide 25: Bayan Khundii Gold Project
Bayan Khundii Gold Project Drill-Trench Plan Map 500 m Line 4 25
Slide 26: Bayan Khundii Gold Project
Bayan Khundii Gold Project Line 1: 40m Northwest of Striker Zone BKD-‐28 1m (g/t Au) 0.23 1.23 0.35 0.27 0.23 1.40 3.13 5.91 0.12 0.16 0.18 0.12 0.13 0.11 0.75 0.34 0.20 0.09 0.12 0.21 0.55 0.71 0.13 0.61 0.72 0.69 0.67 1.31 0.60 0.37 0.22 0.11 0.19 0.63 0.21 1.07 2.76 0.38 0.41 0.36 0.28 0.33 0.40
Slide 27: Bayan Khundii Gold Project
Bayan Khundii Gold Project Line 2 (Striker Zone): High-Grade Gold Over 500m BKD-‐09; 1m samples from 33 to 59m (g/t) 0.21 79.40 18.50 0.03 0.11 0.08 0.28 0.08 0.06 0.24 0.18 0.77 38.90 0.30 5.21 4.56 0.25 1.04 0.60 1.37 0.67 1.09 0.19 0.22 0.43 0.33 27
Slide 28: Bayan Khundii Gold Project
Bayan Khundii Gold Project Line 3: 40m Southeast of Striker Zone BKD-‐10; 1m (g/t Au) 0.11 0.15 0.18 0.11 0.17 0.10 0.09 0.08 0.17 0.11 0.14 2.98 0.69 3.01 1.25 0.05 1m @ 0.12 19.6 g/t 4.22 2.65 2.27 3.37 167.00 6.27 0.30 0.10 0.07 0.31 0.12 1.14 0.15 0.28 0.67 0.05 0.14 28
Slide 29: Bayan Khundii Gold Project
Bayan Khundii Gold Project Line 4: Long Section Through Striker Zone 35m 70m 105m 140m 29
Slide 30: Bayan Khundii Gold Project
Bayan Khundii Gold Project Low Sulphidation Epithermal Model 500m Silica Cap Silica Cap Striker (silicification) Gold Zone (silicification) Stockwork Hill Zone Source: Adapted from Buchanan (1990); Hollister (1995); Beger & Eimson (1990) 30
Slide 31: Bayan Khundii Gold Project
Bayan Khundii Gold Project June 14th Drill Highlights 500 m Hole BKD-32 115m @ 0.43 g/t, Trench BKT-17 continuous mineralization 7 m @ 8.7 g/t within below 35 m younger cover 37 m of 2.1 g/t Au 350 m Hole BKD-20 extension Hole BKD-40 1 m @ 19.6 g/t 2 m @ 15.3 g/t and 18 m of 0.4 g/t below younger co
Slide 32: Bayan Khundii Gold Project
Bayan Khundii Gold Project Multiple Gold Targets Over 4 km Trend High-Grade Gold Discovered 3.5 km High-Grade Gold 3.5 km From Main Mineralized Zone Outside of Main Mineralized Zone Northeast Zone 6.9 g/t Au 3.5 g/t Au 1.3 g/t Au 4.1 g/t Au Main Zone 500 metres Anomalous Gold Sample Drill Hole 32
Slide 33: Bayan Khundii Gold Project
Bayan Khundii Gold Project Excellent Initial Metallurgy § Gold is free milling and amenable to conventional processing techniques § Gravity concentration and cyanidation of the gravity tails yielded: - 99% recovery from high- grade composite (24.9 g/t Au) and - 92% from low-grade composite (0.7 g/
Slide 34: Bayan Khundii and Altan Nar Projects
Bayan Khundii and Altan Nar Projects Objectives § Establish limits and size potential of gold mineralization at Bayan Khundii § Grow the resource base at Bayan Khundii and Altan Nar § Complete the necessary studies required to secure a mining license and necessary permits for both projects § Com
Slide 35: Strategic Options Analyses
Strategic Options Analyses Preliminary Evaluations in Preparation for Feasibility Level Study § Study to evaluate mining and processing parameters/options/costs for development § Testing through RPM and Blue Coast Research Labs; Gravity, Carbon-in-pulp (CIP) and Flotation on Bayan Khundii and Alta
Slide 36: Regional Infrastructure
Regional Infrastructure Shinejinst Soum § Road Tsahildag Khudag Basin - 175 km to rail head / mining center (Ceke Port of Entry on China border) Geophysical Survey & § Water Drill Holes - Hydrogeological study completed in Tsahildag Khudag Basin (cost $460,000); 40 km Altan Nar northeast of Altan
Slide 37: Regional and Local Community
Regional and Local Community Scholarship Fund Open House Event Educational Field Trips Bayankhongor Aimag Shinejinst Soum Tsogt Soum, Govi-Altai Aimag Herder Well Protection Medical Equipment Monastery Renovation Bayan Khundii project area Shinejinst Soum Bayan Undur Soum ! 37
Slide 38: Why Invest in ERD?
Why Invest in ERD? Early-In Opportunity Development Stage of a Successful Mining Company ‒ Developing a new gold district through greenfield discovery ‒ Early in exploration to development value curve Value / ~Market Cap ‒ Low point in commodity cycle = low valuations Ownership ‒ 100% interest in Pr
Slide 39: Erdene Resource Development Corp. Developing a New Gold District
Erdene Resource Development Corp. Developing a New Q2 - 2016 Gold District in TSX: ERD Southwest Mongolia Peter C. Akerley President & CEO, Director Tel 902-423-6419 Email info@erdene.com Website www.erdene.com Twitter @ErdeneRes