39 slides from Erdene Resource Development's investor presentation, September 2017
Slide 1: Developing a New Gold District in Southwest Mongolia
crip) ERDENE RESOURCE DEVELOPMENT TSX:ERD DEVELOPING A NEW GOLD DISTRICT IN SOUTHWEST MONGOLIA CORPORATE UPDATE | SEPT 2017
Slide 2: Forward Looking Statements
Forward Looking Statements Certain information regarding Erdene ("the Company") mineralized zone has an interpreted dip of 45 degrees Kelly, P.Eng., of Blue Coast Research Ltd., a Qualified contained herein may constitute forward-looking therefore true width is close to reported drill hole Person fo
Slide 3: Investment Highlights
Investment Highlights • 100% Ownership in Several High- Grade, Near-Surface Gold Projects • Large Land Position with High Expansion and Discovery Potential • >24,000 Metre Drill Program Underway with Results to Continue Throughout Q4 • Extensive Regional Copper Exploration Program Funded by Teck Res
Slide 4: Corporate Snapshot
Corporate Snapshot Share Structure Shareholder Summary Exchange: Symbol TSX: ERD 55% Retail Share Price (08-Sep-2017) $0.86 52-Week Range $0.31 - $1.40 Market Capitalization $125 million Institutional 25% (incl. 10 institutions; Shares Outstanding 145.9 million largest holding - 8.7%) Shares Fully D
Slide 5: Highly Experienced, Mongolia-Focused Board
Highly Experienced, Mongolia-Focused Board Peter Akerley, President & CEO John Byrne Mining executive/geologist with 25+ years Finance industry professional with 30+ experience in mineral exploration, corporate years experience in Canadian banking finance, project development & management industry.
Slide 6: Gold Discovery Trend – The Search for New Deposits
Gold Discovery Trend – The Search for New Deposits Sharp Decline in Major(1) Gold Discoveries Discovered vs. Produced Ounces 1050 160 Number of Gold Discoveries 1000 751 820 800 604 120 570 Million Ounces 600 80 400 157 40 200 0 0 1990-1999 2000-2009 2010-2015 Discovered Ounces Produced Ounces Gold
Slide 7: Giant Gold Deposits & Prospective Terranes
Giant Gold Deposits & Prospective Terranes 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 TSX:ERD | www.erdene.com | 7
Slide 8: Regional Gold Production/Development
Regional Gold Production/Development TSX:ERD | www.erdene.com | 8
Slide 9: A New Metals District - Proximal to China Rail & Highway
A New Metals District - Proximal to China Rail & Highway Located in Area of Increasing Mining Activity & Regional Infrastructure Build-Up TSX:ERD | www.erdene.com | 9
Slide 10: An Emerging Gold & Copper District
An Emerging Gold & Copper District 45 km x 25 km District of Significant Arc-Related Metal Projects TSX:ERD | www.erdene.com | 10
Slide 11: Bayan Khundii
Bayan Mongolian word for Rich | Khundii Mongolian word for Valley Looking Northeast Through Striker Zone (2 kilometres)
Slide 12: Indications of a Major Discovery
Bayan Khundii Gold Project Indications of a Major Discovery • Discovered by Erdene in Q2-2015; surface Discovery samples returned up to 4,380 g/t gold • First drill hole in Q4-2015: 7 m of 27 g/t gold at 14 m depth • 198 holes completed between October 2015 Drilling and Sept 12, 2017 totalling 30,72
Slide 13: 1.7 km Trend and Open in all Directions
Bayan Khundii Gold Project 1.7 km Trend and Open in all Directions • Mineralization hosted within altered Devonian volcanics (blue) ! • Locally intruded by post- mineral granites and syenites (pink)! • Overlain by post- mineralized Cretaceous/ Quaternary units (green/ brown)! • Structural control in
Slide 14: 2015 Drilling
Bayan Khundii Gold Project 2015 Drilling Q4-2015: 695 metres of drilling over 300 x 150 m area Gram-Meter Contour 1 5 10 15 25 50 500 Grade (g/t) x Thickness (m) 2015 Q4-2015; Initial Definition of Striker Zone 7m @ 27.5 g/t Au @14m Depth 15m @ 9.9 g/t Au @ 34m Depth 12m @ 16.2 g/t Au @ 11m Depth TS
Slide 15: 2016 Drilling
Bayan Khundii Gold Project 2016 Drilling 2016: 9,696 metres of drilling over 500 x 350 m area Gram-Meter Contour 1 5 10 15 25 50 500 Grade (g/t) x Thickness (m) 2016 2016; First Step-Out Result at Midfield Zone 123m @ 1.3 g/t Au @ 20m Depth, (including 68m @ 2 g/t Au) 2016; Major intersections in St
Slide 16: 2017 Drilling
Bayan Khundii Gold Project 2017 Drilling 2017: 20,500 metres of drilling over 1.2 km x 400 m area Gram-Meter Contour 1 5 10 15 25 50 500 Grade (g/t) x Thickness (m) 2017 North Midfield Step-Outs West Striker Step-Outs 108m @ 2.8 g/t Au 58m @ 1.1 g/t Au @ 135m Depth @ 98m Depth (incl. 28m @ 1.4 g/t A
Slide 17: New 2017 Extensions to the North and at Depth
Bayan Khundii Gold Project New 2017 Extensions to the North and at Depth Most ContinuousCross-Section: mineralization…..! Looking West from Striker to Midfield c b a TSX:ERD | www.erdene.com | 17
Slide 18: Parallel Stacked Zones Open in all Directions
Bayan Khundii Gold Project Parallel Stacked Zones Open in all Directions Most Continuous mineralization…..! Long-Section: Looking North Through Striker Zone and Western Extension TSX:ERD | www.erdene.com | 18
Slide 19: 2017 Definition & Expansion Drill Program
Bayan Khundii Gold Project 2017 Definition & Expansion Drill Program >20,000m of drilling in fully-funded Phase I Bayan Khundii 2017 Drill exploration program Program 4 STRIKER ZONE • Definition drilling 3 5 • Deep drilling • Lateral extensions in all directions MIDFIELD ZONE 2 6 • Definition Drilli
Slide 20: Regional Gold District
REGIONAL GOLD DISTRICT SEVERAL GOLD-COPPER PROJECTS WITHIN A 40 KM BY 20 KM DISTRICT
Slide 21: The Khundii License Prospects – Regional Exploration
The Khundii License Prospects – Regional Exploration Similar Epithermal Gold Targets to Bayan Khundii Multiple Gold-in-Soil Early-stage epithermal gold-silver targets Geochemical Anomalies over large area (~5 km X 4 km) • Khundii North: 800m X 500m prospect area along trend of BK structure; multiple
Slide 22: Ulaan Property – Epithermal Gold and Porphyry Copper Target
Ulaan Property – Q3 Acquisition Epithermal Gold and Porphyry Copper Target Khundii Licence Immediately West of Flagship Bayan Khundii Gold Western Copper Project Anomaly Khundii West TSX:ERD | www.erdene.com | 22
Slide 23: Ulaan Property – Intense Alteration Zone
Ulaan Property – Q3 Acquisition Epithermal Gold and Porphyry Copper Target Intense Alteration Zone Measuring 3 KM in Ulaan Property Diameter Highlights • Alteration, geochemical and geophysical signature consistent with porphyry-style mineralization • Epithermal quartz veining and silicification and
Slide 24: Altan Nar Gold-Polymetallic Project
Altan Nar Gold-Polymetallic Project Highlights Altan Nar 16 KM North High-Grade Au-Ag-Pb-Zn System; Soil of Bayan Khundii Anomaly 10 kilometres 1) See Forward Looking Statements on slide 2 for cautionary statements regarding Gold Equivalent calculations TSX:ERD | www.erdene.com | 24
Slide 25: Altan Nar Highlights
Altan Nar Gold-Polymetallic Project Highlights First Hole at Altan Nar Returned 21m @ 3.0 g/t AuEq Within 50m of Surface, and 50m Vertically Below the Discovery Hole 16m @ 7.1 g/t AuEq 1) See Forward Looking Statements on slide 2 for cautionary statements regarding Gold Equivalent calculations TSX:E
Slide 26: Altan Nar Highlights
Altan Nar Gold-Polymetallic Project Highlights High-Grade Au-Ag-Pb-Zn Altan Nar 5.6 KM Mineralized Trend System • Initial, shallow NI 43-101 resource established on first 2 of 18 targets: Union North (UN) - 147k oz Indicated @ 2.47 g/t AuEq and 102k oz Inferred @ 2.12 g/t AuEq (1.0 g/t AuEq Discover
Slide 27: Discovery Zone (DZ) - Most Advanced of 18 Targets
Altan Nar Gold-Polymetallic Project Discovery Zone (DZ) - Most Advanced of 18 Targets Plan Map Highlights • Exposed at surface • Minimum strike length of 500 metres • Broad, near-surface zones of high- grade gold and base metal mineralization • New high-grade zone identified in Q4-2016 in central DZ
Slide 28: Discovery Zone Q3 Drilling - Testing Parallel Zones & at Depth
Altan Nar Gold-Polymetallic Project Discovery Zone Q3 Drilling - Testing Parallel Zones & at Depth Plan Map Cross-Section (Looking southwest) 1) See Forward Looking Statements on slide 2 for cautionary statements regarding Gold Equivalent calculations TSX:ERD | www.erdene.com | 28
Slide 29: Carbonate Base Metal Gold Deposit Comparison
Altan Nar Gold-Polymetallic Project Carbonate Base Metal Gold Deposit Comparison High Grade, Steeply Dipping Zones, Open at Depth and Along Strike 1) See Forward Looking Statements on slide 2 for cautionary statements regarding Gold Equivalent calculations TSX:ERD | www.erdene.com | 29
Slide 30: Significant Exploration Program Underway
Altan Nar Gold-Polymetallic Project Significant Exploration Program Underway Magnetite destruction associated with mineralized vein/breccia zones • High Resolution Ground Magnetic Survey: 1,000 line-km Altan Nar Target Area magnetic survey completed in Q2 outlining zones of magnetite destruction ass
Slide 31: A Fertile New Gold-Copper Terrane – Satellite Image
A Fertile New Gold-Copper Terrane – Satellite Image Au (gold), Cu (green), Mo (blue) Deposits & Advanced Prospects Altan Nar Area Zuun Mod Area Bayan Khundii Area TSX:ERD | www.erdene.com | 31
Slide 32: Advancing Toward Development
Bayan Khundii & Altan Nar Gold Projects Advancing Toward Development • Near surface, open pit developments • Potential for central processing facility • Environmental baseline studies underway • Water reserve established within 40 km • Power assessment underway, including assessment of renewable ene
Slide 33: Process Test Work
Bayan Khundii & Altan Nar Gold Projects Process Test Work Bayan Khundii Project • Free milling and amenable to conventional processing • Master composites ranging from 0.7 g/t to 24.9 g/t gold - Up to 99% recovery - Standard 60 to 75 micron particle size and 48-hr bottle roll • Grindability studies
Slide 34: Potential Process Flowsheet
Bayan Khundii Gold Project Potential Process Flowsheet Bayan Khundii material is free milling and is anticipated to be processed with conventional CIL and gravity separation Loaded Carbon to Carbon Strip Circuit Cyclone Regenerated Carbon from Carbon Strip Circuit CIL Tails to Tailings Impoundment F
Slide 35: Regional Infrastructure
Bayan Khundii & Altan Nar Gold Projects Regional Infrastructure Road - 225 km to rail head / mining center (Ceke Port of Entry on China border) Water - Hydrogeological study completed in basin 40 km northeast of Altan Nar and Bayan Khundii; large aquifer identified, with estimated water resource at
Slide 36: 2017 Exploration Program
2017 Exploration Program Apr May Jun Jul Aug Sep Oct Nov Dec Drilling - Bayan Khundii Drilling - Altan Nar Drilling - Bayan Khundii Regional Drilling - Water/Aquifer Exploration Exploration - Ulaan Teck Alliance Program Geophysics - BK, AN, AA, Ulaan Metallurgy - Bayan Khundii Expert/Technical Studi
Slide 37: Erdene's Approach to Growth
Erdene’s Approach to Growth ESTABLISH AND EXPAND GOLD RESOURCES Bayan Khundii and Altan Nar Projects EXPLORE & DRILL TEST NEW GOLD & COPPER PROSPECTS Altan Arrow and Ulaan Projects ADDITIONAL ACQUISITIONS TO CONSOLIDATE DISTRICT Several exploration targets within 40 by 20 km area PERMIT & DEVELOP ES
Slide 38: Erdene's Investment Proposition
Erdene’s Investment Proposition • High-Grade Gold Projects • First Mover in New Metals District • Early in Discovery Phase • Near-Surface • 100% Ownership • Good Metallurgy • Significant Expansion Potential • Well Financed • Strong Board and Management TSX:ERD | www.erdene.com | 38
Slide 39: vie
vie FOR MORE INFORMATION: TEL: 902-423-6419 EMAIL: INFO@ERDENE.COM WWW.ERDENE.COM @ERDENERES oo oe