340 Metres of 0.05% Molybdenum, Including 52 Metres of 0.08%
HALIFAX, Aug. 23 /CNW/ - Erdene Gold Inc. (TSXV:ERD) today announced
results of the diamond drilling program at its Zuun Mod porphyry
molybdenum-copper project located in southern Mongolia approximately
150 kilometres north of the Chinese border. The recent drilling, together with
the results of earlier drilling by Gallant Minerals, has confirmed the
potential for wide zones of significantly anomalous molybdenum mineralization
over a strike length exceeding 2.6 kilometres. An onsite, independent
evaluation is now underway at Zuun Mod.
"We are very excited by these new results at Zuun Mod and look forward to
advancing this project. The near surface mineralization continuing to depth in
the central portion of the Southeast Molybdenum Zone enhances the potential of
the Zuun Mod project," said Peter Akerley, President and Chief Executive
Officer. "As the Chinese domestic market continues to mature we anticipate
increasing growth in the stainless steel sector and this, combined with new
pipeline developments driven by global energy demands, suggests the molybdenum
market will remain strong for the long term."
Eleven holes, totaling 3,500 metres, were drilled as part of the 2005
exploration program to test multiple targets throughout the 20-square-
kilometre Zuun Mod porphyry complex. All holes intersected anomalous copper
and molybdenum over various widths. Five of these new holes tested areas
within the Southeast Molybdenum Zone, where four holes intersected
significantly anomalous molybdenum mineralization. The Southeast Molybdenum
Zone consists of a 3-kilometre long series of structurally controlled and
mineralized quartz-monzonites and granodioritic bodies.
Southeast Molybdenum Zone
To date, a total of 10 holes have tested the Southeast Molybdenum Zone
over a 2.6-kilometre strike length; five holes (ZMD series) drilled by Erdene
in 2005 and five holes (KKMD series) drilled in 2003 by Gallant Minerals/WMC
Resource Ltd. (Gallant). The holes are spaced at intervals of 75 metres to
1000 metres and average approximately 380 metres. Of these 10 holes, seven
have returned intersections ranging from 18 metres of 0.04% molybdenum to
340 metres of 0.05% molybdenum beginning within 100 metres of surface and the
three drill holes with the widest mineralized zones, ZMD-11, KKMD-03 and
MD-08, all ended in mineralization.
The thickest intervals of mineralization grading 0.05% molybdenum or
greater from the 2005 drilling were returned from the central portion of the
Southeast Molybdenum Zone where ZMD-11, returned 340 metres of
0.05% molybdenum which contained two zones of 52 metres and 24 metres
averaging 0.08% and 0.09% molybdenum, respectively. This result is
particularly encouraging as it suggests continuity from a previous Gallant
hole, KKMD-08, located 255 metres to the north which returned 160 metres of
0.06% molybdenum and ended in mineralization at 279 metres. Gallant drill hole
MD-03 is also situated in the Southeast Molybdenum Zone, approximately
1.5 kilometres southwest of ZMD-11. KKMD-03 intersected 236 metres of
0.06% molybdenum beginning at 90 metres depth, and also ended in
mineralization at 326 metres.
Surface exploration suggests that the structural corridor which hosts the
Southeast Molybdenum Zone extends over a strike length of approximately
3 kilometres. Highlights from drilling to date in the Southeast Molybdenum
Zone can be found in Table 1 below. A map showing the location of all drill
holes can be viewed on our website at www.erdene.com.
<<
Table 1 - Southeast Molybdenum Zone Results
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Width
2005 Drilling From To Metres Mo % Cu %
-------------------------------------------------------------------------
ZMD-05 86 104 18 0.04 0.05
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ZMD-10 92 106 14 0.04 0.11
-------------------------------------------------------------------------
ZMD-10 148 168 20 0.04 0.10
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ZMD-10 236 252 16 0.04 0.09
-------------------------------------------------------------------------
ZMD-10 338 362 24 0.05 0.08
-------------------------------------------------------------------------
ZMD-10 414 454 40 0.05 0.05
-------------------------------------------------------------------------
ZMD-11 76 416 (eoh) 340 0.05 0.07
-------------------------------------------------------------------------
Including 86 266 180 0.06 0.07
-------------------------------------------------------------------------
Including 86 138 52 0.08 0.05
-------------------------------------------------------------------------
Including 336 416 80 0.06 0.08
-------------------------------------------------------------------------
Including 350 374 24 0.09 0.12
-------------------------------------------------------------------------
2003 Drilling
-------------------------------------------------------------------------
MD-03 90 326 (eoh) 236 0.06 0.08
-------------------------------------------------------------------------
Including 219 309 90 0.09 0.09
-------------------------------------------------------------------------
Including 219 247 28 0.12 0.08
-------------------------------------------------------------------------
Including 273 289 16 0.14 0.11
-------------------------------------------------------------------------
MD-08 119 279 (eoh) 160 0.06 0.06
-------------------------------------------------------------------------
Including 169 199 30 0.08 0.07
-------------------------------------------------------------------------
Including 215 247 32 0.08 0.08
-------------------------------------------------------------------------
(x) eoh (equal sign) end of hole
2005 Drilling Program
---------------------
The Southeast Molybdenum Zone is only a portion of a much larger porphyry
complex at Zuun Mod much of which remains un-explored by drilling. However,
exploration to date has identified an area of significantly anomalous copper
mineralization, referred to as the Northwest Copper Zone. Two Erdene holes,
ZMD-07 and ZMD-08, were drilled in this zone and returned intervals of
36 metres of 0.15% copper and 26 metres of 0.10% copper, respectively (see
Table 2 below). Two Gallant holes located in the Northwest Copper Zone also
returned significantly anomalous results. Drill hole KKMD-13 returned 152
metres of 0.16% copper and drill hole KKMD-04 returned two anomalous intervals
including 20 metres of 0.17% copper and 56 metres of 0.11% copper (see Table 2
below). The four holes within the Northwest Copper Zone are spaced at 250 to
1000 metres apart with an average of approximately 550 metres.
Table 2 - Northwest Copper Zone Results
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Width
2005 Drilling From To Metres Cu %
-------------------------------------------------------------
ZMD-07 152 188 36 0.15
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ZMD-08 46 72 26 0.10
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2003 Drilling
-------------------------------------------------------------
MD-13 30 182 152 0.16
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MD-04 108 128 20 0.17
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MD-04 186 242 56 0.11
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Summary
-------
Based on the 2005 results, the Zuun Mod project fits within management's
target development criteria. In evaluating projects in the Gobi region the
Company focuses on strategic commodities with large tonnage potential to
supply the Chinese development boom for the long term. The confirmation of
molybdenum mineralization in multiple drill holes over an extensive area
indicates that a program of detailed drilling is warranted. Erdene has
arranged for an independent evaluation of the project to take place
immediately. This evaluation will outline the parameters of the next stage of
drilling planned for the fall of 2005 and will identify other elements of a
scoping study to advance the project through resource definition. It is
anticipated that the independent evaluation report will be received by the
Company in September.
About Zuun Mod & Molybdenum
---------------------------
Zuun Mod is located in the south Gobi region of Mongolia where major
copper, gold, coal and uranium projects are currently being developed. The
property is located less than 200 kilometres from rail and high voltage power
facilities being constructed to service the Jiaguan Iron and Steel complex
located in China's Gansu Province. The facilities are being built to source
raw materials from the Naraan Sukhait coal project.
Molybdenum is used in steel and cast iron products as well as
superalloys, electronics, catalysts, lubricants and pigments. Stainless steel,
which can contain up to 6% molybdenum, is a major growth area for the metal as
are natural gas and oil pipelines which utilize a significant amount of
molybdenum. Strong demand in China coupled with limited supply have resulted
in significant price increases in Molybdenum which is currently priced at
US$29/lb.
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 licences and
applications covering more than 1.1 million hectares. Erdene is well funded
with a working capital position of approximately CDN$7.2 million as of
June 30th, 2005. Erdene has 27,232,135 common shares issued and outstanding
and a fully diluted share position of 32,188,910 common shares. Erdene Gold
Inc. trades on the TSX Venture Exchange under the symbol ERD.
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.
For additional information visit Erdene's website at www.erdene.com or
contact the company via email at info(at)erdene.com.
The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this news release.
>>
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