Overview

Located within 200 kilometres of China’s border in Mongolia’s Bayankhongor Province, and 60 kilometres east of the Company’s Bayan Khundii project, the 100% Erdene-owned Zuun Mod porphyry complex measures 12 kilometres in circumference and hosts broad zones of molybdenum mineralization. The deposit is located within a Mining License, which is valid for an initial 30-year term with provision to renew the license for two additional 20- year terms.

In a three-kilometre extended portion of the system, referred to as the South Corridor, Erdene identified three mineralized zones known as the Racetrack North (“RTN”), Racetrack South (“RTS”) and the Stockwork zones. Initial drilling of these zones intersected thick intervals of significant mineralization proximal to the surface and open at depth.

In June 2011, Erdene received an updated National Instrument 43-101 compliant resource from Minarco MineConsult of Sydney, Australia. The Zuun Mod molybdenum deposit has a measured and indicated resource of 218 million metric tonnes (“Mt”) at an average grade of 0.057% molybdenum (“Mo”) and 0.069% copper (“Cu”), at a 0.04% Mo cut off grade, which equates to 273.5 million pounds of contained Mo metal and 330.7 million pounds of contained Cu metal. In addition, Zuun Mod has an Inferred Resource of 168 Mt averaging 0.052% molybdenum and 0.065% copper. Zuun Mod is one of the largest undeveloped molybdenum-copper deposits in the Asia region. It shows that the Zuun Mod deposit is comparable to other porphyry molybdenum projects currently in production or under development worldwide.

Management believes that the Zuun Mod deposit has significant potential for development provided the molybdenum price improves. Market demand for molybdenum has remained depressed significantly from the US$40 per pound values reached in 2005. Improvement in the molybdenum market is an essential factor in the advancement of the Zuun-Mod molybdenum-copper deposit. Erdene will continue to complete evaluations towards optimizing project economics as new information is received regarding technology and/or additional exploration information. The discovery of additional significant copper mineralization at Khuvyn Khar could provide synergies for advancing the Zuun Mod molybdenum deposits.

This project was acquired from Gallant Minerals Limited in 2005 and is subject to a net smelter returns royalty of 1.5%, subject to a buy-down provision.

Peter Dalton, P.Geo. (Nova Scotia), Senior Geologist, Erdene Resource Development Corporation, is a Qualified Person within the meaning of National Instrument 43-101 and has reviewed and approved the scientific and technical information contained herein.


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