Zuun Mod

Overview

Zuun Mod – Molybdenum and Copper Project: One of Asia’s largest undeveloped molybdenum projects and located within 200 kilometers of the world’s largest molybdenum consumer (China) and 35 kilometers east of the Company’s Bayan Khundii gold project. The 100% Erdene-owned Zuun Mod porphyry complex measures 16 kilometers in circumference and hosts broad zones of molybdenum and copper 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 September 2025, SLR Consulting Australia prepared an updated mineral resource estimate for Zuun Mod in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects. The updated Zuun Mod molybdenum deposit has a Measured and Indicated Resource of 271 million metric tonnes (“Mt”) at an average grade of 0.056% molybdenum (“Mo”) and 0.064% copper (“Cu”), at a 0.0035% Mo cutoff grade, which equates to 333.5 million pounds of contained Mo metal and 384.2 million pounds of contained Cu metal. In addition, Zuun Mod has an Inferred Resource of 269 Mt averaging 0.051% molybdenum and 0.059% copper, which equates to 300.0 million pounds of contained Mo metal and 350.7 million pounds of contained Cu metal. Zuun Mod is one of the largest undeveloped molybdenum-copper deposits in Asia. 

During 2023, the Company completed a 4,100-metre drill program at this property, where multiple drill holes along the current resource boundary expanded mineralization and intersections within the core of the deposit exceeded the average block grades in the vicinity. Additionally, the discovery of resource grade mineralization in an exploration hole 1.7 kilometres north of the deposit further demonstrates the upside of this large copper-molybdenum porphyry complex, which remains open in all directions. Surface sampling work in early 2024 identified a new gold prospect on the license, 4.5 kilometres west of the Zuun Mod molybdenum-copper deposit.

Drilling to date at Zuun Mod has been historically oriented vertical (-90 degrees) to sub-vertical (-85 degrees). Because of this, it is believed that sub-vertical veins are under-represented in the drilling data. The Company expects to carry out further oriented drilling, using angled holes (e.g., -60 degrees), in Q4.  It is expected that this drilling program will reaffirm the vein orientation data and confirmation frequency of the veins in the near-vertical vein system. Results from this program have the potential to materially increase the volume and grade of the Zuun Mod mineral resource, particularly in the near-surface. The Zuun Mod license hosts multiple copper, molybdenum and gold prospects, contained within and proximal to the 16-kilometre circumference porphyry complex.

Drilling in Q4 will also test the Khuvyn Khar copper prospect, located 2.2 kilometres northwest of the Zuun Mod molybdenum-copper deposit.  Geologic, alteration and vein-density mapping and geophysical surveys and limited drilling has defined an extensive copper mineralized zone trending over 900 meters.   Limited deeper drilling has been successful in intersecting a copper-silver mineralization zone at approximately 300 metres depth returning 34 meters of 1.3% copper and 9.2 g/t, defined by copper and silver mineralization. 

In addition to upcoming drilling, planned work at Zuun Mod will include process testing, infrastructure and utilities evaluations and marketing studies.

Molybdenum prices have risen steadily since the trough of 2016 reaching all-time highs in early 2023; before settling at ~US$25/lb. Used primarily in stainless steel and other industrial applications, molybdenum was included in the Canadian and Australian Critical Minerals Lists as well as that of the World Bank and International Energy Agency. 

Molybdenum is a strategic industrial metal prized for its ability to significantly enhance the performance of other materials. Molybdenum is used as an alloying element in stainless and specialty steels, improving strength, heat resistance, and corrosion resistance. Molybdenum is utilized in the construction, renewable energy, aerospace, defence and advanced electronics sectors, where molybdenum’s properties are highly desirable and difficult to substitute. 

Near to medium term demand is supported by China’s move toward higher-quality steels and greater use of specialty steels. Longer term, supply growth faces significant constraints due to the scarcity of scalable deposits, aging mines, high capital requirements, environmental hurdles, and long project development timelines—factors that underpin a structurally bullish outlook for the metal. Global production is concentrated in China, the U.S., Chile, and Peru.

Positioned against this backdrop, the Zuun Mod project benefits from its proximity to molybdenum consumers in China, South Korea, and Japan, as well as the emerging markets of Vietnam and Thailand, where processing capacity is rapidly expanding. Erdene expects its concentrate products to be readily absorbed within the region.

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.