Erdene Provides Year-End Financial Results and Project Review
01 Abril 2014 - 7:02AM
Marketwired Canada
Erdene Resource Development Corp. (TSX:ERD) ("Erdene" or "Company"), is pleased
to provide a review of 2013 activities on the Company's principal projects in
Mongolia in conjunction with the release of its year-end financial results.
2013 Project and Financial Highlights
Altan Nar Gold-Polymetallic Project (100% Erdene):
-- Twelve distinct gold-polymetallic mineralized zones identified to date
along a 5.5 by 1.5 km mineralized corridor
-- Trenching program uncovered high grade intersections in four areas that
returned from 5 m of 5.2 g/t gold to 19 m averaging 8.9 g/t gold within
broader zones up to 50 m averaging 1.1 g/t gold
-- Significant silver and base metal mineralization is associated with high
grade gold zones particularly in Union North where trenching returned 19
m of 8.9 g/t gold, 66 g/t silver, 7.7% lead and 2.5% zinc
-- Previous drilling in the Discovery Zone retuned up to 29 m of 4.3 g/t
gold, and drilling at Union North (1.3 km to the northwest) returned up
to 9 m of 4.4 g/t gold
-- Targets remain open along strike, with confirmed lengths of up to 400 m,
and at depth where the deepest intersection on the property ended in 5 m
of 4.7 g/t at 230 m depth in the Discovery Zone
Teck Resources Limited ("Teck") and Khuvyn Khar:
-- Strategic Alliance with Teck established to fund and explore Erdene's
mineral tenements in southwest Mongolia, including the Khuvyn Khar
copper discovery
-- Exploration work completed at Khuvyn Khar identified priority drill
targets with high probability for intersecting copper porphyry
mineralization at relatively shallow depths
-- Through an initial private placement and participation in Erdene's
equity financing in November 2013, Teck is now Erdene's largest
shareholder at 10.4%
Mongolia:
-- The Mongolian government approved a new Foreign Investment Law that
eases restrictions on foreign investors and offers long-term tax
stabilization contracts
-- In January 2014, the Mongolian government reduced the gold royalty from
10% to 2.5% for gold sold through the government
Financials:
-- General and administration costs for the Company decreased 53% compared
to 2012
-- The Company secured $1.69 million in financing during the year
Mongolia Exploration Highlights
Altan Nar Gold-Polymetallic Project
In 2013, a surface mapping and sampling program was undertaken at the Company's
100% owned Altan Nar project in southwest Mongolia to further define targets
along the 5.5 km long mineralized corridor. This work significantly expanded the
target area at Altan Nar to include 12 distinct mineralized zones. A map of
these target zones can be found on the Erdene website (click here for link). In
addition to this ground exploration work, metallurgical testing was completed
and confirmed that the majority of gold mineralization identified to date is
highly amenable to cyanide leach recovery (81%) based on bottle roll testing
(click here for Erdene's June 27, 2013 press release).
In the fourth quarter, the Company completed a total of 1,877 m of trenching
over priority target areas. The results uncovered multiple, high grade gold,
silver and base metals zones, including a strongly mineralized system at the
Union North prospect, 1.3 km northwest of the Discovery Zone, that returned 19 m
of 8.9 g/t gold, 66 g/t silver, 7.7% lead and 2.5% zinc, including 7 m of 20.2
g/t gold, 138 g/t silver, 17% lead and 5% zinc. The 2013 trenching program
intersected well mineralized structures at the Union North/South, Discovery
Zone, Riverside, Maggie, and Northbow/Southbow prospects, with multiple areas
requiring additional exploration. In conjunction with previous drill results,
the trench results confirm the potential for multiple shallow, large,
bulk-tonnage, gold-silver-lead-zinc mineralized targets, and give further
support for the next round of prioritized drilling at Altan Nar. Plans for the
2014 exploration program are currently being finalized with field work expected
to commence early in the second quarter. This program will include higher
density geochemical sampling, mapping, additional trenching, an induced
polarization geophysical survey, and drilling. This work should provide a
greater understanding of the extent of the multiple mineralized structures
identified to date and should provide a stronger base for designing a more
extensive resource definition drill program to follow this phase I program.
Khuvyn Khar Copper Porphyry Project
The 2013 exploration program carried out at Khuvyn Khar has resulted in the
identification and prioritization of seven porphyry copper drill targets, three
of which are considered to be high probability for intersecting copper porphyry
mineralization at relatively shallow depths. Of most significance are targets
characterized by the presence of previously undefined hydrothermal intrusive
breccias ("HIB"). The HIBs have a copper (molybdenum) mineralized matrix and
porphyry clasts and were identified in drill holes adjacent to gravity low
features suggesting that granitic bodies in these locations underwent
fluid-over-pressuring and associated mineralization, underscoring the high
degree of prospectivity.
The intersections of HIB were also located adjacent to, or within, the two
largest, high intensity copper-in-soil anomalies. The target area in the
northern portion of the license is also characterized by the most significant
mobile-metal-ion copper and multi-element geochemical anomaly. Two drill holes
on the perimeter of the target area returned wide intervals of significant
copper mineralization. The 2013 exploration program confirmed that the potential
for copper-rich, porphyry style mineralization, within the Khuvyn Khar - Zuun
Mod complex, is considered to be very favorable, a conclusion supported by high
grade copper-silver mineralization intersected by previous drilling. Exploration
plans for 2014 include detailed surface mapping and geophysical characterization
studies during the second quarter prior to the final design of drill plans and
submission to the Teck-Erdene Alliance for approval of a 2014 drill program.
Altan Arrow Gold Project
During the fourth quarter of 2013, trenching confirmed the presence of high
grade gold within epithermal quartz veins and the potential for broader
mineralized zones on the Company's 100% owned Altan Arrow licence, located 15 km
southeast of the Altan Nar project. Exploration included a series of trenches
over an 800 m strike length. The trenches tested two styles of mineralized
quartz; narrow epithermal quartz veins, and a hydrothermal quartz vein/breccia
zone. Results from the epithermal veins included 6 m of 4.5 g/t gold (includes 1
m of 16.7 g/t gold) in trench AAT-02, however trench mapping suggests the
aurifereous vein is oriented sub-parallel to the trench thereby influencing
reported width. A second trench testing epithermal veins, 300 m to the south of
AAT-02, returned 31.4 g/t gold over 1 m. Trenching results over the
south-western end of the hydrothermal quartz vein/breccia zone intersected a 7 m
wide quartz vein/breccia zone that together with stockwork quartz veins within a
wide zone of phyllic and argillic alteration, averaged 0.18 g/t gold over 17 m.
Mongolia Update
In an effort to improve the investment climate for foreign investors, the
Mongolian government in October 2013 passed, with 83% parliamentary approval, a
new Foreign Investment Law that eases restrictions on foreign investors and
offers long-term tax stabilization contracts. In January 2014, the Mongolian
government announced the passing of an amendment to the Minerals Law reducing
the royalty for gold from 10% to 2.5% under the condition that producers sell
their output to the Mongolian central bank. In addition to these positive
legislative changes, it is anticipated that Phase II funding for Rio Tinto's Oyu
Tolgoi copper-gold project will be approved in 2014, allowing it to advance to
underground development. It is expected that the approval of the underground
phase of this world-class project will be a positive stimulus for the mineral
exploration and mining sector in Mongolia.
Year-End Financial Results Summary
Erdene's year-end 2013 financial statements, Management's Discussion and
Analysis and Annual Information Form were filed with regulatory authorities on
March 31, 2014 and are available on the Company's website here, and on SEDAR.
For the 12 months ended December 31, 2013, the net loss was $2,760,423 or $0.05
basic and diluted loss per share compared to $7,345,810 or $0.15 basic and
diluted loss per share in 2012.
In the prior year, the Company successfully completed a Plan of Arrangement with
Advanced Primary Minerals Corporation. As a result of the transaction, the
Company distributed its North American assets: its 25% interest in the Donkin
Coal Project and Nova Scotia Aggregate interests, to Shareholders via the
distribution of shares of Morien Resources Corp.. The revenues and expenses
associated with the North American assets are categorized under Loss from
Discontinued Operations in the Consolidated Statements of Loss and related
notes.
Exploration expenses totaled $1,701,911 in fiscal 2013 compared to $3,167,762 in
2012. Expenditures were primarily directed toward the Altan Nar gold discovery
as well as the continued work on the Zuun Mod/Khuvyn Khar license under the
Teck-Erdene alliance. Specifically, direct expenditures by project were as
follows:
-- Altan Nar: Approximately $453,000 for the 12 months ended December 31,
2013 (2012 - $2.0 million)
-- Zuun Mod/Khuvyn Khar: Approximately $615,000 for the 12 months ended
December 31, 2013 (2012 - $445,000)
-- Regional and Other: Approximately $848,000 for the 12 months ended
December 31, 2013 (2012 - $1.0 million)
-- Exploration Projects: Approximately $254,000 for Altan Arrow, Teeg
Uul and the Trans Altai projects for the 12 months ended December 31
-- General: Approximately $345,000 including $152,000 in share based
payments for the 12 months ended December 31
-- Mongolia Office: Approximately $249,000 for the 12 months ended
December 31
Administrative expenses totaled $939,455 in 2013 (including $225,626 in non-cash
stock based compensation), compared to $1,678,298 in 2012 (including $186,559 in
non-cash stock based compensation). Cash administration costs decreased
$771,220, or 53%, compared to the prior year, evidence of management's continued
focus on the reduction of overhead and administrative costs and uptake of equity
based compensation in lieu of cash.
Net loss from continuing operations was $2,623,066, or $0.04 per share in fiscal
2013 compared with a loss of $4,641,082, or $0.09 per share in fiscal 2012.
Qualified Person
J.C. (Chris) Cowan, P. Eng. (Ontario), VP Asia for Erdene, is a Qualified Person
as that term is defined in National Instrument 43-101 and has reviewed and
approved the technical information contained in this news release.
About Erdene
Erdene Resource Development Corp. is a Canada-based resource exploration company
focused on the acquisition, exploration, and development of base and precious
metals in underexplored and highly prospective Mongolia. For further information
on the Company, please visit www.erdene.com. Erdene has 68,641,503 issued and
outstanding common shares and, a fully diluted position of 80,080,692 common
shares.
Forward-Looking Statements
Certain information regarding Erdene 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 Erdene 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. Erdene cautions that actual
performance will be affected by a number of factors, most of which are beyond
its control, and that future events and results may vary substantially from what
Erdene 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
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 is subject to change after that date. The Company does not
assume the obligation to revise or update these forward-looking statements,
except as may be required under applicable securities laws.
NO REGULATORY AUTHORITY HAS APPROVED OR DISAPPROVED THE CONTENTS OF THIS RELEASE
FOR FURTHER INFORMATION PLEASE CONTACT:
Erdene Resource Development Corp.
Peter C. Akerley, President and CEO
Ken W. MacDonald, Vice President Business Strategy and CFO
(902) 423-6419
info@erdene.com
www.erdene.com
Twitter: @ErdeneRes
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