Erdene Announces Conversion of EBRD Convertible Loan and Provides Bayan Khundii Gold Project Update

Erdene Announces Conversion of EBRD Convertible Loan and Provides Bayan
Khundii Gold Project Update

HALIFAX, Nova  Scotia,  Oct. 13,  2020  (GLOBE NEWSWIRE)  --  Erdene  Resource
Development Corp. (TSX:ERD;  MSE:ERDN) ("Erdene" or  the "Company")  announces
that the European Bank for  Reconstruction and Development (“EBRD” or  “Bank”)
has exercised its conversion option in respect of its US$5 million convertible
loan (“Convertible  Loan”)  with  the Company.  Following  conversion  of  the
Convertible  Loan,  the  EBRD  owns  and  controls  30,043,290  common  shares
representing approximately 11.2% of the  issued and outstanding common  shares
of the Company.

Erdene is  also  pleased to  provide  a  project update  for  its  100%-owned,
high-grade, open-pit Bayan Khundii Gold  Project (“Bayan Khundii” or “BK”)  in
southwest Mongolia.

Quotes from the Company and EBRD:

"The proceeds of the  EBRD Convertible Loan provided  the funding to  complete
the recently announced  Bayan Khundii  Gold Project  Feasibility Study,”  said
Peter Akerley, Erdene’s President and CEO. “The EBRD’s conversion, along  with
the proceeds  of the  C$20 million  equity  financing led  by a  C$15  million
strategic investment  from  Mr. Eric  Sprott  position Erdene  to  secure  the
project finance required to  move Bayan Khundii  rapidly to production.    The
company is  focused on  expanding the  resources throughout  the district  and
construction readiness  efforts for  the Bayan  Khundii project  as we  target
first gold in 2022.”

“We were  pleased to  support the  economic, technical  and environmental  and
social studies that have demonstrated the  benefits of the Bayan Khundii  Gold
Project in southwest  Mongolia,” said  Eric Rasmussen, the  EBRD Director  for
Natural Resources. “The conversion  of our loan  into common equity  maintains
our interest in the development of the  Bayan Khundii Gold Project and we  are
pleased to support the development of  this valuable resource for the  benefit
of all stakeholders.”

EBRD’s Commitment to Mongolia

The EBRD is one of  the largest investors in Mongolia.  To date, the EBRD  has
invested over €1.8 billion  (C$2.8 billion) in  Mongolia’s economy across  113
projects, with almost all investments in the private sector. The EBRD works in
Mongolia to  support building  a  diverse economy  by developing  the  private
sector and supporting infrastructure improvements.

Financing Update

Under the terms of the Convertible  Loan agreement executed October 11,  2019,
the EBRD provided US$5.0 million of funding to Erdene by way of a  convertible
loan. EBRD exercised its  conversion option on October  9, 2020 in respect  of
the entire  principal amount  of the  Convertible Loan,  receiving  30,043,290
common shares of the Company, representing  11.2% of Erdene’s then issued  and
outstanding common shares. Additionally, the  Company will pay interest  costs
of US$457,639  to  the Bank  in  connection  with the  extinguishment  of  the
Convertible Loan.

With the conversion  of the EBRD  Convertible Loan and  the completion of  the
Bayan Khundii Gold Project  Feasibility Study, Erdene  will focus on  securing
funding for  the Project.  As previously  disclosed, the  Company engaged  HCF
International to act as Project Finance advisor, to secure Project debt as its
primary  responsibility.  HCF  is   progressing  discussions  with   financial
institutions active  in  mine  finance  on the  basis  of  the  Bayan  Khundii
Feasibility Study results and its strong projected cash flows.

Bayan Khundii Gold Project Update

Construction readiness activities for Bayan Khundii Gold Project commenced  in
Q3 2020 and are progressing as outlined below:

  o Detailed design  and  engineering  for the  Carbon-in-Pulp  (“CIP”)  Leach
    processing plant  and  mine  support  infrastructure  are  progressing  on
    schedule, with expected completion in late Q4 2020.
  o Tender and contracting for critical facilities and services has begun with
    the objective to optimize the capital budget for construction.
  o Constructability, value engineering, and HAZOPS review are also underway.
  o Consultations for the  statutory Mongolian  Detailed Environmental  Impact
    Assessment (“DEIA”)  for  the Project  are  underway and  expected  to  be
    completed in Q4 2020, subsequent to  which the DEIA will be submitted  for
    approval.
  o Detailed technical drawings for key Project facilities have been prepared.
  o The general  arrangement for  the site  has been  submitted for  approval,
    along with the  drawings for mine  support facilities, including  offices,
    mine dry, security guard house, workshop, warehouse, and permanent camp.
  o The balance of the technical drawings  are expected to be submitted by  Q1
    2021, allowing a rapid construction ramp up beginning Q2 2021.

About Erdene

Erdene Resource Development Corp. is  a Canada-based resource company  focused
on the acquisition, exploration, and  development of precious and base  metals
in underexplored  and  highly  prospective  Mongolia.  Erdene’s  deposits  are
located in southwestern  Mongolia’s Edren  Terrane, within  the Central  Asian
Orogenic Belt,  host to  some  of the  world’s  largest gold  and  copper-gold
deposits. The Company has  been the leader in  exploration in the region  over
the past  decade and  is responsible  for the  discovery of  the Khundii  Gold
District with interests in three mining licenses and two exploration  licenses
hosting multiple high-grade gold and  gold/base metal prospects, two of  which
are being considered for development:  the 100%-owned Bayan Khundii and  Altan
Nar gold deposits.

Erdene Resource Development Corp. is listed  on the Toronto and the  Mongolian
stock exchanges. Further information is available at www.erdene.com. Important
information may be disseminated exclusively via the website; investors  should
consult the site to access this information.

Early Warning Disclosure

Prior to the conversion of the Convertible Loan, the EBRD did not beneficially
own or control any common shares  of the Company. Following conversion of  the
Convertible  Loan,  the  EBRD  owns  and  controls  30,043,290  common  shares
representing approximately 11.2% of the  issued and outstanding common  shares
of the  Company. The  conversion price  was C$0.21945  per common  share,  for
aggregate nominal consideration  of US$5,000,000  (equivalent to  C$6,593,000,
based on the Bank of Canada exchange rate as of September 18, 2020).

The EBRD holds the common shares for investment purposes. Depending on  market
conditions and other factors,  the EBRD may from  time to time acquire  and/or
dispose of securities of the Company or continue to hold its current position.

A copy of the early  warning report required to  be filed with the  applicable
Canadian  securities  commissions  in  connection  the  transaction  will   be
available under the  Company’s profile  on SEDAR at  www.sedar.com and can  be
obtained by contacting  Khangai Tserenraash at  +976 11 317  974. EBRD’s  head
office is at One Exchange Square, London EC2A 2JN, United Kingdom.

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  the
ability to obtain required third party approvals, 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

Erdene Contact Information

Peter C. Akerley, President and CEO, or
Robert Jenkins, CFO

Phone:     (902) 423-6419
Email:     [email protected]
Twitter:   https://twitter.com/ErdeneRes
Facebook:  https://www.facebook.com/ErdeneResource
LinkedIn:  https://www.linkedin.com/company/erdene-resource-development-corp-/
YouTube:   https://www.youtube.com/channel/UCILs5s9j3SLmya9vo2-KXoA

ERD_Full_logo_CMYK_Dark-01 cropped.jpg

Source Article