Erdene
Reports First Quarter Operating and Financial Results
May 15, 2008 - Halifax, Nova Scotia - Erdene Gold Inc. (TSX:ERD), a diversifie
minerals company with assets in Canada, the U.S. and Mongolia, today provide an
update on the Company's principal projects and plans for 2008 in conjunctio
with the release of its first quarter financial results.
Firs Quarter Operating Highlights:
- Reported multiple interval of over 200 metres of molybdenum mineralization in
many holes within th Racetrack zones at the Zuun Mod project in Mongolia;
- Significantl expanded the Racetrack North and Racetrack South zones at Zuun
Mod;
- National Instrument 43-101 (NI 43-101) compliant resource estimate at Zuun
Mod expected to be complete by the end of the second quarter 200
- Pre-feasibility evaluation at the Donkin Coal project i Nova Scotia is
nearing completion
Zuun Mod Molybdenum Projec
During the first quarter 2008, Erdene received the final assay results from the
2007 resource delineation drilling program for the Zuu Mod molybdenum project. The
molybdenum mineralization identified to dat remains open in several areas,
including west of the Racetrack South Zon and northeast of the Racetrack North
Zone and at depth.
Erdene' independent technical consultants, Minarco MineConsult
("Minarco") ar in the final stages of completing the NI 43-101
compliant resource estimat for the Zuun Mod project. The results of Minarco's
study which include geological modeling, geostatistical analysis, grade
modeling and a minera resource estimate for the Zuun Mod molybdenum deposit are
expected to b released before the end of the second quarter 2008.
Also i the first quarter 2008, final results were received for the detailed
surfac exploration geochemical (rock and soil) and geophysical (gradient Induce
Polarization and Dipole) program across the entire Zuun Mod porphyry complex
This program has identified broad zones of anomalous molybdenum and coppe
mineralization in addition to precious metal targets. These results suppor
management's belief that the Zuun Mod porphyry complex, which covers a area of
approximately 20 square kilometres, remains highly prospectiv for the
identification of additional mineral resources. These targets ar described in
more detail in the Company's press release of February 7 2008. The
budget for the 2008 exploration program at Zuun Mod include plans for drill
testing of a number of geochemical and geophysical target identified within the
Zuun Mod porphyry complex.
Minarco ha also been retained to undertake a preliminary assessment or scoping
stud into the potential economic viability of the Zuun Mod molybdenum deposi
which is expected to be delivered during the third quarter 2008. This stud is
currently underway and will describe many pertinent issues related t the
project. Some topics include: metallurgy, marketing, mining and processin
options, workforce requirements, environmental issues, capital and operatio
costs, and will culminate in a preliminary economic analysis of the Zuu Mod
project.
Donkin Coal Project
The Donkin Coa project, located in Cape Breton, Nova Scotia, Canada, is a joint
ventur project between Erdene and Xstrata Coal Canada ("Xstrata") who
own 25 and 75% of the Donkin Coal Alliance ("DCA"), respectively. The
DCA hold the rights to the Donkin coal resource block which includes the Habou
coal seam which has been targeted for development.
The Harbou seam containing an indicated resource of 101 million tonnes and an
inferre resource of 115 million tonnes and was accessed in late 2007 followin
the dewatering and refurbishment of twin 3.5 kilometre long tunnels. Th
resource is classified as high volatile-A bituminous (~14,000 BTU/lb)
high-sulphur, medium-ash coal. A positive preliminary assessment was complete
in November 2007.
The DCA is in the final stages of completin work related to the pre-feasibility
study on the Donkin coal project. Thi work includes analysis of a large channel
sample from the coal seam, 10,000 metre in-seam drilling program designed to
determine the methan liberation rate, an important factor in ventilation
systems design work market evaluations for both thermal and metallurgical grade
coal, as wel as surface and underground infrastructure design studies. It is
anticipate that the results of the pre-feasibility study will released shortly
alon with a decision about moving forward to a feasibility study on the project
Additional Projects
Erdene and Xstrata continue to work together to identify, explore and develop
coal resources in Mongolia The parties have entered into a Strategic Alliance
agreement whereby Xstrat can earn 75% interest in any coal projects by fully
funding exploratio costs through to completion of a project feasibility study.
Through th Company's extensive Mongolian coal database, Erdene has been able to
identif highly prospective areas where the Company is in the process of
prioritizin property acquisition targets. Erdene also holds the mineral rights
to number of base and precious metal exploration projects in Mongolia. Al of
these projects are under review to determine the best options for movin the
projects forward.
Erdene's management continues to investigat opportunities to advance the
Company's kaolin and construction aggregat business with the goal of maximizing
shareholder value for these projects Kaolin production continues through a
lease-royalty arrangement on th Company's kaolin properties with KaMin LLC (the
company formed by IMi Partners after the recent purchase of the kaolin business
of Huber Engineere Materials) and Deepstep Kaolin Company LLC who have
partnered with Erden to develop a ceramic clay product line. The Company's
Granite Hill projec continues to move forward as the project operators, Ready
Mix USA, progres towards final mine permitting which will be followed by a
production decision Erdene continues to investigate additional construction
aggregate opportunitie in the Southeast U.S.
First Quarter Financial Results
Erdene's first quarter financial statements and management's discussion and
analysis were filed today with the appropriate regulatory authoritie and are
available on the company's website at www.erdene.com or on SEDA at
www.sedar.com. The following are some of the financial highlights fo the first
quarter 2008.
- Erdene had cash and cash equivalent of $6.9 million at quarter-end compared
to $8.7 million at December 31 2007. In addition, the Company had cash
restricted for flow-through expenditure of $1.6 million at quarter-end compared
to $2.7 million at December 31 2007.
- Exploration and operating expenses during the thre months ended March 31,
2008 were $664,395 compared with $442,672 for th same period in 2007.
- The loss for the three months ended Marc 31, 2008 was $1,553,612 or $0.02 per
share compared with a loss of $253,04 or $0.01 per share during the same period
in 2007.
Annual Meetin
The Annual and Special Meeting of the shareholders of Erdene will be held on
May 28, 2007 in Halifax. The meeting will be in the Acadi B & C rooms of
the Halifax Marriott Harbourfront Hotel at 5:30 p.m. Atlanti time. Peter
Akerley, President and CEO will provide shareholders with a update on the
Company's activities and all shareholders are encourage to attend.
About Erdene Gold Inc.
Erdene is a diversifie resource development company with multiple projects at
various stages o development from exploration to production all focused on
high-growth commodities The Corporation has a strong portfolio of exploration
properties in Mongoli where it has a strategic alliance with Xstrata Coal to
develop its coa properties and a strong focus on base metals (copper and
molybdenum), preciou metals (gold) and energy (coal). Minarco-MineConsult, of
Sydney, Australia is currently carrying out a NI 43-101 compliant independent
resource estimat for the Zuun Mod molybdenum project. In addition, Erdene has
near-ter cash flow opportunities in its North American assets, which include a
25 interest in the Donkin Coal Alliance with Xstrata Coal, agreements wit KaMin
LLC (formerly J.M. Huber Corporation) and Ready Mix USA as operator and developers
in the southeast U.S. for its kaolin clay and constructio aggregate projects,
respectively. Erdene has a cash position of
approximatel $7.4 million with 70,644,877 common shares issued and outstanding
and fully diluted share position of 80,447,352 common shares.
Forward-Lookin Statements
Certain information regarding Erdene contained herei may constitute
forward-looking statements within the meaning of applicabl securities laws.
Forward-looking statements may include estimates, plans expectations, opinions,
forecasts, projections, guidance or other statement that are not statements of
fact. Although Erdene believes that the expectation reflected in such
forward-looking statements are reasonable, it can giv no assurance that such
expectations will prove to have been correct. Erden cautions that actual
performance will be affected by a number of factors most of which are beyond
its control, and that future events and result may vary substantially from what
Erdene currently foresees. Factors tha could cause actual results to differ
materially from those in forward-lookin statements include market prices,
exploitation and exploration results continued availability of capital and
financing and general economic, marke or business conditions. The
forward-looking statements are expressl qualified in their entirety by this
cautionary statement. The informatio contained herein is stated as of the
current date and subject to chang after that date.
For more information, please contact:
Pete C. Akerley, President and CEO
or
Ken W. MacDonald, Vice-Presiden North America and CFO
Phone: (902) 423-6419
For additiona information visit Erdene's website at www.erdene.com or contact
the compan via email at info@erdene.com.
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