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Message: Results of 2008 Drill Program and Outlines Future Plans for the Zuun Mod Project
| February 10, 2009 | |
| Erdene Provides Results of 2008 Drill Program and Outlines Future Plans for the Zuun Mod Project | |
|
HALIFAX, NOVA SCOTIA--(Marketwire - Feb. 10, 2009) - Erdene Resource Development Corp. ("ERD") (TSX:ERD) today released additional results from its 2008 Zuun Mod molybdenum exploration and assessment program. The Company also outlined its plans and outlook for the project. "Results from our Zuun Mod 2008 work program continued to demonstrate the exceptionally large nature of the deposit," said Peter Akerley, President and CEO. "Our task now, given the current economic climate, is to prudently advance the project at a rate that is cautiously optimistic of a rebound in steel and molybdenum markets. In doing so, we are positioning Zuun Mod to be one of the new primary molybdenum producers that will come on-stream when the economy turns. Since Zuun Mod is in a region anticipated to be a leading mining camp, coupled with its location relative to the world's largest steel-producing country, we believe the project provides us with a strategic advantage upon the recovery of the global economy." The objective of the 2008 drill program was to define localized zones of higher grade mineralization, particularly those nearer surface, and to revise the resource estimate accordingly. The program was carried out following the release of the initial resource estimate in May 2008 by Minarco MineConsult, ("Minarco") which reported a resource of 110 million tonnes averaging 0.061% Mo in the Measured and Indicated categories. 2008 Highlights 1. The deposit was confirmed to extend to depths exceeding 500 metres over a minimum strike length of 1.7 kilometres while locally coming to within 22 metres of surface. 2. Drilling confirmed several continuous intersections exceeding 350 metres of 0.06% Mo. 3. Multiple high grade zones exceeding 50 metres of 0.10% Mo were intersected. 4. Deepening of hole ZMD-79 returned a total intercept of 428 metres of 0.06% Mo beginning at 22 metres depth with two higher grade zones 66 metres of 0.10% Mo and 70 metres of 0.11% Mo. 5. Hole ZMD-88 returned 132 metres of 0.064% Mo and extended the deposit a further 100 metres to the southwest. 6. Drilling at 50 metre spacing confirmed the continuity of two zones averaging 0.08% Mo exceeding 100 metres in thickness, beginning between 66 metres and 76 metres from surface. During 2008, the goal of the Zuun Mod program was to advance the project through to prefeasibility level. This included engineering and environmental studies led by Minarco MineConsult, as well as drilling to further define higher grade zones, particularly those nearer surface, to select the best location for initial mine development. A total of 32 new holes were completed and eight holes were deepened, totaling 10,785 metres. The results from the deepened holes were reported on September 11, 2008 (see release at www.erdene.com). The 2008 program was successful in defining localized higher grade zones and enlarging the overall deposit, both vertically and laterally. Table 1 provides results from the deepened holes in the main orebody and holes that intersected zones of higher grade mineralization that will be incorporated into a revised resource estimate. A map displaying the location of all holes drilled in 2008 and a summary of all results can be found on ERD's website homepage at www.erdene.com. Table 1 - Highlights of 2008 Drilling Program -------------------------------------------------------- Hole # From To Width (m) % Cu % Mo -------------------------------------------------------- ZMD-24 119 492 373 0.068 0.064 ZMD-39 40 450 410 0.046 0.057 ZMD-57 146 545 399 0.075 0.055 ZMD-72 212 358 146 0.102 0.060 ZMD-79 22 450 428 0.066 0.060 Including 212 278 66 0.101 0.103 Including 338 408 70 0.073 0.110 ZMD-88 134 160 26 0.069 0.069 And 174 262 88 0.069 0.071 ZMD-92 162 216 54 0.065 0.073 Including 170 190 20 0.067 0.113 ZMD-94 66 166 100 0.090 0.077 Including 68 84 16 0.107 0.105 Including 112 128 16 0.111 0.110 Including 146 166 20 0.092 0.101 And 190 200 10 0.055 0.110 ZMD-96 140 168 28 0.078 0.070 And 202 258 56 0.081 0.075 Including 202 222 20 0.089 0.111 ZMD-97 180 218 38 0.086 0.080 ZMD-98 98 114 16 0.060 0.085 ZMD-100 126 136 10 0.042 0.093 ZMD-104 58 70 12 0.023 0.101 ZMD-105 76 230 154 0.078 0.080 Including 134 230 96 0.088 0.106 Including 192 222 30 0.127 0.218 -------------------------------------------------------- Molybdenum Market Overview During the past several months, as a result of declining demand and reduced prices, current supply of molybdenum has been reduced by at least 9%. During this time, six of the nine major molybdenum projects that were planned for financing and production within the next two years, representing nearly 60% of projected new molybdenum supply, have been cancelled or postponed. Although the price and demand reductions have been severe and rapid, some purchasing increases in the Asian market have been observed recently. Renewed growth will likely become first evident in Asia, particularly given continued growth in the automobile sector, oil and gas pipeline construction and modernization programs in China. Given Zuun Mod's strategic location relative to China, only 200 kilometres from the border and rail facilities, when molybdenum consumption returns to historic growth levels, Zuun Mod will be well positioned to ramp up toward production. Outlook Resource evaluation, environmental and hydrogeologic studies are in progress at Zuun Mod. The current focus is on revising the May 2008 resource estimate by incorporating the 2008 drilling data and developing all necessary data and supporting information for a Mining Licence application required to secure tenure for Zuun Mod over the longer term. Drilling has defined at least two areas where mineralization begins within 50 metres of surface, with grades in the 0.07% to 0.09% Mo range over intervals between 60 and 80 metres. These zones display good horizontal and vertical continuity. Management expects to develop initial mine plans in these two areas before moving into higher-volume operations at grades of 0.05% to 0.06% Mo based on higher molybdenum prices. Evaluations of the economics of such a plan will be carried out in 2009 and based on acceptable returns, a prefeasibility program plan will be prepared. During this period, molybdenum and steel markets will be evaluated to assess the proper time to more aggressively advance the project through to feasibility. Expenditures for the Zuun Mod project in 2009 will be limited to those needed to advance the project through these stages and provide the necessary information for the mining licence application. Qualified Person and Sampling Protocol All samples were prepared at the SGS Laboratory in Ulaanbaatar, Mongolia and analyzed at ALS Chemex Laboratory in China. In addition to internal checks by ALS Chemex, ERD implements a QA/QC sample protocol utilizing prepared standards, sample splits and duplicates. ERD's QA/QC protocol is described in detail in the report prepared for ERD by Minarco-MineConsult entitled "Zuun Mod, Porphyry Molybdenum-Copper Project, South-Western Mongolia, Mineral Resource Estimates" dated May 28, 2008, which is filed on SEDAR. J.C. (Chris) Cowan, P.Eng., VP - Asia of ERD, is the qualified person who is supervising ERD's Zuun Mod Project. Mr. Cowan has reviewed and approved this news release and has verified the technical data disclosed herein, including the sampling, analytical, and test data underlying the information. About Erdene Resource Development Corp. ERD is a diversified resource development company with multiple projects at various stages of development from exploration to production all focused on high-growth commodities. These projects include the Zuun Mod molybdenum project in Mongolia; a 25:75 joint venture with Xstrata Coal Canada Ltd. ("Xstrata") on the Donkin Coal Project in eastern Canada which is currently being evaluated for phase I development; an Alliance Agreement with Xstrata whereby they fully fund ERD's coal exploration and development program in Mongolia with the right to acquire a 75% interest in any coal project submitted to them by ERD; and ownership of multiple kaolin deposits and a construction materials deposit in Georgia, USA, some currently in production under royalty agreement and others in the development stage. ERD has a working capital position of approximately $18.1 million with 89,230,877 common shares issued and outstanding and a fully diluted share position of 98,445,852 common shares. |
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