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Erdene adds gold resources at Altan Nar, eyes broader update

As it bears down on a broader resource update that will shape mining studies of its gold-focused properties in Mongolia, Erdene Resource Development Corp. grew resources at its Altan Nar project.

Erdene pegged Altan Nar's indicated resources at 5 million tonnes grading 2.0 g/t of gold, 14.8 g/t of silver, 0.6% zinc and 0.6% lead, with inferred resources of 3.4 Mt grading 1.7 g/t of gold, 7.9 g/t of silver, 0.7% zinc and 0.7% lead. The resource was estimated at a gold equivalent cutoff of 0.7 g/t and was built on a 2015 estimate.

The estimate comes ahead of projectwide resource that Erdene expects to have out in the third quarter, which will set the stage for a preliminary economic assessment and possibly permitting. The resource will pull in Erdene's Bayan Khundii discoveries near Altan Nar that have been the main focus of the junior's exploration in the past couple of years.

Erdene President and CEO Peter Akerley told S&P Global Market Intelligence that if the company moves ahead with permitting later this year, it may take about two years.

"Our target for resources this year had been to get to the 1.5 million [ounces of gold equivalent] point between the two projects, which are 16 kilometers apart," he said. "We think that gives us a good cornerstone for a large gold operation, as a base, over a seven- to 10-year period."

Erdene has yet to do a resource estimate of Bayan Khundii, where it has drilled about 39,500 meters in a mostly near-surface gold deposit. It will serve as the core of the preliminary economic assessment, Akerley said.

Akerley noted that Bayan Khundii, which was discovered in 2015, has simpler metallurgical recoveries than Altan Nar within numerous zones of high-grade gold that the junior continues to flesh out.