Erdene Reports Year
End Financial Results and Provides Project Updates
Halifax, Nova Scotia - April 1,
2009 - Erdene Resource Development Corp. ("Erdene") (TSX:ERD), today
provided an update on the Company's principal projects in conjunction with
the release of its year end financial results.
"In 2008, Erdene made substantial progress in advancing the
Company's projects," said Peter Akerley, President and CEO. "In
2009, we will continue to pursue our goal of assisting our partners with the
development of the Donkin coal and Granite Hill aggregate projects to production
in 2010, while positioning the Zuun Mod molybdenum project for start-up when
the global economy recovers. Our focus continues to be on two regions: China
and the eastern seaboard of the United States, where we see tremendous
opportunity for long term growth in the commodities we are targeting. Going
into 2009, Erdene is well financed and in an enviable position compared to
our peers. We will be prudently managing our financial resources while
advancing these core projects and investigating growth opportunities."
Project Summaries and Updates
Donkin Coal Project
The Donkin coal project is a joint venture between Erdene and
Xstrata Coal Canada, who own 25% and 75%, respectively. Located in Cape
Breton, Nova Scotia, the project is within 35 kilometers of a coal-fired electrical
generating plant and a deep-water coal loading facility. Donkin is being
evaluated as a five-million-tonne-per-annum underground longwall mining
operation. Markets are anticipated to be both domestic and export. The short
shipping distances by water to the east coast of the United States places
Donkin in an ideal position to enter this expanding market.
The project is in the feasibility stage of a Continuous Miner
Exploration and Development program designed to test the suitability of the
deposit for longwall production. A workforce of 12 continues to advance
tunnel refurbishment and maintain the site in advance of a development
decision. The project has cleared regulatory requirements, including
environmental approval, has distributed requests for tenders and entered into
negotiations with potential consumers. The goal of the joint venture remains
the commencement of production in 2010. However, one outstanding matter that
must be finalized before the commencement of mining is to have a coal off-take
agreement signed with potential domestic and international customers with
whom the joint venture is currently in discussions.
Thermal coal is expected to remain the principal fuel for long
term growth of electricity production in the industrialized western nations.
A large, high-energy coal resource proximal to a deep-water port is unique
and positions Donkin to be competitive in the Atlantic seaborne thermal coal
markets.
Zuun Mod Molybdenum Project
At the Zuun Mod molybdenum project in Mongolia, the fourth
quarter saw the completion of a resource expansion and definition drill
program. Several holes drilled to test the central area of the deposit
indicated a deposit thickness of at least 400 metres averaging 0.06%
molybdenum with multiple higher grade zones, including 70 metres of 0.11%
molybdenum in the northeastern portion of the deposit.
These data add to an initial resource estimate, reported in May
2008, that totaled 110 million tonnes averaging 0.061% molybdenum in the
Measured and Indicated category. The current focus is on revising the May
2008 resource estimate by incorporating the 2008 drilling data. During 2009
the project will be advanced at a pace reflecting the current economic
environment, with limited resource, environmental and hydrogeologic studies
focused on moving the project to a mining licence stage. During this period
Erdene will continue to assess the market to determine when the project
should be accelerated toward feasibility. At the same time, the Company will
evaluate options to secure a strategic partner.
Coal Projects In Mongolia
Erdene is involved in a comprehensive coal generative and
acquisition program in Mongolia that evaluates numerous prospective
metallurgical and high-quality thermal coal deposits. The program is being
fully funded by our partner, Xstrata, with whom we are coordinating
operations. Mongolia borders China, which is the world's largest coal
consuming nation. Estimates suggest that over the next 25 years, China will
need to secure approximately six million tonnes per month of new coal
production to meet demand.
During 2008, Erdene conducted numerous property evaluations with
three properties reaching the drill-tested stage. Although results on these
properties do not warrant follow-up exploration, Erdene will continue
property evaluation work during 2009 to identify and secure large-tonnage
coal deposits. The Erdene-Xstrata coal alliance is positioning to become a
major participant in the coal industry of Mongolia.
Advanced Primary Minerals Corp.
In July 2008, Erdene moved forward with its business plan to
create a dedicated vehicle for the Company's primary kaolin operations by
initiating a reverse takeover of Beta Minerals Inc. ("Beta"), a TSX
Venture-listed company. With the conclusion of the deal on February 27, 2009,
Erdene took a major step forward in its development of a specialty mineral
products manufacturing business. Beta changed its name to Advanced Primary
Minerals Corporation ("APM") and is listed on the TSX Venture
Exchange (TSXV:APD) with Erdene as majority shareholder.
The goal of APM is to be North America's leading specialized
kaolin producer. Much of the premium kaolin clay deposits in Georgia and the
UK have been depleted over the past century. APM's primary kaolin products
meet or exceed the quality of comparable foreign imports and domestic
sources. APM looks to take advantage of that situation with its unique, high
quality primary clay deposits and modern processing facilities to focus on
small to moderate-volume opportunities and high-margin specialty products.
Proximity to domestic markets and elimination of foreign exchange risk add a
strong competitive advantage over comparable foreign imports. Kaolin is used
in the manufacture of value-added products for the ceramics, paint and paper
industries.
APM controls high-quality deposits of primary kaolin clay in
Georgia. These properties currently hold an NI 43-101 resource of 25.5
million tons (Indicated and Measured). APM is also in the final stages of
constructing a new state-of-the-art kaolin processing facility in Dearing,
Georgia that is scheduled to begin production in the second quarter of 2009.
Granite Hill Aggregate Project
Erdene's Granite Hill project is a former producing granite
aggregate quarry in central Georgia. Erdene owns the 342-acre property, which
holds in excess of a 120 million-ton resource and is situated on an existing
rail line. It is currently leased to Ready Mix USA, a major construction
materials producer, which is responsible for fully funding the project in
return for a royalty on sales payable to Erdene.
All necessary permits have been obtained and construction is to
be completed nine to 12 months after a production decision by Ready Mix USA.
Their quarry development plan provides for an estimated start-up production
rate of one million tons of granite aggregate per year, with a design
capacity of up to 2.5 million tons. Based on current production projections,
the Granite Hill quarry will have an estimated lifespan in excess of 30
years.
Year End Financial Results
Summary
Erdene's year end 2008 financial statements and Management's
Discussion and Analysis were filed with regulatory authorities on March 31,
2009 and are available on the Company's website at www.erdene.com and on SEDAR at www.sedar.com.
For the 12 months ended December 31, 2008, exploration and
operating expenses amounted to $1,858,544, compared to $4,146,178 in fiscal
2007. Including capitalized costs, exploration expenses were $9,415,073 for
2008 and $13,826,792 for 2007 respectively.
The expenditures were directed toward the continued advancement
of the Company's primary projects, namely the Donkin coal project and Zuun
Mod molybdenum project. Specifically, expenditures by project were as
follows:
·
Zuun Mod: $3,710,393 for the 12 months ended December 31, 2008.
·
Donkin: $3,917,644 for the 12 months ended December 31, 2008.
·
Coal exploration in Mongolia funded by Xstrata: $1,065,826 for
the 12 months ended December 31, 2008.
Administrative expenses totalled $2,306,334 for the year
(including $467,423 in stock based compensation and $52,752 in depreciation),
compared to $2,427,062 in 2007 (including $910,218 in stock based
compensation and $49,952 in depreciation).
The Company recorded a loss of $3,592,391, or $0.04 per share,
in fiscal 2008 compared with a loss of $6,651,063, or $0.11 per share, in
fiscal 2007. At December 31, 2008, Erdene had approximately $16.2 million of
cash and cash equivalents on hand compared with $8.7 million at December 31,
2007.
Outlook
Erdene is well positioned to continue project development
activities. The successful share offering in mid-2008 and the recent reverse
takeover of Beta, with nearly $2 million in cash, has funded the Company to
continue all budgeted operations and commitments. These include, upon receipt
of all necessary approvals, Erdene's share of the Donkin continuous miner
exploration and development program. Erdene has instituted cost-cutting
measures to reduce expenses during 2009 by decreasing administrative overhead
and scaling down or postponing early-stage and grassroots exploration
programs.
Going forward, Erdene will remain focused on developing projects
associated with the Company's core commodities, which consist of coal, base
metals, gold and industrial minerals. Management continues to believe that
these commodities, especially in Asia and North America, have strong
long-term market fundamentals. At the same time, Erdene will investigate
opportunities for further expansion through organic growth, joint ventures
and acquisitions.
New Website Launched
Erdene
is pleased to announce the Company's website has been updated to make it even
more user-friendly and informative. Visitors to 'www.erdene.com' will find Company highlights, project
information, commodity data, up-to-date investor presentations and most
recent webcasts, all newly packaged for easy viewing and reference.
The
redesigned 'Featured Items' section of the home page highlights the most
up-to-date investor information and presentations. For example, 'Update
Webcast' is an interview with Peter Akerley, President and CEO, who details
the Company's most recent activities and projects. Another featured item is
'Asia Mining Congress Presentation', which Mr. Akerley gave in Singapore on
March 24, 2009. The session provides a concise overview of Erdene's key
projects in the energy, metals and industrial minerals sectors.
About Erdene
Erdene Resource Development Corp. is a diversified resource
company with multiple projects at various stages of development from
exploration to production, all focused on high-growth commodities. Erdene has
a current working capital position of approximately $17.0 million with
89,230,877 common shares issued and outstanding and a fully diluted position
of 98,445,852 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 subject to change after that date.
Contact information
Peter C. Akerley
President and CEO
or
Ken W. MacDonald
Vice President Business Strategy and CFO
Phone: (902) 423-6419
e-mail: info@erdene.com