Erdene Resource Development Corp has granted Tian Poh Resources a period of exclusivity to exercise an option to acquire an interest in Erdene’s Zuun Mod molybdenum-copper project in southwest Mongolia. Tian Poh can acquire and retain a 51% interest in the project for US$4.8 million in cash and equity in Tian Poh, and by meeting certain work commitments.

If Tian Poh exercises its option and meets milestones to retain its 51% interest, it will have the right to increase its interest to up to 100% through additional cash and/or equity payments. Erdene will retain a 1% net smelter return royalty, which will be subject to certain buy-down provisions. An option payment of US$50,000 plus US$200,000 in the form of a non-interest bearing debenture has been paid to Erdene.

Tian Poh is an ASX-listed, Singapore-based resource development company with a 100% interest in 10 coal and copper mineral concessions in Mongolia. It is part of the Poh Group established by Singaporean businessman Poh Kay Ping. Through a combination of strategic partnerships and joint ventures, Poh Group is made up of a dynamic group of companies involved in diverse industries across key developing and emerging markets throughout Asia.

Two key areas of focus for Poh Group are resources and engineering. The group’s mineral resource investments in Mongolia are held under Tian Poh. These assets are mainly in southern and south-western Mongolia in close proximity to the Chinese border, giving Tian Poh ready access to China, the largest consumer of copper, molybdenum and coal. Poh Group has grown its engineering business segment through establishing successful strategic alliances with large state-owned companies.

Erdene management has considered this transaction carefully in view of the overall strategic direction of the company. Management recognizes that the Zuun Mod deposit offers significant long-term opportunity, however, in the current environment capital is scarce for major mining projects, like Zuun Mod.

Management believes the best way to maximize shareholder value is by focusing on the advancement of its Altan Nar gold-polymetallic project which management believes is nearer-term and will require a smaller capital investment.

This transaction provides an immediate injection of capital into Erdene with no dilution and, if Tian Poh elects to proceed following the exclusive option period, has the potential for significant cash and equity payments as the Zuun Mod project advances. Furthermore, the structure of the transaction provides considerable upside to Erdene through a sizeable equity interest in Tian Poh.

Meanwhile, Erdene has received final drilling results from the fourth quarter resource drilling program at its wholly-owned Altan Nar project in southwest Mongolia. The drilling intersected multiple high grade gold-polymetallic zones and established continuity of a high grade zone in the southern end of Discovery Zone North.

The results revealed the widest and highest grade zone to date with 30 metres @ 5.1 grams/tonne gold equivalent, including 8 metres @ 13.6 grams/tonne gold equivalent. Drilling at the northern extent of Discovery Zone North returned broad zones of low grade mineralization, including 96 metres @ 1 grams/tonne gold equivalent. This is open along strike and at depth of greater than 150 metres.

Drilling at Discovery Zone South returned 51 metres of 2.5 grams/tonne gold equivalent, including 7 metre and 3 metre intervals with greater than 7 grams/tonne. Union North exploration has defined continuity of main zone mineralization as well as multiple mineralized structures extending south of the main zone.

Erdene’s president and CEO Peter Akerley says, “Results from the resource drilling program have confirmed continuity of near-surface, high-grade mineralization within the Discovery Zone. In addition to the significant grade and size potential of individual targets, what continues to be most impressive about Altan Nar is the high frequency of mineralized zones encountered throughout the 5.6km-long district, indicating that Altan Nar has tremendous potential for the discovery of additional mineralized zones.

“We are looking forward to establishing our maiden mineral resource in accordance with NI 43-101 in coming months and moving the project through expansion and towards development.”

Detailed exploration to date has explored the near-surface extent of only two of the 18 targets identified across the Altan Nar property. Altan Nar has been selected as one of the new discoveries that will be showcased at the Core Shack at this year's PDAC Conference in Toronto, Canada, from March 1-4.

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