Erdene Resource Development Corp has received positive results from Phase I-2017 metallurgical testing conducted by Blue Coast Research (BCR) on its Bayan Khundii Gold Project in southwest Mongolia. Results from two master composites indicate the gold is free milling and amenable to conventional processing techniques.

Tests of the first master composite of 4.3 g/t gold showed recovery after 48 hours was 96% whereas the 96 hour gold recovery was 97% with a grind size of 80% passing 60 micron, 40% solids and 1.0 g/L NaCN.

The second composite of 4.7 g/t received full optimisation test work, including variation on grind size, residence time and sodium cyanide dosage as well as assessing the impact on overall recoveries when initial gravity recovery was applied. Gold recoveries, using a target grind size of 80% passing 60 micron, ranged from 91% to 93.4% after 48-hours with overall gold recovery of 95% after 96-hours.

Grindability studies reported a Bond Rod Mill Work Index of 17.8 kWh/tonne and a Bond Ball Mill Work Index of 16.1 kWh/tonne.

Phase II testing, focused on material in the 1.5 g/t to 3 g/t gold range, will continue through Q1 of 2018. This program is designed to test variability and ultimately recovery of a collection of composites followed by master composites.

The Phase I metallurgical testing is the second program completed to date. The initial metallurgical test work in 2016 tested two representative, master composite samples from Erdene’s initial 2015 drill program at Bayan Khundii.

The 2016 test work included 15 widely spaced drill holes in the Gold Hill and Striker Zones, testing the top 50 metres of the target areas. The results were very encouraging with 99% recovery on the high-grade sample (25.9 g/t gold) and 92% on the low-grade sample (0.7 g/t gold) using a combination of gravity and leach.

The 2017 metallurgical program has been separated into two phases (I and II) to allow for completion of the 2017 drill program and the production of composites and master composites that are representative of, and best reflect the anticipated average grades of, the gold mineralised system.

Based on the success of the latest testing program, BCR has recommended additional tests to better study the metallurgical characteristics of Bayan Khundii and further optimise recoveries. It is anticipated that these will be initiated in Q4 2017.

Meantime, Erdene drilling at Bayan Khundii continues to define a new zone north of the Midfield Zone with best result being 120 metres @ 1.14 g/t, including 3 metres @ 33 g/t.

A high-grade zone continues to be defined between Midfield and Striker zones with 128 metres @ 1.14 g/t, including 22 metres @ 3.3 g/t. Testing for continuity of a new zone west of Striker returned 25 metres @ 1.4 g/t, including 3 metres @ 7.8 g/t.

The Striker Zone itself continues to provide high-grade mineralisation one hole returning 22 metres @ 2.4 g/t, including 1 metre @ 43 g/t. A hole extension intersected a new zone with 58 metres @ 1.2 g/t, including 16 metres @ 2.8 g/t.

The ongoing drill program will include testing of target areas in the broader 2 by 1.8km Bayan Khundii prospect area, as well as continued definition of recently discovered targets north of Midfield Zone and west of Striker-Midfield zones with closer-spaced drilling. Three drill rigs continue to operate, including one rig conducting a hydro-geologic program.

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