Erdene Resource Development Corp has made significant progress on its Bayan Khundii Gold Project in Mongolia, marking a pivotal moment for the company and the Mongolian mining sector. The establishment of a Strategic Alliance with Mongolian Mining Corporation, Mongolia's leading publicly traded mining company, is a key development that promises to enhance the project's growth and success. This partnership is expected to leverage the strengths of both entities to accelerate the development of the Bayan Khundii Gold Project, which is anticipated to become Mongolia's largest primary gold producer upon reaching full production.
Construction activities have already begun at the Bayan Khundii site, with exploration efforts in the broader Khundii Minerals District continuing to yield positive results. These developments are bolstering the project's prospects, as highlighted by Peter Akerley, Erdene's CEO. The Bayan Khundii gold mine is distinguished as one of the highest-grade open-pit gold mines under development globally, setting a strong foundation for its future success.
The economic viability of the Bayan Khundii Gold Project is further underscored by the recently updated NI 43-101 Feasibility Study. This study presents a compelling economic case, with a base case after-tax NPV5% of US$170 million and an internal rate of return (IRR) of 35%. These figures improve to US$223 million and 42%, respectively, at a gold price of US$2,000/oz. The study also estimates total recovered gold at 476,000 ounces, a 25% increase from the 2020 feasibility study, with an average gold recovery rate of 93%.
Moreover, the project's all-in sustaining cost is projected at US$869 per ounce, with upfront capital costs of US$88 million plus a 12% contingency and pre-production costs of US$2 million. These findings highlight the project's robust economics and its potential to generate significant value for stakeholders. With early works completed, project finance secured, and long-lead orders arriving on-site, Erdene is on schedule to produce first gold at Bayan Khundii in the second quarter of 2025. This milestone will not only mark a significant achievement for Erdene but also for the Mongolian mining industry as a whole.
