Erdene Resource Development Corporation press release
Erdene's Drilling Intersects Wide Zone of Molybdenum Mineralization at Zuun Mod in Mongolia's South Gobi
TSX - Toronto Stock Exchange · Gold · Silver · Lead · Zinc · Molybdenum · Antimony · Copper · Canada
340 Metres of 0.05% Molybdenum, Including 52 Metres of 0.08%
HALIFAX, Aug. 23 /CNW/ - Erdene Gold Inc. (TSXV:ERD) today announced results of the diamond drilling program at its Zuun Mod porphyry molybdenum-copper project located in southern Mongolia approximately 150 kilometres north of the Chinese border. The recent drilling, together with the results of earlier drilling by Gallant Minerals, has confirmed the potential for wide zones of significantly anomalous molybdenum mineralization over a strike length exceeding 2.6 kilometres. An onsite, independent evaluation is now underway at Zuun Mod. "We are very excited by these new results at Zuun Mod and look forward to advancing this project. The near surface mineralization continuing to depth in the central portion of the Southeast Molybdenum Zone enhances the potential of the Zuun Mod project," said Peter Akerley, President and Chief Executive Officer. "As the Chinese domestic market continues to mature we anticipate increasing growth in the stainless steel sector and this, combined with new pipeline developments driven by global energy demands, suggests the molybdenum market will remain strong for the long term." Eleven holes, totaling 3,500 metres, were drilled as part of the 2005 exploration program to test multiple targets throughout the 20-square- kilometre Zuun Mod porphyry complex. All holes intersected anomalous copper and molybdenum over various widths. Five of these new holes tested areas within the Southeast Molybdenum Zone, where four holes intersected significantly anomalous molybdenum mineralization. The Southeast Molybdenum Zone consists of a 3-kilometre long series of structurally controlled and mineralized quartz-monzonites and granodioritic bodies.
Southeast Molybdenum Zone To date, a total of 10 holes have tested the Southeast Molybdenum Zone over a 2.6-kilometre strike length; five holes (ZMD series) drilled by Erdene in 2005 and five holes (KKMD series) drilled in 2003 by Gallant Minerals/WMC Resource Ltd. (Gallant). The holes are spaced at intervals of 75 metres to 1000 metres and average approximately 380 metres. Of these 10 holes, seven have returned intersections ranging from 18 metres of 0.04% molybdenum to 340 metres of 0.05% molybdenum beginning within 100 metres of surface and the three drill holes with the widest mineralized zones, ZMD-11, KKMD-03 and MD-08, all ended in mineralization. The thickest intervals of mineralization grading 0.05% molybdenum or greater from the 2005 drilling were returned from the central portion of the Southeast Molybdenum Zone where ZMD-11, returned 340 metres of 0.05% molybdenum which contained two zones of 52 metres and 24 metres averaging 0.08% and 0.09% molybdenum, respectively. This result is particularly encouraging as it suggests continuity from a previous Gallant hole, KKMD-08, located 255 metres to the north which returned 160 metres of 0.06% molybdenum and ended in mineralization at 279 metres. Gallant drill hole MD-03 is also situated in the Southeast Molybdenum Zone, approximately 1.5 kilometres southwest of ZMD-11. KKMD-03 intersected 236 metres of 0.06% molybdenum beginning at 90 metres depth, and also ended in mineralization at 326 metres. Surface exploration suggests that the structural corridor which hosts the Southeast Molybdenum Zone extends over a strike length of approximately 3 kilometres. Highlights from drilling to date in the Southeast Molybdenum Zone can be found in Table 1 below. A map showing the location of all drill holes can be viewed on our website at www.erdene.com.
<< Table 1 - Southeast Molybdenum Zone Results Width 2005 Drilling From To Metres Mo % Cu % ZMD-05 86 104 18 0.04 0.05 ZMD-10 92 106 14 0.04 0.11 ZMD-10 148 168 20 0.04 0.10 ZMD-10 236 252 16 0.04 0.09 ZMD-10 338 362 24 0.05 0.08 ZMD-10 414 454 40 0.05 0.05 ZMD-11 76 416 (eoh) 340 0.05 0.07 Including 86 266 180 0.06 0.07 Including 86 138 52 0.08 0.05 Including 336 416 80 0.06 0.08 Including 350 374 24 0.09 0.12 2003 Drilling MD-03 90 326 (eoh) 236 0.06 0.08 Including 219 309 90 0.09 0.09 Including 219 247 28 0.12 0.08 Including 273 289 16 0.14 0.11 MD-08 119 279 (eoh) 160 0.06 0.06 Including 169 199 30 0.08 0.07 Including 215 247 32 0.08 0.08 (x) eoh (equal sign) end of hole
2005 Drilling Program The Southeast Molybdenum Zone is only a portion of a much larger porphyry complex at Zuun Mod much of which remains un-explored by drilling. However, exploration to date has identified an area of significantly anomalous copper mineralization, referred to as the Northwest Copper Zone. Two Erdene holes, ZMD-07 and ZMD-08, were drilled in this zone and returned intervals of 36 metres of 0.15% copper and 26 metres of 0.10% copper, respectively (see Table 2 below). Two Gallant holes located in the Northwest Copper Zone also returned significantly anomalous results. Drill hole KKMD-13 returned 152 metres of 0.16% copper and drill hole KKMD-04 returned two anomalous intervals including 20 metres of 0.17% copper and 56 metres of 0.11% copper (see Table 2 below). The four holes within the Northwest Copper Zone are spaced at 250 to 1000 metres apart with an average of approximately 550 metres.
Table 2 - Northwest Copper Zone Results Width 2005 Drilling From To Metres Cu % ZMD-07 152 188 36 0.15 ZMD-08 46 72 26 0.10 2003 Drilling MD-13 30 182 152 0.16 MD-04 108 128 20 0.17 MD-04 186 242 56 0.11
Summary Based on the 2005 results, the Zuun Mod project fits within management's target development criteria. In evaluating projects in the Gobi region the Company focuses on strategic commodities with large tonnage potential to supply the Chinese development boom for the long term. The confirmation of molybdenum mineralization in multiple drill holes over an extensive area indicates that a program of detailed drilling is warranted. Erdene has arranged for an independent evaluation of the project to take place immediately. This evaluation will outline the parameters of the next stage of drilling planned for the fall of 2005 and will identify other elements of a scoping study to advance the project through resource definition. It is anticipated that the independent evaluation report will be received by the Company in September.
About Zuun Mod & Molybdenum Zuun Mod is located in the south Gobi region of Mongolia where major copper, gold, coal and uranium projects are currently being developed. The property is located less than 200 kilometres from rail and high voltage power facilities being constructed to service the Jiaguan Iron and Steel complex located in China's Gansu Province. The facilities are being built to source raw materials from the Naraan Sukhait coal project. Molybdenum is used in steel and cast iron products as well as superalloys, electronics, catalysts, lubricants and pigments. Stainless steel, which can contain up to 6% molybdenum, is a major growth area for the metal as are natural gas and oil pipelines which utilize a significant amount of molybdenum. Strong demand in China coupled with limited supply have resulted in significant price increases in Molybdenum which is currently priced at US$29/lb.
Qualified Person
This press release has been prepared under the supervision of Michael Corey, P.Geo., who serves as the qualified person under National Instrument 43-101. All samples are assayed at SGS Laboratory in Ulaanbaatar, Mongolia. In addition to SGS Laboratory internal checks, Erdene Gold incorporates a QA/QC sample protocol utilizing prepared standards, sample splits and duplicates.
About Erdene Gold Inc.
Erdene Gold Inc. is a mineral exploration company focused on Mongolia with over 20 precious and base metal projects that include 47 licences covering in excess of 840,000 hectares, as well as 19 uranium licences and applications covering more than 1.1 million hectares. Erdene is well funded with a working capital position of approximately CDN$7.2 million as of June 30th, 2005. Erdene has 27,232,135 common shares issued and outstanding and a fully diluted share position of 32,188,910 common shares. Erdene Gold Inc. trades on the TSX Venture Exchange under the symbol ERD.
Forward-Looking Statements Certain information regarding the Company 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 the Company 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. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond the Company's control, and that future events and results may vary substantially from what the Company 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 Company's 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.
For additional information visit Erdene's website at www.erdene.com or contact the company via email at info(at)erdene.com.
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