Erdene Resource Development Corporation press release
Erdene Initiates Definition Drilling Program at its Zuun Mod Molybdenum Project
TSX - Toronto Stock Exchange · Gold · Silver · Lead · Zinc · Molybdenum · Antimony · Copper · Canada
Provides Update on Base and Precious Metals Exploration Programs
HALIFAX, Nov. 24 /CNW/ - Erdene Gold Inc. (TSXV:ERD) today announced it has initiated a definition drill program at Zuun Mod, its molybdenum-copper project in Mongolia. The Company also provided an update on its precious and base metal exploration programs in Mongolia.
Zuun Mod Molybdenum-Copper Project
Drilling resumed this week in the Racetrack Zone of the three kilometre long Southeast Corridor. An independent Consultant recently concluded that the Zuun Mod molybdenum-copper exploration project merits a resource definition drilling program to establish the resource potential of previously delineated molybdenum mineralized areas within the Stockwork and Racetrack Zones. Previous drilling in the Racetrack Zone included hole ZMD-11, which intersected 340 metres of 0.08% MoS2 (0.05% molybdenum) within which 52 metres averaged 0.13% MoS2 (0.08% molybdenum), and KKMD-08, located 255 metres to the north which returned 160 metres of 0.10% MoS2 (0.06% molybdenum) and ended in mineralization at 279 metres. Drilling will then move to the Stockwork (1.5 kilometres southwest of ZMD-11) and Intersection Zones (one kilometre northeast of ZMD-11). The most significant hole in the Stockwork Zone, drill hole KKMD-03, intersected 236 metres of 0.10% MoS2 (0.06% molybdenum) beginning at 90 metres depth and ending in mineralization at 326 metres. Included within this 236 metre intersection were 28 metres averaging 0.20% MoS2 (0.12% molybdenum). This zone remains open from KKMD-03 to the south and is bounded to the north by lower grade mineralization. The Stockwork (formerly the Southeast Zone) and Racetrack Zones each cover target areas of approximately 600 metres by 400-600 metres. Drilling is expected to continue through to mid-December. It is anticipated that a minimum of 2000 metres can be completed by the end of 2005 with results to be reported early in 2006. The definition drilling program will resume in 2006. The objective of the current drill program is to establish lateral continuity from molybdenum mineralized zones intersected in previous drilling and to test for shallower mineralization to enhance potential open-pit economics. The Stockwork and Racetrack Zones have the potential to contain resources of sufficient tonnage and grade to be of economic significance. The Intersection Zone is a large, virtually untested area (2.0 kilometres by 1.0 kilometre) of anomalous molybdenum and copper identified from surface rock and soil samples, believed by management to offer significant potential for outlining near-surface mineralization. Only one previous hole (KKMD-7) tested the northeastern portion of the zone and returned drill results that included highly anomalous molybdenum and copper up to 0.61% copper and 0.45% MoS2 (0.27% molybdenum) over two-metre intervals as well as near surface molybdenum mineralization with 0.08% MoS2 (0.065% molybdenum) over the top 10 metres of the hole. The Zuun Mod project has been under exploration and evaluation since 2002 with a 20 square kilometre porphyry-related alteration and mineralized system outlined. The property lies within the South Gobi porphyry belt as defined by the Oyu Tolgoi copper-gold deposit and other smaller porphyry copper deposits. Prior to the current drill program, a total of 7520 metres of diamond drilling has been completed on the property with total exploration expenditures (WMC- Gallant and Erdene) of approximately US$2.91 million. The project is less then 200 kilometres north of the Chinese border where rail and power is being developed to provide raw material to the Jiquan Iron and Steel complex in northern China.
Tsenkher Gol Project
A surface exploration program was recently completed at the Tsenkher Gol gold project confirming the presence of widespread, highly anomalous gold bearing zones. The work program entailed infill rock-chip sampling, trenching, and gradient and dipole-dipole induced polarization surveys on the main targets zones. The results have highlighted three main gold-bearing zones including Altan Suult, SE Khond Uul, and NW Khond Uul. These zones occupy an area of 10 square kilometres and are characterized by high-grade quartz veins (grab samples up to 179 g/t gold) and lower gold values associated with disseminated sulphides in the host altered granite. All three zones show evidence indicating strong structural control of gold mineralization. Structures of importance appear to be NW and EW trending as well as zones of intersection between these two structural trends. Gold mineralization is typically contained within shear zones, sheeted and stockwork quartz veining, breccias, and as disseminations hosted within quartz-sericite-pyrite altered granitoids. Preliminary results of one-metre interval chip sampling from trenches indicate wide (10 metres -14 metres) intersections of low-grade (0.22g - 1.2g) gold mineralization in the SE Khond Uul Zone and individual quartz vein bearing samples which assay up to 7.33 g/t. Gradient induced polarization survey results indicate large, structurally oriented resistivity and chargeability anomalies that correlate with each of the three main gold bearing alteration zones. A dipole-dipole survey across the Altan Suult and SE Khond Uul alteration zones indicate that the anomalies extend to depth. Pending receipt of outstanding assays, a review of exploration data will follow to identify drill targets. The encouraging results from the surface exploration program that confirmed previous work performed on the property, combined with supporting geophysical survey interpretation, place the Tsenkher Gol property as a high priority project for the 2006 field season. The Tsenkher Gol Gold project is targeting granite hosted disseminated gold mineralization in an environment geologically similar to Centerra Gold's producing Boroo Mine. The property is less than 200 kilometres east of Ulaanbaatar and is located along a newly paved highway. In addition, active placer gold mining operations occur in drainages adjacent to the Tsenkher Gol property.
Temuujin Project - Virgin Property
Three diamond drill holes (TDD-2A, TDD-20, TDD-21) totaling 1,743 metres were completed in September 2005. Holes TDD-2A and 20 were collared to investigate a broad Titan IP high chargeability anomaly centered over the Temuujin II prospect Central Zone along lines 5800mE and 5400mE. Hole TDD-21 was drilled in the Temuujin II West grid area to test the western extension of a high chargeability IP anomaly defined in 2004 coincident with the tourmaline monzogranite dyke. The two holes testing the Titan anomaly intersected generally intense propylitic andesite characterized by pervasive to mottled chorite-epidote- pyrite and rare chalcopyrite. An overprint of intense phyllic alteration characterized by pyrite-rich, quartz-sericite alteration was also intersected over widths varying from 1 metre to 10 metres. The propylitic alteration zones include some minor gold (up to 0.3g/t), copper (up to 0.08%) and zinc (up to 0.5%) enrichment over two-metre wide intervals. Phyllic altered zones also have significant gold enrichment (up to 1.2g/t) over isolated two-metre intervals. Hole TDD-21 was collared 1.3 kilometres west of previous scout drilling to test a sulphide-bearing tourmaline breccia zone exposed on surface in the Temuujin II west grid area. The hole intersected an approximate 60 metre wide zone (21-81 metres) of an argillic (clay)-altered, tourmaline-bearing intrusive monzonite to intrusive breccia. Disseminated pyrite and arsenopyrite and rare stringers of arsenopyrite were noted. Assay results are consistent with previous assays of the monzonite, characterized by enriched arsenic (up to 0.13% arsenic) and low concentrations of gold and copper. Previous 2004 scout drilling and the results of the recent three drill holes identify the Temuujin II prospect as an area of porphyry-related alteration and mineralization. Alteration occurs over a four kilometre distance from Temuujin II to the Temuujin II west grid areas coincident with the strike of a tourmaline monzonite dyke. While the program has been successful in confirming a well-mineralized and altered porphyry system, the Company's management and technical team are disappointed that to date, it has not been successful in identifying potentially economic concentrations of copper or gold.
Erdenet Copper - Molybdenum Project
Erdene's 2005 exploration program identified a number of copper targets within the Company's claim group surrounding Erdenet Mining Corporation's ("EMC") copper-molybdenum mine, one of the largest copper producing mines in Central Asia. The highest priority target is the Baglai area immediately east of the mine. A geophysical (dipole-dipole induced polarization) survey was carried out in November over a portion of an area of intensely altered granite with associated sulphides on the Baglai License. The survey outlined a 500 metre by 600 metre zone of high chargeability and resistivity over the alteration zone and coincident gradient and magnetic anomalies. The dipole anomaly extends from near surface to an interpreted depth of 300 metres. A second, smaller 300 metre by 300 metre zone of high chargeability and resistivity was also outlined over volcanic rocks intruded by Erdenet Complex granites on the southern portion of the Baglai License. The dipole anomalies are open to both the east and west. Additional dipole surveys as well as compilation of previous exploration in the vicinity are required to complete coverage of the Baglai area to prioritize drill targets for a late winter/spring drill program.
Khets Uul (Wild Mountain) Gold-Copper Project
A program of surface mapping and rock sampling, and trenching were completed at Khets Uul in early September. This work confirmed the extent of surface alteration and secondary copper-bearing zones from 2004 exploration. Trenching east and west of the Jugants massive sulphide zone (24 metre trench result of 1.85g/t gold, 11.92g/t silver and 1.54% copper) in the Khets Uul property identified weak to moderate pyrite alteration up to 100 metres wide that extends along strike over a distance of approximately 1 kilometre. The possibility remains that the Jugant massive sulphide zone represents the near surface exposure of more substantial mineralization occurring down-dip. Channel samples from the westernmost trench (Trench 2) intersected narrow zones (1-2 metres) of silicification and rare quartz veining with maximum assays of 0.18% copper and 5g/t gold. These results effectively confirm the results from 2004 surface sampling which returned a grab sample of 4.9g/t gold. The easternmost trench (Trench 1) intersected a zone of pyrite alteration zone with maximum assays of 0.1% copper and 0.25g/t gold. Several dipole-dipole IP survey lines were also completed across the alteration zone along strike. Several narrow moderate high chargeability anomalies were defined and remain unexplained. The effectiveness of IP surveys is greatly limited by the rugged topography. Additional exploration will be considered on final compilation of results in early 2006.
Erdene Gold Exhibiting and Presenting at the San Francisco Gold & Precious Metals Conference
Erdene Gold, is exhibiting at the San Francisco Gold & Precious Metals Conference on November 27-28, 2005 at the San Francisco Marriot. Mr. Peter Akerley, President and C.E.O. and Mr. Ken MacDonald, Vice President and C.F.O. will be in attendance. Mr. Akerley will be presenting at the conference, providing an overview of activities at 4 pm on Monday November 28th.
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 diversified mineral exploration company focused on Mongolia with over 20 mineral exploration projects that include 71 licenses and cover approximately four million acres. Significant projects include the Zuun Mod molybdenum-copper project where resource definition drilling is now underway, the Central Basin Uranium Projects (International Uranium Corporation Joint Venture), the Ikh Tal-Erdenet Mine copper exploration program where high priority targets have been identified adjacent to Mongolia's largest mining complex, the Tsenkher Gol Gold project targeting a granite hosted disseminated gold target, the Galshar coal program, where drilling is underway to determine coal quality and thickness and the Temuujin copper-gold porphyry project in the South Gobi Mineral Belt. Erdene is well funded with a working capital position of approximately CDN$5.7 million as of September 30th, 2005. Erdene has 27,269,635 common shares issued and outstanding and a fully diluted share position of 32,188,910 common shares. Erdene Gold Inc. currently 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.
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this news release.