Erdene Resource Development Corporation press release
Erdene's Drilling Returns Highest Near-Surface Grades to Date and Extends Size of the Zuun Mod Molybdenum Target Near Chinese Border
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156 Metres of 0.06% Molybdenum Including 20 Metres of 0.11% Starting at 72 Metres
HALIFAX, Jan. 9 /CNW/ - Erdene Gold Inc. (TSX:ERD) today announced results of the recent diamond drilling program at its Zuun Mod porphyry molybdenum project in southern Mongolia. The project is in the South Gobi, approximately 150 kilometres north of the Chinese border. "The three-kilometre long Southeast Molybdenum Zone continues to provide strong results, increasing our confidence in the potential for defining a very large molybdenum resource. We are very excited with confirmation of higher grades in the upper-levels of the mineralized system as it is important to the potential economic viability of the project," said Erdene President and CEO, Peter Akerley. "We believe that the demand for molybdenum will continue to increase over the long term driven by steel manufacturing in China, making the location of Zuun Mod very strategic." A six-hole, 1,793-metre drill program was completed in mid-December at Zuun Mod. Five vertical holes were drilled in the Southeast Molybdenum Zone, and all intersected significant molybdenum mineralization. Three were delineation holes (two in the Racetrack Zone and one in the Stockwork Zone) and two were reconnaissance holes. There was one additional reconnaissance hole drilled to the northwest of the Southeast Molybdenum Zone. A total of 15 vertical holes have tested the Southeast Molybdenum Zone, and 12 of the holes have intersected significant mineralization. To view a plan map for Zuun Mod please visit the company web site: www.erdene.com.
Highlights include:
Racetrack Zone returns best results to date, including high near- surface grades: 20 metres of 0.11% Mo beginning at 72 metres. Additional high-grade zones (30 metres and 16 metres of 0.10% Mo) were intersected at approximately 200 metres in both new Racetrack Zone holes.
Continuity of the mineralized zones between holes is indicated within the Racetrack Zone, which remains open to the south-southwest.
Strong indications of associated copper mineralization in the Racetrack Zone: 10 metres of 0.24% copper (high 0.58% over 2 metres) and 0.15% molybdenum (high 0.24% over 2 metres).
Delineation Drilling In conjunction with recommendations from an independent consultant, Erdene initiated close-spaced drilling on the Racetrack and Stockwork Zones to define the molybdenum mineralization in these areas. Two holes tested continuity and extension of the Racetrack Zone, located in the central portion of the Southeast Molybdenum Zone. Thick zones of molybdenum mineralization have now been intersected in four holes over a 400-metre strike length. The four holes have mineralized zones with average molybdenum values equal to or greater than 0.05% over an average thickness of 235 metres. Each of these holes terminated within the mineralized zone. Hole ZMD-12 was drilled between two previous holes (KKMD-08 and ZMD-11), and provides higher confidence in zone continuity. Hole ZMD-13 (a 100 metre step-out from ZMD-11) effectively extends the Racetrack mineralization to the southwest and intersected high- grade mineralization closer to surface (72 metres) than previously identified. The upper 10 metres of the zone also contains high copper values, 10 metres of 0.24% Cu from 72 metres to 82 metres. The full extent of this zone is yet to be determined as it remains open to the southwest. Hole ZMD-14, collared approximately 1.5 kilometres southwest of ZMD-13, tested the Stockwork Zone between two previously drilled holes (KKMD-03 and MD-09). Hole ZMD-14 intersected significant molybdenum mineralization and provides added confidence in zone continuity over a 500-metre strike length. The Stockwork Zone remains open to the south and southwest. << Table 1 - 2005 November-December Delineation Drilling Results Width Zone Drill Hole From To Metres Mo % MoS2 %(x) Racetrack ZMD-12 84 300 eoh 216 0.05 0.08 Including 180 264 84 0.07 0.12 Including 186 216 30 0.10 0.17 ZMD-13 72 349 eoh 277 0.05 0.08 Including 72 228 156 0.06 0.10 Including 72 92 20 0.11 0.18 Including 72 82 10 0.15 0.25 Including 204 220 16 0.10 0.17 Stockwork ZMD-14 128 190 62 0.05 0.08 Including 134 160 26 0.07 0.12 eoh equals end of hole (x) Molybdenum analysis is reported either as Molybdenum (Mo) or Molybdenite (MoS2). A conversion factor of 1.66 was used to calculate the MoS2 values from the analytical results reported as Mo.
Reconnaissance Drilling Two reconnaissance drill holes, ZMD-15 and 16, were drilled 800 metres apart in the Intersection Zone (northwest portion of the Southeast Molybdenum Zone) where a previous hole had indicated potential for near-surface mineralization. Hole ZMD-15 intersected 0.12% Mo over a 2-metre interval at 32 metres depth from surface and hole ZMD-16 intersected 32 metres of 0.07% Mo at a depth of 156 metres. These results demonstrate the potential of the northwest portion of the Southeast Molybdenum Zone to host significant mineralization. A third reconnaissance hole, ZMD-17, that did not return significantly anomalous values, was drilled to test a surface alteration anomaly two kilometres northwest of the Racetrack Zone.
Table 2 - 2005 November-December Reconnaissance Drilling Results Width Drill Hole From To Metres Mo % MoS2 %(x) ZMD-15 32 34 2 0.12 0.20 And 284 328 34 0.05 0.08 ZMD-16 46 56 10 0.04 0.07 And 156 188 32 0.07 0.12 (x) Molybdenum analysis is reported either as Molybdenum (Mo) or Molybdenite (MoS2). A conversion factor of 1.66 was used to calculate the MoS2 values from the analytical results reported as Mo.
Summary The recent drill results further strengthen management's view that Zuun Mod hosts a potentially economic molybdenum resource. The increasing grades near surface in the southern portion of the Racetrack zone, significant thickness of mineralized zones and the large untested areas remaining, attest to the potential of the Zuun Mod project. Because of these factors and the project's close proximity to Chinese markets, processing capacity and infrastructure, Erdene management is very positive about the potential of the project. Scoping study components and drilling are expected to continue throughout 2006.
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 that are 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 in southern Mongolia. Molybdenum is used in steel and cast iron products as well as superalloys, electronics, catalysts, lubricants and pigments. Production of certain stainless steel products, 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, has resulted in significant price increases in molybdenum. It is currently priced at US$24/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 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 project, 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 programs are 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 $4 million as of December 31st, 2005. Erdene has 27,269,635 common shares issued and outstanding and a fully diluted share position of 32,188,910 common shares.
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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