Erdene Resource Development Corp (TSX:ERD, OTC:ERDCF) told investors that development activities at its Bayan Khundii gold project in southwestern Mongolia are underway with the early works phase of the project nearing completion.
The company noted that the early works contract with MSC Properties, an affiliate of the company’s strategic partner Mongolian Mining Corporation, includes final design and engineering works, the establishment of temporary construction facilities, including a camp, fuel station, aggregate crushing and concrete batch plant, and bulk earthworks.
The work under this contract is largely complete, with aggregate and concrete batch plants established, construction office and accommodations erected, bulk earthworks, including site levelling and process plant footing excavation well progressed, and off-site and on-site road improvements largely complete.
The early works phase of the project represents about 5% of the total construction effort, Erdene noted.
The company is currently in negotiations with MSC Properties on an engineering, procurement, and construction contract for the remainder of the build, which it hopes will be executed in the fourth quarter of 2023. The company is also in talks with a Mongolian power provider.
Further, the company noted that on August 30, 2023, Erdene and its partner Mongolian Mining Corporation amended their Strategic Alliance Agreement for the Bayan Khundii project to advance $15 million of the $30 million third stage of financing to continue early works, while the parties work to secure the balance of capital before reaching a formal construction decision.
Erdene said two international financial institutions are conducting due diligence on the project’s updated Feasibility Study, announced on August 15, 2023, and are expected to provide the project’s debt financing.
The company expects the debt financing could make up as much as 65% of the total financing package and anticipates the deal closing in late 2023.
“With the finalization of the updated Bayan Khundii Project Feasibility Study, we are working to lock in the project financing in advance of a formal construction decision,” Erdene CEO Peter Akerley said in a statement.
“Through our Strategic Alliance with Mongolian Mining Corporation, Mongolia’s largest independent miner, we are targeting first gold and cash flow in 2025, while we continue to explore, discover and develop the other mineral deposits in our Khundii Minerals District.”
Erdene is a Canada-based resource company focused on the acquisition, exploration, and development of precious and base metals in underexplored and highly prospective Mongolia.
Contact the author at emily.jarvie@proactiveinvestors.com
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