Erdene Continues to Expand Zuun Mod Molybdenum Deposit
Erdene Gold Inc. (TSX: ERD) is pleased to announce that a significant new molybdenum zone has been identified at the northern limits of the 2007 phase I drill program area. This zone, which remains open at depth, includes 258 metres of 0.052% Mo with multiple higher grade intersections including 20 metres of 0.173% Mo. This discovery is now the subject of additional 200 metre step-out drilling. Erdene is also pleased to announce the commencement of the Minarco-MineConsult’s resource study on the Zuun Mod molybdenum deposit and the appointment of a Director of External Relations and Communications.
“Zuun Mod continues to demonstrate exceptional potential for the development of a very large near surface molybdenum resource on the doorstep of the fastest growing molybdenum market in the world,” said Peter Akerley, President and CEO of Erdene. “As Erdene’s main projects continue to advance, we have expanded our core management team by appointing Diane Webber as Director of External Relations and Communications. Diane brings a wealth of experience to this key position.”
Recent Results
Hole ZMD-39, located 500 metres northeast of the northern most hole previously announced (ZMD-29: 80 metres of 0.073% Mo beginning at 46 metres within 198 metres of 0.05% Mo), has returned 258 metres of 0.052% Mo beginning at 92 metres and continuing to the bottom of the hole. To date, seven holes within a 400 metre by 400 metre area have been completed in the discovery area with all additional results pending. Step-out holes at 200 metre spacing are continuing in the west, north, and northwest directions. A summary of results for ZMD-39 are provided in the following table.
Table 1 ———————————————– Hole # From To Width (m) Mo % ———————————————– ZMD-39 (eoh) 92 350 258 0.052 ———————————————– Including 92 112 20 0.173 ———————————————– Including 224 272 48 0.075 ———————————————– Including 310 350 40 0.084 ———————————————–
Drilling continues on the Racetrack Zone where in excess of 10 kilometres of vertical drilling has taken place since May 2007. This zone continues to be drill tested at 100 metre intervals to determine the full extent of the mineralization outlined to date.
Additional drilling has also taken place in expanding the Stockwork Zone in the southwest with 200 metre step-out holes. Drilling is expected to continue well into November as the Company continues to expand areas of identified molybdenum mineralization.
Analytical results from Chemex are pending for 23 complete holes (up to ZMD-64) as well as eight partial holes which were those deepened from 250 metres to 350 metres in the central Racetrack zone. Chemex is completing multi-element XRF which includes rhenium analysis. Rhenium contents are averaging approximately 0.2g/t in the molybdenum mineralized zones. SGS Laboratories are utilized in situations where more rapid turnaround is required for holes that may impact the direction of imminent drilling as was the case in ZMD-39. Additional results for Zuun Mod will be reported on receipt.
Zuun Mod Complex
The Zuun Mod porphyry complex lies at the intersection of two regional structures within the South Gobi Arc Terrane that extends across the entirety of southern Mongolia. Numerous porphyry copper-gold-molybdenum systems are known to occur within the terrane including Ivanhoe Mines Oyu Tolgoi Cu-Au deposit to the east. Copper and molybdenum mineralization at Zuun Mod is hosted by strong pervasive potassic alteration zones with quartz-sericite-pyrite overprint in veinlets, quartz stockwork and locally sheeted veins within andesite porphyry, granodiorite and quartz monzonite. Propylitic alteration is observed in the outer fringe of the complex which has a surface alteration expression measuring 5 kilometres by 4.5 kilometres.
The structurally controlled South Corridor zone lies within the southeastern portion of the Zuun Mod Porphyry complex. The molybdenum mineralization in the South Corridor is now anchored by holes 2.6 kilometres apart and open at depth. These holes contain in excess of 250 metres of greater than 0.05% Mo with multiple higher grade zones including 90 metres of 0.09% Mo in drill hole KKMD-03 in the south and the zones in ZMD-39, reported in Table 1 above. The South Corridor hosts the newly identified zone around hole ZMD-39 as well as the previously identified Stockwork, Intersection and Racetrack zones. The Racetrack zone is being defined over a 1.4 kilometre strike length. Results to date indicate a central mineralized zone characterized by greater than 0.06% Mo over thicknesses ranging from 58 to 194 metres with many holes open at depth. Molybdenum mineralization has been defined over thicknesses of up to 380 metres, is open at depth and locally comes within 18 metres of surface. The mineralization remains open in multiple directions.
Surface Work Expansion
Erdene has recently undertaken an expansion of the surface exploration program across the entire Zuun Mod complex. The expanded surface program includes a more detailed geochemical survey and an expanded IP dipole-dipole survey over an area approximately 4.5 kilometres wide by 10 kilometres long. Previous rock and soil geochemical survey programs have identified broad zones of anomalous molybdenum and copper mineralization within the Zuun Mod complex around a mapped andesite unit approximately 12 kilometres in circumference. This includes extensive zones outside the South Corridor. Widely spaced reconnaissance drilling in some of these areas intersected significantly anomalous copper and molybdenum mineralization including 18 metres of 0.051% Mo and 0.11% Cu in hole KKMD-04 located 1 kilometre northwest of ZMD-39 and 12 metres of 0.30% copper in KKMD-05, approximately 1.3 kilometres northwest of ZMD-39. Hole KKMD-13, 1 kilometre to the west, intersected an andesite porphyry and returned anomalous copper throughout, with 152 metres of 0.16% Cu. The Zuun Mod complex has multiple targets including zones in excess of 2.5 kilometres in length that remain untested by drilling. In addition the complex has yet to be tested below 250 metres depth outside the South Corridor.
Minarco-MineConsult
Erdene has retained the services of Minarco-MineConsult, a member of the Runge Group, of Sydney Australia, to carry out an independent resource estimate for the Zuun Mod molybdenum project. Minarco-MineConsult is a prominent mining and energy industry advisor in the Asia Pacific region. Erdene management recently completed a site visit to Zuun Mod along with a representative of Minarco-MineConsult who is in the early stages of the detailed resource study. The report will include geological modeling, geostatistical analysis, grade modeling and a mineral resource estimate for the Zuun Mod molybdenum deposit. The final report is expected in first quarter 2008 and will include the results from the current resource delineation drilling program.
Appointment of Director of External Relations and Communications
Erdene is pleased to announce the appointment of Diane Webber, P.Geo., as Director of External Relations and Communications. Ms. Webber is a graduate of Saint Mary’s University with a BSc Honours in Geology and brings over 20 years of experience in the exploration and mining industry most recently in investor relations. Ms. Webber’s experience includes both surface and underground exploration for precious and base metals in both Canada and internationally. Ms. Webber has recently visited the Company’s two most advanced projects, the Donkin coal and Zuun Mod molybdenum projects and had an opportunity to become familiar with the projects and to meet with all project geologists and managers. Ms. Webber will be pleased to answer any enquiries regarding the company.
About Erdene Gold Inc.
Erdene is a diversified mineral company with exploration properties focused on high-growth commodities and near-production assets. The Company has a strong portfolio of exploration properties in Mongolia focused on base metals (copper and molybdenum), precious metals (gold and palladium) and energy (coal). Erdene has strategic alliances with Xstrata Coal to develop its coal properties in Mongolia. In addition, Erdene has near-term cash flow opportunities in its North American assets, which includes its 25% interest in the Donkin Coal Alliance in Nova Scotia with Xstrata Coal Donkin Limited and agreements with J.M. Huber Corporation and Rinker Materials as operators and developers in the southeast U.S. for its kaolin clay and aggregate projects, respectively. Erdene has a working capital position of approximately $9.0 million with 65,809,439 common shares issued and outstanding and a fully diluted share position of 75,330,852.
Qualified Person
This press release has been prepared under the supervision of J. C. (Chris) Cowan, P.Eng., who serves as the qualified person under National Instrument 43-101. All samples were prepared and analyzed at the SGS Laboratory in Ulaanbaatar, Mongolia. In addition to internal checks by SGS Laboratory, the Company incorporates a QA/QC sample protocol utilizing prepared standards, sample splits and duplicates.
Forward-Looking Statements
Certain information regarding Erdene 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 Erdene 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. Erdene cautions that actual performance will be affected by a number of factors, most of which are beyond its control, and that future events and results may vary substantially from what Erdene 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 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.
Contacts: Diane E. Webber Director of External Relations and Communications 902-423-6419 info@erdene.comwww.erdene.com
SOURCE: Erdene Gold Inc.