Bayan Khundii (“Rich Valley”) is located within the Tian Shan Copper-Gold Belt in southwest Mongolia and was discovered in 2015 when a rock-chip sampling program revealed multiple quartz veins that returned high-grade gold values. Erdene followed up the initial work with a comprehensive exploration program that has included geological mapping, soil geochemical surveys, surface rock chip sampling, a ground magnetic survey, induced polarization surveys, and the completion of more than 38,000 metres of diamond drilling.
The Bayan Khundii gold mineralization is associated with quartz adularia veins and breccias and is disseminated within the altered host rocks. Visible gold has been identified in several drill holes as irregular-shaped grains, but the gold is generally fine grained. Drilling has intersected high gold grades (with up to 306.0 g/t gold over 1.0 metre intervals) within broad mineralized zones containing up to 131.0 metres of 3.9 g/t gold (including 80.0 metres of 6.0 g/t gold). Multiple high-grade targets have been established through limited shallow drilling and surface sampling within four kilometres of the deposit, including the Khar Mori (Dark Horse) prospect identified in late 2019.
A Feasibility Study Mineral Reserve Estimate effective July 1, 2020 outlined Proven and Probable Reserves of 3.4 Mt grading 3.7 g/t gold containing 409.0 kozs of gold. The NI 43-101 Technical Report contemplates a high-grade open pit mine using conventional crushing and grinding, leach and a carbon-in-pulp plant with processing capacity of 1,800 tpd. Gold recovery is estimated at 93% and average annual gold production of 63,500 ounces is expected over a six-year mine life.
Erdene started an 18,000 metre drill program at the Khundii Gold District in August 2020. Highlights from the first 10,000 metres drilled include high-grade gold intersections in a new zone at Striker West, 200 metres west of the proposed Bayan Khundii pit:
- BKD-334: 28.0 metres of 2.5 g/t gold, from 122.0 metres;
- BKD-338: 38.0 metres of 1.8 g/t gold, from 108.0 metres;
- BKD-339: 54.0 metres of 1.2 g/t gold, from 129.0 metres.
Erdene has obtained many of the permits required to begin construction at the Bayan Khundii Gold Project. A Detailed Environmental Impact Assessment (“DEIA”) has been prepared and following local stakeholder consultations the company will submit its statutory DEIA to the Ministry of Environment and Tourism of Mongolia for approval.
Erdene also announced a $20M Private Placement financing led by Eric Sprott.