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.
An updated Feasibility Study announced in August 2023 incorporated updated mineral resources, including resources from the high-grade Dark Horse Mane deposit. The Bayan Khundii Gold Deposit contains pit-constrained Measured & Indicated Resources based on a cut-off grade of 0.4 g/t of 613,000 oz Au contained within 7.4 Mt at an average grade of 2.58 g/t Au and 319,000 oz Ag at an average grade of 1.34 g/t Ag , effective as of April 20, 2023. The Dark Horse Mane mineral resources contains 61,700 oz of Au within 682 kt at 2.8 g/t Au based on a cut off grade of 0.35 g/t for oxide and transitional material and 1.02 g/t for fresh bedrock material. The effective date is November 2022.
The Feasibility Study contemplates a high-grade open pit mine using conventional crushing and grinding, and a carbon-in-pulp plant with processing capacity of 1,935 tpd. Gold recovery is estimated at 93% and average annual gold production of 74,200 ounces is expected over an eight year mine life.