Erdene Resource Development : Management Information Circular - May 20, 2025
ERD.TO
Published on 05/26/2025 at 11:20
MEETING DATE: JUNE 25, 2025 AT 10:00 A.M.
1969 Upper Water Street, Suite 1300 McInnes Cooper Tower - Purdy's Wharf Halifax, NS
Canada B3J 3R7
May 20, 2025
NOTICE OF ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
170 Cromarty Drive, Suite 200 Dartmouth NS Canada B3B 0G1
The annual and special meeting ("Meeting") of the shareholders ("Shareholders") of Erdene Resource Development Corporation ("Corporation") will be held at 1969 Upper Water Street, Suite 1300, McInnes Cooper Tower - Purdy's Wharf, Halifax, Nova Scotia, on June 25, 2025 at 10:00 a.m. (Atlantic Time) for the following purposes:
to receive the audited financial statements of the Corporation for the year ended December 31, 2024, copies of which were mailed to Shareholders;
to elect directors of the Corporation for the forthcoming year;
to appoint the auditor of the Corporation for the forthcoming year and to authorize the directors to fix the auditor's remuneration:
to consider a resolution approving termination of the Corporation's shareholder rights plan;
to consider, and if deemed advisable, pass a special resolution granting the board of directors of the Corporation the authority to implement a consolidation of the Corporation's Common Shares on the basis of one (1) new Common Share for every six (6) existing Common Shares; and
to transact such further and other business as may properly come before the Meeting or any adjournment thereof.
Details of the matters proposed to be put before the Meeting are set forth in the management information circular ("Circular") accompanying and forming part of this notice of meeting ("Notice of Meeting").
Only Shareholders of record as of the close of business on May 21, 2025 are entitled to receive notice of the Meeting and, except as noted in the attached Circular, to vote at the Meeting. To assure your representation at the Meeting as a Registered Shareholder, please complete, sign, date and return the enclosed proxy, whether or not you plan to personally attend. Sending your proxy will not prevent you from voting in person at the Meeting. All proxies completed by Registered Shareholders must be received by the Corporation's transfer agent, Computershare Investor Services Inc., not later than June 23, 2025 at 10:00 a.m. (Atlantic Time). A Registered Shareholder must return the completed proxy to Computershare Investor Services Inc., as follows:
by mail in the enclosed envelope;
by the Internet or telephone as described on the enclosed proxy; or
by registered mail, by hand or by courier to the attention of Computershare Proxy Department, 8thFloor, 100 University Avenue, Toronto, Ontario, M5J 2Y1.
Non-Registered Shareholders whose shares are registered in the name of an intermediary should carefully follow voting instructions provided by the intermediary. A more detailed description on returning proxies by Non-Registered Shareholders can be found on page 2 of the attached Circular.
If you receive more than one proxy or voting instruction form, as the case may be, for the Meeting, it is because your shares are registered in more than one name. To ensure that all of your shares are voted, you must sign and return all proxies and voting instruction forms that you receive.
DATED at Dartmouth, in the Halifax Regional Municipality, Nova Scotia, this 20thday of May, 2025.
BY ORDER OF THE BOARD OF DIRECTORS
(signed) Peter C. Akerley
President and Chief Executive Officer
TABLE OF CONTENTS
INFORMATION REGARDING ORGANIZATION AND CONDUCT OF MEETING 4
Solicitation of Proxies 4
Appointment and Revocation of Proxies 4
Notice-and-Access 6
Exercise of Proxies 6
Voting Shares 6
Principal Shareholders 7
INTEREST OF CERTAIN PERSONS OR COMPANIES IN MATTERS TO BE ACTED UPON 7
BUSINESS TO BE TRANSACTED AT THE MEETING 7
Presentation of Financial Statements 7
Election of Directors 7
Appointment of Auditor 13
Approval of Termination of the Rights Plan 14
Consolidation of Common Shares of the Corporation 15
EXECUTIVE COMPENSATION 19
Compensation Discussion & Analysis 19
Assessment of Risks Associated with the Corporation's Compensation Policies and Practices 24
Summary Compensation Table 25
Share-Based and Option Based Awards 26
Termination and Change of Control Benefits 27
Director Compensation 28
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS 30
Equity Compensation Plans 30
Omnibus Equity Incentive Plan 31
Incentive Stock Option Plan 37
Deferred Stock Unit Plan 40
INDEBTEDNESS OF DIRECTORS AND OFFICERS 42
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS 42
CORPORATE GOVERNANCE 42
Board of Directors 42
Board Mandate 44
Position Descriptions 44
Orientation and Continuing Education 44
Ethical Business Conduct 45
Nomination of Directors 45
Compensation Committee 46
Audit and Risk Management Committee 47
Pre-Clearance Committee 47
Corporate Governance and Disclosure Policy Committee 47
Technical Committee 47
Other Board Committees 47
Assessments 47
PROPOSALS BY SHAREHOLDERS 47
ADDITIONAL INFORMATION 48
APPROVAL OF CIRCULAR 48
SCHEDULE A - Change of Auditor Package
ERDENE RESOURCE DEVELOPMENT CORPORATION MANAGEMENT INFORMATION CIRCULAR
As at May 20, 2025, except as indicated
THIS MANAGEMENT INFORMATION CIRCULAR IS FURNISHED IN CONNECTION WITH THE SOLICITATION OF PROXIES BY OR ON BEHALF OF THE MANAGEMENT OF ERDENE RESOURCE
DEVELOPMENT CORPORATION ("Corporation" or "Erdene") for use at the annual and special meeting of shareholders of the Corporation ("Shareholders") to be held at 1969 Upper Water Street, Suite 1300, McInnes Cooper Tower - Purdy's Wharf, Halifax, Nova Scotia, on June 25, 2025 at 10:00 a.m. (Atlantic Time), or at any adjournment thereof ("Meeting"), for the purposes set forth in the accompanying notice of meeting ("Notice of Meeting").
Solicitation of proxies will be primarily by mail but may also be by telephone or other means of communication by the directors, officers, employees or agents of the Corporation at nominal cost. All costs of solicitation will be paid by the Corporation. The Corporation will also pay the fees and costs of intermediaries for their services in transmitting proxy-related material in accordance with National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer ("NI 54-101").
Shareholders may be "Registered Shareholders" or "Non-Registered Shareholders". If common shares of the Corporation ("Common Shares") are registered in the name of an intermediary and not registered in the Shareholder's name, they are said to be owned by a "Non-Registered Shareholder". An intermediary is usually a bank, trust company, securities dealer or broker, or a clearing agency in which an intermediary participates. The instructions provided below set forth the different procedures for voting Common Shares at the Meeting to be followed by Registered Shareholders and Non-Registered Shareholders.
The persons named in the enclosed instrument appointing proxy are officers and directors of the Corporation. Each Shareholder has the right to appoint a person or company (who need not be a Shareholder) to attend and act for him at the Meeting other than the persons designated in the enclosed form of proxy. Shareholders who have given a proxy also have the right to revoke it insofar as it has not been exercised. The right to appoint an alternate proxyholder and the right to revoke a proxy may be exercised by following the procedures set out below under "Registered Shareholders" or "Non-Registered Shareholders", as applicable.
If any Shareholder receives more than one (1) proxy or voting instruction form, it is because that Shareholder's shares are registered in more than one form. In such cases, Shareholders should sign and submit all proxies or voting instruction forms received by them in accordance with the instructions provided.
Registered Shareholders
Registered Shareholders have two (2) methods by which they can vote their Common Shares at the Meeting, namely in person or by proxy. To assure representation at the Meeting, Registered Shareholders are encouraged to return the proxy included with this management information circular ("Circular"). Sending in a proxy will not prevent a Registered Shareholder from voting in person at the Meeting. The vote will be taken and counted at the Meeting. Registered Shareholders who do not plan to attend the Meeting or do not wish to vote in person can vote by proxy.
Proxies must be received by the Corporation's transfer agent, Computershare Investor Services Inc., ("Computershare") not later than June 23, 2025 at 10:00 a.m. (Atlantic Time). A Registered Shareholder must return the completed proxy to Computershare as follows:
by mail in the enclosed envelope; or
by the Internet or telephone as described on the enclosed proxy; or
by registered mail, by hand or by courier to the attention of Computershare Proxy Department, 8thFloor, 100 University Avenue, Toronto, Ontario, M5J 2Y1.
To exercise the right to appoint a person or company to attend and act for a Registered Shareholder at the Meeting, such Shareholder must strike out the names of the persons designated on the enclosed instrument appointing a proxy and insert the name of the alternate appointee in the blank space provided for that purpose.
To exercise the right to revoke a proxy, in addition to any other manner permitted by law, a Shareholder who has given a proxy may revoke it by instrument in writing, executed by the Shareholder or his attorney authorized in writing, or if the Shareholder is a corporation, by a duly authorized officer or attorney thereof, and deposited: (i) at the registered office of the Corporation, 1300-1969 Upper Water Street, McInnes Cooper Tower, Purdy's Wharf, PO Box 730, Halifax, Nova Scotia B3J 2V1, Attention: D. Suzan Frazer, at any time up to and including the last business day preceding the Meeting at which the proxy is to be used, or at any adjournment thereof; or (ii) with the chair of the Meeting on the date of the Meeting, or at any adjournment thereof, and upon either of such deposits the proxy is revoked.
Non-Registered Shareholders
Non-Registered Shareholders who have not objected to their intermediary disclosing certain ownership information about themselves to the Corporation are referred to as "NOBOs". Non-Registered Shareholders who have objected to their intermediary disclosing the ownership information about themselves to the Corporation are referred to as "OBOs".
In accordance with the requirements of NI 54-101, the Corporation is sending the Notice of Meeting, this Circular, a voting instruction form ("VIF") or a form of proxy, as applicable (collectively, the "Meeting Materials") directly to the NOBOs and, indirectly, through intermediaries, to the OBOs. The Corporation will also pay the fees and costs of intermediaries for their services in delivering Meeting Materials to OBOs in accordance with NI 54-101.
Meeting Materials Received by OBOs from Intermediaries
The Corporation has distributed copies of the Meeting Materials to intermediaries for distribution to OBOs. Intermediaries are required to deliver these materials to all OBOs of the Corporation who have not waived their right to receive these materials, and to seek instructions as to how to vote Common Shares. Often, intermediaries will use a service company (such as Broadridge Financial Solutions, Inc.) to forward the Meeting Materials to OBOs.
OBOs who receive Meeting Materials will typically be given the ability to provide voting instructions in one of two ways:
Usually, an OBO will be given a VIF which must be completed and signed by the OBO in accordance with the instructions provided by the intermediary. In this case, the mechanisms described above for Registered Shareholders cannot be used and the instructions provided by the intermediary must be followed.
Occasionally, however, an OBO may be given a proxy that has already been signed by the intermediary. This form of proxy is restricted to the number of Common Shares owned by the OBO but is otherwise not completed. This form of proxy does not need to be signed by the OBO but must be completed by the OBO and returned to Computershare in the manner described above for Registered Shareholders.
The purpose of these procedures is to allow OBOs to direct the proxy voting of the Common Shares that they own but that are not registered in their name. Should an OBO who receives either a form of proxy or a VIF wish to attend and vote at the Meeting in person (or have another person attend and vote on their behalf), the OBO should strike out the person named in the form of proxy as the proxy holder and insert the OBOs (or such other person's) name in the blank space provided or, in the case of a VIF, follow the corresponding instructions provided by the intermediary. In either case, OBOs who received Meeting Materials from their intermediary should carefully follow the instructions provided by the intermediary.
To exercise the right to revoke a proxy, an OBO who has completed a proxy (or a VIF, as applicable) should carefully follow the instructions provided by the intermediary.
Proxies returned by intermediaries as "non-votes" because the intermediary has not received instructions from the OBO with respect to the voting of certain shares or, under applicable stock exchange or other rules, the intermediary does not have the discretion to vote those shares on one or more of the matters that come before the Meeting, will be treated as not entitled to vote on any such matter and will not be counted as having been voted in respect of any such matter. Common Shares represented by such "non-votes" will, however, be counted in determining whether there is a quorum.
Meeting Materials Received by NOBOs from the Corporation
As permitted under NI 54-101, the Corporation has used a NOBO list to send the Meeting Materials directly to the NOBOs whose names appear on that list. If you are a NOBO and the Corporation's transfer agent, Computershare, has sent these materials directly to you, your name and address and information about your holdings of Common Shares have been obtained from the intermediary holding such shares on your behalf in accordance with applicable securities regulatory requirements.
As a result, any NOBO of the Corporation can expect to receive a scannable VIF from Computershare. Please complete and return the VIF to Computershare in the envelope provided. In addition, telephone voting and internet voting are available, as further described in the VIF. Instructions in respect of the procedure for telephone and internet voting can be found in the VIF. Computershare will tabulate the results of the VIFs received from the Corporation's NOBOs and will provide appropriate instructions at the Meeting with respect to the shares represented by the VIFs received by Computershare.
By choosing to send these materials to you directly, the Corporation (and not the intermediary holding Common Shares on your behalf) has assumed responsibility for: (i) delivering these materials to you; and (ii) executing your proper voting instructions. The intermediary holding Common Shares on your behalf has appointed you as the proxyholder of such shares, and therefore you can provide your voting instructions by completing the proxy included with this Circular in the same way as a Registered Shareholder. Please refer to the information under the heading "Registered Shareholders" for a description of the procedure to return a proxy, your right to appoint another person or company to attend the meeting, and your right to revoke the proxy.
Although a Non-Registered Shareholder may not vote the Common Shares registered in the name of his or her broker directly at the Meeting, a Non-Registered Shareholder may attend the Meeting as proxyholder for the Registered Shareholder and vote the Common Shares in that capacity. Non-Registered Shareholders who wish to attend the Meeting and indirectly vote their Common Shares as proxyholder for the Registered Shareholder should enter their own names in the blank space on the form of proxy provided to them and return the same to their broker (or the broker's agent) in accordance with the instructions provided by such broker.
The Corporation is not sending the Meeting Materials to Registered Shareholders or Non-Registered Shareholders using notice-and-access delivery procedures defined under NI 54-101 and National Instrument 51-102 - Continuous Disclosure Obligations.
Where a choice is specified, the Common Shares represented by proxy will be voted for, withheld from voting or voted against, as directed, on any poll or ballot that may be called. Where no choice is specified, the proxy will confer discretionary authority and will be voted in favour of all matters referred to on the form of proxy. The proxy also confers discretionary authority to vote for, withhold from voting, or vote against amendments or variations to the matters identified in the Notice of Meeting and with respect to other matters not specifically mentioned in the Notice of Meeting but which may properly come before the Meeting.
Management has no present knowledge of any amendments or variations to matters identified in the Notice of Meeting or any business that will be presented at the Meeting other than that referred to in the Notice of Meeting. However, if any other matters properly come before the Meeting, it is the intention of the persons named in the enclosed instrument appointing proxy to vote in accordance with the recommendations of management of the Corporation.
The authorized capital of the Corporation consists of an unlimited number of Common Shares, of which 365,326,958 are issued and outstanding as of the date hereof.
The board of directors of the Corporation ("Board of Directors" or "Board") has fixed the record date for the Meeting as the close of business on May 21, 2025 ("Record Date"). Only Shareholders as of the close of business on the Record Date will be entitled to vote at the Meeting, provided that a Shareholder that produces satisfactory evidence no later than 10 days before the Meeting that such Shareholder owns Common Shares and demands that such Shareholder's name be included on the list of Shareholders entitled to vote at the Meeting shall be entitled to vote at
the Meeting. Shareholders entitled to vote shall have one vote each on a show of hands and one vote per Common Share on a poll.
Two or more persons present in person representing at least 5% of the Common Shares entitled to be voted at the Meeting will constitute a quorum at the Meeting.
Other than as set out below, as of the date hereof, to the knowledge of the directors and executive officers of the Corporation, no person or company beneficially owns, or exercises control or direction over, directly or indirectly, Common Shares carrying 10% or more of the voting rights attached to all outstanding Common Shares of the Corporation.
Shareholder
Number of Common Shares
Percentage of Common Shares
2176423 Ontario Ltd. (controlled by Eric Sprott)
72,212,465
19.8%
No person who has been a director or executive officer of the Corporation since January 1, 2024 nor any proposed nominee for election as a director, nor any associate of the foregoing, has any material interest, direct or indirect, by way of beneficial ownership of securities of the Corporation or otherwise, in matters to be acted upon at the Meeting other than the election of directors.
The financial statements of the Corporation, the auditor's report thereon and management's discussion and analysis for the financial year ended December 31, 2024, will be presented to the Shareholders at the Meeting.
The Articles of Incorporation of the Corporation and applicable laws provide that the size of the Board of Directors must consist of not fewer than three (3) directors and not more than ten (10) directors to be elected annually. The Corporation's by-laws provide that the size of the Board of Directors is to be determined by the Board of Directors. The Board is presently comprised of seven (7) directors. The Board has determined that, in the forthcoming year, the business of the Corporation may be best conducted by a Board of Directors consisting of five (5) directors and has fixed the size of the Board at five (5) effective at the close of the Meeting. The Board is authorized to appoint up to one-third (1/3) of the number of directors elected at the previous annual general meeting of Shareholders.
Each of the persons named below is currently a director of the Corporation. All of the proposed nominees are, in the opinion of management, well qualified to direct the Corporation's activities for the ensuing year and they have all confirmed their willingness to serve as directors, if elected. The term of office of each director elected will be until the next annual meeting of the Shareholders or until the position is otherwise vacated.
Unless the proxy specifically instructs the proxyholder to vote against, Common Shares represented by the proxies hereby solicited shall be voted for the election of the nominees whose names are set forth below. Management does not contemplate that any of these proposed nominees will be unable to serve as a director, but if that should occur for any reason prior to the Meeting, the Common Shares represented by the properly executed proxies given in favour of nominees of management named in the enclosed form of proxy may be voted for another nominee at such proxyholder's discretion.
President and Chief Executive Officer of the Corporation
Nova Scotia, Canada
Director since: February 25, 2003
Chief Executive Officer and
Non-Independent Director
Mr. Akerley has over 35 years of experience in mineral exploration, corporate financing, project development and management of publicly listed resource companies. He is one of the founders and principals of Erdene and has held the position of President and Chief Executive Officer of the Corporation since March 2003. Mr. Akerley is a geologist who has worked extensively in foreign jurisdictions throughout his career, predominately in North and South America and Asia, with a focus on Mongolia, where he has led the technical team through the confirmation of a major molybdenum and copper deposit, the discovery and definition of the Altan Nar gold deposit and the discovery of the Bayan Khundii gold project. He has extensive experience in corporate M&A, joint venture arrangements and financings, leading the Corporation through more than 20 such business arrangements since taking the Corporation public in 2004. Mr. Akerley served on the Board and Special Committee of Temex Resources Corp. advising on the sale of the company to Lake Shore Gold Corp. and was previously chairman of the TSX-V listed Morien Resources Corp., where he was involved in the sale of the Donkin Coal and Black Point Aggregate projects, converting those interests into royalties. He also pioneered the company's involvement as the founding and lead sponsor of the very successful Catapult leadership program in Nova Scotia. Mr. Akerley has a BSc (1988) from Saint Mary's University in Halifax, specializing in geology, and completed the Institute of Corporate Directors Audit Committee Effectiveness course in December 2012.
Board and Committee Attendance during 2024
Board of Directors
5 of 5
100%
Technical Committee
1 of 1
100%
None
Votes For
Votes Against
Total Votes Cast
# of Votes
169,943,256
88,916
170,032,172
% of Votes
99.95%
0.05%
100.00%
Ownership and Value At-Risk
As at Common Shares Deferred Share Units
Total Shares/Units Total Value At-Risk
May 16, 2025
3,156,849
2,293,427
5,450,276
$5,068,757
May 16, 2024
2,856,849
1,976,760
4,833,609
$1,957,612
Corporate Director
British Columbia, Canada
Director since: June 14, 2016
Independent Director
Dr. Biolik has over 30 years of public and private sector experience and is one of the foremost Canadian experts on Central Asian business and diplomacy. From 2010 to 2012, Dr. Biolik occupied the position of Regional Director, Pacific Region, Foreign Affairs and International Trade Canada. In 2012, Dr. Biolik retired from the federal public service. From 2014 to 2020, she worked as independent consultant and Vice-President and Chief Executive Advisor of Allam Advisory Group, a global business strategy and commercial diplomacy consulting firm. She was Canada's first resident Ambassador in Mongolia where she opened a full-fledged Canadian Embassy in 2008. Dr. Biolik previously served as Ambassador of Canada to Kazakhstan, Kyrgyzstan and Tajikistan as well as Consul General of Canada in St. Petersburg, Russian Federation. She also served as Senior Advisor for international relations and parliamentary affairs to the Governor General of Canada, as European Marketing Manager for Canada Post, as Senior Manager at Investment Partnerships Canada and as Director of the International Business Opportunities Centre. Dr. Biolik has extensive expertise in international commerce and has worked closely with Canadian companies in emerging markets. From 2013 to 2019, Dr. Biolik served also as external member of the Program and Research Council at Royal Roads University in Victoria, BC. She holds a Ph.D. from the University of Montreal and is fluent in English, French, Russian and Polish.
Board and Committee Attendance during 2024
Board of Directors
5 of 5
100%
Corporate Governance and Disclosure Policy Committee
1 of 1
100%
Audit and Risk Management Committee
4 of 4
100%
None
Votes For
Votes Against
Total Votes Cast
# of Votes
169,800,590
231,582
170,032,172
% of Votes
99.86%
0.14%
100.00%
Ownership and Value At-Risk
As at Common Shares Deferred Share Units
Total Shares/Units Total Value At-Risk
May 16, 2025
246,462
725,161
971,623
$903,609
May 16, 2024
246,462
602,053
848,515
$343,649
President, CEO and Director, Carolina Rush Corporation (TSX-V)
North Carolina, USA
Director since: July 2, 2015
Independent Director and Chair of the Board
Mr. Croft is an executive and entrepreneur with 30 years of global experience across increasingly senior roles, from non-profit to mid-tier to mega-cap to micro-cap. He has expertise building and leading successful enterprises, project delivery, complex stakeholder management, public-private partnership, strategic communications, corporate governance and ESG. His deep Mongolia expertise dates back to 1994, when his three years of service as a U.S. Peace Corps Volunteer included two years living and working in Bayankhongor Province in southwest Mongolia. He lived and worked full-time in Mongolia for 15 years, and also lived and worked in South Korea, Indonesia, Hong Kong and Singapore. He has held executive and senior advisory roles with Oyu Tolgoi LLC, Ivanhoe Mines, Rio Tinto, Peabody Energy and Duke Energy. He has been an independent director of Erdene since June 2015, and chairman of the board since June 2019. He is a member of the Erdene's Audit and Risk Management Committee and Corporate Governance and Disclosure Policy Committee. Since April 2017, Layton has been President, CEO and Director of Carolina Rush Corporation (formerly Pancontinental Resources Corp.), a Canadian junior mining company (TSXV: RUSH) focused on exploring the Southeast USA, home of North America's first gold rush. Since January 2022, Layton has been an independent director of Voltage Metals Corp., a Canadian junior mining company (CSE: VOLT) exploring for nickel in Ontario. Layton holds a BA from the University of North Carolina at Chapel Hill, an MA from the School for International Training in Vermont, and an MA from the Fletcher School of Law and Diplomacy at Tufts University in Massachusetts. He lives in Charlotte, North Carolina.
Board and Committee Attendance during 2024
Board of Directors
5 of 5
100%
Corporate Governance and Disclosure Policy Committee
1 of 1
100%
Audit and Risk Management Committee
4 of 4
100%
Carolina Rush Corporation (TSX-V) Voltage Metals Corporation (CSE)
Votes For
Votes Against
Total Votes Cast
# of Votes
169,300,590
731,582
170,032,172
% of Votes
99.57%
0.43%
100.00%
Ownership and Value At-Risk
As at Common Shares Deferred Share Units
Total Shares/Units Total Value At-Risk
May 16, 2025
1,378,478
688,666
2,067,144
$1,922,444
May 16, 2024
1,228,478
575,855
1,804,333
$730,755
CEO and Chair, Fisher Transport Limited
Mr. MacDonald was appointed director of the Board in June 2019. Until May 2019, Mr. MacDonald served as Executive Vice President of Erdene, a position he held from 2016. Additionally, Mr. MacDonald served as Chief Financial Officer of Erdene from March 2003 to May 2019. From September 1992, Mr. MacDonald has also been the President and owner of Fisher Transport Limited, a specialized transport company, where he currently serves as CEO and Chair. In addition, he was the Vice President of Finance for Kaoclay Resources Inc. from 1996 to June 2006. Prior to 1985, Mr. MacDonald, a chartered professional accountant, was a senior manager with one of Canada's major accounting firms. From 1985 to September 1992, he was vice president finance with public and private corporations in the resource sector. Mr. MacDonald graduated from St. Mary's University in 1977 with a BCom and received the Chartered Professional Accountant designation in 1980.
Nova Scotia, Canada
Director since: June 20, 2019
Independent Director
Board and Committee Attendance during 2024
Board of Directors
5 of 5
100%
Compensation Committee
2 of 2
100%
Audit and Risk Management Committee
4 of 4
100%
None
Votes For
Votes Against
Total Votes Cast
# of Votes
169,418,506
613,666
170,032,172
% of Votes
99.64%
0.36%
100.00%
Ownership and Value At-Risk
As at Common Shares Deferred Share Units
Total Shares/Units Total Value At-Risk
May 16, 2025
2,087,781
451,823
2,539,604
$2,361,832
May 16, 2024
2,102,781
365,334
2,468,115
$999,587
Executive Director of Tarva Investment & Advisory Chairman of Kincora Copper Limited
New South Wales, Australia
Director since: March 14, 2018
Independent Director
Mr. McRae was appointed director of the Board in March 2018. Mr. McRae is a seasoned CEO, having led mining organizations through the full mining development cycle in four countries and across three continents. Cameron served a 28-year career with Rio Tinto, and in Mongolia was President of Oyu Tolgoi LLC and Rio Tinto's country director for Mongolia. In that role he led the construction and start-up of the US$6 billion Oyu Tolgoi copper-gold mine, ahead of schedule, which at peak of construction had over 15,000 people employed on site. Cameron has led successful greenfield and brownfield construction projects, overarching business transformations and business improvement projects, and at the corporate level has deep commercial/M&A experience. Prior to Oyu Tolgoi, Cameron was CEO of Richards Bay Minerals in South Africa (2008-10), Managing Director of Murowa Diamonds in Zimbabwe (2006-07) and Project Director for the Hail Creek Coking Coal Expansion project in Australia. Prior to 2004, Cameron held commercial and project leadership roles, both at Corporate and Business Unit levels. In 1995, he was a key team member responsible for the A$29 billion merger of CRA and RTZ into the dual listed Rio Tinto (which was the world's largest merger at the time). Mr. McRae is the co-founder of DTP Partners, a broad-based consultancy firm and is Chairman of Kincora Copper Limited (KCC on the TSX-V and ASX). Cameron is an advisor to the Business Council of Mongolia (previously Vice Chairman), is a trustee of the Arts Council of Mongolia. Cameron was schooled in Australia and Africa and holds a commercial degree and an MBA (Monash Mount Eliza, 1991).
Board and Committee Attendance during 2024
Board of Directors
5 of 5
100%
Technical Committee
1 of 1
100%
Kincora Copper Limited (TSX-V and ASX)
Votes For
Votes Against
Total Votes Cast
# of Votes
169,943,256
88,916
170,032,172
% of Votes
99.95%
0.05%
100.00%
Ownership and Value At-Risk
As at Common Shares Deferred Share Units
Total Shares/Units Total Value At-Risk
May 16, 2025
744,778
356,018
1,100,796
$1,023,740
May 16, 2024
744,778
280,811
1,025,589
$415,364
Information relating to the Directors Nominated for Election:
The information as to the number of Common Shares beneficially owned as at May 16, 2025, and May 16, 2024, not being within the knowledge of Erdene, has been furnished by the respective nominees.
The value at-risk is presented on the basis of market value. The market value of Common Shares and DSUs is based on a value of
$0.930 with respect to Common Shares and DSUs held at May 16, 2025, and $0.405 in respect of Common Shares and DSUs held at May 16, 2024, being the closing price of the Common Shares on the Toronto Stock Exchange ("TSX") on such dates.
Deferred Share Units reported in the foregoing tables include Deferred Share Units issued under the Omnibus Equity Incentive Plan, as well as Deferred Stock Units issued under the legacy Deferred Stock Unit Plan as these instruments are economically equivalent.
Corporate Cease Trade Orders and Bankruptcies
Except as discussed below, no proposed director of the Corporation is, or within ten years prior to the date of this Circular has been, a director, chief executive officer or chief financial officer of any company (including the Corporation) that:
was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, in each case that was in effect for a period of more than 30 consecutive days, that was issued while such person was acting in the capacity as director, chief executive officer or chief financial officer; or
was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, in each case that was in effect for a period of more than 30 consecutive days, that was issued after such person ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.
On June 6, 2023, the Ontario Securities and Commission (the "OSC") issued a cease trade order against Voltage Metals Corporation ("Voltage") for failure to file audited financial statements and management's discussion and analysis for the year ended December 31, 2022, interim financial statements and management's discussion and analysis for the period ended March 31, 2023, and associated certifications of the foregoing filings as required by National Instrument 52-109. During all relevant times, Mr. Croft was a director of Voltage. Voltage subsequently filed such filings and the cease trade order was revoked effective September 5, 2023.
No proposed director of the Corporation:
is, as at the date of this Circular, or within ten years prior to the date of this Circular has been, a director or executive officer of any company (including the Corporation) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or
has, within ten years prior to the date of this Circular, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the proposed director.
Penalties and Sanctions
No proposed director of the Corporation has been subject to: (i) penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable securityholder in deciding whether to vote for a proposed director.
Effective May 23, 2025, the Board determined to appoint MNP LLP as the Corporation's auditors and to propose MNP LLP for appointment at the Meeting. The Shareholders will be asked at the Meeting to vote for the appointment of MNP LLP as auditor of the Corporation until the next annual meeting of Shareholders, at a remuneration to be fixed by the Board. KPMG LLP, the Corporation's prior auditor, resigned on April 7, 2025. KPMG's auditors' reports on the financial statements of the Corporation for the years ended December 31, 2023, and December 31, 2024, did not express a modified opinion, and KPMG has not had any reportable events as defined in National Instrument 51-102, Continuous Disclosure Obligations. A copy of the change of auditor package is attached as Schedule A to this Circular and has been filed on SEDAR+ under the Corporation's profile.
It is intended that all proxies received will be voted in favour of the appointment of MNP LLP as auditor of the Corporation unless a proxy contains instructions to withhold the same from voting. Greater than 50% of the votes of Shareholders present in person or by proxy are required to approve the appointment of MNP LLP as auditor of the Corporation.
The Board has determined that it is appropriate to terminate the amended and restated shareholder rights plan agreement with Computershare Investor Services Inc., as rights agent (the "Rights Agent"), dated as of June 14, 2017 (the "Rights Plan"). At the Meeting, the Corporation will be seeking to terminate the operation of the Rights Plan.
Objectives of the Rights Plan
The primary objectives of the Rights Plan are to: (i) ensure, to the extent possible, that all holders of Common Shares and the Board have adequate time to consider and evaluate any unsolicited bid for the Common Shares; (ii) provide the Board with adequate time to identify, develop and negotiate value enhancing alternatives, if considered appropriate, to any such unsolicited bid; (iii) encourage the fair treatment of the Shareholders in connection with any take-over bid made for the Common Shares; (iv) generally, to assist the Board in enhancing Shareholder value; and
(v) ensure consistency with the Canadian take-over regime.
The Rights Plan encourages a potential acquiror to proceed with their bid in accordance with Canadian take-over bid rules, which require that the bid satisfy certain minimum standards intended to promote fairness or have the approval of the Board. Under the Rights Plan, those bids that meet certain requirements intended to protect the interests of all Shareholders are deemed to be "Permitted Bids". Permitted Bids must be made by way of a take-over bid circular prepared in compliance with applicable securities laws and, among other conditions, must remain open for the minimum period set out in the Rights Plan. In the event a take-over bid does not meet the Permitted Bid requirements, or a person otherwise acquires 20% or more of the outstanding Common Shares, subject to certain exemptions, the rights will entitle Shareholders, other than any Shareholder acquiring the Common Shares, to purchase additional Common Shares at a substantial discount to the market value at the time. As a result, the investment of the Shareholder or Shareholders making the acquisition will be greatly diluted if a substantial portion of the rights are exercised.
This summary is qualified in its entirety by reference to the text of the Rights Plan. A copy of the Rights Plan may be obtained from the Corporation's public disclosure documents found on SEDAR+ at https://www.sedarplus.ca or by request from the Corporation at 170 Cromarty Drive, Suite 200, Dartmouth, Nova Scotia, B3B 0G1, telephone (902) 423-6419 or [email protected].
Certain Reasons for Terminating the Rights Plan
The Board has determined that the Rights Plan unduly restricts the ability of the larger shareholders of the Corporation to continue to support the Corporation through additional equity investments and is otherwise unnecessary given the current market climate and the existing rules governing take-over bids applicable to all reporting issuers in Canada and thus believes that it is in the best interests of the Corporation and its shareholders to terminate the Rights Plan, effective at the close of business on the day immediately following the Meeting.
The Board continues to be committed to achieving the objectives for which the Rights Plan was initially adopted but believes that the objectives of the Rights Plan could be achieved otherwise. The proposed termination of the Rights Plan does not restrict the Corporation's ability to adopt a shareholder rights plan in the future.
Shareholders' Resolutions Approving the Termination of the Rights Plan
In order to effect the termination of the Rights Plan, it is proposed to amend the terms of the Rights Plan so as to provide that the Rights Plan would expire as of the close of business on the day following the Meeting.
At the Meeting, shareholders will be asked to consider and, if deemed appropriate, to pass, with or without variation, a resolution in the form set out below (the "Rights Plan Resolution") subject to such amendments, variations or additions as may be approved at the Meeting.
The Board recommends that shareholders vote FOR the Rights Plan Resolution. In order to be effective the Rights Plan Resolution must be approved by not less than a majority of the votes cast by all holders of Common Shares (other than any holder that is not an Independent Shareholder (as defined in the Right Plan) who will be excluded by the provisions of Section 5.4(2) of the Rights Plan), present in person, or represented by proxy, at the Meeting. Management is not aware as at the date of this Circular of any Shareholder who would be so excluded. In the absence of contrary instructions, the persons named in the accompanying form of proxy intend to vote the Common Shares represented thereby FOR the Rights Plan Resolution.
"NOW THEREFORE BE IT RESOLVED THAT:
The Rights Plan be amended by deleting the definition of "Expiration Time" in section 1.1(ee) of the Rights Plan and replacing it with the following:
"Expiration Time" means the earlier of: (i) the Termination Time, and (ii) the close of business on the day immediately following the date of the Corporation's annual meeting of shareholders held in 2025.
Any one officer or director of the Corporation be and is hereby authorized and directed to execute all such documents, instruments and agreements and take all necessary steps to effect the amendment to the Rights Plan and terminate the Right Plan."
At the Meeting, Shareholders will be asked to consider a special resolution (the "Consolidation Resolution"), to effect a consolidation of all of the issued and outstanding Common Shares (the "Share Consolidation") at a ratio of six (6) pre-consolidation Common Shares for one (1) post-consolidation Common Share (the "Consolidation Ratio").
In determining this Share Consolidation ratio, the Board has considered the following factors, among others:
the historical trading prices and trading volume of the Common Shares;
the then prevailing trading price and trading volume of the Common Shares and the anticipated impact of the Share Consolidation on the trading of the Common Shares;
minimum ongoing listing requirements of the TSX; and
prevailing general market and economic conditions and outlook for the trading of the Common Shares.
Background to and Reasons for the Share Consolidation
In order to facilitate future financing and business development activities, the Corporation's board of directors believes that it would be in the best interests of the Corporation and its Shareholders to consolidate the Common Shares. Such consolidation may enhance the Common Shares' marketability as an increase in the price per Common Share is likely to increase the interest of institutional and other investors in the Common Shares, thereby expanding the pool of investors that may consider purchasing Common Shares and investing in the Corporation.
If the Share Consolidation is approved, the effective date of the Share Consolidation will be determined at the discretion of the Board (the "Effective Date"), provided that such date shall be no later than June 25, 2026. The Board will retain the authority, notwithstanding approval of the Share Consolidation by Shareholders, to determine in its discretion not to proceed with, and abandon, the Share Consolidation at any time prior to the Effective Date if it determines, in its sole discretion, that the Share Consolidation is not in the Corporation's best interests, without further approval or action by or prior notice to Shareholders. If the Share Consolidation is not implemented prior to June 25, 2026, the shareholder approval granted in respect of the Share Consolidation will be deemed to have been revoked and the Board will be required to obtain new shareholder approval if it wishes to implement a share consolidation.
The Share Consolidation is subject to Shareholder approval and acceptance by the TSX.
Effects of the Share Consolidation
General
If the Share Consolidation is implemented, its primary effect will be to proportionately decrease the number of issued and outstanding Common Shares by a factor equal to the Consolidation Ratio. At the close of business on May 16, 2025, the last trading day before the date of this Circular, the closing price of the Common Shares on the TSX was
$0.930 and there were 365,326,958 issued and outstanding Common Shares. Based on the number of Common Shares issued and outstanding on May 16, 2025, immediately following the completion of the Share Consolidation, for illustrative purposes only, the number of Common Shares issued and outstanding will equal 60,887,826 Common Shares. The Corporation does not expect the Share Consolidation itself to have any economic effect on Shareholders or holders of securities exercisable or exchangeable for, or convertible into, Common Shares, except to the extent the Share Consolidation will result in fractional shares as discussed below.
The Share Consolidation will not affect the listing of the Common Shares of the Corporation on the TSX. Following the Share Consolidation, the Common Shares will continue to be listed on the TSX under the symbol "ERD", although the post-consolidation Common Shares will be considered a substituted listing with new CUSIP and ISIN numbers.
Because the Share Consolidation will apply to all of the issued and outstanding Common Shares, the proportionate voting and equity interests in the Corporation and other rights, preferences, privileges or priorities of the holders of Common Shares will not be affected by the Share Consolidation, other than as a result of the treatment of fractional shares as described below. For example, a holder of 2% of the voting power attached to all of the outstanding Common Shares immediately prior to the Effective Date of the Share Consolidation will generally continue to hold 2% of the voting power attached to all of the outstanding Common Shares immediately after the Effective Date of the Share Consolidation. The number of registered Shareholders will not be affected by the Share Consolidation.
If approved and implemented, the Share Consolidation may result in some Shareholders owning "odd lots" of fewer than 100 Common Shares. Odd lot shares may be more difficult to sell, and brokerage commissions and other costs of transactions in odd lots may be higher than the costs of transactions in "round lots" of even multiples of 100 shares. The Board believes, however, that these potential effects are outweighed by the anticipated benefits of the Share Consolidation.
Effect on Omnibus Plan and Legacy Plans
Subject to prior approval of the TSX, the exercise or conversion price and/or the number of shares of the Corporation issuable under the Corporation's Omnibus Plan and Legacy Plans will be proportionately adjusted upon the implementation of the Share Consolidation based on the Consolidation Ratio, and the number of Common Shares reserved for issuance under the Corporation's Omnibus Plan and Legacy Plans will be reduced proportionately based on the Consolidation Ratio. Shareholder approval is not required in order for the Board to make the necessary adjustments mentioned above in order to give effect to the Share Consolidation.
Effect on Non-Registered Shareholders
Non-Registered Shareholders holding Common Shares through an intermediary (a securities broker, dealer, bank or financial institution) should be aware that the intermediary may have different procedures for processing the Share Consolidation than those that will be put in place for Registered Shareholders. If Shareholders hold their Common Shares through an intermediary and they have questions in this regard, they are encouraged to contact their intermediaries.
Effect on Share Certificates
If the Share Consolidation is approved by Shareholders and subsequently implemented, those Registered Shareholders who will hold at least one new post-consolidation Common Share will be required to exchange their share certificates representing old pre-consolidation shares for new share certificates representing new post-consolidation Common Shares or, alternatively, a Direct Registration System (a "DRS") Advice/Statement representing the number of new post-consolidation Common Shares they hold following the Share Consolidation. The DRS is an electronic registration system which allows Shareholders to hold shares in their name in book-based form, as evidenced by a DRS Advice/Statement rather than a physical share certificate.
If the Share Consolidation is implemented, the Corporation's transfer agent will mail to each Registered Shareholder a letter of transmittal. Each Registered Shareholder must complete and sign a letter of transmittal after the Share Consolidation takes effect. The letter of transmittal will contain instructions on how to surrender to the transfer agent the certificate(s) representing the Registered Shareholder's pre-consolidation Common Shares. The transfer agent will send to each Registered Shareholder who follows the instructions provided in the letter of transmittal a new share certificate representing the number of post-consolidation Common Shares to which the Registered Shareholder is entitled rounded up to the nearest whole number or, alternatively, a DRS Advice/Statement representing the number of post-consolidation Common Shares the Registered Shareholder is entitled rounded up to the nearest whole number following the Share Consolidation. Non-Registered Shareholders who hold their Common Shares through intermediaries (securities brokers, dealers, banks, financial institutions, etc.) and who have questions regarding how the Share Consolidation will be processed should contact their intermediaries with respect to the Share Consolidation.
Until surrendered to the transfer agent, each share certificate representing pre-consolidation Common Shares will be deemed for all purposes to represent the number of post-consolidation Common Shares to which the Registered Shareholder is entitled as a result of the Share Consolidation. Until Registered Shareholders have returned their properly completed and duly executed letter of transmittal and surrendered their old share certificate(s) for exchange, Registered Shareholders will not be entitled to receive any distributions, if any, that may be declared and payable to holders of record of Common Shares following the Share Consolidation.
Any Registered Shareholder whose old certificate(s) have been lost, destroyed or stolen will be entitled to a replacement share certificate only after complying with the requirements that the Corporation and its transfer agent customarily apply in connection with lost, stolen or destroyed certificates.
The method chosen for delivery of share certificates and letters of transmittal to the Corporation's transfer agent is the responsibility of the Registered Shareholder and neither the Corporation nor its transfer agent will have any liability in respect of share certificates and/or letters of transmittal which are not actually received by the transfer agent.
REGISTERED SHAREHOLDERS SHOULD NEITHER DESTROY NOR SUBMIT ANY SHARE CERTIFICATE UNTIL HAVING RECEIVED A LETTER OF TRANSMITTAL.
No Fractional Shares
No fractional shares will be issued or delivered to Registered Shareholders of Common Shares in connection with the Share Consolidation. If, as a result of the Share Consolidation, a Registered Shareholder becomes entitled to a fractional share, the number of new post-consolidation Common Shares to which the Registered Shareholder is entitled, will be rounded up to the nearest whole number.
Accounting Consequences
If the Share Consolidation is implemented, net income or loss per Common Share, and other per Common Share amounts, will be increased because there will be fewer shares issued and outstanding. In future financial statements, net income or loss per share and other per share amounts for periods ending before the Share Consolidation took effect would be recast to give retroactive effect to the Share Consolidation.
Tax Consequences
Shareholders should consult their tax advisors regarding the tax consequences of the Share Consolidation to them, including the effects of any Canadian or U.S. federal, provincial, state, local, foreign and/or other tax laws.
No Dissent Rights
Shareholders are not entitled to exercise any statutory dissent rights with respect to the proposed Share Consolidation.
Risks associated with the Share Consolidation
No guarantee of an increased Share price
There are numerous factors and contingencies that could affect the Common Share price prior to or following the Share Consolidation, including the status of the market for the Common Shares at the time, the status of the Corporation's reported financial results in future periods, and general economic, geopolitical, stock market, and industry conditions, the market's perception of the Corporation's business and other factors, which are unrelated to the number of Common Shares outstanding. Therefore, there can be no assurance that the per share trading price of the Common Shares following the Share Consolidation will increase as a result of the Share Consolidation or will not decrease in the future. Accordingly, the market price of the Common Shares may not be sustainable at the direct arithmetic result of the Share Consolidation and may be lower.
The liquidity of the Common Shares after the proposed Share Consolidation may be lower than immediately before the Share Consolidation
While the Board believes that a higher share price may provide the benefits described above, the Share Consolidation may not result in a share price that will attract institutional investors or investment funds. As a result, the liquidity of the Shares may not improve after giving effect to the Share Consolidation. Furthermore, the liquidity of the Common Shares could be adversely affected by the reduced number of Common Shares that would be outstanding after the Share Consolidation.
Shareholders may hold odd lots following the Share Consolidation
The Share Consolidation may result in some Shareholders owning "odd lots" of less than 100 shares on a post-consolidation basis. "Odd lots" may be more difficult to sell, or require greater transaction costs per share to sell, than shares held in "board lots" of even multiples of 100 shares.
Shareholder Approval
The Board believes that the proposed Share Consolidation is in the best interest of the Corporation. Accordingly, the Board recommends that Shareholders vote FOR the Consolidation Resolution as set out below:
"BE IT RESOLVED, as a special resolution of the shareholders of Erdene Resource Development Corporation (the "Corporation"), that:
the Corporation be and is hereby authorized to file articles of amendment under the Canada Business Corporations Act to amend its articles of incorporation to change the number of issued and outstanding common shares of the Corporation (the "Common Shares") by consolidating the issued and outstanding Common Shares on the basis of one (1) new post-consolidation Common Share for every six (6) pre-consolidation Common Shares (the "Share Consolidation"), such amendment to become effective at a date in the future to be determined by the board of directors of the Corporation (the "Board") when the Board considers it to be in the best interests of the Corporation to implement such Share Consolidation (the "Effective Date"), but in any event not later than June 25, 2026, subject to approval of the Toronto Stock Exchange (the "TSX");
the amendment to the articles of incorporation giving effect to the Share Consolidation will provide that no fractional Common Shares will be issued in connection with the Share Consolidation and that the number of post-consolidation Common Shares to be received by a registered shareholder will be rounded up to the nearest whole number of Common Shares that such holder would otherwise be entitled to receive upon the implementation of the Share Consolidation;
this resolution is subject to TSX and regulatory approval and the Corporation will not proceed with the Share Consolidation and will abandon all resolutions in connection with the Share Consolidation if TSX and regulatory approval is not obtained;
notwithstanding that this special resolution has been duly adopted by the shareholders of the Corporation, the Board be and is hereby authorized, in its sole discretion, to revoke this special resolution in whole or in part at any time prior to it being given effect without further notice to, or approval of, the shareholders of the Corporation; and
any director or officer be and is hereby authorized and directed to execute on behalf of the Corporation, and to deliver or to cause to be delivered all such documents, agreements and instruments, including articles of amendment, and to do and to cause to be done all such other acts or things as he shall determine to be necessary or desirable to carry out the intent of this special resolution."
In order to be effective, the Consolidation Resolution must be approved by not less than two-thirds (66 2/3%) of the votes cast by the Shareholders present in person, or represented by proxy, at the Meeting. In the absence of contrary instructions, the persons named in the accompanying form of proxy intend to vote the Common Shares represented thereby FOR the Consolidation Resolution.
Applicable securities regulations require that the Corporation give details of the compensation paid to the Corporation's "named executive officers" who are defined as follows:
the chief executive officer;
the chief financial officer;
each of the three most highly compensated executive officers (or individuals acting in a similar capacity) other than the CEO and CFO, at the end of the most recently completed financial year whose compensation was, individually, more than $150,000 for that financial year; and
each individual who would be a named executive officer under paragraph (c) but for the fact that the individual was neither an executive officer of the Corporation, nor acting in a similar capacity, at the end of that financial year.
As at December 31, 2024, the end of the most recently completed financial year of the Corporation, the named executive officers of the Corporation were the four most highly compensated individuals, namely, the President and Chief Executive Officer ("CEO"), the Vice-President and Chief Financial Officer ("CFO"), as well as the Chief Development Officer, and the Vice-President Exploration (collectively, the "Named Management").
Role of Compensation Committee
The compensation committee of the Corporation ("Compensation Committee") has been assigned the responsibility of reviewing the remuneration package for the CEO and for senior executives and to recommend changes, if any, to the Board. In making its recommendations, the Compensation Committee considers each individual's performance and remuneration and incentives paid to senior executives of comparable companies. The Compensation Committee also seeks the views of the CEO when reviewing compensation for other executive officers because of his day-to-day involvement with these officers. It is also the responsibility of the Compensation Committee to review any proposals concerning the Corporation's Omnibus Equity Incentive plan (the "Omnibus Plan") including grant proposals for approval by the Board.
The Compensation Committee currently consists of Kenneth MacDonald (Chair), David Mosher and Hedley Widdup, all of whom are independent within the meaning of National Instrument 58-101 - Disclosure of Corporate Governance Practices. All members of the Compensation Committee have more than 25 years of experience in their respective field, and, during that time, each has been closely involved with implementing and reviewing compensation policies at their respective organizations. Each of the Compensation Committee members have held senior roles with public and/or private companies directly related to the mining industry.
Comparative Market Data
When making compensation recommendations in relation to the remuneration of the Named Management, the Compensation Committee looks at the compensation of the Named Management relative to the compensation paid to similarly situated executives at companies that the Compensation Committee considers to be peers of the Corporation. A benchmark group (the "Peer Group") is determined by screening and selecting publicly traded companies in the same general industry (exploration, development and construction) and on the basis of comparable size of operations, geographic focus and market capitalization.
In 2022 the Corporation's Peer Group consisted of Ascot Resources Ltd., Bluestone Resources Inc., Entrée Resources Ltd., Gold Standard Ventures Corp., Kincora Copper Ltd., Liberty Gold Corp., Marathon Gold Corp., Orezone Gold Corp., Pure Gold Mining Inc., Sabina Gold & Silver Corp., Steppe Gold Ltd., Wallbridge Mining Company Ltd and Xanadu Mines Ltd. The 2023 Peer Group consisted of Ascot Resources Ltd., Bluestone Resources Inc., Entrée Resources Ltd., GoGold Resources Inc., Integra Resources Corp., Kincora Copper Ltd., Liberty Gold Corp., Marathon Gold Corp., Signal Gold Inc., Steppe Gold Ltd., Treasury Metals Inc., Wallbridge Mining Company Ltd and Xanadu Mines Ltd. The 2024 Peer Group consisted of Ascot Resources Ltd., Bluestone Resources Inc., Entrée Resources Ltd.,
First Mining Gold Corp., GoGold Resources Inc., Integra Resources Corp., Liberty Gold Corp., Rio2 Ltd., Signal Gold Inc., Steppe Gold Ltd., Wallbridge Mining Company Ltd and Xanadu Mines Ltd.
Although backward-looking peer benchmarking is, and will continue to be, a determining factor in total compensation, other factors such as market conditions and availability of financing are also taken into consideration.
Currency
All references to "$" or "dollars" set forth in this Circular are in Canadian dollars, except where otherwise indicated.
Objectives of the Compensation Program
Erdene's executive compensation program is designed to attract, retain and motivate top executive talent to achieve the Corporation's business goals and objectives with appropriate risk-taking while acting ethically. The primary goals of the Corporation's compensation program are to:
provide total compensation that is competitive in the context of Erdene's peers and the mineral exploration industry in general;
attract, retain and motivate executives who are critical to the success and financial performance of the Corporation;
reward achievements with a variable pay component, based on the attainment of individual and the Corporation's operational and financial objectives;
align management's interests with the long-term interests of Shareholders;
ensure that the total compensation package takes into account the Corporation's present stage of development and its available financial resources.
Elements of Executive Compensation Program
The Corporation's executive compensation program is structured with a clear focus on pay-for-performance, aligned with the interests of Shareholders. Erdene's compensation is comprised of five components: (i) base salary; (ii) annual cash bonuses; (iii) stock options and other share-based compensation; (iv) benefits; and (v) perquisites. The elements of compensation are described in more detail below.
Components Element Form Period Program Objectives and Details
FIXED
Base Salary Cash Annual Reflects the executive's level of
responsibility, experience, market competitiveness, and the executive's overall performance.
Short-term Incentive Cash Annual Linked to the achievement of
predetermined financial and operational performance objectives.
VARIABLE
Long-term Incentive Share-based awards,
including options and deferred share units
Longer-term Encourages and rewards executives for
increasing total shareholder value.
Benefits Corporate benefits plan
Annual or Longer-Term
Provide health, dental, disability and insurance coverage.
Perquisites Cash Annual A limited number of personal benefits,
including professional fees and hardship allowances.
The Board, on the recommendation of the Compensation Committee, considers each of these components of compensation when assessing the total compensation package for Named Management. The Board relies heavily on the recommendations of the Compensation Committee and any independent consultants that it may retain from time to time for setting salary, bonus and share based compensation levels, to ensure the Corporation's compensation levels and practices remain competitive and appropriate.
Base Salary
Salaries of the Named Management are based on a comparison with competitive positions, taking into account the size and sector, as well as the level of activity, of the group. Individual circumstances, including the scope and geographic location of the Named Management's position, the Named Management's relevant competencies or experience and retention risk, are also considered. The financial performance of the Corporation is also a factor as is the individual performance of the Named Management. The base salary for each of the Named Management is reviewed by the Compensation Committee each year in consultation with the CEO. Base salaries may be adjusted based on any change in their role within the Corporation, performance of the individual, performance of the Corporation or general changes in market salary levels. Named Management can elect to receive all or a portion of their salary in the form of deferred share units (see the discussion below under "Share-based Awards"). Named Management who elect to receive DSU in lieu of salary receive a share-based award of additional DSUs equal to 20% of such elected amount.
Performance Bonus
In 2017, the Board adopted a bonus plan, effective for the 2016 financial year, for the CEO, CFO and any executive officer whose contract of employment specifies that their compensation will be reviewed by the Board (each, a "Senior Executive"). Currently, there are two Senior Executives, the CEO and the CFO covered by this plan. Under the plan, each Senior Executive is responsible for the preparation and submission of their individual objectives to the CEO early in the first quarter of the financial year. The CEO initially reviews the goals of each Senior Executive other than the CEO and the Chair of the Compensation Committee reviews the goals of the CEO. The Senior Executives' goals are to be submitted to the Compensation Committee during the first quarter for review and, if appropriate, a recommendation is submitted to the Board for final approval.
Individual performance in relation to these goals is used to calculate each Senior Executive's bonus amount under the Corporation's bonus plan, with 75% of the Senior Executive's calculated bonus amount based on success in achieving these goals. The remaining 25% of each Senior Executive's performance bonus amount is tied to the Common Share price performance relative to the S&P/TSX Global Gold Index. The maximum bonus amounts, weighting of the performance objectives, and goal categories for the Senior Executives are set out below.
Erdene Senior Executive Bonus Plan Annual Performance Evaluation Criteria
General Performance Objectives Individual Performance Weighting % Totals
Name and Position
Maximum Bonus Percentage of Annual Salary
Share Price Weighting
Individual Performance Weighting
Team Development
Finance, acquisition or M&A Deal Development and Execution
Operations, Permitting, Regulatory, Government Affairs
Exploration successes and Resource/ Reserve
Budgets, Timelines, Regulatory Compliance and financial Control
Internal Communications
Health, Safety, Environment and Community
Chief Executive Officer
60%
25%
75%
20%
20%
15%
20%
5%
15%
5%
100%
VP and CFO
40%
25%
75%
20%
30%
10%
0%
20%
15%
5%
100%
The CEO will review the performance goals and assess each Senior Executive's performance (other than his own performance). Based upon the results of these reviews, the CEO will recommend to the Compensation Committee performance ratings as well as performance bonus payments for the Senior Executives, other than himself. The Chair of the Compensation Committee will assess the performance of the CEO and will make a recommendation on performance rating and bonus payment for the CEO to the Compensation Committee.
In calculating Senior Executives' bonus entitlement under the Common Share price performance component, the percentage change in the daily average market capitalization of the Corporation from the previous year will be compared to the percentage change in the daily average balance of the S&P/TSX Global Gold Index from the previous year. If they are equal to each other, the Senior Executive will receive one‐half of the 25%. This amount will increase
by 1% for each five percentage points that the percentage change in the daily average market capitalization of the Corporation exceeds the percentage change in the daily average balance of the S&P/TSX Global Gold Index until the maximum of 25% is reached. The S&P/TSX Global Gold Index was chosen as a benchmark performance measure as it consists of a broad-based representation of the performance of mining companies with diversified assets.
Ultimately, any payment under the bonus plan is at the Board's discretion. Before approving the payment of a bonus, the Board will consider general market and industry conditions, including the recommendations and independent compensation analyses performed from time to time by independent consultants, as well as the Corporation's financial position. In addition to the Senior Executive bonus plan, the Compensation Committee will continue to consider and, where appropriate, recommend the payment of discretionary cash bonuses to Named Management.
In 2022, the CEO and the CFO received bonus entitlements of approximately 55% and 37% of their annual base salary, respectively. In 2023, the CEO and the CFO received bonus entitlements of approximately 52% and 34% of their annual base salary, respectively. In 2024, the CEO and the CFO received bonus entitlements of approximately 53% and 36% of their annual base salary, respectively, reflecting the attainment of the majority of the individual performance goals. See the notes to the table under the heading "Executive Compensation - Summary Compensation Table".
Share-based Awards
Long-term incentives for directors, officers, employees and consultants of the Corporation are currently provided through awards granted under the Corporation's omnibus equity incentive plan (the "Omnibus Plan") which was approved by Shareholders at the Corporation's annual and special meeting of Shareholders held on June 22, 2023. The Omnibus Plan replaced the Corporation's amended and restated incentive stock option plan (the "Option Plan") and the Corporation's deferred stock unit plan (the "DSU Plan", and together with the Option Plan, collectively, the "Legacy Plans"). The Legacy Plans remain in effect only in respect of outstanding awards granted pursuant to the Legacy Plans and once the existing awards granted under the Legacy Plans are exercised or terminated, the Legacy Plans will terminate. See "Securities Authorized for Issuance under Equity Compensation Plans" for more information on the Omnibus Plan and the Legacy Plans.
Share-based awards granted pursuant to the Omnibus Plan and Legacy Plans, are generally awarded to executives, including the Named Executives, at the commencement of employment and periodically thereafter. At the time of commencement of employment, share-based awards generally reflect industry comparables with companies at similar levels of development. During employment, share-based awards are granted to reward Named Executives for their current performance, expected future performance and value to the Corporation, and taking into account that number of awards already held by the Named Executive and others.
All grants of share-based awards to the Named Executives are reviewed and approved by the Compensation Committee and the Board. The process is initiated by management recommending a grant of awards to the Compensation Committee. The Compensation Committee reviews these recommendations and, if they are approved, recommends them to the Board. In evaluating grants to the Named Executives, the Compensation Committee and the Board evaluate a number of factors including, but not limited to: (i) the number of awards already held by such Named Executive; (ii) a fair balance between the number of awards held by the Named Executive concerned and the other executives of the Corporation, in light of their responsibilities and objectives; and (iii) the value of the awards as a component in the Named Executive's overall compensation package.
Benefits
The CEO, CFO and other Named Management participate in a corporate benefits program. The benefits program includes medical, dental and life insurance, in line with organizations of a similar size, and are not a material portion of the overall compensation of the Named Management.
Perquisites
The Corporation provides a limited number of perquisites to its Named Management which vary by title but do not account for a material portion of the overall compensation of the Named Management, with the exception of Mr. Jon Lyons, Vice-President & Chief Development Officer, who receives benefits related to his residency in Mongolia. For example, the Corporation offers paid parking and memberships in industry-related organizations. The Corporation awards these perquisites as tools for attraction, retention and motivation.
Other Factors for Understanding Compensation
Except for the anti-hedging policy contained in the Omnibus Plan, the Corporation does not currently have a policy prohibiting Named Management or directors of the Corporation from purchasing financial instruments, including for greater certainty, prepaid variable forward contracts, equity swaps, collars, or units of exchange funds, that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by the Named Management or director. However, none of the Named Management or directors of the Corporation has purchased such financial instruments.
The following graphs present the Corporation's cumulative total Shareholder return for the past one-year and five-year periods, respectively, in comparison to the cumulative total Shareholders returns generated by the same investment in the most comparable indices - the S&P/TSX Global Gold Index and the VanEck Vectors Junior Gold Miners ETF.
The Common Shares appreciated 67% from January 1, 2024 to December 31, 2024. In comparison, the value of the S&P/TSX Global Gold Index increased by 19% and the VanEck Vectors Junior Gold Miners ETF increased by 15% over the same period.
On average, the Common Shares appreciated 44% per year from January 1, 2020 to December 31, 2024, for total appreciation of 220%. In comparison, the value of the S&P/TSX Global Gold Index increased by 6% per year over the same period, for a total increase of 30%. The VanEck Vectors Junior Gold Miners ETF increased by 0% per year over the same period, for a total increase of 1%.
As noted above, a number of factors and performance elements are taken into account when determining compensation for the Named Management. Although total cumulative Shareholder return is one performance measure that is reviewed in determining compensation, and Common Share price performance as compared to the S&P/TSX Global Gold Index accounts for 25% of each Senior Executive's calculated bonus amount, there are many other factors taken into account in executive compensation deliberations and bonus calculations. As a result, a direct correlation between total cumulative Shareholder return over a given period and executive compensation levels is not anticipated.
The Compensation Committee considers the risks associated with executive compensation and corporate incentive plans when designing and reviewing such plans and programs which have generally been implemented by or at the direction of the Compensation Committee.
The following table details Named Management compensation for the years ended December 31, 2022, 2023 and 2024.
Name and principal Salary(1) Option-based position Year ($) awards(2)
($)
Share-based awards(3)
($)
Annual incentive plans(4)
($)
All other compensation(5)($)
Total compensation ($)
Peter C. Akerley,
2024
424,927
176,000
70,000
208,821
Nil
879,748
President & CEO(7)
2023
404,692
186,000
62,000
193,149
Nil
845,841
2022
357,490
83,500
3,471
197,835
Nil
642,296
Robert L. Jenkins,
2024
274,886
88,000
47,594
82,049
Nil
492,529
Vice-President & CFO
2023
242,748
74,400
42,055
77,238
Nil
436,441
2022
214,435
50,100
8,577
79,115
Nil
352,227
Michael X. Gillis,
2024
235,992
52,800
30,341
37,083
Nil
356,216
Vice-President
2023
224,755
46,500
27,584
30,649
Nil
329,488
Exploration
2022
198,540
26,200
25,000
25,000
Nil
274,740
Jon M.L. Lyons(6)
2024
329,808
52,800
41,831
51,719
114,816
590,974
Vice-President & CDO
2023
292,879
55,800
35,769
39,744
104,287
528,479
2022
264,961
32,750
35,000
35,000
110,548
478,259
Notes:
Salary includes the value of DSUs received at the election of the Named Management in lieu of cash compensation. DSUs are valued at the five-day volume weighted average price ("VWAP") of the common shares at the grant date. In 2022, Mr. Akerley and Mr. Jenkins elected to receive DSUs in lieu of cash compensation with a value of $17,354 and $42,887, respectively. In 2023, Mr. Akerley and Mr. Jenkins elected to receive DSUs in lieu of cash compensation with a value of Nil and $24,275, respectively. In 2024 Mr. Jenkins elected to receive DSUs in lieu of cash compensation with a value of $27,971.
This column shows the total compensation value of stock options granted to the Named Management in 2022, 2023 and 2024. Option based awards are valued using the Black-Scholes method in accordance with the Corporation's accounting policies and using the following key assumptions. For 2022: No dividends are to be paid, risk-free interest rate of 3.0%, expected volatility of 62%, and an expected life of 3.6 years. For 2023: No dividends are to be paid, risk-free interest rate of 3.2%, expected volatility of 55%, and an expected life of 4.4 years. For 2024: No dividends are to be paid, risk-free interest rate of 3.8%, expected volatility of 54%, and an expected life of 4.6 years. The average fair value of the options issued, on the date granted, was $0.15 per option in 2022, $0.17 per option in 2023 and $0.17 per option in 2024. 0 options were exercised by named management in 2022, 150,000 options were exercised in 2023 and 700,000 options were exercised in 2024.
Excludes salary earned by Named Management who elect to take DSUs in lieu of cash but includes the share-based award issued for making such an election. In 2022, the Compensation Committee made discretionary awards of DSUs pursuant to the DSU Plan and in 2023 and 2024 pursuant to the Omnibus Plan.
Cash bonuses were paid to Mr. Akerley and Mr. Jenkins in accordance with the Corporation's Senior Executive Bonus Plan in 2022, 2023 and 2024. See "Executive Compensation - Compensation Discussion & Analysis - Performance Bonus". Also in 2022, 2023 and 2024 discretionary cash bonuses were paid to Mr. Gillis and Mr. Lyons.
Includes perquisites and benefits for Named Management that exceed 10% of base salary or $50,000. Mr. Lyons receives hardship benefits from the Corporation to offset costs associated with residency in Mongolia. All other perquisites and benefits received by Named Management are not a material component of total compensation.
Mr. Lyons was appointed Vice-President Projects in 2021 and Chief Development Officer ("CDO") in 2023. Prior to these dates, Mr. Lyons served as Vice-President Regulatory and Strategy of the Corporation.
Mr. Akerley does not receive any compensation for his role as a director of the Corporation.
Outstanding Share-Based Awards and Option-Based Awards
The following tables detail option-based and share-based awards to Named Management as at December 31, 2024.
Share-based Awards
Market or Number of Market or payout value of
shares or units of payout value of vested share-
shares that have share-based based awards not vested awards that have not paid out or
(#) not vested distributed
($) ($)(2)
Value of
Option unexercised in-expiration date the-money
options
($)(1)
Option exercise price ($)
Number of securities underlying unexercised options
(#)
Option-based Awards
Name
Peter C.
Akerley
1,000,000
1,000,000
0.30
0.36
February 12, 2029
May 9, 2028
President &
CEO
500,000
400,000
0.31
0.37
August 9, 2027
June 23, 2026
723,000
N/A
N/A
1,218,986
400,000
0.49
August 27, 2025
100,000
0.22
May 13, 2025
Robert L.
500,000
0.30
February 12, 2029
Jenkins,
400,000
0.36
May 9, 2028
Vice-President
300,000
0.31
August 9, 2027
350,000
N/A
N/A
643,957
& CFO
250,000
0.37
June 23, 2026
250,000
0.49
August 27, 2025
Michael X.
300,000
0.30
February 12, 2029
Gillis
250,000
0.36
May 9, 2028
Vice-President
200,000
0.31
August 9, 2027
230,000
N/A
N/A
395,898
Exploration
200,000
0.37
June 23, 2026
200,000
0.49
August 27, 2025
Jon M. L.
300,000
0.30
February 12, 2029
Lyons Vice-
300,000
0.36
May 9, 2028
President &
250,000
0.31
August 9, 2027
265,500
N/A
N/A
342,772
CDO
250,000
0.37
June 23, 2026
250,000
0.49
August 27, 2025
Notes:
The value of unexercised in-the-money options is the difference between the 2024 year-end closing price on the TSX for Common Shares, which was $0.560, and the exercise price of the options.
The market value of vested DSUs is determined by multiplying the number of outstanding DSUs as at December 31, 2024 by the 2024 year-end closing price on the TSX for Common Shares, which was $0.560.
During the financial year ended December 31, 2022, 0 options were exercised by Named Management, 150,0000 options in 2023 and 700,000
in 2024.
All options and share-based awards vested upon grant.
Value Vested or Earned During 2024
Name
Option-Based Awards
- Value Vested during Share-Based Awards -
2024 Value Vested during 2024
($) ($)
Non-equity Incentive Plan Compensation - Value earned during 2024
($)
Peter C. Akerley
President & CEO Robert L. Jenkins, Vice-President & CFO Michael X. Gillis
Vice-President Exploration Jon M. L. Lyons
Vice-President & CDO
Notes:
Nil(1)70,000(2)Nil
Nil(1)75,565(2)Nil
Nil(1)30,341(2)Nil
Nil(1)41,831(2)Nil
On February 12, 2024, an aggregate of 2,100,000 options were granted to the Named Management and vested immediately, having an exercise price of $0.30. The market price of the Common Shares on February 12, 2024, was $0.30, based on the 5-day volume weighted average price.
The value vested is based on the market price of the Common Shares on the vesting date (the date of grant). In 2024, an aggregate of 597,564 DSUs were granted to Mr. Akerley, Mr. Jenkins, Mr. Gillis and Mr. Lyons and vested immediately. In 2024, Mr. Jenkins elected to receive DSUs in lieu of cash compensation with a value of $27,971 (71,358 DSUs). The 5-day volume weighted average market price of the Common Shares on the grant date was $0.41.
The Corporation has not entered into any compensatory plan, contract or arrangement where a Named Management is entitled to receive compensation in the event of resignation, retirement or any other termination, a change of control of the Corporation, except as disclosed below.
Under the terms of the employment agreements with Mr. Jenkins, Mr. Gillis and Mr. Lyons, on termination of their employment without cause, they are entitled to one month's notice for every year of employment with the Corporation or, in lieu of notice, the greater of three (3) month's base salary and one (1) month's base salary for every year of employment with the Corporation. If Mr. Akerley's employment is terminated by the Corporation without cause, he will receive an amount equal to the amount of the salary and bonuses paid to him in the 12-month period preceding the termination and the Corporation shall continue his group insurance benefits, if any, for 6 months after the date of termination. Additionally, Mr. Jenkins, Mr. Gillis and Mr. Lyons have entered retention agreements that entitle these individuals to a bonus payable upon the Bayan Khundii Gold Project achieving commercial production and US$10 million of net cash flow from gold sales, provided they remain employed by the Corporation, calculated as 100% of their base salary in 2019. In the event that the employment of Mr. Jenkins, Mr. Gillis or Mr. Lyons is terminated without cause before the Bayan Khundii Gold Project attains commercial production and US$10 million of net cash flow from gold sales, these individuals will be entitled to a pro rata portion of the retention bonus.
In addition, under the terms of the employment agreements with Mr. Akerley and Mr. Jenkins, in the event of a change of control of the Corporation, each may terminate their respective agreements with the Corporation. If they do so, the Corporation is required to pay a lump sum severance payment equal to the amount of the salary and bonuses paid in the 24-month period preceding the termination in the case of Mr. Akerley and in the 18 months preceding the termination in the case of Mr. Jenkins.
If Mr. Akerley's employment is terminated by the Corporation as a result of death or disability, he shall receive an amount equal to the salary and bonuses paid to him in the 12-month period preceding the termination.
If the employment of any of the Named Management is terminated for cause, the Corporation is required to pay each of them their then current salary accrued pursuant to their respective employment agreements.
If the Named Management's employment had been terminated effective December 31, 2024, it is the Corporation's interpretation that the following amounts would have been payable as of the effective date of the termination, in addition to the salary accrued to the termination date:
Name
Type of Termination
Resignation
Cash DSU(3)
Termination without Cause
Cash DSU(3)
Termination with Cause
Cash DSU(3)
Death/Disability
Cash DSU(3)
Change of Control
Cash DSU(3)
Notes:
Current Salary
Peter C. Nil Akerley(1)
1,218,986
633,748
1,218,986 Accrued
Annual
Robert L. Nil Jenkins
643,957
308,481
643,957 Accrued
Annual
Michael X. Nil Gillis
395,898
563,740
395,898 Accrued
Annual
Jon M.L. Nil Lyons (2)
342,772
391,305
342,772 Accrued
Annual
1,218,986
633,748
1,218,986
1,231,589
1,218,986
643,957
Nil
643,957
665,059
643,957
395,898
Nil
395,898
Nil
395,898
342,772
Nil
342,772
Nil
342,772
Current Salary
Current Salary
Current Salary
In the event of termination without cause or upon a change of control, the Corporation shall continue Mr. Akerley's group insurance benefits, if any, for 6 months after the date of termination; provided that if the Corporation is unable to continue any such benefits by reason of their termination of employment, the Corporation is not required to pay Mr. Akerley amounts in lieu thereof.
Mr. Lyons' employment contract had an initial term running through to April 30, 2025. This contract contains automatic renewal terms and Mr. Lyons remains an employee of the Corporation as at the date of this Circular. Mr. Lyons is also entitled to a moving allowance on termination of the contract.
At the option of the Corporation, DSUs may be redeemed for Common Shares in lieu of cash.
The following table sets forth amounts of compensation provided to members of the Board of Directors other than Named Management for the financial year ended December 31, 2024:
# of DSUs
All other
Total
Share-based awards(2)
Option-based
Name Fees earned(1)
($)
Value of DSUs
awards(3)($)
compensation ($)
($)
($)
Dr. Anna G. Biolik
21,000
44,200
94,191
44,000
Nil
109,200
John P. Byrne
12,000
26,000
51,860
44,000
Nil
82,000
T. Layton Croft
44,000
60,000
127,811
44,000
Nil
148,000
Kenneth MacDonald
27,000
41,000
87,338
44,000
Nil
112,000
Cameron McRae
15,000
40,000
85,207
44,000
Nil
99,000
David V. Mosher
17,000
43,400
92,511
44,000
Nil
104,400
Hedley Widdup
18,000
40,000
85,207
44,000
Nil
102,000
Notes:
Fees earned are comprised of board retainers and meeting honoraria. Fees earned includes the value of DSUs received at the election of a director in lieu of cash compensation. DSUs are valued at the five-day volume weighted average price ("VWAP") of the common shares at the grant date. Dr. Biolik elected to receive DSUs in lieu of cash compensation with a value of $21,000. Mr. Byrne elected to receive DSUs in lieu of cash compensation with a value of $5,000. Mr. MacDonald elected to receive DSUs in lieu of cash compensation with a value of
$5,000. Mr. Mosher elected to receive DSUs in lieu of cash compensation with a value of $17,000.
Excludes "fees earned" by a director that the director has elected to take as DSUs but includes the share-based award for making such an election. DSUs vest immediately at the date of grant and the value of the DSUs is calculated based on the 5-day VWAP on the grant date. DSUs shall be redeemed by the Corporation, in Common Shares or cash, at the option of the Corporation, when the holder resigns or retires or otherwise leaves the Corporation. The total value and number of DSUs granted to a Director is disclosed in the Incentive Plan Awards -Value Vested or Earned During 2024 table on page 25.
All options had a 5-year term and were fully vested at the date of grant. The Corporation values stock-based incentives using the Black-Scholes method using the following assumptions: no dividend yield, risk-free interest of 3.69%, expected volatility of 56.5% and an expected life of 5 years. Options to acquire Common Shares are issued with an exercise price equal to the market price at the date the options are granted. The fair value of the options was $0.176 per option for options granted in 2024. 700,000 options were exercised by directors in 2024.
From January 1, 2024 to December 31, 2024, non-management directors who are not executive officers were entitled to an honorarium of $40,000 of DSUs per annum ($10,000 of DSUs per quarter) and a $10,000 cash retainer per annum ($2,500 cash retainer per quarter), as well as $1,000 per meeting of the Board of Directors or any committee of the Board of Directors. The Chairman of the Board was entitled to an honorarium of $60,000 of DSUs per annum ($15,000 of DSUs per quarter) and a $20,000 cash retainer per annum ($5,000 cash retainer per quarter), as well as
$2,000 per meeting of the Board of Directors or any committee of the Board of Directors, while Committee chairs were entitled to receive $2,000 per meeting. Directors have the option of receiving all or a portion of the cash retainer and meeting fees in DSUs. Board members who are approved by the Board to observe meetings of Committees of which they are not a member may be paid an honorarium commensurate with Committee members for their attendance at such meetings. The aggregate amount of cash paid to directors in 2024 based upon their meeting attendance was
$106,000. Directors are also reimbursed for travel and other out-of-pocket expenses incurred for attendance at directors' meetings. Directors who elect to receive DSUs in lieu of fees receive a share-based award of additional DSUs equal to 20% of such elected amount.
From time to time the Compensation Committee of the Board completes a peer comparison of board compensation and makes a recommendation to the Board. The Board makes a decision as to the compensation to be paid to non-management directors, who are not executive officers, based on the recommendation of the Compensation Committee.
Outstanding Share-Based Awards and Option-Based Awards
Share-based Awards(3)
Option-based Awards(3)
The following table presents details of all outstanding option-based awards and outstanding share-based awards to members of the Board of Directors other than Named Management as at December 31, 2024.
Number of Value of Number of
securities Option unexercised shares or units Name underlying exercise Option expiration in-the-money of shares that unexercised price date options have not vested
options ($) ($)(1) (#)
(#)
Market or payout value of share-based wards that have not vested
($)
Market or payout value of vested share-based awards not paid out or distributed
($)(2)
Dr. Anna G.
250,000
0.30
February 12, 2029
Biolik
250,000
0.36
May 9, 2028
125,000
0.31
August 9, 2027
172,250
N/A
N/A
393,490
100,000
0.37
June 23,2026
100,000
0.49
August 27, 2025
John P. Byrne
250,000
0.30
February 12, 2029
250,000
0.36
May 9, 2028
125,000
100,000
0.31
0.37
August 9, 2027
June 23,2026
206,650
N/A
N/A
453,646
100,000
0.49
August 27, 2025
100,000
0.22
May 13, 2025
T. Layton Croft
250,000
0.30
February 12, 2029
250,000
0.36
May 9, 2028
125,000
0.31
August 9, 2027
172,250
N/A
N/A
373,053
100,000
0.37
June 23,2026
100,000
0.49
August 27, 2025
Kenneth
250,000
0.30
February 12, 2029
MacDonald
250,000
0.36
May 9, 2028
125,000
0.31
August 9, 2027
172,250
N/A
N/A
243,361
100,000
0.37
June 23,2026
100,000
0.49
August 27, 2025
Cameron McRae
250,000
0.30
February 12, 2029
250,000
0.36
May 9, 2028
125,000
0.31
August 9, 2027
172,250
N/A
N/A
190,970
100,000
0.37
June 23,2026
100,000
0.49
August 27, 2025
David V. Mosher
250,000
0.30
February 12, 2029
250,000
0.36
May 9, 2028
125,000
100,000
0.31
0.37
August 9, 2027
June 23,2026
206,250
N/A
N/A
400,296
100,000
0.49
August 27, 2025
100,000
0.22
May 13, 2025
Hedley Widdup
250,000
0.30
February 12, 2029
250,000
0.36
May 9, 2028
125,000
0.31
August 9, 2027
100,000
0.37
June 23,2026
240,250
N/A
N/A
162,162
100,000
0.49
August 27, 2025
200,000
0.22
May 13, 2025
Notes:
The value of unexercised in-the-money options is the difference between the 2024 year-end closing price on the TSX for Common Shares, which was $0.560, and the exercise price of the options.
The market value of vested DSUs is determined by multiplying the number of outstanding DSUs as at December 31, 2024 by the 2024 year-end closing price on the TSX for Common Shares, which was $0.560.
All options and DSUs fully vested on grant.
At December 31, 2024, an aggregate of 702,661 DSUs were held by Dr. Biolik, an aggregate of 810,083 DSUs were held by Mr. Byrne, an aggregate of 666,166 DSUs were held by Mr. Croft, an aggregate of 434,573 DSUs were held by Mr. MacDonald, an aggregate of 341,018 DSUs were held by Mr. McRae, an aggregate of 714,815 DSUs were held by Mr. Mosher and an aggregate of 289,575 DSUs were held by Mr. Widdup.
Name
Option-Based Awards - Share-Based Awards - Value Non-equity Incentive Plan Value Vested during 2024 Vested during 2024 Compensation - Value
($) ($) earned during 2024
($)
Value Vested or Earned During 2024
Dr. Anna G. Biolik Nil(1)65,200(2)
Nil
John P. Byrne Nil(1)26,000(2)
Nil
T. Layton Croft Nil(1)60,000(2)
Nil
Kenneth MacDonald Nil(1)46,000(2)
Nil
Cameron McRae Nil(1)40,000(2)
Nil
David V. Mosher Nil(1)60,400(2)
Nil
Hedley Widdup Nil(1)40,000(2)
Nil
Notes:
On February 12, 2024, an aggregate of 1,500,000 options were granted to directors and vested immediately, having an exercise price of $0.30. The market price of the Common Shares on February 12, 2024, based on a 5-day volume weighted average price, was $0.30.
The value vested is based on the market price of the Common Shares on the vesting date (the date of grant). In 2024, 139,108 DSUs were granted to Dr. Biolik, 64,207 DSUs were granted to Mr. Byrne, 127,811 DSUs were granted to Mr. Croft, 97,989 DSUs were granted to Mr. MacDonald, 85,207 DSUs were granted to Mr. McRae and Mr. Widdup and 129,028 DSUs were granted to Mr. Mosher, and all vested immediately. The 5-day volume weighted average market price of the Common Shares on the grant date was $0.41.
During the year ended December 31, 2024, 700,000 options were exercised by members of the Board of Directors.
The Corporation currently has in place the Omnibus Plan, as well as the Legacy Plans. The following table sets out information as of December 31, 2024, the Corporation's most recently completed financial year, with regard to outstanding awards exercisable into Common Shares under the Omnibus Plan and the Legacy Plans.
Plan Category
Number of securities to be issued upon exercise of outstanding options, warrants and rights
Weighted-average exercise price of outstanding options, warrants and rights
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(a)
(b)
(c)
Omnibus Plan - Options
5,480,000(1)
$0.30
Omnibus Plan - DSUs
2,796,024(2)
N/A
Omnibus Plan - RSUs
Nil
N/A
3,777,447(5)(6)
Omnibus Plan - PSUs
Nil
N/A
Option Plan
16,965,000(3)
$0.37
Nil
DSU Plan
7,195,224(4)
N/A
Nil
Total
32,436,248
N/A
3,777,447
Notes:
This number represents options granted under the Omnibus Plan and represents 1.5% of the issued and outstanding Common Shares as of December 31, 2024.
This number represents DSUs granted under the Omnibus Plan and represents 0.8% of the issued and outstanding Common Shares as of December 31, 2024.
This number represents options issued under the legacy incentive stock option plan and represents 4.7% of the issued and outstanding Common Shares as of December 31, 2024. No new options will be granted under the legacy incentive stock option plan.
This number represents DSUs issued under the legacy DSU plan and represents 2.0% of the issued and outstanding Common Shares as of December 31, 2024. No new DSUs will be granted under the legacy DSU plan.
This maximum number of Common Shares issuable pursuant to the Omnibus Plan, together with awards outstanding under the Legacy Plans, is limited to a maximum of 10% of the issued and outstanding Common Shares at any point in time.
Disclaimer
Erdene Resource Development Corporation published this content on May 26, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on May 26, 2025 at 15:19 UTC.