Erdene Enters into an Agreement to Acquire Tereg Uul Copper-Gold Porphyry Prospect

Published: 2025-07-03 08:05:42 ET ERD.TO

Published on 07/03/2025 at 08:05

Erdene Resource Development Corporation announced the execution of an option agreement to acquire an up to 80% ownership interest in the Tereg Uul copper-gold porphyry prospect, located approximately 10 kilometres southwest of the Oyu Tolgoi deposit. Tereg Uul: The 6,694 hectare Tereg Uul exploration license, located in Khanbogd & Bayan-Ovoo soums, South Gobi province, is held by the private Mongolian company Tereg Uul Mines LLC ("TUM"). The license was issued on April 5, 2023, and is in its third year of a maximum 12-year term, and can be converted to a mining license at any time prior to the end of the twelfth year by meeting the requirements prescribed under the Minerals Law of Mongolia.

The property is located approximately 10 kilometres southwest from the Oyu Tolgoi mine, along the Oyu Tolgoi mineralization corridor, and 5 kilometers south of the O Yu Tolgoi license boundary near Entree/Oyu Tolgoi's joint venture Railway copper-gold prospect. The porphyry trend continues south through the Tereg Uul licence to the Khatsavach Uul porphyry copper prospect located 10 kilometres south of Tereg Uul. Although modern exploration is limited due to closure since 2009, state sponsored mapping in the late 1980s and exploration on the license in the early 2000s by Ivanhoe Mines identified geophysical and geochemical anomalies which remain undrilled.

The license is underlain by favorable Paleozoic host rocks of similar ages to those which host the Oyu Tolgoi deposits. The Tereg Uul property also contains several anomalous gold occurrences related to epithermal style veins at surface and base metal geochemical signatures. Exploration is expected to commence in late third quarter.

Under the terms of an option agreement Erdene may acquire an up to 80% interest in TUM through a series of exploration and payment milestones. Upon signing the option agreement, Erdene will commit to invest USD 300,000 in specified exploration expenditures within twelve months and make a payment of USD 200,000 to the option grantor. On the first, second and third anniversaries of the option agreement, the Company shall make payments of USD 400,000, USD 500,000 and USD 900,000, respectively, to the option grantor, and commit to a total of USD 3,000,000 in exploration expenditures.

The Company may acquire a 51% equity ownership stake in TUM between the third and fourth anniversaries through a payment of USD 5 million to the option grantor. Erdene will direct all exploration activities at the property during the term of the option and may terminate the option agreement without penalty at any time. Erdene can acquire an up to 80% equity ownership stake through the investment of a further USD 10 million in exploration and evaluation expenditures, and through an additional payment of USD 8 million to the option grantor, on or before the eighth anniversary of the agreement.