Erdene Announces Q2 2025 Results

Executive Summary

• Erdene reports Q2 2025 operating and financial results, highlighting substantial construction completion at the Bayan Khundii Gold Project (BK) and targeting first gold pour in late Q3 2025 with commercial production by year‑end.
• Ore‑control drilling delivered exceptionally high‑grade intercepts—including 6 m @ 481.9 g/t Au and a 1 m @ 2,370 g/t Au zone—expanding the mineralized envelope beyond the previously modeled resource.
• The company entered an option agreement to acquire up to an 80 % interest in the Tereg Uul copper‑gold prospect adjacent to Oyu Tolgoi and received shareholder approval for a 6‑for‑1 share consolidation.

Key Details

• Construction Progress
• Substantially completed BK complex as of June 30 2025; all major permits (including chemical usage permit) obtained.
• Commissioning of mining, processing plant, and site infrastructure underway; dry commissioning in progress.

• Forecast first gold production late Q3 2025; commercial output expected by end‑2025.

• Capital & Liquidity

• US$115 million incurred for capital and operating expenditures to Q2 2025.

• Undrawn liquidity of up to US$31 million remains available to the joint venture (Erdene Mongol) for commissioning and ramp‑up.

• Workforce & Safety

• 454 contractors/staff on site; recordable injury frequency rate 0.2 per 200,000 hrs; no reportable environmental incidents.

• ~35 % of site personnel are local residents of Bayankhongor province.

• Drilling Results (Ore‑Control Program)

• 201 RC holes completed on a 5 m spaced grid extending up to 60 m beyond the 2023 resource boundary.
• 76 % of holes intersected >0.3 g/t Au; ~30 % returned intervals averaging >5 gm Au; ~10 % exceeded 20 gm Au.

• Highlight intercepts:

  • BKGC‑1062: 6 m @ 481.9 g/t Au (2,891 gm Au) and a 1 m @ 2,370 g/t Au zone within the same hole.
  • BKGC‑1071: 5 m @ 73.5 g/t Au (368 gm Au).
  • Additional high‑grade intervals listed in release table (e.g., BKGC‑1023 5 m @ 4.11 g/t Au, BKGC‑1030 3 m @ 12.03 g/t Au).

• Resource Expansion

• Results being incorporated into an updated block model to support mine planning and scheduling.

• Ore mining commenced on lower‑grade material for start‑up feed (late August 2025).

• Corporate Transactions

• Option agreement signed July 2025 to acquire up to 80 % of the Tereg Uul copper‑gold porphyry prospect (~10 km SW of Oyu Tolgoi).

• Shareholder approval obtained for a 6‑for‑1 consolidation of common shares; expected completion Q3 2025.

• Financial Performance

• Net loss for quarter: C$4,122,330 (vs. C$1,868,814 prior year).
• Exploration & evaluation expenses: $514,224 (down from $596,590 YoY).
• Corporate & administrative expenses: $658,353 (slightly down YoY).

• Loss from associate (EM) increased to $2,995,481 due to higher interest expenditures for BK construction.

• Future Work

• Engaged RPMGlobal to prepare an updated independent mineral resource estimate for the Zuun Mod molybdenum‑copper project; report slated for Q3 2025.
• Continued community development and support for local SMEs (agricultural purchases, technical assistance, micro‑finance loans).

Notable Quotes

• Peter Akerley, President & CEO: “The team made great progress during the second quarter… we are on track for first gold pour in late Q3 2025, anticipating commercial gold production by end of year.”
• Peter Akerley: “Ore‑control drilling returned excellent results… including the highest‑grade intercept to date in the Khundii Minerals District.”

All technical information reviewed and approved by Qualified Person Peter Dalton, P.Geo.