In August 2009, Erdene released an updated National Instrument 43-101 compliant resource estimate for the Company’s Zuun Mod Molybdenum Project in Mongolia. The Zuun Mod molybdenum deposit has a measured and indicated resource of 98 million metric tonnes (“Mt”) at an average grade of 0.062% molybdenum (“Mo”), at a cut-off grade of 0.05% Mo equating to 133.8 million pounds (“Mlbs”) of contained Mo metal. In addition, there is 73 Mt of inferred resource at an average grade of 0.060% Mo equating to a further 97.1 Mlbs of contained Mo metal. This makes Zuun Mod one of the largest undeveloped molybdenum-copper deposits in the Asia region and shows that the Zuun Mod deposit is comparable to other porphyry molybdenum projects currently in production or under development world-wide.
With the completion of the new Zuun Mod resource estimate, the Company’s independent technical consultants, Minarco-MineConsult of Australia, are now conducting pit optimization and scheduling studies to combine with the previously completed work under a preliminary assessment level study initiated in 2008. Following completion of this work, it is anticipated that the information will be used to create a financial model on which to base decisions regarding the advancement of the project to the pre-feasibility stage.
During 2009, Erdene carried out work in preparation for conversion of the Zuun Mod exploration license to a mining license. This included work by two Mongolian consulting companies that prepared technical reports in support of the mining license application. These reports have been finalized and submitted to the government authorities in Mongolia for approval. Once approved, the Company will apply for a mining license covering approximately 10,000 hectares. Under the Minerals Law of Mongolia, the initial term for a mining license is 30 years with an option for two, 20-year extensions. The mining license application is expected to be finalized in the second quarter of 2010 followed by Mongolian feasibility studies required to be filed subsequent to receiving a mining license.
Located within 200 kilometres of China’s border in Mongolia’s Bayankhongor Province, the Zuun Mod porphyry complex measures 12 kilometres in circumference and hosts broad zones of molybdenum mineralization. In a three-kilometre long portion of the system, referred to as the South Corridor, Erdene identified three mineralized zones known as the Racetrack North, Racetrack South and the Stockwork zones. Initial drilling of these zones intersected thick intervals of significant mineralization proximal to surface and open at depth.
In June 2009, Erdene received an updated National Instrument 43-101 compliant resource for the project from Minarco MineConsult of Sydney Australia. The June 2009 Zuun Mod resource report can be viewed by clicking here.
Zuun Mod Resource Table
Cut-off Grade Mo% |
Resource Category |
Resources Mt |
Mo% |
Contained Mo Metal Mlbs |
Cu% |
Contained
Cu Metal
Mlbs |
Re ppm |
Contained Re Metal lbs (000's) |
||
0.04% |
Measured |
37 |
0.056 |
46 |
0.063 |
51 |
0.22 |
18 |
||
Indicated |
143 |
0.054 |
169 |
0.065 |
204 |
0.23 |
72 |
|||
M&I |
180 |
0.054 |
215 |
0.064 |
255 |
0.23 |
90 |
|||
Inferred |
185 |
0.051 |
208 |
0.066 |
270 |
0.25 |
101 |
|||
0.05% |
Measured |
25 |
0.061 |
34 |
0.066 |
36 |
0.24 |
13 |
||
Indicated |
73 |
0.062 |
100 |
0.068 |
109 |
0.28 |
44 |
|||
M&I |
98 |
0.062 |
134 |
0.067 |
145 |
0.27 |
57 |
|||
Inferred |
73 |
0.06 |
97 |
0.065 |
105 |
0.32 |
51 |
|||
0.06% |
Measured |
11 |
0.068 |
17 |
0.067 |
17 |
0.26 |
6 |
||
Indicated |
33 |
0.072 |
52 |
0.07 |
51 |
0.34 |
25 |
|||
M&I |
44 |
0.071 |
69 |
0.069 |
68 |
0.32 |
31 |
|||
Inferred |
29 |
0.069 |
44 |
0.067 |
43 |
0.36 |
23 |
|||
Minarco MineConsult Resources Estimate Notes:
Effective Date: June 2009.
Inferred Resources are not additional in NI 43-101 statement of Resource
Conversion Factor: 2204.64 lbs/tonne
M&I means Measured and Indicated
Contained Metal for Ore Resources will be less due to application of modifying factors
Totals may differ due to rounding errors
The Mineral Resource estimate was prepared under the supervision and based on information compiled by Philippe Baudry, who is an employee of Minarco-MineConsult. Philippe Baudry is a Qualified Person within the meaning of such term under NI 43-101.
Following the release of the June 2009 Zuun Mod Resource Report additional drilling was carried out at Zuun Mod. The 2009 drill program was designed to evaluate the Zuun Mod deposit at depth. Two previously drilled holes were deepened by approximately 300 m to a maximum depth of 851.9 m. This drilling program was successful in determining that mineralized lithologies extend at depth with similar grades to the main Zuun Mod deposit. Although it is unlikely that the mineralization at depths of 700 m to 800 m will be economic, it does demonstrate the large size of the Zuun Mod porphyry system and is a reflection of the potential for additional discoveries at Zuun Mod.
Zuun Mod sits on the doorstep of China, a country predicted to be responsible for half of the world’s steel production by 2025. This will require a significant increase in the importation of several commodities, including molybdenum. With prices and demand strengthening and with Chinese companies seeking molybdenum resources globally, we are very optimistic that our Zuun Mod project will command the attention of those interested in a long term supply of molybdenum for the region.
