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Erdene announces strategic alliance with MMC

Published by , Editorial Assistant
Global Mining Review,

Erdene Resource Development Corporation has announced the execution of strategic alliance and investment agreements with Mongolian Mining Corporation (MMC) for the development of its Bayan Khundii Gold project. This strategic alliance brings together Mongolia’s pre-eminent precious metals explorer with an exceptional national miner in a partnership to unlock the riches of the Khundii Minerals District (KMD).


  • MMC is Mongolia’s largest internationally traded mining company, listed on the main board of the Hong Kong Stock Exchange (HKEx: 975).
  • Erdene holds three mining licenses and an exploration licence in the KMD in southwestern Mongolia that host high-grade, open castable gold deposits, and silver, copper, lead, zinc and molybdenum resources.
  • MMC to invest US$40 million in return for a 50% equity interest in Erdene’s Mongolian subsidiary, Erdene Mongol LLC (EM), holding the Khundii and Altan Nar mining licenses and the Ulaan exploration license through a three-stage transaction. 
  • Erdene will retain a 50% equity interest in EM and a 5.0% Net Smelter Return (NSR) royalty on all production from the Khundii, Altan Nar and Ulaan licenses, as well as any properties acquired within 5 km of these licenses, beyond the first 400 000 oz gold recovered.
  • The first stage of the transaction, to be completed in January 2023, sees MMC invest US$5 million in EM to finance exploration, and an updated feasibility study (FS) and life of mine (LOM) plan for the Bayan Khundii Gold project. 
  • The second stage of the transaction will see MMC invest an additional US$5 million upon delivery of the updated FS to complete pre-development and exploration work in advance of a Bayan Khundii construction decision.
  • The third stage of the transaction will see MMC invest a further US$30 million once EM has reached a construction decision, providing equity capital for the Bayan Khundii Gold project, targeting close in 3Q23.
  • Erdene will appoint EM’s Chief Executive and Chief Exploration Officers and MMC will appoint EM’s Chief Operating and Chief Financial Officers.
  • Erdene maintains a 100% interest in its large Zuun Mod Molybdenum-Copper deposit and Khuvyn Khar Copper project, located approximately 30 km east of Bayan Khundii, and adjacent to a planned railway development.

Mr. Peter Akerley, Erdene’s President and CEO, said:

“We are extremely pleased to announce our strategic alliance with MMC, Mongolia’s leading private-sector mining company. The combination of our exploration expertise and their mining experience and execution capability will ensure the success of the Bayan Khundii Gold project and the expansion of the Khundii Minerals District for the benefit of all stakeholders. This alliance transforms our company, establishing a clear path to unlock the riches of the Khundii Minerals District.”

Dr. Battsengel Gotov, Executive Director and CEO of MMC, said:

“We are excited to partner with Erdene on exploration activities and to fund further development of their projects in Mongolia. Our partnership will be important in unlocking new opportunities for the Mongolian minerals sector which will further increase the industry’s contribution to the economy.”

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