Mongolia

Bayan Khundii Project

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Overview

Mine TypeOpen Pit
StageConstruction
Commodities
  • Gold
  • Silver
Mining Method
  • Truck & Shovel / Loader
Production Start... Lock
Mine Life6.75 years (as of Jan 1, 2023)
ShapshotBayan Khundii Gold Project is situated within an emerging gold district that Erdene refers to as the Khundii Minerals District (“KMD”), which includes the BK and Dark Horse Mane gold deposits.

On January 29, 2024 Erdene announced the commencement of full construction at the Bayan Khundii Gold Project and the close of the investment by Mongolian Mining Corporation (“MMC”) as part of the Strategic Alliance Agreement (“SAA”) to develop the Khundii Minerals District.

Owners

SourceSource
CompanyInterestOwnership
Mongolian Mining Corp. 50 % Indirect
Erdene Resource Development Corp. (operator) 50 % Indirect
The Project is 100% held by Erdene Mongol LLC, a wholly owned subsidiary of Erdene Resource Development Corp. (Erdene). The Project includes the Khundii Exploration License (XV-015569; 2,205.71 ha) and the Khundii Mining License (MV-021444, 2,308.62 ha).

On January 10, 2023, Erdene executed a Strategic Alliance Agreement (“SAA”) with Mongolian Mining Corp. (MMC) to develop the Bayan Khundii Gold Project. On January 23, 2024, the parties formally closed the SAA by issuing shares in Erdene Mongol LCC (EM) to MMC representing a 50% equity ownership.

Details of the SAA include:

* MMC has invested US$40 million in EM, Erdene’s Mongolian subsidiary holding the Khundii and Altan Nar mining licenses and the Ulaan exploration license.

* Erdene retains a 50% equity interest in EM and a 5.0% Net Smelter Return royalty on production from the Khundii, Altan Nar and Ulaan licenses, as well as any properties acquired within a 700km2 area of interest, beyond the first 400,000 ounces gold recov

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Deposit type

  • Epithermal
  • Vein / narrow vein
  • Breccia pipe / Stockwork

Summary:

The Project is located within the southeast part of the Trans Altai Terrane (“TAT”). The Trans Altai is an island arc terrane within the Central Asian Orogenic Belt (“CAOB”), which extends more than 3,000 km from the Urals to the Pacific. The CAOB is host to numerous porphyry copper and epithermal Au deposits of largely Devonian to Permian age. The closest known deposits of this type in Mongolia are those of the Oyu Tolgoi cluster, located ~700 km ESE of Bayan Khundii.

The southeast portion of the TAT is referred to by Erdene as the Khundii Minerals District (“KMD”) and host to a number of porphyry and epithermal deposits and occurrences, including the BK gold deposit, the Dark Horse gold deposit, the Altan Nar gold-polymetallic deposit, the Zuun Mod Mo-Cu deposit and the Ulaan SE gold mineralization.

The bedrock geology of the Khundii license area is dominated by a sequence of the Carboniferous Ulziithar Formation, comprised of tuffaceous units, volcanoclastic sedimentary sequences, basalt and andesite flows and volcanic breccia and is approximately 2,000 m thick. Rocks of the Ulziitkhar Formation were intruded by multiple plutons and stocks of the early Carboniferous Bayan Airag intrusive complex, and together these rocks were unconformably overlain by Permian and Jurassic volcanic and sedimentary units. All rocks in the region are overlain by unconsolidated sediments of Quaternary or Recent age.

Three sets of structures were distinguished in the KMD by their orientation and length, relationship to granitoid intrusions, and their cross-cutting relationships. The largest and oldest set comprises firstorder ENE-trending lithospheric scale lineaments, interpreted as deep-seated, inherited basement structures. A second set comprises structures that trend NE in en echelon fault segments that collectively define the ENE lithospheric trend. This set of NE-trending faults, including those at the Bayan Khundii deposit, are interpreted as a series of normal faults with dip-slip displacement. These extensional faults are interpreted to have formed the controlling structures at Bayan Khundii. Model integration of structural data from the BK gold deposit in three dimensions indicates a set of tilted extensional fault blocks in which gold was deposited in a fractured relay ramp structure between the fault tips of two soft-linked normal faults. A third set of smaller, N-S trending lineaments are noted. One of these N-S structures hosts the Dark Horse Mane gold deposit and can be traced for 3.5 km to the south where it connects to the extensional faults of the Bayan Khundii deposit.

Mineralization at the BK gold deposit consists of gold ±silver in massive-saccharoidal, laminar and comb-textured quartz ±hematite veins, multi-stage quartz-adularia-chalcedony ±hematite veins, quartz-hematite breccias, along late fractures (±hematite/specularite), and as disseminations within intensely illite-quartz altered pyroclastic rocks, where it is commonly associated with hematite that partially or completely replaced pyrite grains. Gold mineralization is mostly hosted in parallel NW-SE trending, moderately-dipping (approximately 45°) zones that range in width from 4 to 149 m.

Gold mineralization at the Dark Horse Mane deposit is hosted within strongly altered tuffaceous and volcanoclastic rocks, crosscut by quartz and quartz-hematite veins and stockwork zones. Several vein types are present, including comb-textured quartz-adularia veins, sugary crustiform-textured quartz veins, and multi-stage quartz-chalcedony veins. Mineralization is associated with a shallow (<60 m depth) oxide zone with high-grade Au mineralization at Dark Horse including well-developed structurally controlled supergene oxide zones which lies above a locally deeper sulphide-rich zone.

The BK and DH Mane gold deposits and the Ulaan Southeast gold occurrence, although identified as separate mineralization, as they were discovered at different times, all three may be part of a single epithermal system based on their proximity, inclusion within a contiguous white mica alteration zone, and generally similar mineralization features; they are also related to the same structural trends.

The BK gold deposit is interpreted as a low-sulphidation epithermal deposit hosted within a corridor of en-echelon extensional faults. Dark Horse Mane shares many features with the BK gold deposit, including field and petrographic evidence for an early high-temperature event of K-feldspar-biotitequartz alteration, and chalcopyrite encapsulated in quartz, as well as patches of lithocap-style alteration. This early porphyry-like assemblage was overprinted by quartz-illite alteration associated with epithermal Au mineralization.

The higher As and Sb contents in the Dark Horse project area suggest that it may represent a shallower erosion level than at Bayan Khundii. Recent drilling intersected a shallow (<60 m depth) oxide zone with high-grade Au mineralization at Dark Horse (including a 5 m interval averaging 123.5 g/t Au), which lies above a deeper sulfide-rich zone (of pyrite, arsenopyrite and arsenian pyrite), hosted by silicified and illite-altered lapilli andesite tuffs and volcanoclastic units. The presence of oxidation zone in Dark Horse is evidence to the near surface mineralization environment where leached sulphide minerals from surface were oxidized in the supergene process.

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Mining Methods

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Comminution

Crushers and Mills

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Processing

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Production

CommodityProductUnitsAvg. AnnualLOM
Gold Payable metal oz 74,200475,287
Gold Metal in doré oz 78,200476,001
Silver Payable metal oz 121,097
Silver Metal in doré oz 121,278

Operational metrics

Metrics
Daily processing capacity 0000
Annual ore mining rate 000
Annual production capacity 00
Annual processing capacity 000000
Stripping / waste ratio 000
Waste tonnes, LOM 00000
Ore tonnes mined, LOM 0000
Total tonnes mined, LOM 00000
Tonnes processed, LOM 0000000
* According to 2023 study.

Production Costs

CommodityUnitsAverage
Cash costs Gold USD 000
Total cash costs Gold USD 000
All-in sustaining costs (AISC) Gold USD 000
Assumed price Silver USD 000
Assumed price Gold USD 0000
* According to 2023 study / presentation.

Operating Costs

Currency2023
OP mining costs ($/t milled) USD 41.1 *  
Processing costs ($/t milled) USD  ....  Subscribe
G&A ($/t milled) USD  ....  Subscribe
Total operating costs ($/t milled) USD  ....  Subscribe
* According to 2023 study.

Project Costs

MetricsUnitsLOM Total
Initial CapEx $M USD  ......  Subscribe
Sustaining CapEx $M USD  ......  Subscribe
Closure costs $M USD  ......  Subscribe
Total CapEx $M USD  ......  Subscribe
OP OpEx $M USD  ......  Subscribe
Processing OpEx $M USD 166.3
G&A costs $M USD 20.2
Total OpEx $M USD  ......  Subscribe
Income Taxes $M USD  ......  Subscribe
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Gross revenue (LOM) $M USD  ......  Subscribe
Net revenue (LOM) $M USD  ......  Subscribe
Pre-tax Cash Flow (LOM) $M USD  ......  Subscribe
After-tax Cash Flow (LOM) $M USD  ......  Subscribe
Pre-tax NPV @ 5% $M USD  ......  Subscribe
Pre-tax NPV @ 10% $M USD  ......  Subscribe
Pre-tax NPV @ 7.5% $M USD  ......  Subscribe
After-tax NPV @ 5% $M USD  ......  Subscribe
After-tax NPV @ 10% $M USD  ......  Subscribe
After-tax NPV @ 7.5% $M USD  ......  Subscribe
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Heavy Mobile Equipment

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Personnel

Mine Management

Source Source
Job TitleNameProfileRef. Date
....................... Subscription required ....................... Subscription required Subscription required Jan 31, 2024
....................... Subscription required ....................... Subscription required Subscription required Feb 1, 2024
....................... Subscription required ....................... Subscription required Subscription required Aug 15, 2023
....................... Subscription required ....................... Subscription required Subscription required Aug 15, 2023
....................... Subscription required ....................... Subscription required Subscription required Feb 1, 2024

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