Erdene Resource Development (ERD) Q3 2024 earnings summary

Executive summary

• Achieved significant construction progress at the Bayan Khundii Gold Mine, reaching 45% overall completion by September 30, 2024, with the process plant 55% complete.

• All major mechanical equipment is on site, SAG and ball mills installed, and non-process infrastructure advancing, including accommodation, waste facility, and transmission line.

• Expansion drilling adjacent to the planned open pit returned the highest gold grades to date, confirming strong growth potential and high-grade ore zones.

• Ore control drilling confirmed high-grade domains consistent with the reserve model, supporting an updated mine plan.

• First gold production targeted for mid-2025, with commercial production expected in Q3 2025.

Financial highlights

• Net loss of $1,687,580 for Q3 2024, compared to $1,200,099 for Q3 2023.

• Exploration and evaluation expenses were $215,903 in Q3 2024, slightly down from $219,670 in Q3 2023.

• Corporate and administrative expenses totaled $582,089, down from $600,595 year-over-year.

• Loss from investment in associate increased to $918,649 from $445,493, mainly due to higher non-capitalized interest expenditures.

• Approximately US$70 million in project expenditures incurred to end of Q3 2024.

Outlook and guidance

• Process plant and critical infrastructure buildings expected to be closed in coming months, with mechanical and electrical works completion in Q1 2025.

• Commissioning to begin in Q2 2025, aiming for first gold in mid-2025 and commercial production in Q3 2025.

• Anticipated capex increase due to weather, logistics, and scope changes, but impacts expected to be manageable with available funding.

• Updated mine plan to incorporate recent high-grade drilling results.