Erdene Resource Development (ERD) Status update summary

Economic assessment

• Base case at $25/lb molybdenum and $5/lb copper: after-tax NPV8 of $745.1M, IRR of 16.1% and payback in production year 6.

• At $33/lb molybdenum and $6.50/lb copper: after-tax NPV8 of $1,980.7M, IRR of 27.8% and payback in production year 4.

• Initial capital is $686.8M, including $176.7M contingency; sustaining capital is $462.6M and closure cost is $86.5M.

• AISC is $13.89/lb molybdenum, including copper credits; C1 cash cost is $10.24/lb.

• Break-even is $18.50/lb molybdenum; projected revenue mix is 78% molybdenum and 22% copper.

Operating outlook and resources

• PEA outlines a 34-year conventional open-pit mine and 25 Mtpa concentrator, processing 834.2 Mt of plant feed at a 1.31:1 waste-to-feed strip ratio.

• Life-of-mine recovered production is estimated at 672.1 Mlb molybdenum and 947.2 Mlb copper; recoveries are 88.4% and 89.6%, respectively.

• Updated resources include 407.1 Mt Measured and Indicated, containing 427.0 Mlb molybdenum and 553.7 Mlb copper; Inferred Resources total 596.2 Mt.

• Inferred Resources account for 74% of PEA plant feed, including 16% scheduled during the six-year undiscounted payback period.

• Conventional flotation is planned; mining fleet, drilling and blasting are assumed contractor-provided, with fleet capital included in operating costs.

Location and market position

• Zuun Mod is 35 km from the Bayan Khundii Gold Mine, about 280 km from the Mongolia-China border railhead and within a 6,041-hectare license.

• A power line built for Bayan Khundii is within 30 km; a new coal haul road is 35 km away, and the PEA assumes a third-party power purchase agreement.

• Management cited molybdenum demand growth above 4% annually over five years, a structural supply deficit expected in 2026 and Asia accounting for nearly 65% of consumption.

• Management said prices above $33/lb are supported by tight supply, rising Asian demand and limited new primary mine development.

• Asian customers have shown long-term offtake interest; discussions continue with potential partners on offtake, financing and strategic partnerships.