The UB Post-Leading English News

 Erdene said that it signed contracts with two Mongolian consulting companies to assist with the application to convert the current Zuun Mod molybdenum exploration license into a mining license.

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 Zuun Mod project is a porphyry molybdenum deposit (with copper and rhenium) and consists of a single license totaling 49,538 hectares. It is located in Bayankhongor province approximately 950 kilometers southwest of Ulaanbaatar and 215 kilometers from railhead on the Mongolia-China border at Ceke. The railhead is located 20 kilometers south of the Nariin Sukhait and Ovoot Tolgoi coal mines.

“As we mark a full year since the global economic events of late 2008, we find ourselves in a much improved environment in regards to raw material consumption and price outlook,” said Peter Akerley, President and CEO of Erdene.

“We are currently witnessing a major upswing in interest in the commodities on which we have maintained our focus and now find ourselves in a strong position to move the Zuun Mod molybdenum project toward pre-feasibility. In addition to the global economic improvement, we have witnessed a positive change in the political environment in Mongolia with the signing of the investment agreement on the Oyu Tolgoi project. This has given us the confidence to accelerate our property acquisition program in Mongolia.”

The Government of Mongolia finalized investment agreement with Ivanhoe Mines and its strategic partner Rio Tinto for the Oyu Tolgoi copper-gold project on October 6. The signing signaled the industry as the most globally attractive locations for investment in the mineral exploration sector.

“Over the past few years, political issues in Mongolia had caused us to maintain a cautious stance in regards to new opportunities; however, with the positive events of the past 60 days we have begun to act on opportunities generated during that period.”

For the three months ended September 30, 2009, exploration and operating expenses amounted to $948,115 compared to $295,995 in the third quarter 2008. Including capitalized exploration costs and excluding write-offs, exploration expenses were $1,215,699 for the third quarter of 2009 compared to $1,805,187 in the third quarter of 2008.

Erdene’s third quarter expenditures were directed toward the continued advancement of the Company’s primary projects, namely the Donkin coal project, Zuun Mod molybdenum project, metal exploration in Mongolia and industrial mineral projects.
The company recorded a loss of $1,239,158, or $0.01 per share, in the third quarter of 2009 compared with a loss of $887,425, or $0.01 per share, in the third quarter of 2008.

Recently, Erdene has applied for five exploration licenses totaling over 400,000 hectares and has plans to continue to increase our staking and acquisition activity. In Mongolia, Erdene is partnered with Xstrata Coal on a comprehensive coal generative and acquisition program. The Company has conducted numerous property evaluations for prospective metallurgical and high-quality thermal coal deposits. Xstrata Coal is fully funding the exploration programs through to completion of feasibility to earn a 75 per cent interest in the projects funded. In regards to our metals exploration program, in addition to Zuun Mod, Erdene is focused on porphyry style copper,gold and molybdenum prospects and have been very active in the evaluation of these during the past two years.

Sharing a border with Mongolia is China, the world’s largest coal consumer. Estimates suggest that over the next 25 years, China will need to secure approximately six million tonnes of new coal production per month to meet demand. Coal-fired power plants are projected to satisfy approximately three quarters of China’s total power generation requirements to 2030. A similar situation exists for metals with Chinese companies, many state funded, being very acquisitive for copper and molybdenum projects worldwide.