Erdene Resource Development has been approved for a detailed environmental impact assessment of its Bayan Khundii gold project in Mongolia.
The company said it would now begin preparations for the construction of the project. A formal construction decision is expected to be made in early 2022.
In 2020, Erdene produced a bank-guaranteed feasibility study for the project, with a net present value of $100m and an internal rate of return of 42 per cent at a 5 per cent discount rate, all after tax. In the first phase of the eight-year operation, an open-pit mine is expected to produce 382700 ounces of gold at a total maintenance cost of $733 per ounce. At the gold price of $1400 an ounce, the project will recoup its costs in less than two years.
Bayan Khundii has a resource capacity of 8.3 million measured and indicative tonnage, with a gold grade of 2.19g / tonne, containing 585000 ounces. The inferred resources are 500000 tons, with a grade of 2.18g gold per ton, containing 36000 ounces.
In August, Erdene announced a new gold discovery about 300m west of the Bayan Khundii deposit. Drilling continued to expand the discovery, with the best boreholes found by UDH-22, at 77m of 3.2g / t gold and 71m of 0.8g / t gold, including 27m of 8.7g / t gold, and 1 m of 156.5 g / t gold at this intersection.
Follow-up drilling of the black horse mane target 2.4km north of Bayan Khundii confirmed the high-grade gold oxide zone starting from the surface and opening along the strike and depth. The best test results come from the ADD-146 hole, the gold grade of 17 meters is 16.7 / ton, of which the gold grade of 8 meters is 33.5g / ton.
