Xstrata Coal Canada Increases Ownership in Erdene

Xstrata Coal Canada Increases Ownership in Erdene

Erdene Resource Development Corp. announced it was notified that Xstrata Coal Canada has increased its ownership in the company to greater than 5% through the purchase of common shares in the open market.

As a result, Xstrata Coal retains certain rights per its Alliance Agreement with Erdene, including a first option to enter into a joint venture and earn a 75% interest in any coal opportunity in Mongolia identified by Erdene by funding all work through completion of a feasibility study. Erdene is currently conducting drill programs on three coal projects in Mongolia as part of the Erdene-Xstrata Alliance.

Alliance Agreement between Erdene and Xstrata Coal

On February 13, 2006, Erdene and Xstrata Coal entered into an agreement whereby Erdene granted Xstrata Coal certain rights, including a first option to enter into a joint venture and earn a 75% interest in any coal opportunity in Mongolia identified by Erdene by funding all work through completion of a feasibility study and by maintaining a minimum 5% equity position in Erdene. In addition, by maintaining the 5% equity interest Xstrata Coal have the right to name a nominee to Erdene’s board of directors and if Erdene elects to develop or pursue third party participation in any non-coal projects or properties in Mongolia or elsewhere, Xstrata Coal has a sixty-day right to review all supporting project information and determine whether it wishes to participate in the project prior to Erdene making the opportunity available to another party or developing the property itself. Concurrent with the execution of the Alliance Agreement, and through a subsequent financing Xstrata acquired 4,000,000 shares of Erdene. Following a private placement by Erdene in June of 2008, Xstrata’s interest in Erdene was diluted to less than five percent (5%).

About Erdene Resource Development Corp.

Erdene (formerly Erdene Gold Inc.) is a diversified resource development company with multiple projects at various stages of development from exploration to production all focused on high-growth commodities. The Corporation has a strong portfolio of exploration properties in Mongolia where it has a strategic alliance with Xstrata Coal to develop its coal properties and a strong focus on base metals (copper and molybdenum), precious metals (gold) and energy (coal). Minarco-MineConsult, of Sydney, Australia, has recently completed a National Instrument 43-101 compliant independent resource estimate for the Zuun Mod molybdenum project and is currently working on a scoping study on the project. In addition, Erdene has near-term cash flow opportunities in its North American assets, which include a 25% interest in the Donkin Coal Alliance with Xstrata Coal, agreements with KaMin LLC (formerly J.M. Huber Corporation) and Ready Mix USA as operators and developers in the southeast U.S. for its kaolin clay and construction aggregate projects, respectively. Erdene has a cash position of approximately $21.1 million with 89.2 M common shares issued and outstanding and a fully diluted share position of 98.6 M common shares.

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