Erdene Resource Development Corporation

Thank you for standing by. This is the conference operator. Welcome to the Urdine Resource Development First Quarter 2026 Financial and Operating Results Conference Call and Webcast. As a reminder, all participants on the telephone are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then the number one on your telephone keypad. Should you need assistance during the call, you may signal the operator by pressing star, then zero. Participants on the webcast may type in their questions in the Q&A box on the right of the slides. Now, let me turn the call over to John Vincic.

Thank you, operator, and hello, everyone, and thank you for joining our call today. Before we begin, some housekeeping items to note. The accompanying presentation for today's call is available for download from the company's website at www.urdine.com. and yesterday's press release, the financial statements, and the MD&A are all posted on Erdene's website and CDAR+. I'll point out that management's remarks on the Bayan-Hundy Gold Mine's operating performance in the first quarter of 2026 are at the Erdene-Mongol level, a 50-50 joint venture between Erdene and Mongolia Mining Corporation. It's also important to note that this conference call contains forward-looking information that is based on the company's current expectations estimates, and beliefs, and may also use terms that are non-IFRS performance measures. Please review Erdene's latest disclosure materials, including the company's most recent annual information form for the risks associated with its forward-looking information and the use of non-IFRS performance measures. Please note that all dollar amounts mentioned on today's call are in Canadian dollars unless otherwise noted. And today's speakers from Erdene are Peter Akerle, President and Chief Executive Officer, and Robert Jenkins, Chief Financial Officer. Please go ahead, Peter.

Thanks, John, and hello, everyone. Our company is an emerging gold producer focused on establishing buy-in Hyundai as one of the highest-grade open-pick gold mines globally, while continuing to grow through the exploration and development of our other precious and industrial metal deposits in the Hyundai Minerals District. With our track record as one of the most successful explorers in Mongolia over the past 20 years, we are excited about the value we can deliver in the district. But we will also continue to be active on other opportunities in prospective regions of the country, like the Terrigul Copper Gold Prospect in the Oyutogoy District, where drilling began last week. Let me now share with you details on our operating results for Q1 2026, as well as more on our growth opportunities. Please turn your attention to slide four. During the quarter, the Bayanunde Process Plant achieved average throughput of 94% of nameplate capacity and average gold recovery rates of 96%, higher than our anticipated recoveries in our feasibility study. With this performance, we are very proud to announce that we reached the milestone of commercial production during the first quarter of 2026, less than six months after commissioning the plant. While we continue to focus on optimizing operations at the Bayan-Hundi mine, our exploration team is working on multiple opportunities to extend Bayan-Hundi's mine life and support plant expansion, targeting areas adjacent to the mine. At the Dark Horse deposit, just two and a half kilometers north of the Bayan-Hundi open pit, we expanded high-grade mineralization and identified a three-kilometer trend of targets through recent drilling, with results announced in late Q1. We see further opportunities just west of the pit at Stryker West and Ulan, which will be advanced over the coming months. Over the medium term, we see the opportunity to significantly increase gold production by bringing the Altenaer Gold Project, owned by Erdenmongel, online. And at our wholly-owned Zun Mod project, we recently announced results from drilling that included multiple ore-grade molybdenum and copper intersections, which will be incorporated into a preliminary economic assessment on track for completion in Q3 2026. Zumad, one of Asia's largest undeveloped molybdenum copper deposits, is just 200 kilometers from China, the world's largest consumer of both critical metals. This deposit, exposed at surface, is hosted within a much larger copper porphyry system, and a part of the system is the high-grade copper discovery at Huvenhar, four and a half kilometers northwest of the molybdenum deposit. which is scheduled for further exploration in the second half of the year. Beyond the Hyundai Minerals District, last week we kicked off the Maiden Drill Program at Tarigul, a project just 10 kilometers from the giant Oyetogoi copper gold mine, which is on track to be the fourth largest globally by the end of the decade. Results for Tarigul will be delivered in early Q3. Now, let's dig into some of the details on the performance of buying Hyundai over the past few months. As shown on slide five, The Urdan-Mongo processing team fed 151,000 tons of ore at an average grade of 1.9 grams per ton into the plant in Q1, averaging 1,675 tons per day, or 94% of the plant's target throughput. Gold recoveries averaged 96% in Q1, well above the target of the 93% reported in the feasibility study. With throughput and recoveries averaging over 90% during the quarter, We are very pleased to have reached commercial production status. Erd and Mongol sold over 8,500 ounces of gold and over 3,100 ounces of silver in Q1, 15% and 19% respectively more ounces than in Q4 2025. This brings us to total gold production of almost 16,000 ounces since we commissioned the mine in September of 2025. Realized prices in Q1 for gold and silver were $48.70 U.S. and $80 per ounce, respectively. Earth and Mongol generated $42 million U.S. in revenue, 35% higher than Q4 2025. And overall, the process plant is operating extremely well with throughput and recoveries exceeding expectations, generating positive cash flows in the strong gold and silver price environment. Turning to slide six, during January and February, we saw reduced mining rates and stockpiled and fed lower grade ore to the plant as our team continued to increase their understanding of the deposit and establish a single working level. As you can see on this slide, we're operating in a very tight space with mining, grade control, drilling, and blasting within the midfield, striker, and gold hill zones, all within 250 meters of each other as we're in the initial phases of mining. These challenges are gradually being overcome with training, expert participation, and through pit expansion. Another challenge we've been addressing is blast fragmentation, which left approximately 15% of ore stockpiled as it was oversized for the plant's crusher. This oversized material is more siliceous and therefore is expected to be higher grade. In Lake Q1, a mobile crusher was added to handle this ore. Improvement in feed grades coincided with the addition of the crushing unit. In addition, consultants have recently been on site advising on blasting improvements which are being observed in the mine. Introducing more experienced geologists into the pit has also paid dividends. As a result, in Q1, the mining team generated 155,000 tons of ore at an average grade of 1.5 grams per ton, with a significant improvement in grade later in the quarter. Feed grades averaged 2.7 grams per ton in March, with three grams per ton or higher over the past few weeks of the month, as seen on the graph on this slide. The focus for the remainder of Q2 is to consistently deliver these higher grades to the Bayan Hyundai plant by continuing to pre-crush oversized ore and build our team's selective mining abilities, with additional team members and expert training to reduce dilution and improve blasting performance. Although we witnessed some weather-related factors due to the spring thaw impacting productivity in early April, overall, these initiatives, along with access to additional high-grade zones, has recently seen us achieve closer to our target feed grade. While our immediate priority is to consistently deliver high-grade feed to the Bayanande plant, our second objective is to grow operations. As seen on slide seven, our immediate focus are on two areas adjacent to the Bayan Hyundai mine, Dark Horse and Bayan Hyundai West, where we see substantial potential to grow gold resources and thereby extend the life and possibly expand the production capacity of the Bayan Hyundai complex, as I'll describe in more detail on the following slides. As shown on slide eight, Dark Horse, two and a half kilometers north of Bayan Hyundai, currently host the planned 50,000-ounce high-grade gold pit, characterized by an oxide zone exposed at surface. In Q2, we will begin great control drilling to establish detailed plans for mining in the second half of 2027. However, this deposit lies within a three-kilometer mineralized trend, where exploration reported as part of a year-end report in late March highlighted several growth opportunities. At Dark Horse South, highlights adjacent to the currently planned pit included very high-grade near-surface intercepts, 9.6 grams per ton over 19 meters and 28.7 grams per ton over 3 meters, in areas expanding the limits of the resource. At Dark Horse North, 500 meters north of the planned pit, we intersected multiple zones of gold mineralization within oxide and transition zones, including 43 meters of 1.9 grams and 16 meters of 1.4. This area, 700 meters in strike length, with oxide material extending up to 100 meters depth, provides lower grade ore, which is being considered for an eventual heap leach opportunity to complement the Bionhundi carbon and pulp plant. Composites from Dark Horse are currently the subject of heap leach amenability testing at Blue Coast Research in British Columbia, Canada, with results expected in mid-2026. Although Dark West North is the current focus for the heat bleach, we are assessing various sources from the Hyundai Gold deposits and prospects that could form a base for supporting that facility, including Alton Arrow to the northeast. The mineralized structure at Alton Arrow has been traced over 1.7 kilometers, and although at an earlier stage of expiration, results in this oxidized zone are very encouraging, including recent drill results of up to 16 meters of 1.36 grams per ton and also a silver zone where we had five meters of 66 grams per tonne silver in the near surface. Overall, the Dark Horse drill program improved the scale of the resource opportunities at Dark Horse South and North, and importantly, reinforced the presence of anomalous gold targets along at least three kilometres of trend, with several adjacent targets remaining untested. We anticipate commencing another expansionary drill program in Q3, following the infill program in Q2. As seen on slide nine, there is a substantial opportunity to expand the Bayan Hyundai pit to the west. Just a reminder that that initial pit was developed at an 1850 gold price. Work is now underway to incorporate resources from Stryker West into an expanded pit supported by recent drilling and the impact of the higher gold prices. Mineralization of Bayan Hyundai continues onto the Ulan license, which has been traced up to 400 meters depth Within these thick intervals of gold mineralization are very high-grade feeder zones, as you can see in the tables at the top of slide 9. An updated Bayanhande mine plan is expected to be completed later in 2026, with a first sign of that expansion potential to the west. Lying between Erdin Mongol's Bayanhande and Ulaan license is the Haransab license, held by Erdnus Alt, a Mongolian state-owned company. Longer term, there could be an opportunity to create a super pit to collaboratively mine the ore in this deposit across the area from Bayan Hyundai through to Elan. We have established a cornerstone reserve at Bayan Hyundai and Dark Horse to support the initial mining period and the related infrastructure to support an extension and expansion of the Bayan Hyundai complex. The Bayan Hyundai epithermal system has been traced for over 10 kilometers of interconnected structures and is still in the early days of expiration. We are very excited about the potential it offers. As seen on slide 10, I'd also like to remind everyone of the potential and plans for the Alton Nard deposit held by Erdenmongol just 16 kilometers north of Bayan Hyundai. This area hosts a five kilometer long mineralized trend where we've defined more than a half a million ounces of gold resources as well as byproduct silver, lead, and zinc. This intensely mineralized gold and silver system has received almost no recent expiration given the focus at Bayan Hyundai and remains open a long strike and at depth. The system is geologically different from Bayan Hyundai, defined as a gold polymetallic intermediate sulfidation deposit with similarities to Barrick's Porguera and Lundin's Fruta del Norte. These deposits can be vertically extensive relative to low sulfidation systems like Bayan Hyundai. and are often spatially related to porphyry copper deposits with high potential copper targets identified on the Alton NAR license. Alton NAR provides a significant exploration opportunity to expand existing resources and the optionality to develop a deposit to feed high-grade into the Bayan Hyundai complex, both the CIP and possibly heat bleach, but also offers the opportunity for a standalone producer of flotation concentrate. All options are currently being assessed. with resource expansion drilling along with further metallurgical testing to provide the basis for a feasibility study by late 2027. The gold-focused exploration opportunities in the Bayanhandi and Altanar areas, combined with our history of exploration success in the region, strongly suggests that we have the potential to extend and expand production in the coming years, providing us with a foundation for long-term growth of our gold business. Let me now turn to our wholly owned exploration and development projects. Starting on slide 11, Zumad is one of Asia's largest undeveloped molybdenum and copper deposits. I was recently at mining conferences in Hong Kong and Singapore, and our management team had recently traveled through China to visit molybdenum consumers. We are seeing tremendous interest in molybdenum and in Zumad to help feed the demand for this commodity in the Asian specialty steel markets. especially as Chinese molybdenum mines approach end of life. We've also seen stronger molybdenum prices in recent months. In Q1, we announced results from 18 holes, which included multiple intersections of ore-grade mineralization in areas previously modeled as waste. To highlight just one hole, Zumad 98 extended to 450 meters depth, intersected near continuous molybdenum copper mineralization over 374 meters, an average 0.07% molybdenum equivalent. These drill results, along with metallurgical test work underway to develop a conceptual process flow sheet, mine planning, processing, and infrastructure studies will all be incorporated into the ZUNMA preliminary economic assessment planned for completion by Q3 2026. We expect the pending PEA will demonstrate the value creation potential of this large project for shareholders. The other projects in our portfolio include the Hoevenhaar copper prospect and the Terrigool property in the Ouyutogoy district. At Hoevenhaar, in Q1, we engaged consultants to conduct geophysics to generate copper porphyry targets for further drilling in 2026. This work will follow up on the intersection of 65 meters averaging 0.6% copper, including 30 meters averaging 1.25% copper, which we reported in early Q1. At Taragool, we recently completed geophysical and geochemical studies to select targets for drill testing. Our first drill program started just a few days ago. These projects are at an earlier stage, but they have tremendous value creation potential, and we expect them to generate new slope for a prolonged period as we're just getting started on these projects. In summary, BindHundy is our foundation, but the exploration pipeline is our future. By continuing to progress the gold exploration targets held by Erd and Mongol, and advancing our ZoonMod, Hoevenhaar, and Terragool projects, we're building a company with significant opportunities for multiple new discoveries and developments, thereby providing tremendous upside for our shareholders. Now, I'd like to turn the call over to Bob to provide financial highlights for the quarter.