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.

Thank you, Peter. Moving on to slide 13, let me provide the financial highlights for the quarter ended March 31st, 2026. Before getting into the details of Erdene's financial results, a reminder to everyone on the call, Erdene's investment in Bayan Hyundai is held through its joint venture stake in the Mongolian company, Erdene Mongol LLC. Therefore, the following discussion on Erdene's consolidated financial results which have been prepared in accordance with international financial reporting standards, reflects only our proportionate share of Erdin Mongol's operating results, as well as our corporate operations. All figures are in Canadian dollars, unless otherwise noted. Erdin's share of income from Erdin Mongol totalled $7 million for the three months ended March 31st, 2026, compared to a loss of $2.1 million for the three months ended March 31st, 2025, As Buy and Hyundai achieved commercial production in Q1 2026, while in Q1 2025, the mine was under construction and not yet generating revenue. For Q1 2026, exploration and evaluation expenses for Urdan Resource Development Corporation, representing the work by our team on controlled properties, totaled $891,000. compared to $974,000 for the three months ended March 31st, 2025, with the quarter-over-quarter reduction primarily due to an increase in reimbursements from Erdmongul for geologic and technical support provided on their behalf. Corporate and administrative expenses, representing Erdian's public company costs, totaled $1.4 million in Q1, 2026, compared to 1.5 million in Q1 2025, with the change compared to the prior year quarter, primarily due to a reduction in non-cash share-based compensation costs, partially offset by higher spend on invest relations, professional fees, and regulatory costs, as we increase our marketing efforts following the first gold core at Buy and Hyundai in late 2025. These costs are typically higher in the first quarter of the year as they incorporate annual employee bonuses, and non-cash equity compensation grants based on performance in the preceding year. In total, Erdene generated net income of $4.8 million for the three months ended March 31, 2026, compared to a net loss of $4.5 million for the three months ended March 31, 2025, with a change compared to prior period primarily due to the current period contribution from Erdemongol LLC. Corporately, Erdene ended the quarter with $29 million of cash following the bot deal private placement in February 2026. This cash will allow us to advance the Zunmod, Hovenhart projects, and Tergool, as Peter has just described. Erdmongel ended the quarter with US$21 million of cash on hand. No further capital injections are expected from Erdene to fund operations at Bainhande, as the mine is generating positive cash flow from operations. This concludes the review of our financial performance for Q1 2026. I'll now turn the call back to Peter.

Thanks, Bob. Our success to date has been due to our people and our local relationships. Ensuring their health and safety is our top priority. On slide 14, I'll highlight our commitment to safety, the environment, and the communities where we operate. At the end of Q1 2026, we had 451 staff and contractors on site. with a total of 479,000 person hours during the quarter. Approximately 40% of our direct site personnel are residents of Bayan Hangor, the province hosting our mine, and 15% of the mine's employees are female. One of our key community initiatives is an equipment operator training program conducted in partnership with Mongolia Mining Corporation and focused on local employment. We have had over 180 residents of Bayan Hangor participate in a classroom and hands-on program at MMC's UHG mining complex over the past two years, with many joining the Bayan Hande team. Burden Mongol has been very active in the community, training, conducting community development programs focused on small and medium-sized entities through a microfinance program, local procurement, supporting public health services, and youth education. Erdene and Erdemongol are deeply committed to our communities and proud of the progress achieved through these programs. As you can see from my earlier remarks, we are generating momentum across our business. Achieving commercial production at Bayan Hyundai is a major milestone and a testament to the hard work of our team. But as I've said many times, the gold mine at Bayan Hyundai is just the beginning. Slide 15 summarizes our 2026 roadmap with a clear focus on transitioning buying Hyundai into a steady state producer. This operational foundation allows us to capture maximum value from current gold prices while simultaneously delivering on expiration to expand the gold production towards at least 100,000 ounces of gold per year while also extending its life beyond 10 years. I believe we are well positioned both operationally and financially to deliver on these objectives and value for our shareholders and stakeholders alike. With that, I'll hand it back to the operator to begin the Q&A session.

Thank you. As a reminder, to join the question queue, you may press star then the number one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. Participants on the webcast may type their questions into the Q&A box.

We'll take a moment to let questions queue up. Your first question comes from the line of Don McLean at Paradigm Capital.

Your line is now open.

Hey, good morning, Peter and Bob and team. Looks like a nice step forward in March on the quarter. Things are progressing. Maybe a few questions. Peter, I'll ask you to put your mining engineer hat on. One is, I guess we're all trying to see where we're vectoring in terms of where the all-in sustaining costs will land, where the steady state will be. So we look at March. It was about twice the grade of January, February. So I guess the first question of a few is, is that indicative of where we're going, or was that just a good month? Because we know when you're scheduling, a mine, there's higher grade areas, there's lower grade areas, and you're on a month by month, it can look quite granular.

Yeah, so let me speak to the mining engineering technical side of that, and perhaps I'll let Bob conclude on the cost basis. Just to sort of lay the land for the progression we've seen in the pit to date. First off, it's getting the entire team in that pit experienced in the selective mining of deposits. And you're right, there's going to be ebb and flow to those grades. But generally, I'm very pleased with the progress we're seeing that I think will lead us to getting closer to that steady state reserve grade of 3.8 grams per tonne. We come up against issues and we face those issues and resolve them in most cases. The experience question, which leads to dilution, is something that will just come with time and is improving. The crushing issue we address, which has led to improvement. The blasting side with the higher fragmentation we're addressing and we've seen improvement there. We had some temporary inflow of water into the pit that restricted access to higher grade zones in April, but that's a seasonal thing we've now dealt with. A long answer to your question, Don, I believe that we are headed towards that steadier state, sort of in that three and a half gram range up to that 3.8. Not only did we see that over the last few weeks of March, but as we got through the inflow of water in early April, we've seen that and better over the last couple of weeks. So feel good with the trajectory we're on. Bob?

Yeah, thanks for that, Peter. Don, as far as costs that we saw in Q1, just doing the math on what came through versus the overall costs, it would work out to about $2,200 US an ounce. Now, obviously, given that the grade was below where we expect to be on a run rate and Some of the mining challenges that Peter's outlined, we think that is higher than where we expect to land. As you might recall, when we put our feasibility study out a few years ago, it was about 870. We've no doubt seen the impact of higher royalties and whatnot, but based on what we see in front of us, I think we are targeting somewhere around $1,300 an ounce, but that will need to be updated as we get a bit more information and just learn a bit more as we get into this. The other thing that all would be aware is we've certainly seen some impact on fuel prices as all globally have. As we sit here today, fuel prices are approximately 10% of overall mining costs. So therefore, you know, there's a bit of a bogey there that we'll need to just work through as we fully understand the impacts and all would be in that same bucket.

Well, $1,300 would be... Would be impressive. So just back, Peter, to the blasting controls and the shovel accuracy, the feasibility study is all sort of theoretical, and you noted that there's progress, but do you think that the expectations built into the feasibility study are actually achievable in real life?

You know, I'd say in the early operations, we're seeing anywhere from 20 to 30 percent dilution. And as we have looked over the last several weeks and in late March, we've been able to see that dilution get under control and be closer to what we anticipated, perhaps in the 10 to 15 percent range. But, you know, it's a short window in time, but we're actually seeing the performance of ore grades delivered to the plant. are actually superior once measured in the plant. We're getting a positive reconciliation once we've now added all of these things to improve efficiencies. The jury's still out a little bit, Don, but what we've seen over the past several weeks suggests that's achievable.

You touched on reconciliation because that's such a critical thing. I know it's really early at this stage, but you're great in your tonnage reconciliation. compared to what you expected from the reserve and the feasibility study. How's that looking?

I'd say it's ebbed and flowed over the last six months, and we'll be able to report on that more fully as we get into steady state later in Q2 and into Q3. But as I said, when we look at the grade reported from the grade control model, which is actually more conservative than our global resource, we're now seeing grades reporting to the mill that are higher than our projected grade. So let's hope that continues. Like I say, it's a somewhat brief window in time, but we'll be able to give you more details on that as we have a larger body of information leading into our next reporting period.

Perfect. And one last question. I don't mean to hold you up, but it is a critical stage at this point. So the feasibility and the reserves were done at 1850 or something like that the world is now you know two and a half times that or approximately yeah so what do you do with that material that is below the cutoff grade that was in the feasibility study because it would actually have economic value how do you deal with that

Yeah, so we're now looking at a price coming out of the independents targeting a cutoff grade price of around $3,800, $3,900 U.S., which pushes our economic cutoff grade down from what was around 0.7 to, say, 0.35. So you're right. We're generating a tremendous amount of now economic ore that's being stockpiled. We have just set up bottle roll testing facilities at our site, at our lab. We have an ALS lab on the mine site. And we'll now begin bottle roll testing of various ores from Bayan Hyundai and elsewhere to see if they can also complement this conceptual heap leach plan we have. So that would be ideal if we could see recoveries coming out of the low-grade Bayan Hyundai that could go on a heap. Otherwise, they're stockpiled for back-end processing at end of mine life at some future date.

Great. But the operative is that they're being stockpiled. That's great.

That's right, yeah.

Thank you very much.

Okay. Thank you, Don.

Thank you. There are no further questions from the telephone. I'll now pass the call over to John Zitzik to ask management questions that have come in from email and on the webcast. Please go ahead, John.

Thank you, Operator. First question from the webcast. Peter, you've noted that buy-in Hyundai can reach a capacity of about 100,000 ounces per year of production. When could that be achieved, and what are all the pieces that need to fall into place to get to that level?

There's a lot in there, John, but maybe let me walk through where we could source that ore from. When you look at the buy-in Hyundai system, as I mentioned in the presentation, there is a substantial amount of volume as you move west, through Hyundai West and across Urinsav into Ulan. If that could all be consolidated, perhaps you're getting up into a doubling of current resources, a large portion of that sitting in the Hyundai West and Ulan licenses that we currently control. When you look to the north, it's still very early stages at Dark Horse, but we see substantial room for growth there. So I think those sources, as we continue to expand our exploration activities, could provide us with the resource base, which would need to be up in that million ounce plus range to support 100,000 ounce per year ore being provided to the facilities. When I say the facilities, I'm thinking both the CIP and potentially the heap leach. The heap leach is that low-hanging fruit opportunity that if we can bring it on with the lower CAPEX and lower OPEX, it could potentially introduce another 20,000 to 30,000 ounces per year of production. That would allow you to peak over that 100,000 ounce mark, given we're currently targeting 80,000 to 85,000 from the CIP. If we had sufficient high-grade feed to add to the CIP plant, we do have the option of adding a gravity circuit at the front end that could potentially open up more volume going through the circuit. Those are the areas of source and potential production expansion. which I feel quite confident on. We just have to continue through the additional exploration and studies in the coming year to put us in that position. I think one more thing I'd add to that, John, is that Altenaer has the ability to add another, let's say, 70,000 to 80,000 ounces per year just to put a bracket around it. We won't know until we complete the exploration up there that we'll start to pick up on later this year. There's already half a million ounces of gold plus byproduct in the near surface, sort of top 150 meters. So I feel today we have an economic deposit there. It's just a matter of going through the increased exploration and studies. It's probably something that you couldn't see coming on until 28, 29 if we built a new facility. But there is the optionality I discussed to bring the high-grade ore from Alton NAR to BK as well. So that also sort of adds to that 100,000 plus per year, both source material and production facility.

Thank you, Peter. The next question, what is the impact of rising oil prices on your cost structure?

I'll take that one, John. I think I alluded to this briefly in my response to Don McLean. But just as a reminder, about 10% of the operating costs at Bayan Hyundai are fuel-related. We have sourced a majority of the energy for the project through an overhead transmission line that is under a take-or-pay arrangement, so we're not directly exposed as many sites would be where they are primarily diesel generation. All that to say, given the overall cost structure that we've seen, you know, if 10% of our costs are fuel-related, that could be somewhere in the neighborhood of $100 an ounce that could hit the bottom line if we see oil prices continue to remain where they are. And for reference, diesel price in Mongolia are in the neighborhood of $1.35 US a liter today.

Thank you.

Next question. You seem excited with the prospects for ZoonMod. What can we expect from the upcoming PEA?

Yeah, my excitement just increases exponentially on ZoonMod as we talk more to the market. As I mentioned in the presentation, we spent some time in Asia both talking to investors, traders, molybdenum users, a really broad spectrum. across the market, and that tips into the copper demand discussions as well, but just very positive feedback in terms of the current demand and lack of supply. Every user of Maldi we met with in China would buy our concentrate today, and the prices today are in that $28 to $30 a pound range, and actually somewhat higher in China than they are globally given the shortage. No zoom mod is a very large open pittable deposit at surface low strip good metallurgy. And the knock against it was always its location, because it was remote and today you know you've got a now completed haul road for metallurgical coal within 25 kilometers of the site we've demonstrated, we can tap into grid power. The demand is there. I think right time, right place. We're very excited about pushing that PEA across the line later in Q3, but I think it's somewhat of a curiosity almost in our portfolio with no value attributed, but there's significant value there that we'll, for the first time, demonstrate when we come out with a PEA, ideally in September.

Thank you, Peter. Another question from the webcast. Now that you've moved into full production, are there any thoughts to giving a more detailed breakdown of the income statement and balance sheet for the JV?

Thanks, John. I'll take that one. So I'd say there's kind of two answers to that question. First off, our financials are prepared in accordance with IFRS, and under IFRS, from The accounting rules are gap financials cannot change materially. The requirements for joint venture accounting allow us just to show really our investment in Erdmongel as well as our proportionate share of the income from Erdmongel. That said, you should expect to see more fulsome disclosure error in our MD&A on the operating performance of Erdmongel and our proportionate share. And now that we are past commercial production, stay tuned in Q2 for a bit more disclosure there.

Thank you, Bob.

There's no further questions from the webcast. I'm going to turn the call back to Peter Akerley for closing remarks. Peter?

Thank you, John, and thank you, everyone, for taking the time to join us today. We look forward to speaking to you again in a few months, but please, if you have any questions, reach out directly. We're always available. Have a good day, everyone.

Thank you. Ladies and gentlemen, this does conclude today's conference call. We thank you for participating. You may now disconnect.