Bayan Khundii Feasibility Study: $115M Capex Over a 6-Year Mine Life
Erdene Resource Development Corp.'s Bayan Khundii in Mongolia, Khundii Minerals District, southwestern Mongolia has a Feasibility Study outlining initial capital of $115M. The mine plan runs 6 years at about 75000 oz Au/yr per year.
Erdene Resource Development Corp.'s Bayan Khundii has reported Feasibility Study results for the gold project in Mongolia, Khundii Minerals District, southwestern Mongolia. It reflects Erdene Resource Development Corp.'s (ERD.TO) latest disclosed economics for the asset.
Economics. Initial capital expenditure is estimated at $115M. Economics are based on US$1,800/oz Au (FS economic pit); US$1,850/oz Au (2023 Feasibility for open-pit).
Production and mine plan. The project envisions an open-pit operation. Life of mine is 6 years. Average annual production is approximately 75000 oz Au/yr. Average head grade is 3.8 g/t Au (average BK reserve grade). Metallurgical recovery averages 93%. The open-pit strip ratio is 11:1.
Resources and ownership. The company holds a 50% interest in the project. Royalties and streams: Erdene maintains a 5% net smelter royalty after 400,000 ounces of gold produced (50:50 JV with MMC on gold projects).
These figures are extracted from Erdene Resource Development Corp.'s technical disclosures and reflect the most recent Feasibility Study on file. Compare this project against other developers and producers in our project economics database, and always verify the numbers against the original technical report before making any investment decision.
Reserves & Resources
| Category | Tonnage | Grade | Contained |
|---|---|---|---|
| Proven | 2.7 Mt | 4.1 g/t Au, 1.7 g/t Ag | 360.2 koz Au, 159.4 koz Ag |
| Probable | 1.1 Mt | 3.0 g/t Au, 1.7 g/t Ag | 104.7 koz Au, 61.1 koz Ag |
| Total | 3.8 Mt | 3.8 g/t Au, 1.7 g/t Ag | 464.9 koz Au, 220.5 koz Ag |
Our Analysis
- Initial capex
- $115M
costlier than 38% of 121 projects we track
- Mine life
- 6yrs
- Study price assumption
- US$1,800/oz Au (FS economic pit); US$1,850/oz Au (2023 Feasibility for open-pit)
- Spot gold today
- $4,103.70/oz
Among the 121 gold projects we track, this one sits in the lower half for initial capex at $115M, which ordinarily signals a manageable build. But the company itself is a micro-cap at US$254M, and the build cost represents roughly half of that entire market cap. That is the sharpest funding-risk signal here: a company this size cannot quietly finance a project worth 0.5x its equity value without significant dilution, debt, or a partner. The feasibility study is build-ready, a plus or minus 15% band, so the numbers carry weight, but the financing path is the real constraint.
The jurisdiction is Mongolia's Khundii Minerals District in the southwest, a known gold belt but one that carries higher-risk perceptions for investors compared to established mining jurisdictions. The mine life is short at six years, which limits the window for capital recovery and means the IRR depends heavily on early-year cash flows. The study uses US$1,800/oz and US$1,850/oz gold price assumptions, both well below today's spot of $4,103.70/oz. That gap creates a substantial upside buffer if prices hold, but it also means the published returns are conservative relative to current market conditions.
The single question that decides whether this project works: can a micro-cap with a diversified portfolio of ten projects raise the financing to build a $115M mine in a higher-risk jurisdiction within a six-year mine life? If yes, the low capex and high spot-price tailwind make the arithmetic compelling. If not, the study remains a technical exercise rather than a deliverable project.
Our take, benchmarked against the project economics in the Mining Stocks database. Figures are estimates drawn from company technical reports — not investment advice; always verify against the source filing.