Q2 2026 Erdene Resource Development Corp Earnings Call

August 17, 2026

Operator: Thanks for standing by. This is the conference operator. Welcome to the Erdene Resource Development Q2 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 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 in their questions in the chat feature of the webcast. Now let me hand the call over to John Vinsik.

Speaker #1: Operator: Thank you for standing by. This is the conference operator. Welcome to the Erdene Resource Development Q2 2026 financial and operating results conference call and webcast.

Speaker #1: 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.

Speaker #1: To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star, then 0.

Speaker #1: Participants on the webcast may type their questions into the chat feature of the webcast. Now, let me hand the call over to John Dinsek.

Speaker #2: Yes.

Speaker #3: Thank you, operator, and hello, everyone. Thank you for joining our call today. A few housekeeping items to note: The accompanying presentation for today's call is available for download from the company's website at www.erdene.com.

Moderator: Thank you, operator, and hello everyone, and thank you for joining our call today. A few housekeeping items to note. The accompanying presentation for today's call is available for download from the company's website at www.erdene.com. The press release, financial statements, and MD&A related to this quarter are all posted on Erdene's website and on SEDAR Plus. I will point out that management's remarks on the Bayan Khundii Gold Mine's operating performance are at the Erdene Mongol level, a 50/50 joint venture between Erdene and Mongolian Mining Corporation. It is 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 this forward-looking information and the use of non-IFRS performance measures.

[Company Representative] (Erdene): Thank you, operator, and hello everyone, and thank you for joining our call today. A few housekeeping items to note. The accompanying presentation for today's call is available for download from the company's website at www.erdene.com. The press release, financial statements, and MD&A related to this quarter are all posted on Erdene's website and on SEDAR Plus. I will point out that management's remarks on the Bayan Khundii Gold Mine's operating performance are at the Erdene Mongol level, a 50/50 joint venture between Erdene and Mongolian Mining Corporation. It is 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 this forward-looking information and the use of non-IFRS performance measures.

Speaker #3: The press release, financial statements, and MD&A related to this quarter are all posted on Erdene's website and on SEDAR+. I'll point out that management's remarks on the Bayan Khundii Gold Mine's operating performance are at the Erdene Mongol level, a 50/50 joint venture between Erdene and Mongolian Mining Corporation.

Speaker #3: It is 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.

Speaker #3: Please review Erdene’s latest disclosure materials, including the company's most recent Annual Information Form, for the risks associated with this forward-looking information and the use of non-IFRS performance measures.

Speaker #3: Please note that all dollar amounts mentioned on today's call are in Canadian dollars, unless otherwise noted. Today's speakers from Erdene are Peter Akerly, President and Chief Executive Officer; and Robert Jenkins, Chief Financial Officer.

Moderator: Please note that all dollar amounts mentioned on today's call are in Canadian dollars, unless otherwise noted. Today's speakers from Erdene are Peter Akerley, President and Chief Executive Officer, and Robert Jenkins, Chief Financial Officer. Peter, please go ahead.

[Company Representative] (Erdene): Please note that all dollar amounts mentioned on today's call are in Canadian dollars, unless otherwise noted. Today's speakers from Erdene are Peter Akerley, President and Chief Executive Officer, and Robert Jenkins, Chief Financial Officer. Peter, please go ahead.

Speaker #3: Peter, please go ahead.

Speaker #4: Thanks, John. And hello, everyone. Thank you for joining us today. Erdene Resource Development is an emerging minerals producer, focused on developing a multi-mine, multi-commodity business in the Khundii Minerals District of southwestern Mongolia.

Peter Akerley: Thanks, John, and hello everyone. Thank you for joining us today. Erdene Resource Development is an emerging minerals producer focused on developing a multi-mine, multi-commodity business in the Khundii Minerals District of southwestern Mongolia. We have established the foundation for that development by advancing the high-grade gold mine at Bayan Khundii to commercial production earlier this year. From this initial open pit, we see great potential for continued growth through mine life extension and expansion, which I will share with you on today's call. Given our more than 20-year exploration history and development track record in the country, we are confident of the value we can deliver to all stakeholders through the continued development of the Khundii Minerals District. Let me now share with you the highlights of our operating results for Q2 2026, as well as an overview of our growth plans for the balance of the year.

Speaker #4: We've established a foundation for that development by advancing the high-grade gold mine at Bayan Khundii to commercial production earlier this year. From this initial open pit, we see great potential for continued growth through mine life extension and expansion.

Speaker #4: Which I'll share with you on today's call. Given our more than 20-year exploration history and development track record in the country, we are confident in the value we can deliver to all stakeholders through the continued development of the Hundy Minerals District.

Speaker #4: Let me now share with you the highlights of our operating results for Q2 2026, as well as an overview of our growth plans for the balance of the year.

Speaker #4: We delivered strong performance in the second quarter, growing production and improving mining performance at the Bayan Hundy Gold Mine, co-owned with our strategic partner, Mongolian Mining Corporation.

Peter Akerley: We delivered strong performance in the second quarter, growing production and improving mining performance at the Bayan Khundii Gold Mine, co-owned with our strategic partner, Mongolian Mining Corporation. As you can see on slide 5, the mine produced nearly 12,000 ounces of gold in the second quarter, a 37% increase compared to Q1 2026. Ore feed grades were 2.4 grams per ton, a 25% improvement from Q1, largely due to the teams focused on improved mining efficiency, which I will describe in more detail on the coming slides. We continue to make tremendous progress as we work towards a feed grade of 3.5 grams per ton by year-end. The process plant has performed very well to date, operating at expected throughput and outperforming on gold recoveries.

Speaker #4: As you can see on slide 5, the mine produced nearly 12,000 ounces of gold in the second quarter, a 37% increase compared to Q1 2026.

Speaker #4: Our feed grades were 2.4 grams per ton, a 25% improvement from Q1, largely due to the team's focus on improved mining efficiency, which I'll describe in more detail on the coming slides.

Speaker #4: We continue to make tremendous progress as we work towards achieving a feed grade of 3.5 grams per ton by year-end. The process plant has performed very well to date, operating at expected throughput and outperforming on gold recoveries.

Speaker #4: The joint venture company has been generating strong operating cash flow, allowing for its first debt repayment in the past few weeks, and we have ample liquidity at the corporate level following our $29 million financing in Q1.

Peter Akerley: The joint venture company is generating strong operating cash flow, allowing for its first debt repayment in the past few weeks. We have ample liquidity at the corporate level following our CAD 29 million financing in Q1. At Zuun Mod, our large-scale molybdenum copper project, we remain on track to deliver a preliminary economic assessment in the next 60 days, which we expect to showcase the scale and economic potential of this asset. The broader molybdenum market is very robust, underpinned by strong demand and growth fundamentals. To that end, we have received offtake interest from several Asian counterparties, demonstrating the attractiveness of our project, given its proximity to key markets with growing demand. On the growth side, the Khundii Minerals District remains early in its discovery life. Our exploration and development teams are working on several opportunities to expand resources that could support mine life extensions and plant expansions.

Speaker #4: At Zunmad, our large-scale molybdenum-copper project, we remain on track to deliver a preliminary economic assessment in the next 60 days, which we expect to showcase the scale and economic potential of this asset.

Speaker #4: The broader molybdenum market is very robust, underpinned by strong demand and growth fundamentals. To that end, we have received off-take interest from several Asian counterparties, demonstrating the attractiveness of our project.

Speaker #4: Given its proximity to key markets with growing demand. On the growth side, the Hundy Minerals District remains early in its discovery life. Our exploration and development teams are working on several opportunities to expand resources that could support mine life extensions and plant expansions.

Speaker #4: I'll share those with you as we continue through today's presentation. As shown on slide 6, total plant throughput was 153,000 tons of ore at an average grade or at an average rate of 1682 tons per day.

Peter Akerley: I will share those with you as we continue through today's presentation. As shown on slide 6, total plant throughput was 153,000 tons of ore at an average rate of 1,682 tons per day or 94% of capacity during the second quarter. Gold recoveries have remained consistent every quarter at 96% since first production and in excess of our target of 93%. In total, Bayan Khundii produced 11,709 ounces of gold, 37% more than previous quarter. Since first gold was poured in September 2025, we have produced nearly 28,000 ounces of gold. Silver production in Q2 was just over 3,300 ounces, largely consistent with the prior quarter. Average realized prices were $4,493 per ounce of gold and $72 per ounce of silver. Turning to slide 7.

Speaker #4: Or 94% of capacity during the second quarter. Gold recoveries have remained consistent every quarter at 96% since first production, in excess of our target of 93%.

Speaker #4: In total, Bayan Khundii produced 11,709 ounces of gold, 37% more than the previous quarter, since first gold was poured in September 2025. We have produced nearly 28,000 ounces of gold.

Speaker #4: Silver production in Q2 was just over 3,300 ounces, largely consistent with the prior quarter. Average realized prices were $4,493 per ounce of gold and $72 per ounce of silver.

Speaker #4: Turning to slide 7, in Q2, the mining team moved 3.8 million tons of material, 19% more than in Q1. They mined 247,000 tons of ore at an average grade of 1.4 grams per ton.

Peter Akerley: In Q2, the mining team moved 3.8 million tons of material, 19% more than in Q1, mining 247,000 tons of ore at an average grade of 1.4 grams per ton. A 59% increase in ore volume compared to Q1. This is a result of multiple improvements across the mining effort, increasing experience in high-grade selective gold mining, greater precision in defining and mining the high-grade zones, improved blasting techniques and program design, and ore tracking using high-precision GPS have all led to improved efficiency and less dilution and loss. The front-end mobile crusher is now operating consistently, which has reduced stockpiling of oversized material containing relatively higher-grade ore.

Speaker #4: A 59% increase in ore volume compared to Q1. This is a result of multiple improvements across the mining effort: increasing experience in high-grade selective gold mining, greater precision in defining and mining the high-grade zones, improved blasting techniques and program design, and ore tracking using high-precision GPS.

Speaker #4: All of this has led to improved efficiency and less dilution and loss. The front-end mobile crusher is now operating consistently, which has reduced stockpiling of oversized material containing relatively higher-grade ore.

Speaker #4: Additionally, during the quarter and continuing into July, we continued to expand the pit laterally, generating low- to mid-grade material to position us to drive into higher-grade zones and achieve our target head grades of 3.5 grams per ton by year-end.

Peter Akerley: Additionally, during the quarter and continuing into July, we continued to expand the pit laterally, generating low- to mid-grade material to position us to drive into higher-grade zones and achieve target head grades of 3.5 grams per tonne by year-end, which should result in increased metal production and lower unit costs. At 30 June 2026, the mining fleet consisted of 18 dump trucks, five excavators, three dozers, and associated support equipment. While we are very pleased with the recent improvements in mining performance, we are also pursuing resource expansion opportunities near the mine. As seen on slide 8, our immediate focus is two areas adjacent to the Bayan Khundii mine. Khundii West, including Ulaan and Dark Horse, both have seen limited deep or expansion drilling, given our focus over the past few years on mine construction.

Speaker #4: This should result in increased metal production and lower unit costs. At June 30, 2026, the mining fleet consisted of 18 dump trucks, 5 excavators, 3 dozers, and associated support equipment.

Speaker #4: While we are very pleased with the recent improvements in mining performance, we are also pursuing resource expansion opportunities near the mine. As seen on slide 8, our immediate focus is two areas adjacent to the Bayan Hundy mine: Hundy West, including Ulan and Darkors. Both have seen limited deep or expansion drilling, given our focus over the past few years on mine construction.

Speaker #4: They are part of the same Bayan Hundy hydrothermal system and are expected to add ounces that will support mine life extension and potentially capacity expansion of the Bayan Hundy plant complex.

Peter Akerley: They are part of the same Bayan Khundii hydrothermal system and are expected to add ounces that will support mine life extension and potentially capacity expansion of the Bayan Khundii plant complex. At Dark Horse, we will be testing along the 3-kilometer strike length to expand the near-surface oxide resource for both CIP and possibly heap leach processing. Khundii West provides substantial upside to expand Bayan Khundii pit westward, laying the groundwork for a much larger pit. Initially, the pit will expand west from Bayan Khundii and, in the future, potentially incorporate both the Khuren Tsav and Ulaan resources, subject to agreement with Erdenes Alt, the entity that holds the narrow triangle of ground between the Khundii and Ulaan licenses. A 12,000-meter exploration program has been approved for H2 2026 that will focus on these targets.

Speaker #4: At Darkors, we will be testing a long, 3-kilometer strike length to expand the near-surface oxide resource for both CIP and possibly heap-leach processing. Hundy West provides substantial upside to expand the Bayan Hundy pit westward, laying the groundwork for a much larger pit.

Speaker #4: Initially, the pit will expand west from Bayan Hundy and, in the future, potentially incorporate both the Herensab and Ulan resources, subject to agreement with Erdenes Alt, the entity that holds the narrow triangle of ground between the Hundy and Ulan licenses.

Speaker #4: A 12,000-meter exploration program has been approved for the second half of 2026 that will focus on these targets. I'll now share with you some of the details of this program.

Peter Akerley: I will now share with you some of the details of this program. On slide 9, you can see a plan map on the left of the Bayan Khundii deposit expanding into Striker West and a section through that area on the right. The Striker West resource is now incorporated into a planned development by virtue of a revised pit reflecting current gold price. However, this area has seen limited close-spaced or expansion drilling, as can be seen in the section. The highlighted boxes are substantial mineralized zones, as reported in the table, and include significant zones outside of the defined resource and also the highest grade zone reported in the area, including intersections of 22 meters of 6 and 42 meters of 7 respectively.

Speaker #4: On slide 9, you can see a plan map on the left of the Bayan Hundy deposit expanding into Stryker West, and a section through that area on the right.

Speaker #4: The Stryker West resource is now incorporated into a planned development by virtue of a revised pit reflecting the current gold price. However, this area has seen limited close-spaced or expansion drilling, as can be seen in the section.

Speaker #4: The highlighted boxes are substantial mineralized zones, as reported in the table, and include significant zones outside of the defined resource and also the highest-grade zone reported in the area, including intersections of 22 meters of 6 and 42 meters of 7, respectively.

Speaker #4: A 9,000-meter drill program will commence in the coming weeks to provide the information necessary to improve confidence in the continuity of the high-grade zones and, in some instances, to bring new material into resources and reserves.

Peter Akerley: A 9,000-meter drill program will commence in the coming weeks to provide the information necessary to improve confidence in the continuity of the high-grade zones and, in some instances, to bring new material into resources and reserves. This program will allow for the development of final plans and design for the Striker West expansion later in the development of the Bayan Khundii mine. Discussions are also underway with Erdenes Alt, the Mongolian state-owned company that holds the narrow strip of land between the two licenses, focused on incorporating the resources of the Khuren Tsav license into a potential collaborative super pit.

Speaker #4: This program will allow for the development of final plans and design for the Stryker West expansion, later in the development of the Bayan Khundii mine.

Speaker #4: Discussions are also underway with Erdenes Alt, the Mongolian state-owned company that holds the narrow strip of land between the two licenses. These are focused on incorporating the resources of the Herensab license into a potential collaborative super pit. That development would drive into deeper resources than the current design in Stryker West, and the western extension of that pit would cross into our Ulan license, where we currently have a reported resource of 78,000 ounces of indicated and 38,000 ounces of inferred at a grade of 1.9 grams per ton at the 0.7 cutoff, with room for further expansion.

Peter Akerley: That development would drive into deeper resources than the current design in Striker West, and the western extension of that pit would cross into our Ulaan license, where we currently have a reported resource of 78,000 ounces of indicated and 38,000 ounces of inferred at a grade of 1.9 grams per tonne at the 0.7 cutoff, with room for further expansion. As shown on slide 10, just 2.5 kilometers north of Bayan Khundii is the Dark Horse area, host to the Dark Horse South Satellite Reserve, which currently hosts a 50,000-ounce high-grade gold deposit at surface. This deposit is positioned within a 3-kilometer mineralized trend with multiple adjacent gold mineralized structures exposed at surface, providing exceptional exploration potential, as highlighted in our March update and displayed on this slide.

Speaker #4: As shown on slide 10, just 2.5 kilometers north of Bayan Hundy is the Darkors area, host to the Darkors satellite reserve, which currently contains a 50,000-ounce high-grade gold deposit at surface.

Speaker #4: This deposit is positioned within a 3-kilometer mineralized trend, with multiple adjacent gold-mineralized structures exposed at surface, providing exceptional exploration potential, as highlighted in our March update and displayed on this slide.

Speaker #4: Highlights from that drilling included very high-grade, near-surface intercepts of 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.

Peter Akerley: Highlights from that drilling included very high-grade near-surface intercepts of 9.6 grams per tonne over 19 meters and 28.7 grams per tonne over 3 meters in areas expanding the limits of the resource. Grade control drilling is underway at Dark Horse South, supporting mine plans to bring this high-grade satellite deposit into the mill feed in H2 2027, ahead of the original year 3 sequencing in 2028. The addition of this very high-grade satellite deposit will provide the ability to deliver higher grades to the BK plant in 2027. At Dark Horse North, 500 meters north of the planned Dark Horse pit, the mineralized area spans 700 meters of strike length, with oxide material extending to 100 meters depth and hosting both high-grade material suitable for the CIP plant but also a substantial volume of lower-grade oxide material that appears amenable for feed to a potential heap leach development.

Speaker #4: Grade-controlled drilling is underway at Darkors South, supporting mine plans to bring this high-grade satellite deposit into the mill feed in H2 2027, ahead of the original Year 3 sequencing in 2028.

Speaker #4: The addition of this very high-grade satellite deposit will provide the ability to deliver higher grades to the BK plant in 2027. At Darkors North, 500 meters north of the plant and Darkors pit, the mineralized area spans 700 meters of strike length, with oxide material extending to 100 meters depth. This area hosts both high-grade material suitable for the CIP plant, as well as a substantial volume of lower-grade oxide material that appears amenable for feed to a potential heap-leach development.

Speaker #4: Continuing northeast of Darkors, the mineralized structure has been traced over an additional 1.7 kilometers at Alton Arrow. This area and adjacent structures to the south will be subject to a 3,000-meter drill program later this year, as shown on the plan map on slide 10.

Peter Akerley: Continuing northeast of Dark Horse, the mineralized structure has been traced over an additional 1.7 kilometers at Altan Nar. This area, and adjacent structures to the south, will be subject to a 3,000-meter drill program later this year, as shown on the plan map on slide 10. Altan Nar is at an earlier stage of exploration. However, the gold and silver-bearing shallow oxide zones are very encouraging, and it could provide additional resources to support the heap leach facility. Composites from Dark Horse are undergoing heap leach amenability testing at Blue Coast Research in British Columbia, with initial results indicating good recoveries to support the heap leach facility.

Speaker #4: Alton Arrow is at an earlier stage of exploration; however, the gold- and silver-bearing shallow oxide zones are very encouraging, and it could provide additional resources to support the heap leach facility.

Speaker #4: Composites from Darkors are undergoing heat-bleach amenability testing at Blue Coast Research and British Columbia, with initial results indicating good recoveries to support the heat-bleach facility.

Speaker #4: The Greater Darkors area is a large, under-explored portion of the BK complex that provides exceptional potential to continue to add ounces, extending mine life at the BK CIP plant, as well as a very real opportunity to expand production through the addition of a heap-leach facility.

Peter Akerley: The greater Dark Horse area is a large underexplored portion of the BK complex that provides exceptional potential to continue to add ounces, extending mine life at the BK CIP plant, as well as a very real opportunity to expand production through the addition of a heap leach facility. We have established cornerstone open pit reserves at Bayan Khundii and Dark Horse to support the initial mining period, and we have the related infrastructure to support an extension and expansion of the Bayan Khundii complex. With 10 kilometers of interconnected structures already mapped, the Bayan Khundii epithermal system is still in its exploratory life with excellent growth potential. As seen on slide 11, I would also like to remind everyone of the potential and plans for the Altan Nar deposit, located just 16 kilometers north of Bayan Khundii.

Speaker #4: We have established cornerstone open-pit reserves at Bayan Khundii and Darkhorse to support the initial mining period. We also have the related infrastructure to support an extension and expansion of the Bayan Khundii complex.

Speaker #4: With 10 kilometers of interconnected structures already mapped, the Bayan Khundii epithermal system is still in its exploratory life, with excellent growth potential. As seen on slide 11, I'd also like to remind everyone of the potential and plans for the Altan Arrow deposit.

Speaker #4: Located just 16 kilometers north of Bayan Hundy, the deposit hosts an indicated resource of 313,000 ounces at 2.16 grams per tonne gold and 15.7 grams per tonne silver, plus a further 210,000 ounces of inferred resources.

Peter Akerley: The deposit hosts an indicated resource of 313,000 ounces at 2.16 grams per ton gold and 15.7 grams per ton silver, plus a further 210,000 ounces of inferred resources. What makes this deposit particularly attractive is how shallow it is. Roughly 90% of the resource sits within 150 meters of surface and it remains open at depth. This gives us development flexibility. We can truck selected ore to our existing plant at Bayan Khundii, build a flotation plant on site to produce a concentrate or some combination of the two. With about 14% of the gold inventory at Altan Nar hosted in oxides, it is also a potential feed source for a proposed heap leach operation at Bayan Khundii. But the real story here is growth.

Speaker #4: What makes this deposit particularly attractive is how shallow it is. Roughly 90% of the resource sits within 150 meters of surface, and it remains open at depth.

Speaker #4: This gives us development flexibility. We can truck selected ore to our existing plant at Bayan Khundii, build a flotation plant on site to produce a concentrate, or use some combination of the two.

Speaker #4: And with about 14% of the gold inventory at Alton Arrow hosted in oxides, it's also a potential feed source for a proposed heap-leach operation at Bayan Khundii.

Speaker #4: But the real story here is growth. Today's resources are confined to just two zones, Union North and Discovery, with a mineralized corridor that runs 5.5 kilometers long and half a kilometer wide, with more than 20 targets identified along trend.

Peter Akerley: Today's resource is confined to just two zones, Union North and Discovery, with a mineralized corridor that runs 5.5 kilometers long and a half kilometer wide, with more than 20 targets identified along trend. The corridor has seen no exploration in the past several years given our focus on Bayan Khundii. Our 2026 metallurgical program is now complete with excellent results. We have an AI-based evaluation of the property underway with planning for a large-scale exploration program to be carried out in 2027. Altan Nar provides opportunity to expand existing resources and the optionality to develop a deposit that feeds high-grade material into an expanding gravity circuit at the Bayan Khundii plant, complementing the existing CIP plant and possible new heap leach plant.

Speaker #4: The corridor has seen no exploration in the past several years, given our focus on Bayan Khundii. Our 2026 metallurgical program is now complete, with excellent results.

Speaker #4: And we have an AI-based evaluation of the property underway, with planning for a large-scale exploration program to be carried out in 2027. Alton Arrow provides an opportunity to expand existing resources and the optionality to develop a deposit that feeds high-grade material into an expanding gravity circuit at the Bayan Hundy plant, complementing the existing CIP plant and possible new heap-leach plant.

Speaker #4: Taking into consideration the impact of higher metal prices, depletion of the Bayan Hundy pit in the first year, and recent drill results from Darkors, we recently updated the mineral resource estimates for the gold projects held by Erdene Mongol within the Hundy Minerals District.

Peter Akerley: Taking into consideration the impact of higher metal prices, depletion of the Bayan Khundii pit in the first year, and recent drill results from Dark Horse, we recently updated the mineral resource estimates for the gold projects held by Erdene Mongol within the Khundii Minerals District, which includes the Bayan Khundii deposit, Dark Horse deposit, Ulaan, and Altan Nar, as shown on slide 12. Considering that the operating cutoff grade for the Bayan Khundii plant is in the range of 0.7 grams per ton, it's most useful to look at the resources at that cutoff and consider the remaining low grade as stockpiled for future blending or as a potential feed for a heap leach facility. The table displayed summarizes the updated gold resources for the Erdene Mongol deposits.

Speaker #4: Which includes the Bayan Khundii deposit, Darkhor deposits, Ulaan, and Altan Arrow, as shown on slide 12. Considering that the operating cutoff grade for the Bayan Khundii plant is in the range of 0.7 grams per ton, it's most useful to look at the resources at that cutoff and consider the remaining low grade as stockpiled for future blending or as a potential feed for a heap-leach facility.

Speaker #4: The table displayed summarizes the updated gold resources for the Erdene Mongol deposits. It's important to recognize that while the Bayan Khundii and Darkhorse resources utilize actual cost, the other deposits will not translate to reserves equally.

Peter Akerley: It's important to recognize that while the Bayan Khundii and Dark Horse resources utilize actual cost, the other deposits will not translate to reserves equally. However, it provides a useful snapshot of the potential for mine life extension at Bayan Khundii. The global resource includes 835,000 ounces at 2.9 grams per ton and 9 grams per ton silver in the measured and indicated categories, with a further 265,000 ounces at 1.5 grams per ton inferred. We believe this strongly supports the ability to extend production life to in excess of 10 years. Beyond that, we have room for increased production through three key expansion paths, the CIP plant optimization, adding a gravity circuit, and potentially introducing heap leach processing as we continue to grow resources in the region. For 2026, we are targeting approximately 50,000 ounces of gold.

Speaker #4: However, it provides a useful snapshot of the potential for mine life extension at Bayan Hundy. The global resource includes 835,000 ounces at 2.9 grams per ton, and 9 grams per ton silver, in the measured and indicated categories, with a further 265,000 ounces at 1.5 grams per ton inferred.

Speaker #4: We believe this strongly supports the ability to extend production life to in excess of 10 years. Beyond that, we have room for increased production through three key expansion paths.

Speaker #4: The CIP plant optimization, adding a gravity circuit, and potentially introducing heat-bleach processing as we continue to grow resources in the region. For 2026, we are targeting approximately 50,000 ounces of gold, looking ahead.

Peter Akerley: Looking ahead, our objective is to reach the 3.5 gram per ton processing grade target by year-end and continue that into 2027 with grade enhancement brought into the mix with the development of Dark Horse. It's also important to note that Erdene holds a 5% NSR on all minerals produced from our licenses in the Khundii Minerals District once we reach 400,000 ounces of production. In September, our three large mineralized deposits and associated prospects in the Khundii Minerals District will be the subject of a Khundii Geo Symposium, which we are hosting in collaboration with the Canadian government in Mongolia. We are bringing together global experts and expect to generate new ideas and exploration approaches for the exploration of the district.

Speaker #4: Our objective is to reach the 3.5-gram-per-ton processing grade target by year-end and continue that into 2027, with grade enhancement brought into the mix with the development of Darkhorse.

Speaker #4: It's also important to note that Erdene holds a 5% NSR on all minerals produced from our licenses in the Hundy Minerals Districts once we reach 400,000 ounces of production.

Speaker #4: In September, our three large mineralized deposits and associated prospects in the Khundii Minerals District will be the subject of a Khundii Geosymposium, which we are hosting in collaboration with the Canadian government in Mongolia.

Speaker #4: We are bringing together global experts and expect to generate new ideas on exploration approaches for the district. We're confident that the exploration opportunities in the Bayan Hundy, Darkhorse, and Altan Arrow areas, combined with our history of exploration success in the region, support delivery of these ambitious but achievable goals.

Peter Akerley: We are confident that the exploration opportunities in the Bayan Khundii, Dark Horse, and Altan Nar areas, combined with our history of exploration success in the region, support delivery of these ambitious but achievable goals. We see the Bayan Khundii complex as the foundation for further discoveries in this vast and underexplored region, positioning it to underpin the long-term growth of our business. Now let me turn to Erdene's controlled exploration and development projects, in particular, the giant Zuun Mod molybdenum copper project. As shown on slide 13, Zuun Mod is one of Asia's largest undeveloped molybdenum copper deposits, located just 200 kilometers from China, the world's largest consumer of both of these critical metals. The deposit is exposed at surface and hosted within a much larger copper porphyry system.

Speaker #4: We see the Bayan Hundy complex as the foundation for further discoveries in this vast and under-explored region, positioning it to underpin the long-term growth of our business.

Speaker #4: Now, let me turn to Erdene's controlled exploration and development projects, in particular the giant zun mob molybdenum copper project. As shown on slide 13, zun mob is one of the one of Asia's largest undeveloped molybdenum copper deposits.

Speaker #4: Located just 200 kilometers from China, the world's largest consumer of both of these critical metals, the deposit is exposed at surface and hosted within a much larger copper porphyry system.

Speaker #4: We envision a low strip, large-scale, open-pit operation delivering molybdenum copper contracts of concentrates to the Asian market and one that can leverage the infrastructure we've already established in the Hundy Minerals District.

Peter Akerley: We envision a low strip, large scale, open pit operation delivering molybdenum copper concentrates to the Asian market and one that can leverage the infrastructure we have already established in the Khundii Minerals District. Against that backdrop, we are well advanced on the preliminary economic assessment. Mineral resources, mining, metallurgy, and marketing studies are substantially complete, with process engineering, power infrastructure, and modeling work underway. We expect to deliver the PEA in mid H2. We see this study as a major opportunity to surface the value of Zuun Mod for Erdene shareholders. As shown on slide 14, Zuun Mod looks set to come online in an environment of tight supply and increasing demand.

Speaker #4: Against that backdrop, we are well advanced on the preliminary economic assessment. Mineral resources, mining, metallurgy, and marketing studies are substantially complete. With process engineering, power infrastructure, and modeling work underway, we expect to deliver the PEA in mid-H2.

Speaker #4: We see this study as a major opportunity to surface the value of Zuun Mod for Erdene shareholders. As shown on Slide 14, Zuun Mod looks set to come online in an environment of tight supply and increasing demand.

Speaker #4: Given molybdenum's use in specialty steels for energy, defense, and construction, and emerging use cases in the computer chip industry—including as a replacement for tungsten—prices have increased significantly over the past two years and have stabilized above US$30 per pound over the past six months.

Peter Akerley: Given molybdenum's use in specialty steels for energy, defense, and construction, and emerging use cases in the computer chip industry, including tungsten replacement, prices have increased significantly over the past two years and have stabilized above US $30 a pound over the past six months. At this price level, Zuun Mod is a very attractive project, further supported by its location only 200 kilometers from the world's largest molybdenum consumer. The timing is compelling. Several of China's moly mines are approaching end of life, and the resulting supply deficit, combined with growing demand, is supporting historically strong molybdenum prices. The other projects in our portfolio include the Khuvyn Khar copper prospect and the Tereg Uul property in the Oyu Tolgoi district. Khuvyn Khar, 4.5 kilometers northwest of the Zuun Mod project, is a high-grade copper discovery.

Speaker #4: At this price level, Zuun Mod is a very attractive project, further supported by its location only 200 kilometers from the world's largest molybdenum consumer.

Speaker #4: The timing is compelling. Several of China's moly mines are approaching end of life, and the resulting supply deficit, combined with growing demand, is supporting historically strong molybdenum prices.

Speaker #4: The other projects in our portfolio include the Hovenhar copper prospect and the Teragoul property in the Oyutogoy District. Hovenhar, 4.5 kilometers northwest of the Zuun Mod project, is a high-grade copper discovery.

Speaker #4: We have engaged Quantek Geoscience, a global leader in geophysics, to conduct an extensive survey starting in late Q3 that will provide deeper targets for follow-up.

Peter Akerley: We have engaged Quantec Geoscience, a global leader in geophysics, to conduct an extensive survey starting in late Q3 that will provide deeper targets for follow-up as we seek to build on the intersection of the 30 meters of 1.25% copper we reported earlier this year. At Tereg Uul, just 10 kilometers from the Oyu Tolgoi mine, which is on track to be the fourth largest globally by the end of the decade, we recently wrapped up our maiden drill program. This 11-hole, 2,700-meter program was a success, with eight of nine shallow holes at the web prospect intersecting gold mineralization, outlining a 1.5-kilometer trend, and a deeper hole in the central part of the license intersecting native copper in a propilitic alteration zone. On the basis of these results, Erdene extended its option to acquire up to 80% of the license for another year in July.

Speaker #4: As we seek to build on the intersection of the 30 meters of 1.25% copper we reported earlier this year at Teragoul, just 10 kilometers from the Oyu Tolgoi mine—which is on track to be the fourth largest globally by the end of the decade—we recently wrapped up our maiden drill program.

Speaker #4: This 11-hole, 2,700-meter program was a success, with 8 of 9 shallow holes at the Web prospect intersecting gold mineralization, outlining a 1.5-kilometer trend, and a deeper hole in the central part of the license intersecting native copper in a propylitic alteration zone.

Speaker #4: On the basis of these results, Erdene extended its option to acquire up to 80% of the license for another year in July. While these projects are at an earlier stage, they have tremendous value-creation potential for Erdene's shareholders.

Peter Akerley: While these projects are at an earlier stage, they have tremendous value creation potential for Erdene shareholders. In summary, the Bayan Khundii complex is our foundation, but the vast exploration pipeline in the Khundii Minerals District is our future. Expansion of the gold exploration targets held by Erdene Mongol and advancing our Zuun Mod, Khuvyn Khar, and Tereg Uul projects provides significant opportunities for mine life extension and optimization, along with new discoveries that would create sustained value for our shareholders. Now I'd like to turn the call over to Bob to provide financial highlights for the quarter. Bob?

Speaker #4: In summary, the Bayan Khundii complex is our foundation, but the vast exploration pipeline in the Khundii Minerals District is our future. Expansion at the gold exploration targets held by Erdene Mongol, and advancing our Zuun Mod, Ulaan Khud, and Terguun projects provide significant opportunities for mine life extension and optimization, along with new discoveries that would create sustained value for our shareholders.

Speaker #4: Now, I'd like to turn the call over to Bob to provide financial highlights for the quarter. Bob?

Speaker #2: Thank you, Peter. Moving to slide 16, let me provide the financial highlights for the quarter ended June 30, 2026. Before getting into the details of Erdene's financial results, a reminder to everyone on the call that Erdene's investment in Bayan Khundii is held through a 50% joint venture stake in the Mongolian company Erdene Mongol LLC.

Robert Jenkins: Thank you, Peter. Moving to slide 16, let me provide the financial highlights for the quarter ended 30 June 2026. Before getting into the details of Erdene's financial results, a reminder to everyone on the call that Erdene's investment in Bayan Khundii is held through a 50% joint venture stake in the Mongolian company, Erdene Mongol LLC. Included on this slide are financial excerpts representing 100% of the joint venture operations for Erdene Mongol, as well as the consolidated results for Erdene Resource Development, representing our proportionate share of Erdene Mongol performance and our corporate operations. All figures are in Canadian dollars unless otherwise noted. Starting with Erdene Mongol. in Q2, the business generated US $53 million of revenue on sales of nearly 12,000 ounces of gold and over 3,300 ounces of silver at average sale prices of US $4,493 and US $72 per ounce respectively, or CAD 75 million.

Speaker #2: Included on the slide are financial excerpts representing 100% of the joint venture operations for Erdene Mongol, as well as a consolidated result for Erdene Resource Development, representing our proportionate share of Erdene Mongol's performance and our corporate operations.

Speaker #2: All figures are in Canadian dollars unless otherwise noted. Starting with Erdene Mongol, in Q2, the business generated US$53 million of revenue on sales of nearly 12,000 ounces of gold and over 3,300 ounces of silver, at average sale prices of US$4,493 and US$72 per ounce, respectively.

Speaker #2: Or 75 million Canadian dollars. Revenues were 32% higher in Q2 than in Q1, reflecting higher sales volumes despite modestly lower metal prices. Total cost of revenue for the quarter was US$24 million, or C$33 million, approximately US$2,000 per ounce sold.

Robert Jenkins: Revenues were 32% higher in Q2 than in Q1, reflecting higher sales volumes despite modestly lower metal prices. Total cost of revenue for the quarter was US $24 million or CAD 33 million, approximately US $2,000 per ounce sold. Given minimal sustaining capital expenditures in the period, as we are within the first year of operations, all in sustaining costs are not materially different from this figure. Overall cost per ounce were approximately 20% lower than in Q1, given the increase in production and improvements in mining efficiency that Peter's outlined earlier. Erdene Mongol ended the quarter with US $40 million of cash, and the project debt was approximately US $120 million or CAD 175 million. Subsequent to quarter end, the business made a US $10 million debt repayment on the project's fully drawn $50 million working capital facility.

Speaker #2: Given minimal sustaining capital expenditures in the period, as we are within the first year of operations, all unsustaining costs are not materially different from this figure.

Speaker #2: Overall cost per ounce was approximately 20% lower than in Q1, given the increase in production and improvements in mining efficiency that Peters outlined earlier.

Speaker #2: Erdene Mongol ended the quarter with US$40 million of cash, and the project debt was approximately US$120 million, or C$175 million. Subsequent to quarter-end, the business made a US$10 million debt repayment on the project's fully drawn US$50 million working capital facility.

Speaker #2: With the mine generating cash, capital allocation priorities will be to pay down the project’s debt while investing in the expansionary exploration programs described by Peter earlier.

Robert Jenkins: With the mine generating cash, capital allocation priorities will be to pay down the project's debt while investing in the expansionary exploration programs described by Peter earlier. Turning to Erdene's consolidated financial performance in Q2, our share of income from Erdene Mongol totaled CAD 11.2 million, 60% ahead of Q1, reflecting the higher sales and lower unit cost, partially offset by lower gold prices. For Q2 2026, exploration and evaluation expenses for Erdene Resource Development represented work by our team on controlled properties totaled just over CAD 700,000, compared to CAD 900,000 for the three months ended 31 March 2026. The quarter-over-quarter reduction was primarily due to the timing of payments under the corporation's incentive compensation program to technical staff, partially offset by increased activity associated with exploration at Tereg Uul.

Speaker #2: Turning to Erdene's consolidated financial performance in Q2, our share of income from Erdene Mongol totaled $11.2 million, 60% ahead of Q1, reflecting higher sales and lower unit costs, partially offset by lower gold prices.

Speaker #2: For Q2 2026, exploration and evaluation expenses for Erdene Resource Development, representing work by our team on controlled properties, totaled just over $700,000, compared to $900,000 for the three months ended March 31, 2026.

Speaker #2: The quarter-over-quarter reduction was primarily due to the timing of payments under the corporation's incentive compensation program to technical staff, partially offset by increased activity associated with exploration at Teragoul.

Speaker #2: Corporate and administrative expenses representing Erdene's public company costs totaled $1.6 million in Q2 2026, compared to $1.6 million in Q1 2026. The quarter-over-quarter change is primarily due to increased marketing and investor relations efforts, as well as costs associated with the company's annual general meeting, which took place in May.

Robert Jenkins: Corporate and administrative expenses representing Erdene's public company costs totaled CAD 1.6 million in Q2 2026 compared to CAD 1.6 million in Q1 2026. The quarter-over-quarter change is primarily due to increased marketing and investor relations efforts, as well as costs associated with the company's annual general meeting, which took place in May. In total, Erdene generated net income of CAD 10 million or CAD 0.15 per share in the second quarter, compared to CAD 4.8 million or CAD 0.07 a share in the first quarter. Erdene ended the quarter with CAD 28 million of corporate cash, an ample liquidity position to grow the business in the period till we see returns of capital from our investment in Erdene Mongol. On 30 June, the company launched a normal course issuer bid, allowing for the buyback of up to 10% of the company's free trading stock.

Speaker #2: In total, Erdene generated net income of $10 million, or $0.15 per share in the second quarter, compared to $4.8 million, or $0.07 per share in the first quarter.

Speaker #2: Erdene entered the quarter with $28 million of corporate cash—an ample liquidity position to grow the business in the period until we see returns of capital from our investment in Erdene Mongol.

Speaker #2: On June 30, the company launched a normal course issuer bid, allowing for the buyback of up to 10% of the company's free-trading stock.

Speaker #2: Since that date, Erdene has bought back and canceled almost 100,000 shares at an average price of $5.20 per share. We believe the market price of our shares may, at certain times, not reflect the inherent value of the company, and we will selectively repurchase as we see this as an efficient use of capital to increase shareholder value.

Robert Jenkins: Since that date, Erdene has bought back and canceled almost 100,000 shares at an average price of CAD 5.20 per share. We believe the market price of our shares may at certain times not reflect the inherent value of the company, and we will selectively repurchase as we see this as an efficient use of capital to increase shareholder value. This concludes the review of our financial performance for the second quarter. I'll turn the call back to Peter.

Speaker #2: This concludes the review of our financial performance for the second quarter. I'll turn the call back to Peter.

Speaker #1: Thank you, Bob. Turning to slide 17, the health and safety of our employees, contractors, and local communities is a top priority and the core foundation of our operational success.

Peter Akerley: Thank you, Bob. Turning to slide 17. The health and safety of our employees, contractors, and local communities is a top priority and the core foundation of our operational success. At the end of Q2 2026, there were 565 staff and contractors on site, with a total of 520,000 person-hours worked during the quarter. The 12-month rolling average lost time injury frequency rate was 2 per million person-hours. While a respectable result, we will continually strive towards zero. Zero reportable environmental incidents did occur during the quarter. Environmental management efforts remain focused on mitigating potentially adverse impacts and advancing environmental protection activities, such as the endemic vegetation trials at the 2-hectare plantation at the Bayan Khundii mine. One of our ongoing community initiatives is our operator training program, conducted in partnership with Mongolian Mining Corporation and focused on local employment.

Speaker #1: At the end of Q2 2026, there were 565 staff and contractors on site, with a total of 520,000 person-hours worked during the quarter. The 12-month rolling average lost time injury frequency rate was 2 per million person-hours. While this is a respectable result, we will continually strive towards zero.

Speaker #1: Zero reportable environmental incidents occurred during the quarter. Environmental management efforts remained focused on mitigating potentially adverse impacts and advancing environmental protection activities, such as the endemic vegetation trials at the two-hectare plantation at the Bayan Khundii mine.

Speaker #1: One of our ongoing community initiatives is our operator training program, conducted in partnership with Mongolian Mining Corporation and focused on local employment. More than 180 residents of Bayan Hongor Province have taken part in a classroom and hands-on program at MMC's UHG mining complex over the past two years, with many of those joining the Bayan Hundy mining team.

Peter Akerley: More than 180 residents of Bayankhongor province have taken part in a classroom and hands-on program at MMC's UHG mining complex over the past 2 years, with many of those joining the Bayan Khundii mining team. Erdene Mongol has also been actively supporting community partnership initiatives. Over the past several weeks, the team sponsored the annual Naadam Festival in Shinejinst, the nearest community to Bayan Khundii. Erdene Mongol has also recently awarded scholarships to over 50 local youngsters, investing in the education of our community. As outlined on slide 18, our key deliverables for 2026 reflect our commitment to value creation and support of our long-term plan to develop a multi-mine, multi-commodity district. Bayan Khundii is rapidly establishing itself as a reliable, steady-state gold producer. This strong operational foundation generates consistent cash flow while enabling us to execute targeted exploration programs across our portfolio.

Speaker #1: Erdene Mongol has also been actively supporting community partnership initiatives. Over the past several weeks, the team sponsored the annual NADEM Festival in Shinejinst, the nearest community to Bayan Khundii, and Erdene Mongol has also recently awarded scholarships to over 50 local youngsters, investing in the education of our community.

Speaker #1: As outlined on slide 18, our key deliverables for 2026 reflect our commitment to value creation and support our long-term plan to develop a multi-mine, multi-commodity district.

Speaker #1: Bayan Khundii is rapidly establishing itself as a reliable, steady-state gold producer. This strong operational foundation generates consistent cash flow while enabling us to execute targeted exploration programs across our portfolio.

Speaker #1: This work, in turn, is paving the way toward our longer-term goal of expanding production and extending mine life beyond 10 years, while the first half of 2026 was highly productive.

Peter Akerley: This work, in turn, is paving the way towards our longer-term goal of expanding production and extending mine life beyond 10 years. While H1 2026 was highly productive, our H2 will deliver several major catalysts, including continued improvement of grade and production, targeting 3.5 grams as we move through year end into 2027. Preparation to accelerate the Dark Horse deposit for 2027 mining and continued expansion of the adjacent resources to support both CIP and potentially heap leach. Exploration and potential partner developed to expand westward at Bayan Khundii, leading to an enhanced mine plan. The delivery of the Zuun Mod PEA alongside exploration results in the adjacent copper targets. As we reach each of these goals, we expect to unlock substantial incremental value for shareholders.

Speaker #1: Our second half will deliver several major catalysts, including continued improvement of grade and production, targeting 3.5 grams as we move through year-end 2027.

Speaker #1: Preparation to accelerate the Dark Horse deposit for 2027 mining and continued expansion of the adjacent resources, to support both CIP and potentially heap leach.

Speaker #1: Expiration and potential partner-developed plans to expand westward at Bayan Khundii, leading to an enhanced mine plan. In the delivery of the Zuun Mod PEA, alongside exploration results in the adjacent copper targets.

Speaker #1: As we reach each of these goals, we expect to unlock substantial incremental value for shareholders. In closing, I believe we are well positioned to deliver on these objectives and create value for shareholders and stakeholders alike.

Peter Akerley: In closing, I believe we are well positioned to deliver on these objectives and create value for shareholders and stakeholders alike. With that, I will hand it back to the operator to begin the Q&A session. Thank you.

Speaker #1: With that, I'll hand it back to the operator to begin the Q&A session. Thank you.

Speaker #3: As a reminder, to join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal the operator by pressing star then zero.

Operator: As a reminder, to join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then 0. Participants on the webcast may type their questions in the chat feature of the webcast. Your first question comes from Hanif Jamal with HJamal Holdings. Your line is now open.

Speaker #3: Participants on the webcast may type their questions in the chat feature of the webcast. Your first question comes from Hanif Jamal with HJamalHolding. Your line is now open.

Speaker #4: Hi, guys. This is a question for Bob. Congrats on the ramp-up—it looks like it's going well. Question for you: Did you say that your all-in sustaining costs are around $2,000 an ounce for this quarter?

[Analyst] (HJamal Holdings): Hi, guys. This is Ahmed. This is a question for Bob. Congrats on the ramp-up. It looks like it is going well. Question for you, did you say that your all-in sustaining costs are around $2,000 an ounce for this quarter?

[Analyst]: Hi, guys. This is Ahmed. This is a question for Bob. Congrats on the ramp-up. It looks like it is going well. Question for you, did you say that your all-in sustaining costs are around $2,000 an ounce for this quarter?

Speaker #2: That's correct.

Robert Jenkins: That is correct.

Speaker #4: Okay. And then your cost of revenue, $33 million—do you see that staying stable into Q3 and Q4 of this year?

[Analyst] (HJamal Holdings): Okay. Your cost of revenue is $33 million. Do you see that staying stable into Q3 and Q4 of this year?

[Analyst]: Okay. Your cost of revenue is $33 million. Do you see that staying stable into Q3 and Q4 of this year?

Speaker #2: We expect that to come down as we look to the back half of the year ahead. And really, I mean, it’s as simple as a significant portion of the cost in the business would be fixed.

Robert Jenkins: We expect that to come down as we look to the back half of the year, Hanif.

[Analyst] (HJamal Holdings): Yeah.

[Analyst]: Yeah.

Robert Jenkins: Really, a significant portion of the cost in the business would be fixed, and the grade has been a little bit below where we expect to be. Once we get close to that 3.5 that Peter mentioned as our target, we expect to see the AISC end up in the range of about $1,500 per ounce US if we are able to see those improvements.

Speaker #2: And the grade has been a little bit below where we expect to be. Once we get closer to that 3.5 that Peter mentioned as our target, we expect to see the ASIC end up in the range of about $1,500 per ounce US if we're able to see those improvements.

Speaker #4: Got it. Okay, thanks. I have no more questions.

[Analyst] (HJamal Holdings): Got it. Okay. Thanks. I have no more questions.

[Analyst]: Got it. Okay. Thanks. I have no more questions.

Speaker #2: Thank you.

Robert Jenkins: Thank you.

Speaker #3: Your next question comes from Don McLean with Paradigm Capital. Your line is now open.

Operator: Your next question comes from Don McLean with Paradigm Capital. Your line is now open.

Speaker #1: Oh, good morning, guys. Yeah, good progress in the second quarter. Peter, just a couple of questions on the current operations. I actually have some others as well, but I'll just focus on the current operations for the moment.

Don McLean: Oh, good morning, guys. Yeah. Good progress in the second quarter. Peter, just a couple of questions on the current operations. I actually have some others as well, but I will just focus on the current operations for the moment. The grade outlook, you said you are targeting 3.5 grams by year-end. Do you think that is kind of the stable, steady-state grade that you can maintain at the project?

Don MacLean: Oh, good morning, guys. Yeah. Good progress in the second quarter. Peter, just a couple of questions on the current operations. I actually have some others as well, but I will just focus on the current operations for the moment. The grade outlook, you said you are targeting 3.5 grams by year-end. Do you think that is kind of the stable, steady-state grade that you can maintain at the project?

Speaker #1: The grade outlook—you said you're targeting 3.5 grams by year-end. Do you think that's kind of the stable, steady-state grade that you can maintain at the project?

Speaker #2: So maybe to start with the core resource, Don, you know, when we look at Dark Horse and Bayan Khundii combined, we have about a 0.7 cutoff, around a 4.5 gram average grade, at a 0.7 cutoff.

Peter Akerley: So maybe to start with the core resource, Don. When we look at Dark Horse and Buenavente combined, we have at a 0.7 cut-off, around a 4.5 gram average grade at a 0.7 cut-off. If you factor in dilution, you can get down into that 4 gram range. So factoring or targeting 3.5 grams, I think is achievable by year-end. One of the key elements that could influence that and perhaps enhance it is the acceleration of the Dark Horse development next year. As you know, we have a very high grade super gene satellite deposit that we are now looking to bring on earlier, and if that comes into the mix by mid-year, then we could see that 3.5 gram improved upon. But I feel comfortable with that target.

Speaker #2: If you factor in dilution, you know, you can get down into that 4-gram range. So, factoring or targeting 3.5 grams, I think, is achievable by year-end.

Speaker #2: One of the key elements that could influence that, and perhaps enhance it, is the acceleration of the Dark Horse development next year. As you know, we have a very high-grade supergene satellite deposit that we're now looking to bring on earlier.

Speaker #2: And if that comes into the mix by mid-year, then we could see that 3.5 gram improved upon. But I feel comfortable with that target. We've seen great strides in both the dilution control and our engineers and geology teams getting a better handle on pit sequencing.

Peter Akerley: We have seen great strides in both the dilution control and our engineers and geology teams getting a better handle on pit sequencing. I think just moving dirt in the right time and place is a critical part of this as well. But yeah, I feel confident with those targets.

Speaker #2: I think just moving dirt at the right time and place is a critical part of this as well. But yeah, I feel confident with those targets.

Speaker #1: So, when we go back to the reserve model reconciliation, how do you feel now? You know, that exercise during a feasibility study is always somewhat academic—it becomes very different when you're actually trying to chase narrow structures in a pit.

Don McLean: So when we go back to the reserve model reconciliation, how do you feel now about that exercise during a feasibility study is often somewhat academic. It becomes very different

Don MacLean: So when we go back to the reserve model reconciliation, how do you feel now about that exercise during a feasibility study is often somewhat academic. It becomes very different

Peter Akerley: Yeah

Don McLean: when you are actually trying to chase narrow structures in a pit, at substantial volumes. How is the reconciliation working out, not just in terms of ounces and grade, but just the internal dilution versus the blasted dilution?

Don MacLean: when you are actually trying to chase narrow structures in a pit, at substantial volumes. How is the reconciliation working out, not just in terms of ounces and grade, but just the internal dilution versus the blasted dilution?

Speaker #1: At substantial volumes, how is the reconciliation working out—not just in terms of ounces and grade, but the internal dilution versus the blasted dilution?

Speaker #2: Yeah, so it's taken a while to get to the point where we're comfortable with the grade control models reflecting mining, but I'd say just in the last month or so, we're seeing those start to line up.

Peter Akerley: Yeah. It has taken a while to get to the point where we are comfortable with the grade control models reflecting mining, but I would say just in the last month or so, we are seeing those start to line up. Early on with the amount of dilution we were underperforming significantly, in terms of delivering what was reported in the mine to the mill. But in the last few months, that has flipped with us overachieving. We are working with the modelers and the engineers to refine those grade control models further. I would say just in the last few weeks, they are starting to line up. It has taken a bit of a back and forth amongst the modelers, geologists, and the mill reported grades, but it is coming into line now.

Speaker #2: I mean, early on, with the amount of dilution, we were underperforming significantly in terms of delivering what was reported in the mine to the mill.

Speaker #2: But in the last few months, that has flipped, with us overachieving. So we're working with the modelers and the engineers to refine those grade control models further.

Speaker #2: And I'd say just in the last few weeks, they're starting to line up. So it's taken a bit of back and forth amongst the modelers, geologists, and the mill-reported grades.

Speaker #2: But it's coming into line now. Shifting into the dilution side, I would guess we were in that 30 to 40 percent range for the first few months.

Peter Akerley: Shifting into the dilution side, I would guess we were in that 30% to 40% range for the first few months and getting down into that 20% or less range today. Ultimately, our target is to be closer to 10%, but that is also headed in the right direction. Still work to do, but yeah, it is lining up. The resource estimate that we did for Buenavente most recently used a vein type model as opposed to intrusive type model, and it came in about 10% less overall when you look at the lower grade cut-off. But the high grade core remains intact, and that is at the 0.7 or higher level. Yeah, hopefully that answers your question, but let me know if I missed anything in there.

Speaker #2: And getting down into that 20 percent or less range today. Ultimately, our target is to be closer to 10 percent, but that's also headed in the right direction.

Speaker #2: Still work to do, but yeah, it's lining up. The resource estimate that we did for Bayan Hundy most recently used a vein-type model, as opposed to an intrusive-type model.

Speaker #2: And it came in about 10 percent less overall when you look at the lower-grade cutoff. But the high-grade core remains intact, and that's at the 0.7 or higher level.

Speaker #2: So, yeah, hopefully that answers your question, but let me know if I missed anything in there.

Speaker #1: But overall, the ounces are there, and the grade is what was originally expected once you look through the mining dilution. The original model, I guess, never—yeah.

Don McLean: But overall, the ounces are there and the grade from what was originally expected once you look through the mining dilution.

Don MacLean: But overall, the ounces are there and the grade from what was originally expected once you look through the mining dilution.

Peter Akerley: Yeah, that is right.

Don McLean: I guess every. Yeah.

Don MacLean: I guess every. Yeah.

Speaker #2: Yeah. So today, as we look at the grade delivered by the mine and reported in the mill, it's starting to line up. So that verifies the model we're using to determine those block grades being delivered to the mill.

Peter Akerley: Yeah. Today, as we look at the grade delivered by the mine and reported in the mill is starting to line up, so that verifies the model we are using to determine those block grades being delivered to the mill.

Speaker #1: Great. Great. And then, you know, just specific to the mill, because the recovery’s been terrific. You’re at 6% below rated capacity.

Don McLean: Great. Just specific to the mill, because the recovery has been terrific. You are at 6% below rated capacity. What we often see with mills is they are actually able to run at higher than rated capacity once the mine is able to deliver the volume. The mine can usually deliver more than the mill can handle, or they bury the mill as they like to call it. This is more selective mining. Do you think the mill has the capacity to run at higher than rated capacity based on what you have seen? Or will it always be constrained by the ability of the mine to deliver the kind of grade that you want to see?

Don MacLean: Great. Just specific to the mill, because the recovery has been terrific. You are at 6% below rated capacity. What we often see with mills is they are actually able to run at higher than rated capacity once the mine is able to deliver the volume. The mine can usually deliver more than the mill can handle, or they bury the mill as they like to call it. This is more selective mining. Do you think the mill has the capacity to run at higher than rated capacity based on what you have seen? Or will it always be constrained by the ability of the mine to deliver the kind of grade that you want to see?

Speaker #1: What we often see with mills is they are actually able to run at higher than rated capacity. Once the mine is able to deliver the volume, the mine can usually deliver more than the mill can handle.

Speaker #1: Or they bury the milling, as they like to call it. But this is more selective mining. Do you think the mill has the capacity to run at higher than rated capacity, based on what you've seen?

Speaker #1: Or will it always be constrained by the ability of the mine to deliver the kind of grade that you want to see?

Speaker #2: I don't see a constraint on delivery of ore as we get to, you know, this higher level of efficiency that we've just talked about.

Peter Akerley: I do not see a constraint on delivery of ore as we get to this higher level of efficiency that we just talked about. The plant is designed for a maximum capacity of about 1950 ton per day, and we have always looked at our targeted throughput at about 92% of that. That gets you up, I think, into the mid 1750 ton per day, a little higher. The reported throughput, as you would have seen in today's announcement was, I think it was 1686. So a little lower than what our target is, but that does not account for the days of shutdown as we started things up. We had, I think, a 3 or 4-day shutdown. On a daily basis, we are exceeding that 1780 or that 92% of maximum throughput. So yeah, I do feel steady state, we can get up a little higher than where we are today.

Speaker #2: The plant is designed for a maximum capacity of about 1,950 tons per day, and we've always kind of looked at our targeted throughput at about 92% of that.

Speaker #2: So, that gets you up, I think, into the mid-1,750—sort of 1,750 tons per day. A little higher. The reported throughput, as you would have seen in today's announcement, was—I think it was 1,686.

Speaker #2: So, a little lower than what our target is. But that doesn't account for the days of shutdown as we started things up. You know, we had, I think, a three- or four-day shutdown.

Speaker #2: On a daily basis, we are exceeding that 1,780 or that 92 percent of maximum throughput. So yeah, I do feel at steady state we can get up a little higher than where we are today.

Speaker #2: I'd also point out, from a conservative perspective, that you're always going to have softer rock in the upper benches, which is where we've been.

Peter Akerley: I'd also point out from a conservative perspective, that you're always going to have softer rock in the upper benches, which is where we've been. As we get deeper into this mine, we could see somewhat harder rock that would probably keep you closer to our target. Just a little bit more detail around the throughput.

Speaker #2: So, as we get deeper into this mine, we could see somewhat harder rock that would probably keep you closer to our target. But, yeah, just a little bit more detail around the throughput.

Speaker #1: Sure, yeah, that makes sense. That's great. Okay, so onwards and upwards. I have some other questions about the future, but I'll pass it back to the operator in case somebody else has questions.

Don McLean: Sure. Yeah, that makes sense. That's great. Okay, onwards and upwards. I have some other questions about the future, but I'll pass it back to the operator in case somebody else has some questions.

Don MacLean: Sure. Yeah, that makes sense. That's great. Okay, onwards and upwards. I have some other questions about the future, but I'll pass it back to the operator in case somebody else has some questions.

Speaker #3: Yeah, I don't know if there are questions from the telephone. I'll now pass the call over to John Vincic to ask management the questions that have come in from email and on the webcast.

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

Speaker #3: Please go ahead, John.

Speaker #4: Thank you, operator. Peter, I'll give you a question from the webcast before you go back to Dawn for his follow-ups. The script mentions the heap leach opportunity several times.

Moderator: Thank you, operator. Peter, I'll give you a question from the webcast before you go back to Don for his follow-ups. The script mentions the heap leach opportunity several times. Dark Horse, North Altan Nar, Altan Nar oxides, the low-grade stockpiles. What are the decision gates and rough timelines to sanctioning this, and what did the Blue Coast results actually show?

[Company Representative] (Erdene): Thank you, operator. Peter, I'll give you a question from the webcast before you go back to Don for his follow-ups. The script mentions the heap leach opportunity several times. Dark Horse, North Altan Nar, Altan Nar oxides, the low-grade stockpiles. What are the decision gates and rough timelines to sanctioning this, and what did the Blue Coast results actually show?

Speaker #4: Dark Horse North, Altan Arrow, Altan Nar oxides, the low-grade stockpiles—what are the decision gates and rough timelines to sanctioning this? And what did the Blue Coast results actually show?

Speaker #2: Mm-hmm. So, you know, maybe just to back up a little bit on Mongolia in general, there are half a dozen heap leach gold operations in Mongolia that are operating today.

Peter Akerley: Maybe just to back up a little bit on Mongolia in general, there are half a dozen heap leach gold operations in Mongolia that are operating today. In fact, one, I think about 100 and some kilometers to the west of us. So it is a proven technology. We often get asked about cold weather climates for heap leach, but a number of viable operations in country, and therefore a number of experienced operators in the heap leach industry and country. When we first went into the Bayan Khundii district or the Khundii district, we did not expect to see the depth of oxidation we see today. We are seeing it now at each of our project areas. Dark Horse has been the one we focused on the most, given that that entire 50,000 ounces of 7 grams sits in an oxidized super gene. So we began to step out from that.

Speaker #2: In fact, there's one I think about 100-and-some kilometers to the west of us. So, it is sort of a proven technology. We often get asked about cold weather climates for heap leach.

Speaker #2: But there are a number of viable operations in-country, and therefore, a number of experienced operators in the heap leach industry in-country. When we first went into the Bayan Khundii district, or the Khundii district, we didn't expect to see the depth of oxidation we see today.

Speaker #2: And we're seeing it now at each of our project areas. Dark Horse has been the one we've focused on the most, given that the entire 50,000 ounces at 7 grams sits in an oxidized supergene.

Speaker #2: So we began to step out from that. We see Dark Horse, Altan, and Arrow—that 3-kilometer trend—as the key delivery of ounces for a heap leach.

Peter Akerley: We see Dark Horse, Altan Nar, that 3-kilometer trend as the key delivery of ounces for a heap leach. What we would like to see is economic viability utilizing that as the resource base. We do have, as I have mentioned, multiple sources for additional oxide from the other projects, and we also have the low-grade stockpile that is growing at Bayan Khundii that will not give as high a recovery as we see in the oxides, but we are still seeing in the range of 50% recoveries from that, 0.7 and less material at Bayan Khundii. So another potential source. So I feel like after we get this drilling done in Q4, we will update the resource again and be targeting somewhere around 100,000 ounces as a baseline to justify the startup of a moderate size heap leach facility.

Speaker #2: And what we'd like to see is economic viability utilizing that as the resource base. We do have, as I've mentioned, multiple sources for additional oxide from the other projects.

Speaker #2: And we also have the low-grade stockpile that's growing at Bayan Khundii. That won't give as high a recovery as we see in the oxides, but we're still seeing, you know, in the range of 50% recoveries from that 0.7 and less material at Bayan Khundii.

Speaker #2: So, another potential source. I feel like, after we get this drilling done in Q4, we will update the resource again and be targeting somewhere around 100,000 ounces as a baseline to justify the startup of a moderate-sized heap leach facility.

Speaker #2: The column leach test is not complete yet at Blue Coast, but we do expect recoveries well in excess of 60 percent from Dark Horse material.

Peter Akerley: The column leach test is not complete yet at Blue Coast, but we do expect recoveries well in excess of 60% from Dark Horse material and perhaps in that low 70s, but we will see as we get final results out of that. There are some synergies that we can bring into play from the Bayan Khundii facility, but we would look to have a pad set up somewhere in the neighborhood of the Bayan Khundii plant. We feel like once we have made that investment decision in 2027, we would have perhaps a year or so to put that in place. So a 2028 bringing on stream of a complimentary heap leach production facility.

Speaker #2: And perhaps in that low 70s, but we'll see as we get final results out of that. There are some synergies that we can bring into play from the Bayan Khundii facility.

Speaker #2: But we would look to have a pad set up somewhere in the neighborhood of the Bayan Hundy plant. And we feel that once we've made that investment decision in 2027, we would have perhaps a year or so to put that in place.

Speaker #2: So, a 2028 bringing on stream of a complementary heap leach production facility.

Speaker #4: Thank you, Peter. Another question from the webcast: Once the Zoom Mod PA is complete and published in the next 60 days, how would a gold-focused company fund a large molybdenum-copper development project?

Moderator: Thank you, Peter. Another question from the webcast. Once the Zuun Mod PEA is complete and published in the next 60 days, how would a gold-focused company fund a large molybdenum copper development project? Are the Asian offtake discussions potentially strategic partnerships, and does Zuun Mod compete with Khundii for capital?

[Company Representative] (Erdene): Thank you, Peter. Another question from the webcast. Once the Zuun Mod PEA is complete and published in the next 60 days, how would a gold-focused company fund a large molybdenum copper development project? Are the Asian offtake discussions potentially strategic partnerships, and does Zuun Mod compete with Khundii for capital?

Speaker #4: Are the Asian offtake discussions potentially strategic partnerships? And does Zoom Mod compete with Hundy for capital?

Speaker #2: Good question. Given the financial element there, I'll let Bob cover that one.

Peter Akerley: Good question. Given the financial element there, I will let Bob cover that one.

Speaker #5: Thanks for that, John. So just as a reminder to all on the call, the Zoomod project is wholly owned by Erdene, while the gold projects are held by Erdene Mongol, the joint venture with our strategic partner, Mongolia Mining Corporation.

Robert Jenkins: Thanks for that, John. Just as a reminder to all on call, the Zuun Mod project is wholly owned by Erdene. While the gold projects are held by Erdene Mongol, the joint venture with our strategic partner, Mongolian Mining Corporation. Given the success of Bayan Khundii, the gold extension and expansion projects that we have discussed on today's call are likely to be self-funded within the joint venture, either from operating cash flows or asset level debt. With that as background, there is not necessarily an inherent competition for the capital. Maybe some more color just on what we are seeing at Zuun Mod and how we are thinking about this. We are working on several different funding options, considering that the project of this scale will require a fair bit of capital. Any offtake agreement from a counterparty does provide certainty to all the financiers, reducing overall financing risk.

Speaker #5: So, given the success at Bayan Khundii, the gold extension and expansion projects that we've discussed on today's call are likely to be self-funded within the joint venture, either from operating cash flows or asset-level debt.

Speaker #5: So with that as background, there's not necessarily an inherent competition for the capital. Maybe some more color just on what we're seeing at Zumod, and how we're thinking about this.

Speaker #5: We are working on several different funding options, considering that a project of this scale will require a fair bit of capital. Any offtake agreement from a counterparty does provide certainty to all the financiers, reducing overall financing risk.

Speaker #5: Given the current dynamics in the Mali market, we've received offtake interest from several potential counterparties from across Asia—being China, Korea, and Japan—just, at least, from an initial indication of interest.

Robert Jenkins: Given the current dynamics in the Mongolian market, we have received offtake interest from several potential counterparties from across Asia, being China, Korea, and Japan, just at least from an initial indication of interest. We have also had preliminary discussions with the major development banks in the region where we have got pretty strong relationships, and they again at an early stage have expressed some interest in pushing this project forward. Given that we are still 60 days or so from the release of the PEA, we expect these discussions to really ramp up once that is out in the market and we have got some firm figures we can start to speak to.

Speaker #5: We've also had preliminary discussions with the major development banks in the region, where we've got pretty strong relationships. And they, again, at an early stage, have expressed some interest in pushing this project forward.

Speaker #5: Given that we're still about 60 days from the release of the PA, we expect these discussions to really ramp up once that's out in the market.

Speaker #5: We've got some firm figures we can start to speak to.

Speaker #4: Thanks, Bob. The question from the webcast on the 5 percent royalty: Can you clarify the 5 percent royalty mentioned on the call? Is that an NSR payable to Erdene on 100 percent of JV production once 400,000 ounces is reached?

Moderator: The question from the webcast on the 5% royalty. Can you clarify the 5% royalty mentioned on the call? Is that an NSR payable to Erdene on 100% of JV production once 400,000 ounces is reached, and what is it worth?

[Company Representative] (Erdene): The question from the webcast on the 5% royalty. Can you clarify the 5% royalty mentioned on the call? Is that an NSR payable to Erdene on 100% of JV production once 400,000 ounces is reached, and what is it worth?

Speaker #4: And what does it worth?

Speaker #2: The first part of that question is easy to answer. I'll address the second. The royalty is payable on all ore derived from the joint venture licenses.

Peter Akerley: The first part of that question is easy to answer. I will address the second. The royalty is payable on all ore derived from the joint venture licenses. It is a net smelter royalty, so off the top 5% payable to Erdene on 100% of production. If you look at what we are producing today or targeting to produce, it is pretty simple math. You could multiply the ounces by 4,000 ounces, and that would be our pre-tax payment. At 80,000 ounces per year, which was our target, that would be $16 million U.S. per year. You can do some more creative math on what this could look like 4 years out should we bring on some of these other projects. So that is the royalty, John.

Speaker #2: It's a net smelter royalty, so it's 5 percent off the top, payable to Erdene on 100 percent of production. If you look at what we're producing today, or targeting to produce, it's pretty simple math.

Speaker #2: You could multiply the ounces by, you know, 4,000 ounces, and that would be our pre-tax payment. At 80,000 ounces per year, which was our target, that would be $16 million US per year.

Speaker #2: But you can do some more creative math on what this could look like four years out, should we bring on some of these other projects.

Speaker #2: Yeah, so that's the royalty, John.

Speaker #4: Thank you, Peter. Question on the Super Pit: What needs to happen with Erdene's Alt to incorporate Herensov and Oolong into the mine plan? Who funds what?

Moderator: Thank you, Peter. Question on the super pit. What needs to happen with Erdene as whole to incorporate Khuren Tsav and Ulaan into the mine plan? Who funds what, and when would this potentially show up in the mine plan?

[Company Representative] (Erdene): Thank you, Peter. Question on the super pit. What needs to happen with Erdene as whole to incorporate Khuren Tsav and Ulaan into the mine plan? Who funds what, and when would this potentially show up in the mine plan?

Speaker #4: And when would this potentially show up in the mine plan?

Speaker #2: Yeah, so just a little bit of background here to paint the picture. The Bayan Khundii deposit is continuous to the west. It stretches for well over a kilometer from the northeast side of the pit, across West Striker, and across the Khundii license, which is about 300 meters wide.

Peter Akerley: Just a little bit of background here or painting the picture. The Bayan Khundii deposit is continuous to the west. It stretches for well over 1 kilometer from the northeast side of the pit, across Striker West, across the Khuren Tsav license, which is about 300 meters wide, and onto Ulaan, where we have over 100,000 ounces that would form the back portion of this. Both of the Khuren Tsav and Ulaan licenses are currently exploration stage. So in order to advance those to mining development, they have to go through that government regulatory process, which both parties have now embarked upon. We have had discussions that will bring us to a point where once the mining license is established, resources registered, we will look at jointly developing a development plan, and based on that, begin to enter into discussions on how to share development. Is this a product sharing?

Speaker #2: And onto Oolong, where we have over 100,000 ounces that would form the back portion of this. Both of the Herensov and Oolong licenses are currently at the expiration stage.

Speaker #2: So, in order to advance those to mining development, they have to go through that government regulatory process, which both parties have now embarked upon.

Speaker #2: And we've had discussions that will bring us to a point where, once the mining license is established and resources are registered, we will look at jointly developing a development plan.

Speaker #2: And based on that, begin to enter into discussions on how to share development. You know, is this a product sharing? There are a number of different routes that we could take.

Peter Akerley: There is a number of different routes that we could take, but I expect to see that start to mature in 2027. There is plenty of room for us to continue development as we move to Striker West and Dark Horse in the coming years. So this is out a few years from now. But that is the plan that we have discussed with the Erdene Resource folks at this point. I would also highlight that there is significant potential for additional exploration as we move to that westerly area, both at depth in Striker West, Khuren Tsav, and Ulaan as well. So plenty of room for growth in that area. But it is good to see us moving forward with Erdene as well on that plan.

Speaker #2: But I expect to see that start to mature in 2027. You know, there's plenty of room for us to continue development as we move to West Stryker and Dark Horse in the coming years.

Speaker #2: So this is out a few years from now, but that's the plan that we've discussed with the Erdene's Alt folks at this point. I'd also highlight that there's significant potential for additional exploration as we move to that westerly area, both at depth in West Stryker, Herensav, and Oolong as well.

Speaker #2: So, plenty of room for growth in that area. But it's good to see us moving forward with Erdene's ALT on that plan.

Speaker #4: Thanks, Peter. I'm just going to turn it back to the operator to re-pull and see if anybody else wants to come back into the queue on the live call.

Moderator: Thanks, Peter. I am just going to turn it back to the operator to re-poll to see if anybody else wants to come back into the queue on the live call.

[Company Representative] (Erdene): Thanks, Peter. I am just going to turn it back to the operator to re-poll to see if anybody else wants to come back into the queue on the live call.

Speaker #2: Mm-hmm.

Speaker #6: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Don McClain with Paradigm Capital.

Operator: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Don McLean with Paradigm Capital. Your line is now open.

Speaker #6: Your line is now open.

Speaker #2: Thank you, operator. And just touching on the future, I was really intrigued with the Altan Nar metallurgy and your comment that it could be a potential feed to Bayan Khundii, you know, because it's a large resource.

Don McLean: Thank you, operator. Just touching on the future, I was really intrigued with the Altan Nar metallurgy and comment that it could be a potential feed to the Bayan Khundii mill, because it is a large resource. You talked about the threshold for heap leach being 100,000 ounces, but Altan Nar is quite a bit larger than that. Can you just provide us a bit more color on what the metallurgy is saying as to the possibility of actually feeding that into the Bayan Khundii mill? Because that would extend the project lifespan a lot.

Don MacLean: Thank you, operator. Just touching on the future, I was really intrigued with the Altan Nar metallurgy and comment that it could be a potential feed to the Bayan Khundii mill, because it is a large resource. You talked about the threshold for heap leach being 100,000 ounces, but Altan Nar is quite a bit larger than that. Can you just provide us a bit more color on what the metallurgy is saying as to the possibility of actually feeding that into the Bayan Khundii mill? Because that would extend the project lifespan a lot.

Speaker #2: You talk about the threshold for heap leach being 100,000 ounces, but Altan Nar is quite a bit larger than that. Can you just provide us a bit more color on what the metallurgy is saying as to the possibility of actually feeding that into the Bayan Khundii mill?

Speaker #2: Because that would extend the project life significantly.

Speaker #3: Yeah, we had some good results come out in our metallurgical testing this year on a high-grade sample from ALT and NAR, which we carried out at Blue Coast.

Peter Akerley: Yeah, we had some good results come out in our metallurgical testing this year on a high-grade sample from Altan Nar, which we carried out of glucose, and also just going back and reevaluating where the cutoff would be in terms of the polymetallic nature of the ore and what could go into the CIP plant. We have arrived at approximately 80% of the ore that is reported would be amenable to the CIP processing. 20% is higher in arsenic, but fairly well isolated, and we could selectively mine around that. We are seeing 89% recovery of gold in the higher grade sample. We are up in the 5 gram range on that sample, but that is, it is probably about 70% of the ore. It is another high-grade deposit. So overall, we think we could be seeing 75% recovered from the resources we reported.

Speaker #3: And also, just going back and re-evaluating where the cutoff would be in terms of the polymetallic nature of the ore, and what could go into the CIP plant.

Speaker #3: And we've arrived at approximately 80 percent of the ore that's the CIP processing. Twenty percent is higher in arsenic, but fairly well isolated. And we could selectively mine around that.

Speaker #3: We're seeing 89 percent recovery of gold in the higher-grade sample. We're up in the 5-gram range on that sample, but that is, it's probably about 70 percent of the ore.

Speaker #3: It's another high-grade deposit. So, overall, we think we could be seeing 75% recovered from the resources we reported. And I'd also just note that the exploration opportunity here is immense.

Peter Akerley: I'd also just note that the exploration opportunity here is immense. We've only tested a small portion of the strike length to come up with that half a million ounces. Our objective in 2027, from an exploration perspective, is to focus much of our budget on Altan Nar growth.

Speaker #3: We've only tested a small portion of the Stryker length to come up with that half a million ounces. Our objective in 2027, from an exploration perspective, is to focus much of our budget on Altan and Nariin growth.

Speaker #2: Yeah, that's quite a different sort of view to, at least the way I've been looking at it. I'm not sure how other investors have looked at it all.

Don McLean: That's quite a different sort of view to at least the way I've been looking at it. I'm not sure how other investors have looked at Altan Nar. Looking at it as a concentrate, that's a whole different process and a whole bunch of additional infrastructure, whereas being able to make use of the Bayan Khundii mill saves a lot of capital. One would think more than justifying the recovery difference.

Don MacLean: That's quite a different sort of view to at least the way I've been looking at it. I'm not sure how other investors have looked at Altan Nar. Looking at it as a concentrate, that's a whole different process and a whole bunch of additional infrastructure, whereas being able to make use of the Bayan Khundii mill saves a lot of capital. One would think more than justifying the recovery difference.

Speaker #2: Altan Nar, because looking at it as a concentrate, that's a whole different process and a whole bunch of additional infrastructure, whereas being able to make use of the Bayan Khundii mill saves a lot of capital.

Speaker #2: One would think.

Speaker #3: Yeah, there's.

Speaker #2: More than justifying the recovery difference.

Speaker #3: Yeah, the improved recovery is in sort of our look at the deposit. That provides us with that higher available, amenable ore. That's really kind of changed our thinking.

Peter Akerley: Yeah. The improved recoveries and our look at the deposit that provides us with that higher available amenable ore has really changed our thinking. On a trade-off study, we see the route as being superior to truck it into the CIP. You're correct, if we paid CAD 120 million to build Bayan Khundii and we add inflation, assume a similar size plant, we're probably up in the CAD 140, CAD 150 million range by the time we build Altan Nar, which is capital we don't have to inject. It's only a 16-kilometer trucking distance. The oxide cap could become quite valuable to us as well with, I think it was about 12% of the resource is oxide near surface, with plenty of room to expand that as well. So getting excited about that opportunity. Obviously, we could accelerate that production.

Speaker #3: And on a trade-off study, we see the route as being superior to trucking it into the CIP. And you're correct. You know, if we build Bayan Hundy and we add inflation, assume a similar-sized plant, we're probably up in the $140 to $150 million range by the time we build Altan Nar.

Speaker #3: Which is capital we don't have to inject. It's only a 16-kilometer trucking distance. The oxide cap could become quite valuable to us as well, with, I think it was about 12% of the resources being oxide near surface.

Speaker #3: With plenty of room to expand that as well, we're getting excited about that opportunity. Obviously, we could accelerate that production, and we could be providing some high-grade material to blend upwards in the early days.

Peter Akerley: We could be providing some high-grade material to blend upwards in the early days. So I really like the optionality that's starting to materialize with Altan Nar, which as I spelled out in our presentation, would certainly give us that ability to be well in excess of 10 years with the combined resources available to us.

Speaker #3: So I really like the optionality that's starting to materialize with Alt and NAR, which, as I spelled out in our presentation, would certainly give us that ability to be well in excess of 10 years with the combined resources available to us.

Speaker #2: And so, what's the next step here? Are you doing more metallurgical work on, I guess, lower-grade, more representative samples?

Don McLean: What is the next step here? Are you doing more metallurgical work on, I guess, lower grade, more representative samples?

Don MacLean: What is the next step here? Are you doing more metallurgical work on, I guess, lower grade, more representative samples?

Speaker #3: We will, but what I want to do first is make sure we've completed that much more complete exploration program, and then characterize the ore that we have based on that larger resource.

Peter Akerley: We will, but what I want to do first is make sure we have completed that much more complete exploration program, then characterize the ore that we have based on that larger resource, and then invest in the metallurgical work. So in 2027, the focus will be on Altan Nar to do both of those things. Ideally, as you are coming out the back end of 2027 into 2028, you can put a pin in this, let us say, what is a conceptual option to go to the CIP, put a pin in that, and start to really develop that plan to be trucking ore into Bayan Khundii in the future.

Speaker #3: And then invest in the metallurgical work. So, in 2027, the focus will be on ALT and NAR to do both of those things.

Speaker #3: And ideally, as you're coming out the back end of 2027 into 2028, you can put a pin in this. Let's say, what is a conceptual option to go to the CIP.

Speaker #3: Put a pin in that and start to really develop that plan to be trucking ore into Bayan Khundii in the future.

Don McLean: Excellent. I guess the other question on the Zuun Mod, I know you do not have the answers from the PEA in hand yet, but a couple questions. Do you think the market attaches any value to this based on your discussion with investors?

Don MacLean: Excellent. I guess the other question on the Zuun Mod, I know you do not have the answers from the PEA in hand yet, but a couple questions. Do you think the market attaches any value to this based on your discussion with investors?

Speaker #2: Excellent. And I guess the other question on the Zunmat—I know you don't have the answers from the PEA in hand yet.

Speaker #2: But a couple of questions. Do you think the market attaches any value to this based on your discussions with investors?

Peter Akerley: No. I think that it is a curiosity for some, but I really do not think we are valued at much more than what our six-year gold production profile is. We have never had an economic study yet. So ideally, as we move into that phase in September, we will be able to demonstrate that value. But we will also begin to look at what opportunities do we have corporately to restructure, spin out. We will take a closer look at that, because I think that may be the path we need to take to crystallize full value for Zuun Mod.

Speaker #3: No, I think that it's a curiosity for some, but I really don't think we're valued at much more than what our six-year gold production profile is.

Speaker #3: Yeah, so, and we've never had an economic study yet. So, ideally, as we move into that phase in September, we'll be able to demonstrate that value.

Speaker #3: But we'll also begin to look at what opportunities we have corporately to restructure or spin out. We'll take a closer look at that, because I think that may be the path we need to take to crystallize full value for Zunmat.

Don McLean: Yeah. It is a bit of chalk and cheese relative to the gold side, but projects of that scale generally are pretty sensitive to the price that you see are being used in the study. There is a big delta between what the, shall we say, 3-year average price is and what the current spot is. So that would suggest this thing would have a lot of sensitivity to the metal price. Do you have any kind of visibility about how the project economics, are they looking encouraging in the low 20s, or is it way too early to tell? Below $20 per pound for moly.

Don MacLean: Yeah. It is a bit of chalk and cheese relative to the gold side, but projects of that scale generally are pretty sensitive to the price that you see are being used in the study. There is a big delta between what the, shall we say, 3-year average price is and what the current spot is. So that would suggest this thing would have a lot of sensitivity to the metal price. Do you have any kind of visibility about how the project economics, are they looking encouraging in the low 20s, or is it way too early to tell? Below $20 per pound for moly.

Speaker #2: Yeah, I mean, it is a bit of chalk and cheese relative to the gold side. But projects of that scale generally are pretty sensitive to the price that you see.

Speaker #2: Or being used in the study. And there's a big delta between what the, shall we say, three-year average price is and what the current spot is.

Speaker #2: So that would suggest this thing would have a lot of sensitivity to the metal price. Do you have any kind of visibility about how the project economics are? Are they looking encouraging in the low 20s?

Speaker #2: Or is it way too early to tell? The low $20 per pound for moly.

Peter Akerley: Yeah. I think you need to be in the low 20s to make this project attractive. The current, I think the 3-year trailing, or maybe it is 5, Bob, is $22.50, in that range. Current spot price is closer to $32, $33. But we feel pretty comfortable in between those two numbers as this project becomes very robust. Looking at the demands we are seeing long term, and we have done a lot of our own marketing work on the ground in Asia, speaking with the entire industry. We do feel good about that long-term demand continuing and growth rate continuing at close to 4%, which will generate a need for pretty much the equivalent of what we plan to produce from Zuun Mod coming online every year. Yeah, I think we are right time, right place. We are on the border of the largest consumer who is in deficit.

Speaker #3: Yeah, so I think you need to be in the low 20s to make this project attractive. The current—I think the three-year trailing, and maybe it’s five, Bob—is $2,250.

Speaker #3: In that range. Current spot price is closer to $32, $33. But we feel pretty comfortable that in between those two numbers, this project becomes very robust.

Speaker #3: And looking at the demands we're seeing long term—and we've done a lot of our own marketing work on the ground in Asia, speaking with the entire industry—we do feel good about that long-term demand continuing and the growth rate continuing at close to 4%.

Speaker #3: Which will generate a need for pretty much the equivalent of what we plan to produce from Zunmat coming online every year. So yeah, I think we're right on time.

Speaker #3: Right place. We're on the border of the largest consumer, who's in deficit. They've put export controls on molybdenum. In our discussions with those users and end users, they'd buy our concentrate today.

Peter Akerley: They put export controls on molybdenum. In our discussions with those end users, they would buy our concentrate today. Yeah, I think it is a good time from a market perspective, but I would also like to just revisit the fact that if you look back 10 years ago, this project was considered too remote. But today we have a metallurgical coal haul road within 30 kilometers of Zuun Mod just completed. We have now demonstrated you can bring power in from the grid. A lot has changed in terms of infrastructure, and it couldn't be in a better place than next door to a country that is consuming more molybdenum than anywhere else and can't find enough of it. Yeah, we are excited about what Zuun Mod is about to bring for us.

Speaker #3: So, yeah, I think it's a good time from a market perspective. But I'd also like to revisit the fact that, if you look back 10 years ago, this project was considered too remote.

Speaker #3: But today, we have a coal, metallurgical coal haul road within 30 kilometers of Zunmat—just completed. We have now demonstrated you can bring power in from the grid.

Speaker #3: So, a lot has changed in terms of infrastructure. And it couldn't be in a better place than next door to a country that's consuming more molybdenum than anywhere else—and can't find enough of it.

Speaker #3: So, yeah, we're excited about what Zunmat is about to bring for us.

Don McLean: Yeah. That will be very interesting to see how this looks when it comes out with H2. Could be a surprise for lots of people, myself included. That is great. Well, thank you very much.

Don MacLean: Yeah. That will be very interesting to see how this looks when it comes out with H2. Could be a surprise for lots of people, myself included. That is great. Well, thank you very much.

Speaker #2: Yeah, yeah. That'll be very interesting to see how this looks when it comes out. Q2 could be a surprise for a lot of people, myself included.

Speaker #2: That's great. Well, thank you very much.

Peter Akerley: Thanks, Don.

Speaker #3: Thanks, Don.

Don McLean: Good. Best of luck on Q3.

Don MacLean: Good. Best of luck on Q3.

Speaker #2: And best of luck on Q3.

Peter Akerley: Appreciate it.

Speaker #3: Appreciate it.

Operator: Ladies and gentlemen, as a reminder, should you have a question, please press star one. There are no further questions at this time. I will now turn the call over to Peter Akerley for closing remarks.

Speaker #1: Ladies and gentlemen, as a reminder, should you have a question, please press star one. There are no further questions at this time.

Speaker #1: I will now turn the call over to Peter Ackerly for closing remarks.

Peter Akerley: Well, thank you everyone for joining us today. We look forward to speaking again in a few months, and as always, in the meantime, should you have any questions, please reach out to Bob or I, and please have a good day. Thank you.

Speaker #3: Well, thank you, everyone, for joining us today. We look forward to speaking again in a few months. As always, in the meantime, should you have any questions, please reach out to Bob or me.

Speaker #3: And please, have a good day. Thank you.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and at this please disconnect your lines.