Erdene Resource Development Corporation — Management Reports 2023

May 4, 2023

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MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three months ended March 31, 2023 and 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS

Three months ended March 31, 2023

Contents

Contents
	Page No.
Company Overview	3
Highlights and Significant Subsequent Events	4
Strategy and Outlook	5
Development and Exploration Projects	6
NI 43-101 Technical Reports – Resources and Reserves	6
Khundii Minerals District	6
Khundii Minerals District Exploration	13
Acquisitions	14
Discussion of Operations	15
Summary of Quarterly Results	17
Liquidity and Capital Resources	17
Outstanding Share Data	17
Contractual Obligations	18
Other Financing Arrangements and Commitments	18
Off-Balance Sheet Arrangements	18
Critical Accounting Estimates	18
Adoption of New Accounting Standards and Future Changes in Accounting Policies	19
Financial Instruments and Other Risks	19
Disclosure Controls and Internal Controls Over Financial Reporting	21
Qualified Person	21
Other Information	21

This Management Discussion and Analysis (“ MD&A ”), dated May 3, 2023, relates to the operating results and financial condition of Erdene Resource Development Corporation (“ Erdene ” or the “ Company ” or the “ Corporation ”) and should be read in conjunction with the Corporation’s audited consolidated financial statements for the years ended December 31, 2022, and 2021, and the notes thereto. The consolidated financial statements of the Corporation have been prepared in Canadian dollars in accordance with International Financial Reporting Standards (“ IFRS ”).

This discussion includes certain statements that may be deemed “forward-looking statements”. All statements in this discussion, other than statements of historical fact, that address reserve potential, exploration drilling, exploitation activities, budgeted financial results and events or developments that the Corporation expects, are forward-looking statements. Although the Corporation believes the expectations expressed in such forward-looking statements are based on reasonable assumptions (including, but not limited to, assumptions in connection with the continuance of the Corporation and its subsidiaries as a going concern, general economic and market conditions, mineral prices, and the accuracy of mineral resource estimate), such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploration and evaluation results, continued availability of capital and financing and general economic, market or business conditions.

The risk factors identified above are not intended to represent a complete list of the factors which could affect the Corporation. Additional factors are noted under “Risk Factors” in the Corporation’s latest Annual Information Form, a copy of which is available on the Corporation’s SEDAR document page at www.sedar.com .

Any financial outlook or future-oriented financial information in this MD&A, as defined by applicable securities legislation, has been approved by management of the Corporation as of the date of this MD&A. Such financial outlook or future oriented financial information is provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that such outlook or information should not be used for purposes other than for which it is disclosed in this MD&A.

In preparing this MD&A, the Corporation makes reference to “Exploration and evaluation expenditures”, a non-GAAP financial performance measure. Management believes Exploration and evaluation expenditures, comprised of capitalized and operating expenditures attributable to exploration and evaluation activities, is a valuable indicator of the total investment in the Corporation’s properties for the period of the financial statements. For a detailed reconciliation of this non-GAAP financial performance measure to the most directly comparable measures under IFRS, please see page 15 of this MD&A. The non-GAAP financial performance measure set out in this MD&A is intended to provide additional information to investors and does not have any standardized meaning under IFRS, and therefore may not be comparable to other issuers, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

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Company Overview

Erdene Resource Development Corporation is a Canadian based resource company focused on the acquisition, exploration, and development of large, high-grade, near surface, precious and base metals deposits in underexplored and highly prospective Mongolia. Erdene is listed on the Toronto Stock Exchange (TSX: ERD) and Mongolian Stock Exchange (MSE: ERDN).

The Company holds three mining licenses and an exploration license in southwest Mongolia, where exploration success has led to the discovery of the Khundii Minerals District (“KMD”). The KMD is located within the Trans Altai Terrane of the Central Asian Orogenic Belt (“CAOB”). The CAOB extends 2,500 kilometres from the Ural Mountains to eastern China. The belt hosts several world class porphyry and porphyry related copper and gold deposits, including one of the world’s largest gold deposits, Muruntau, in Uzbekistan, as well as Rio Tinto’s Oyu Tolgoi copper-gold deposit, located approximately 650 kilometres east of the KMD in southeast Mongolia.

The discovery of the KMD is the result of more than 17 years of exploration by Erdene in an underexplored region of southwest Mongolia. Over this period, Erdene has defined the Altan Nar (“AN”) and Bayan Khundii (“BK”) epithermal gold deposits, the Ulaan and Dark Horse gold prospects, the Zuun Mod (“ZM”) molybdenum-copper porphyry deposit, and several prospects and advanced exploration projects. Collectively, these discoveries form the core of the KMD, covering an area approximately 50 by 100 kilometres, elongated northwest.

Within the KMD, the Company is advancing the high-grade, open-pit BK gold project to production while expanding resources at its other deposits and prospects. The Company announced results of an independent Feasibility Study for BK in 2020 (“2020 FS”) and since this time has progressed permitting, procurement, and construction readiness activities in advance of a construction decision. Although COVID19 led to supply chain issues, particularly at Mongolia’s land borders with China, that delayed the start of construction, Erdene has completed much of the preparatory work for the Bayan Khundii Gold Project. Over the past twelve months, Erdene has received regulatory approval for the Project’s detailed design, secured construction permits for the majority of the key facilities, and placed orders for critical long lead time items.

In January 2023, Erdene entered a Strategic Alliance with Mongolian Mining Corporation (“MMC”), the Country’s largest independent miner. Under the terms of the Strategic Alliance, MMC will invest a total of US$40 million for a 50% interest in Erdene’s Mongolian subsidiary, Erdene Mongol LLC (“EM”), which holds the Khundii and Altan Nar mining licenses and the Ulaan exploration license through a three-stage transaction. Erdene will retain a 50% equity interest in EM as well as a 5% Net Smelter Return royalty on all production from the Khundii, Altan Nar and Ulaan licenses, as well as any properties acquired within five kilometres of these licenses, after the first 400,000 ounces of gold recovered. Erdene maintains a 100% interest in the Zuun Mod copper-molybdenum project.

The first stage of the Strategic Alliance was completed in mid-January 2023, with MMC advancing US$5 million by way of a convertible promissory note to finance an updated Feasibility Study (“2023 FS”) and Life of Mine (“LOM”) Plan for the BK Gold Project. Since this time, Glogex Consulting, a leading Mongolian geology and mining consulting firm, has assisted Erdene and MMC in preparing an internal update of the 2020 FS. With the completion of the internal study in late April, MMC advanced the second tranche of US$5 million to EM in early May to fund completion of the 2023 FS and to undertake pre-development and exploration work. The third stage of the partnership will see MMC invest a further US$30 million once EM has reached a construction decision, providing equity capital for the Bayan Khundii Gold Project, targeting Q3 2023.

Work on the 2023 FS is well advanced, targeting release in early Q3 2023. The FS will be prepared by the same consortium of consultants as the 2020 FS and will incorporate updated reserves from BK as well as recently discovered, near surface, reserves from the Dark Horse prospect. The 2023 FS will bring forward grade, targeting a 15-25% increase in average annual gold production over the initial five years compared to the 2020 FS. Additional design and value engineering work will also optimize plant throughput, targeting 650,000 tonnes per annum, alongside capital and operating cost updates. Working with MMC, Erdene continues to update quotations for major plant equipment and non-process infrastructure items, and consistent with macro-economic trends, expects cost increases of 25 to 50% compared to the 2020 FS, though steel, copper and fuel prices have eased with the reopening of land borders with China.

Erdene remains in discussion with Export Development Canada (“EDC”) and other international financial institutions for the senior secured debt component of the BK project finance. Due diligence for the loan was slowed by COVID, but is largely complete, with EDC’s technical consultants delivering their report in early 2022. The debt package will be finalized following the delivery and final review of the 2023 FS. Concurrently, discussions continue with other financiers to secure the balance of capital for development.

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During the first quarter of 2023, Erdene’s exploration team carried out desktop and field orientation work in advance of the 2023 gold exploration program. Erdene is planning 11,000 metres of drilling, beginning in late Q2 at Dark Horse. The Dark Horse area includes the high-grade South Mane and lower grade North Mane deposits along a 1.5-kilometre N-S mineralized structure, as well as high priority targets within adjacent structures over a 3 kilometre by 2-kilometre area. The Dark Horse South Mane deposit will be incorporated into the BK 2023 FS reserves and therefore proximal targets are the highest priority for exploration. Objectives for the first stage of the 2023 Dark Horse program include expanding resources through infill drilling in areas currently reported as inferred resources and testing targets displaying significant gold or pathfinder element anomalism. Results from the first stage will inform subsequent drilling at Dark Horse, as well as exploration at BK West, Ulaan and Altan Nar.

Concurrently Erdene is progressing its ZM project, one of Asia’s largest undeveloped molybdenum-copper deposits. In mid-April, the Company launched a 4,000-metre drill program at this property. This first phase of the drill program, targeting 2,500 metres, is designed to identify areas at the fringes of the currently defined resource, where larger scale expansion drill programs could materially increase resources. Drilling will also test the orientation of higher-grade molybdenum and copper zones at depth. Erdene will complete further market, technical and economic studies as well as permitting work in the coming months, to build upon a conceptual assessment of the project completed by RPMGlobal in late 2021. Based on the studies, as well as the results from the exploration program underway, Erdene anticipates preparing a ZM preliminary economic assessment (“PEA”) in the coming months.

Furthermore, Erdene sees the potential to increase resources through the acquisition of licenses in this under-explored portion of the prolific gold and copper producing CAOB. The KMD hosts the full spectrum of arc-related base and precious metal systems, including copper-molybdenum porphyries, intermediate sulphidation/carbonate base metal gold deposits, and low sulphidation epithermal gold and gold-silver systems. As the longest established Company operating in southwest Mongolia, and through its partnership with MMC, Erdene is well positioned to expand its asset portfolio in this highly prospective terrain.

Highlights and Significant Subsequent Events

Bayan Khundii Gold Project

• Progressed construction readiness and engineering for the BK Gold Project

• Completed detailed design and engineering for 12 of 14 facilities

• Conducted construction, mine planning and gold processing optimization studies with MMC

• Engaged with preferred vendors and received updated quotations for major construction works and mining equipment, leveraging MMC relationships

• Completed internal Feasibility Study update and progressed 2023 NI 43-101 FS

• Worked with MMC and Glogex Consulting to update resource and mine plans, fleet optimization, and capital & operating costs for the internal study

• Advanced hydrogeological, metallurgy and geotechnical work for 2023 FS update

• Updated NI 43-101 2023 FS scheduled to be delivered in mid-2023

• Advanced regulatory approvals and secured key permits for mine development

• Obtained approval for 12 project facilities and received construction permits for eight facilities

• Received regulatory approval of the Project’s 2023 operational plans

• Launched 2023 community engagement program

• Established Bayankhongor province branch office in early Q2

• Held community information sessions in advance of construction

Khundii Minerals District Exploration

• Commenced 4,000-metre drill program at ZM in April 2023

• 2,500 metre first phase will test areas adjacent the current resource to assess expansion potential

• o Results expected to be announced in late Q2

• Carried out desktop and field orientation work in advance of an 11,000-metre gold exploration program o Program will prioritize the greater Dark Horse area

• Drilling will test high priority targets to expand resources and conduct infill drilling to increase confidence in currently reported inferred resources

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Corporate

• Entered Strategic Alliance with MMC and closed the first two tranches receiving US$10 million of funding

• MMC to invest US$40 million for a 50% equity interest in Erdene’s Mongolian subsidiary that holds the Khundii and Altan Nar mining licenses and the Ulaan exploration license

• Erdene retains 50% of EM and a 5.0% NSR royalty on production from the Khundii, Altan Nar and Ulaan licenses, as well as any properties acquired within 5 kilometres, beyond the first 400,000 ounces of gold recovered, as well as 100% interest in ZM

• Closed the first stage of the Alliance in January 2023 and the second stage in early May 2023

• Progressed BK Project Finance with EDC and other international financial institutions.

• EDC due diligence complete pending review of 2023 FS update, anticipated in mid-2023 and key loan terms agreed

• Discussions are proceeding in parallel with Mongolian and International financiers for the balance of capital

• Recorded a net loss of $1,138,937 for the three months ended March 31, 2023, compared to a net loss of $1,231,156 for the three months ended March 31, 2022

• Exploration and evaluation expenditures, including capitalized expenditures, totaled $1,437,182 for the three months ended March 31, 2023, compared to $2,904,572 for the comparative prior year period as reduced field activity and design and engineering work, as well as the payment of a deposit on the elution circuit in early 2022 and the timing of payments under the local cooperation agreement more than offset current period expenditures to update the FS.

• Corporate and administrative expenses totaled $580,111 for the three months ended March 31, 2023, compared to $445,446 for the three months ended March 31, 2022, with the year-on-year increase primarily due to expenditures associated with the negotiation and announcement of the MMC Strategic Alliance as well as higher administrative salaries due to cost-of-living adjustments.

Strategy and Outlook

Erdene is focused on the discovery and development of precious and industrial metal deposits in the KMD. Erdene’s two near term strategic priorities are advancing BK to production, and through exploration and acquisition, expanding and subsequently developing other deposits in the KMD.

In January 2023, the Company announced a Strategic Alliance with MMC to develop the gold deposits of the KMD starting with BK. MMC is the largest, private producer and exporter of high-quality washed hard coking coal in Mongolia. MMC owns and operates the Ukhaa Khudag and the Baruun Naran open pit coking coal mines, both located in Umnugovi Aimag (South Gobi Province), Mongolia. The shares of MMC are listed on the main board of the Hong Kong Stock Exchange (HKEx: 975), and the company has a current market capitalization of approximately US$400 million.

MMC’s largest beneficial shareholder is MCS Group, one of Mongolia’s leading conglomerates. MCS has operated in Mongolia for 30 years, and has operations in engineering, energy, communications, property, mining, consumer goods, health, and hospitality. MCS employs approximately 10,000 staff in Mongolia and is one of the Country’s largest private taxpayers.

Erdene’s exploration and pre-development capabilities, MMC’s mining and operational expertise and the ability of MCS Group companies to provide complimentary infrastructure and energy solutions creates the ideal platform to develop the KMD for the benefit for all stakeholders.

Since announcing the results of the 2020 FS, Erdene has advanced permitting, procurement, and construction readiness activities. Although slowed by restrictions on the movement of goods and services into Mongolia from China, Erdene has received the majority of the permits required to commence the Project build, including the mining license, the Mongolian detailed environmental impact assessment, land and water use permissions and construction permits. With the relaxation of China’s zero COVID policy, and the Strategic Alliance with MMC, the Company expects to reach a construction decision for Bayan Khundii in mid-2023. With the close of the second tranche of the MMC Strategic Alliance in May 2023, the Company intends to complete significant site works in the coming months.

Exploration results to date suggest the greater Khundii-Ulaan alteration zone, including the BK Deposit, Dark Horse prospect and Ulaan, are part of the same, large, gold-bearing hydrothermal system, that shows the potential to host a multimillion-ounce gold deposit. Exploration in 2022 further supports this thesis, with

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high-grade intercepts at Dark Horse, Ulaan SE and Bayan Khundii, and positive results from regional RC and diamond drilling. These results, as well as those from drilling since the last Khundii District resource update in 2019, are being incorporated into an updated NI 43-101 report, which will be incorporated into the 2023 FS. Erdene will launch an 11,000-metre gold exploration program in the coming weeks seeking to further grow resources.

In Q2 2023, Erdene commenced the first phase of a 4,000-metre drill program at its ZM project, one of Asia’s largest undeveloped molybdenum-copper deposits. Along with the exploration work, Erdene will complete further market, technical and economic studies as well as permitting work in the coming months, to build upon the conceptual assessment completed by RPMGlobal (formally Minarco-Mine Consult) in late 2021. Beyond the ZM Deposit, the broader license hosts several high-potential copper and molybdenum prospects. The Khuvyn Khar prospect, located in the northern portion of the ZM porphyry complex, hosts a large area of disseminated copper mineralization within several kilometres of phyllic and potassic altered quartz monzonite and granodiorite intrusives. Multiple copper mineralized zones have been intersected in wide-spaced drilling, including 34 metres of 1.3% copper and 9.24 g/t silver from 308 to 342 metres (hole ZMD-121). The large ZM porphyry complex remains largely untested and management sees several high potential areas for resource expansion and discovery across the license.

Erdene continues to evaluate acquisition opportunities throughout the KMD. Over the past decade Erdene has developed the largest proprietary geologic database of Southwest Mongolia’s mineralization that has led to the identification of more than 20 high-priority targets for acquisition. The Company expects that through its partnership with MMC, it will be an active participant in license tenders in the KMD.

Development and Exploration Projects

NI 43-101 Technical Reports – Resources and Reserves

On September 15, 2018, the Company announced a resource estimate for the Bayan Khundii and Altan Nar deposits. On October 21, 2019, Erdene announced an updated Bayan Khundii Resource as well as a Bayan Khundii Mineral Reserve, as part of a Prefeasibility Study (“PFS”) prepared by Tetra Tech, Inc. The reserve announced October 21, 2019, has been superseded by a Mineral Reserve estimate, dated July 1, 2020, prepared by Auralia Mining Consulting. In conjunction with the Company’s MD&A for the three and six months ended June 30, 2021, and 2020, the Company announced an updated mineral resource estimate for the Bayan Khundii deposit with an effective date of June 17, 2021, prepared by Tetra Tech.

Apart from Zuun Mod, the Company’s other targets are early stage and do not contain any mineral resource estimates, as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43101"). Except for those deposits already delineated, potential quantities and grades disclosed in this MD&A are conceptual in nature, and there has been insufficient exploration to define a mineral resource estimate for other targets disclosed herein. It is uncertain if further exploration will result in these targets being delineated as a mineral resource. Additional information about our projects is also summarized in our AIF and the respective NI 43-101 Technical Reports and can be viewed under the Company’s issuer profile on SEDAR at www.sedar.com.

Khundii Minerals District

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The Khundii Minerals District includes the Company’s high-grade, near-surface Bayan Khundii and Altan Nar deposits, Ulaan SE and Dark Horse prospects and the Zuun Mod Molybdenum-Copper resource.

The Bayan Khundii gold project is located on the 2,309-hectare Khundii mining license held by Erdene’s Mongolian subsidiary, Erdene Mongol LLC. The Khundii mining license includes the Bayan Khundii mineral resources reported in “Khundii Gold Project NI 43-101 Technical Report”, dated December 4, 2019, and prepared by Tetra Tech, Inc., and an updated Mineral Reserve estimate, dated July 1, 2020, prepared by Auralia Mining Consulting and reported in “Bayan Khundii Gold Project Feasibility Study NI 43-101 Technical Report”, dated August 31, 2020.

Bayan Khundii Gold Deposit

The Bayan Khundii deposit was discovered in Q2 2015, with initial drill results reported in Q4 2015; the first hole returned 7 metres of 27.5 g/t gold at 14 metres depth. Definition drill programs completed in 2016 through 2018 identified three main areas over an 800-metre strike length and within 150 metres of surface. These areas of very high-grade gold mineralization over significant widths include: Striker Zone, where mineralization starts from surface, and Midfield and North Midfield Zones that extend to the northeast under younger, post-mineralization cover. The Midfield and North Midfield Zones have returned some of the highest grades and widest mineralized intervals at Bayan Khundii. BKD-98 returned 80 metres of 6.0 g/t gold from 42 metres depth and BKD-261 returned 112 metres of 5.9 g/t gold, both in the Midfield Zone, and BKD-231 in North Midfield, returned 14 metres of 158 g/t gold, including one metre of 2,200 g/t gold.

During Q1 2021, Erdene engaged Tetra Tech, Inc. (“Tetra Tech”) to prepare an updated Mineral Resource Estimate (“Mineral Resource”), incorporating 2020 drilling at Striker West, Striker, Midfield and Midfield North, and reflecting prevailing gold prices.

The updated Bayan Khundii Mineral Resource incorporates 95 additional drill holes totaling 12,889 metres and an updated structural interpretation study completed by Erdene at Bayan Khundii since the previous October 1, 2019, mineral resource estimate was announced. In total, the updated Bayan Khundii Mineral Resource incorporates 350 diamond drill holes totaling 55,791 metres, along with 1,075 metres of trenching from 23 trenches.

The Bayan Khundii updated Mineral Resource conforms to NI 43-101, Companion Policy 43-101CP, and the CIM Definition Standards for Mineral Resources and Mineral Reserves. The Mineral Resource was prepared by Tetra Tech and has an effective date of June 17, 2021. The reported Mineral Resource is based on information provided to Tetra Tech by Erdene and verified where possible by Tetra Tech. Data verification and statistical analyses were carried out by Tetra Tech in support of the Mineral Resource. The details of the parameters used in preparing the updated Mineral Resource, including data verification, sample preparation, analysis and security, are included in the Company’s Q2 2021 MD&A, available on the Company’s website or SEDAR.

The June 2021 Mineral Resource for Bayan Khundii is provided below under the Mineral Resources and Reserves section of this MD&A.

In Q3 2022, Erdene completed a near surface drill program comprised of 25 PQ diamond core holes, totaling 612 metres (averaging 17 metres vertical depth) in three target areas within or near the planned Bayan Khundii economic pit. The objectives of this program were to establish higher confidence in continuity of grade and geometry of the shallow, very high-grade potential starter pit areas located at the Midfield Southeast, Striker South and Striker zones of the Bayan Khundii deposit and to collect material for gravity processing metallurgical test work. The drilling program intersected multiple high-grade intervals, confirming the continuity of near-surface high-grade gold mineralization at Midfield SE, Striker, and Striker South. Multiple holes returned assays greater than 10 g/t gold. These results will be incorporated into the updated Bayan Khundii Feasibility Study that is expected to be completed in mid-2023.

Dark Horse

The greater Dark Horse prospect area (approximately 20 square kilometres) is located in the northern portion of the Khundii mining and Ulaan exploration licenses and is characterized by elevated gold in soil anomalism with multiple surface rock-chip, trench and drill core samples assaying greater than 1 g/t gold. Trace element anomalism, geophysical anomalies related to alteration and mineralization, structures interpreted to represent conduits for mineralizing fluids, and alteration signatures supporting an epithermal mineralization model characterize the greater Dark Horse prospect area. To date the Company has completed 24,092 metres of drilling in 218 holes ranging in vertical depths from 8 to 318 metres within the greater Dark Horse prospect portion of the Khundii mining license, including 28 holes totaling 2,355 metres in 2022.

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Most of the drilling to date has been focused on the Dark Horse Mane discovered in early 2021. Erdene discovered the Dark Horse Mane, 2 kilometres north of the Bayan Khundii deposit, when initial drilling returned 6.0 g/t gold over 45 metres, beginning 10 metres downhole, including 8 metres of 27.1 g/t gold (AAD-58). Drilling over the past year has defined a 1.5-kilometre trend of alteration and gold mineralization within the Dark Horse Mane that remains open along strike to the north and south, and at depth. Highlight interceptions at Dark Horse Mane since the initial discovery include:

• AAD-126: 30 metres of 5.6 g/t gold, beginning 10 metres downhole, including 24.1 g/t over six metres, starting 26 metres downhole

• AAD-137: 24.5 metres of 9.4 g/t gold beginning 1.5 metres downhole, including 13.5 metres of 16.1 g/t gold

• AAD-138: 25 metres of 6.1 g/t gold beginning 18 metres downhole, including 8 metres of 17.1 g/t gold

• AAD-177: 23 metres of 11.4 g/t gold beginning 1 metre downhole, including 4 metres of 59.8 g/t gold within 8 metres of 32.2 g/t gold

• AAD-178: 15 metres of 42.8 g/t gold beginning 11 metres downhole, including 3 metres of 160.4 g/t gold within 5 metres of 123.5 g/t gold

• AAD-218: 12 metres of 20.2 g/t gold beginning at surface, including 6 metres 39.6 g/t gold

The Dark Horse Mane is associated with a north-south trending, linear structural corridor which intersects deep seated northeast trending transform faults, believed to be a conduit for primary mineralizing fluids. The N-S structure has been traced over five kilometres, from the southern portion of the Bayan Khundii deposit to the northern extension of Dark Horse Mane. Gold mineralization is hosted within strongly altered tuffaceous and volcanoclastic rocks, crosscut by quartz and quartz-hematite veins and stockwork zones. The Dark Horse Mane shallow oxide zone begins at surface, hosting supergene enriched gold zones with values up to 195 g/t over 1 metre and ranging in thickness from 20 to 60 metres vertical depth with locally deeper oxidation along fractures. The high-grade oxide body exhibits strong continuity along a north-south strike. Mineralization remains open along strike and at depth.

The near surface oxide gold zones discovered at Dark Horse Mane are the result of oxidation of sulfide bearing epithermal veins and hydrothermal breccias within white mica altered host lithologies. Limited deeper drilling has gold bearing epithermal veins and associated white mica and sulfide alteration zones to a depth of up to 230 metres vertically, that remains open at depth. The gold mineralization near surface at Dark Horse Mane is related to broader areas of structurally controlled alteration and mineralization believed to be connected to feeder structures, distributing gold bearing fluids over a wide area as these fluids approached the paleo surface. Evidence for these feeder structures includes a series of exposed residual quartz lithocaps, associated locally with increasing copper anomalism at depth interpreted to predate the gold mineralization. These lithocaps are distributed along dominant NE trending structures believed to represent transform faults and potentially feeder conduits from a magmatic porphyry source at depth. The highest-grade gold bearing oxide zones at the southern end of the Dark Horse Mane are located proximal to the residual quartz lithocaps and hosted within tuffaceous to porphyritic volcanoclastic units.

RC drilling in Q2 2022 identified several prospects within the broader Dark Horse Mane prospect. Multiple RC holes at East Mane, an 8-hectare area, 500 metres east of Dark Horse Mane, returned anomalous gold (up to 0.22 g/t gold over 3 metres) and pathfinder elements (antimony and arsenic). The East Mane area also exhibits structural and geological similarities to high-grade Dark Horse Mane South mineralization.

Ulaan Southeast

In June 2021, the Company completed the maiden gold exploration program in the southern portion of the Ulaan license, reporting a significant new gold discovery just 300 metres west of the Bayan Khundii Deposit. Results to date, including follow-up drilling in Q2 2022, have confirmed a significant gold discovery at Ulaan SE. Multiple drill holes have returned hundreds of metres (up to 354 metres) of gold mineralization, often ending in mineralization, over an area 200 metres by 250 metres. Gold mineralization begins approximately 80 metres from surface with anomalous gold intersected as shallow as 4 metres depth (UDH-18) and remains open along strike to the west/northwest and at depth. Gold grades up to 156 g/t are related to intense quartz ± hematite veins and stockwork zones enveloped by the same gold bearing silicified, white mica altered lapilli tuff sequence which hosts Erdene’s Bayan Khundii epithermal gold deposit, located just east on the Khundii mining license. Structural controls are also similar with northwest striking, southwest dipping veins hosting the gold and intensifying adjacent to bounding structures and/or feeder conduits typically oriented northeast or north. Gold mineralization, particularly the low-grade envelope, also appears to be partially controlled by lithology with low permeability silicified ash tuffs focusing fluid flow and coarser lapilli tuffs acting as a preferred host to mineralization, stratigraphically dipping to the northwest.

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Highlight interceptions at Ulaan SE since the initial discovery include:

• UDH-14: 217 metres of 1.1 g/t gold beginning 188 metres downhole, including 3.5 g/t gold over 53 metres

• UDH-21: 335 metres of 1.1 g/t gold beginning 115 metres downhole, including 8.7 g/t gold over 27 metres within 77 metres of 3.2 g/t gold

• UDH-22: 152 metres of 1.7 g/t gold beginning 85 metres downhole, including 3.1 g/t gold over 65 metres

• UDH-35: 23 metres of 13.7 g/t gold within 41 metres of 8.1 g/t gold, beginning 187 metres downhole

• UDH-36: 179 metres of 1.2 g/t gold, beginning 72 metres downhole, including several one-metre intervals, ranging from 10 to 33 g/t gold, and ending in mineralization at 350 metres

• UDH-53: 2 metres of 24.9 g/t gold within 27 metres of 3.5 g/t gold, beginning 248 metres downhole

Together with the Bayan Khundii deposit and Dark Horse prospect, results from drilling at Ulaan Southeast demonstrate the potential scale of mineralization within the nearly 4,000-hectare Khundii-Ulaan Hydrothermal system, which extends from Ulaan over 10 kilometres to the northeast onto the Khundii license.

Altan Nar

The 100%-owned Altan Nar deposits are located on the Corporation’s 4,669-hectare Altan Nar mining license, 16 kilometres northwest of Bayan Khundii. The AN mining license was received on March 5, 2020 and is valid for an initial 30-year term with provision to renew the license for two additional 20-year terms. The license hosts 18 mineralized (gold, silver, lead, zinc) target areas within a 5.6 by 1.5-kilometre mineralized corridor. Two of the early discoveries, Discovery Zone (“DZ”) and Union North (“UN”), host wide zones of high-grade, near-surface mineralization, and are the focus of a Resource Estimate released in Q2 2018.

Altan Nar is an intermediate sulphidation, carbonate-base metal gold (“CBMG”) deposit, with similarities to prolific gold deposits such as Barrick Gold’s Porgera mine (Papua New Guinea), Rio Tinto’s formerly producing Kelian mine (Indonesia), Lundin Gold’s Fruta Del Norte deposit (Ecuador), and Continental Gold’s Buritica project (Colombia). CBMG deposits generally occur above porphyry intrusions in arc settings and may extend for more than 500 metres vertically.

Altan Nar received limited exploration over the past two years as the Company’s resources were focused on the Bayan Khundii discovery. In late Q4 2019, the Company drilled five holes totaling 667 metres in DZ. Four holes tested the high-grade core area of the Discovery Zone, over a 130-metre strike length, 70 metres of which remains untested by drilling (“Gap Zone”). The fifth hole tested the southern extension of the deposit. Results from the 2019 program, including the intersection of 45.7 g/t gold, 93.4 g/t silver, 1.54% lead and 3.40% zinc over 7 metres beginning at approximately 70 metres vertical depth, within 23 metres grading 17 g/t gold, are amongst the strongest to date. Many of the 2019 high-grade intersections are locally outside or in areas of previously low-grade resource blocks and therefore expand the DZ high-grade core indicating consistency in high-grade mineralization within the identified ore horizon. These results are expected to positively impact the resource at Altan Nar and open the way for further expansion along strike and elsewhere in the district. The program also demonstrated continuity of anomalous gold and base metals along the structural corridor to the south of the DZ, which will be tested further in upcoming programs.

To date, Indicated Mineral Resources have been established for the Discovery Zone and Union North prospects. The remaining 16 targets at Altan Nar appear very prospective and the Company intends to complete further drilling on the license to increase its understanding of the system.

Mineral Resources and Reserves

Khundii Minerals District

The total Khundii Minerals District gold resource is calculated by adding resources from the Bayan Khundii and Altan Nar deposits and calculating the weighted average grades. The Bayan Khundii Mineral Resource Estimate, prepared by Tetra Tech, has an effective date of June 17, 2021. The Altan Nar Mineral Resource Estimate, prepared by RPMGlobal, has an effective date of May 7, 2018.

Erdene Resource Development Corp. | Management’s Discussion and Analysis | 9

A summarized sensitivity analysis of the grade and tonnage relationships at various cut-off grades for the Khundii Minerals District is shown in the table below[1] :

Cut-Off Grade(1,2)	Resource Classification	Quantity (Mt)	Grade(Aug/t)	Gold(Koz)
Recommended (3)	Measured & Indicated Inferred	13.3 3.9	2.12 1.76	903 222
1.0	Measured & Indicated Inferred	6.3 3.3	3.77 1.99	768 211
1.4	Measured & Indicated Inferred	5.2 3.0	4.42 2.12	738 204

Notes:

(1) Combined resources from Bayan Khundii and Altan Nar.

(2) Cut-off grades for Altan Nar are AuEq2 and for Bayan Khundii are gold only. For the AN resource estimate, Gold Equivalent (“AuEq2”) calculations assume metal prices of US $1,310 per ounce gold, US $18 per ounce silver, and US $2,400 per tonne lead and US $3,100 per tonne zinc.

(3) Tetra Tech recommended cut-off grade for Bayan Khundii is 0.40 g/t gold and RPM recommended cut-off grade for Altan Nar is 0.7 g/t AuEq2 above a pit and 1.4 g/t AuEq2 below the same pit shell.

Bayan Khundii Gold Deposit

Resource

The 2021 Bayan Khundii Mineral Resource Estimate, prepared by Tetra Tech, is based on the combination of geological modeling, geostatistics, and conventional block modeling using the Ordinary Kriging method of grade interpolation in Datamine Studio RM™ software. The QAQC sampling protocols and corresponding sample preparation and shipment procedures have been reviewed by Tetra Tech.

The Mineral Resource Estimate has been constrained to a conceptual pit shell and is reported at a recommended cut-off grade of 0.40 g/t gold. The assumptions and parameters utilized to establish the cutoff grade and pit shell are reported in notes following the table below and support reasonable prospects for eventual economic extraction. Mineral Resources are inclusive of Mineral Reserves (reported below). For further details on the updated Bayan Khundii mineral resource estimate, please see the Company’s Q2 MD&A dated August 12, 2021.

Cut-off Grade (1)	Resource Classification	Quantity (tonnes)	Grade	Gold
			Aug/t	oz
0.4 g/t Au	Measured	3,031,000	2.39	232,700
	Indicated	5,269,000	2.08	352,400
	Measured & Indicated	8,301,000	2.19	585,100
	Inferred	512,000	2.18	35,900

Notes:

(1) Cut-off grades have been calculated using a gold price of $1,600 /ounce, milling and G&A costs of $16.0 / tonne, and mining costs of $3.0 / tonne, and an assumed gold recovery of 95%.

(2) Bulk density of 2.66 for mineralized domains.

(3) Numbers may not add exactly due to rounding.

(4) Conforms to NI 43-101, Companion Policy 43-101CP, and the CIM Definition Standards for Mineral Resources and Mineral Reserves.

(5) Mineral resources which are not mineral reserves do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate.

Reserves

The total Bayan Khundii Mineral Reserve is shown below, as reported in Erdene’s press release dated July 20, 2020. The Bayan Khundii July 1, 2020, BFS Mineral Reserve has been estimated by Qualified Person, Mr. Anthony Keers, Director, Auralia Mining Consulting, using the 2014 CIM Definition Standards for Mineral Resources and Mineral Reserves to conform to the Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects. The Mineral Reserve is based on the October 1, 2019, mineral resource estimate. The Mineral Reserve includes both Proven and Probable Mineral Reserves that were converted from Measured and Indicated mineral resources. Tonnes and grades were calculated for the mining blocks, and allowances for dilution and mining recovery were applied to estimate the Mineral Reserve Statement. The effective date of the Mineral Reserve statement is July 1, 2020.

Erdene Resource Development Corp. | Management’s Discussion and Analysis | 10

	Tonnage (Mt)	Grade (g/t Au)	Contained Au (Koz)
Proven Mineral Reserves Probable Mineral Reserves Mineral Reserve	1.2 2.2 3.4	4.2 3.5 3.7	166 244 409

Notes:

• (1) The effective date of the Mineral Reserve estimate is July 1, 2020. The QP for the estimate is Mr. Anthony Keers of Auralia Mining Consulting.

• (2) The Mineral Reserve estimates were prepared with reference to the 2014 Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards (2014 CIM Definition Standards) and the 2003 CIM Best Practice Guidelines.

• (3) Reserves estimated assuming open pit mining methods.

• (4) Waste to ore cut-offs were determined using a NSR for each block in the model. NSR is calculated using prices and process recoveries for each metal accounting for all off-site losses, transportation, smelting and refining charges.

• (5) Reserves are based on a gold price of $1400/oz.

• (6) Mineral Reserves were calculated from a diluted “mining” block model which included average dilution of 9% and losses of 1%.

• (7) The Mineral Reserve is based on the October 1, 2019, mineral resource estimate.

Altan Nar Gold-Polymetallic Deposit

RPMGlobal calculated the mineral resource estimate for Altan Nar in May 2018 at a number of gold cutoffs, however, RPM recommends reporting the Altan Nar mineral resource at cut-off of 0.7 g/t AuEq2 (see definition for AuEq2 in note 8 below) above a pit and 1.4 g/t AuEq2 below the same pit shell. For further details on the Altan Nar mineral resource estimate, please see the Company’s Altan Nar GoldPolymetallic Project NI 43-101 Technical Report dated March 29, 2021.

Cut-off AuEq2 g/t	Resource		Grade	Grade	Grade	Grade	Grade	Contained Metal	Contained Metal	Contained Metal	Contained Metal	Contained Metal
	Classi-	Quantity (Mt)	Au	Ag	Zn	Pb	AuEq2	Au	Ag	Zn	Pb	AuEq2
	fication		g/t	g/t	g/t	g/t	g/t	Koz	Koz	Kt	Kt	Koz
0.7	Indicated	5.0	2.0 14.8 0.6 0.6 2.8					318 2,350 31.6 29.0 453
	Inferred	3.4	1.7 7.9 0.7 0.7 2.5					186 866 23.7 22.3 277

Notes:

• (1) The Mineral Resources have been constrained by topography and a cut-off of 0.7 g/t AuEq2 above a pit and 1.4 g/t AuEq2 below the same pit shell.

• (2) The Mineral Resource Estimate Summary was compiled under the supervision of Mr. Jeremy Clark who is a full-time employee of RPM and a Member of the Australian Institute of Geoscientists. Mr. Clark has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity that he has undertaken to qualify as a Qualified Person as defined in the CIM Standards of Disclosure.

• (3) All Mineral Resource figures reported in the table above represent estimates as at May 7, 2018. Mineral Resource estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape and continuity of the occurrence and on the available sampling results. The totals contained in the above table have been rounded to reflect the relative uncertainty of the estimate. Rounding may cause some computational discrepancies.

• (4) Mineral Resource grades are reported in accordance with the CIM Standards.

• (5) Mineral Resources reported on a dry in-situ basis.

• (6) No dilution or ore loss factors have been applied to the reported Resource Estimate.

• (7) No allowances have been made for recovery losses that may occur should mining eventually result.

• (8) For the AN resource estimate Gold Equivalent (“AuEq2”) calculations assume metal prices of US $1,310 per ounce gold, US $18 per ounce silver, and US $2,400 per tonne lead and US $3,100 per tonne zinc.

Erdene Resource Development Corp. | Management’s Discussion and Analysis | 11

Technical Studies

On July 20, 2020, Erdene announced the results of an independent Bankable Feasibility Study for the BK gold deposit. The report, titled “Bayan Khundii Gold Project Feasibility Study, NI 43-101 Technical Report”, dated August 31, 2020, was prepared by international and Mongolian firms with significant experience operating in Mongolia. The study incorporates detailed mine design and scheduling, front-end engineering and design for the processing plant and site infrastructure, a hydrogeological assessment, mineral waste facility design, comprehensive capital and operating cost estimation, and an updated economic model.

The 2020 FS envisions a high-grade, open pit mine beginning at surface in the southern portion of the BK deposit (Striker and Gold Hill), expanding northward into adjacent zones at Midfield and North Midfield. The Project incorporates conventional crushing and grinding, leach and a Carbon in Pulp plant with processing capacity of 1,800 tonnes per day. The 2020 FS includes 3.4 million mineable tonnes from the BK resource at an average diluted head grade of 3.7 g/t gold, all of which are Proven and Probable Reserves. The 2020 FS is based on an open-pit mining operation targeting 600,000 tonnes per year of feed material for the processing plant. The total mineable mineralized plant feed is 3.4 million tonnes at an average diluted head grade of 3.7 g/t gold and average strip ratio of 9.1:1 (waste tonne: plant feed tonne). Mineralization starts at surface, with the majority of the deposit contained within the top 100 metres. The deposit structure, grades and depth suggest selective open cut mining will be utilized. Mining will use hydraulic excavators in backhoe configuration. Drilled and blasted material will be loaded into haul trucks, with waste rock deposited in an engineered Integrated Waste Facility (“IWF”) adjacent to the pit, and ore hauled to a crusher or runof-mine (“ROM”) pad adjacent to the processing plant.

The 2020 FS has assumed contract mining based on methodology and costing contained in proposals received from contractors with suitable experience in Mongolia in similar open-pit mining environments. In this scenario the contractor provides the full fleet and personnel to operate the project on a schedule of rates (US$/tonne material moved) basis. The contractor is proposing a total of 4 x excavators (2 x ore, 2 x waste), 10 x 55t payload trucks, 3 x blasthole drills and a fleet of ancillary and support equipment to deliver the required material movement. The contractor’s workforce peaks at approximately 190 personnel to deliver the required schedule of production.

The 2020 FS assumes processing of ROM material via a conventional crush and grind circuit and a carbon in pulp plant. Plant design by 360-Global has been based on testing at Blue Coast Research which has established optimal processing parameters, including; grind size of 80% passing 60 microns; design inputs for comminution circuit, low cyanide concentration in leach circuit (0.5 g/litre sodium cyanide); 36-hour retention time; carbon adsorption parameters and detoxification reagent dosages. The process circuit has been designed to maximize water recovery with the most efficient dewatering process (ceramic disc filters) to achieve targeted 15% moisture in tailings, minimize chemical and reagent usage and minimize environmental impact.

The ore-processing plant will be located adjacent to the Bayan Khundii open pit and throughput will target 600,000 ore-tonnes per year, nominally 1,800 tonnes per day. Total mineralized material from BK, processed in the plant over the course of the mine life, is 3.4 million tonnes at an average diluted head grade of 3.7 g/t gold. Using an estimated mill recovery of 93.1%, total recovered gold over the life of the Bayan Khundii deposit is 381,700 ounces.

Since the Company released results of the 2020 FS in mid-2020, Erdene has advanced permitting, procurement, and construction readiness activities to prepare for construction, while continuing to explore for additional resources. As part of the Strategic Alliance with Mongolian Mining Corporation, Erdene is preparing an updated NI 43-101 Feasibility Study for BK incorporating additional resources and reserves from recent exploration, as well as design and engineering work to optimize plant throughput and bring forward grade, as well as current capital and operating costs. The Company and MMC completed an internal FS update in April 2023, the results of which will be incorporated into the NI 43-101 FS update that’s expected to be announced in mid-2023.

Erdene Resource Development Corp. | Management’s Discussion and Analysis | 12

Khundii Minerals District Exploration

Erdene’s has been the leader in exploration in southwest Mongolia over the past decade and is responsible for the discovery of the KMD comprised of multiple high-grade gold and base metal prospects. In addition to the Bayan Khundii Project and the Altan Nar deposit, the Company has identified several other prospects, the most advanced of which are described below.

Khundii-Ulaan Epithermal Gold Potential

Results from recent exploration confirm that the Khundii Gold District hosts multiple zones of epithermal gold mineralization over a wide area. The Khundii mining license and adjoining Ulaan exploration license cover nearly 4,000 hectares of the Khundii-Ulaan hydrothermal alteration zone, which extends from Ulaan over 10 kilometres to the northeast. This alteration trend has a central zone of intense secondary silica with a peripheral halo of sericite alteration, and an outer zone of white mica and sericite, which hosts the Bayan Khundii gold deposit. This northeast trending alteration area, which incorporates the Ulaan, Bayan Khundii, Dark Horse and other mineralized targets in the area, is associated with a regional structural dilational jog and associated major volcano-plutonic centre, along a northeast trending transform fault. The various styles of alteration and mineralization within the Khundii-Ulaan target area are consistent with a fertile magmatic island arc, with evidence for possible arc migration, and overlapping or telescoped mineralization along major structures.

Exploration results to date suggest the greater Khundii-Ulaan alteration zone and known gold occurrences are part of the same, large, gold-bearing hydrothermal system which remains largely under-explored. Gold mineralization identified to date is hosted within an expansive, white mica and silica altered tuffaceous sequence exposed around the periphery of the Khundii-Ulaan hydrothermal alteration system. Quartz vein textures and clay alteration compositions indicate a large-scale epithermal type gold mineralizing environment existed within the Khundii-Ulaan system with the tuffaceous lithologies acting as preferred hosts for gold mineralization. Exploration planning is currently underway to test multiple high-priority geological, geochemical and geophysical targets across the Khundii-Ulaan target area.

Regional drilling has been restricted to shallow targets with average drill depths of about 100 metres with approximately 70% of regional drill holes having intersected anomalous gold mineralization (defined as >0.1 g/t gold). Success has been driven by the abundance of untested, near surface geochemical and geophysical targets in a region that has had no previous modern exploration. Recent exploration successes testing shallow targets, and the definition of three deposits, exposed at surface, are testament to the discovery potential of this new district. During Q2 2022, the Company completed a 278-hole RC drill program to test shallow targets across the greater Dark Horse area principally on the Khundii License. Results from this work generated multiple new targets, several of which were drill tested in Q3 2022, leading to the confirmation of the new East Mane prospect, approximately 500 metres east of the Dark Horse Mane.

Furthermore, Erdene continues to evaluate opportunities throughout the Trans Altai Terrane, within our licenses and elsewhere in the mineralized belt. This has led to the identification of prospects that are being explored through surface surveys on the Company’s four licenses, drilling of selected targets and evaluation of acquisition targets on private and government held ground.

Ulaan Copper-Gold Porphyry Target

On August 30, 2017, the Corporation’s Mongolian subsidiary acquired a 51% interest in the 1,780-hectare Ulaan exploration license (“Ulaan Property”), immediately west of its high-grade Bayan Khundii deposit. In December 2020, Erdene Mongol LCC acquired the remaining 49% interest in the property. The exploration license is in its seventh year of a maximum 12-year term and can be converted to a mining license at any time prior to the end of the twelfth year by meeting the requirements prescribed under the Minerals Law of Mongolia.

In addition to the UIaan Southeast gold prospect discovery, the Ulaan license hosts a porphyry copper prospect primarily based on the broad (5km by 4km) zone of phyllic (quartz-sericite-pyrite) alteration at surface, with characteristics thought to be related to a porphyry intrusion at depth. Rock chip and stream sediment geochemical sampling identified anomalous concentrations of gold, copper and molybdenum in the surrounding area, and recently completed geophysical surveys have produced a number of follow-up targets.

Three wide spaced holes were drilled in 2018, totaling 1,050 metres over a 1.3-kilometre area in the central portion of the license. These holes intersected volcanic to sub-volcanic rocks exhibiting propylitic to phyllic quartz-sericite-pyrite (“QSP”) alteration with varying concentrations of pyrite and locally low-level copper mineralization (100 to 300 ppm over 60 metres).

Erdene Resource Development Corp. | Management’s Discussion and Analysis | 13

A 700-metre, three-hole drilling program was completed in 2019 to test the alteration system at depth (to 650 metres), by extending a previous drill hole, and to investigate two shallower moderate IP chargeability targets (to 200 metres). The extension hole showed continuity at depth of the phyllic style alteration and ended within elevated copper, averaging 130 ppm over 22 metres. The entire second hole exhibited sericite alteration and pyrite mineralization with localized zones of tourmaline alteration and quartz veining within an andesite host, however no anomalous geochemistry was encountered. The final hole intersected a broad zone of intense tourmaline-silica-sericite alteration which hosts localized gold bearing quartz-tourmaline breccia and breccia veins from 140 to 202 metres (end of hole). Anomalous gold bearing intervals include: 2 metres of 1.3 g/t gold, 4 metres of 0.29 g/t gold, 2 metres of 0.5 g/t gold and 2 metres of 0.23 g/t gold or 40 metres of 0.15 g/t gold average grade. Anomalous copper, exceeding 400 ppm, was also intersected within the anomalous zone. The Erdene technical team is reviewing these results along with associated geology, geochemistry and geophysics to establish the basis for future drill testing of the Ulaan CopperGold Porphyry target.

Zuun Mod Molybdenum-Copper Project

The Zuun Mod Molybdenum-Copper Project is a porphyry molybdenum-copper deposit located in southwest Mongolia on the Company’s Khuvyn Khar license. This project is approximately 950 kilometres southwest of Ulaanbaatar and 215 kilometres from railhead on the Mongolia-China border at Ceke. The property consists of a mining license totaling 6,041 hectares. The mining license is registered in the name of Anian Resources LLC , a wholly owned subsidiary of the Corporation, and has an initial term of 30 years that can be extended for up to 70 years. This project was acquired from Gallant Minerals Limited in 2005 and is subject to a net smelter returns royalty (“NSR Royalty”) of 1.5% held by Sandbox Royalties, subject to a buy-down provision.

In Q2 2011, the Corporation released a NI 43-101 resource estimate for Zuun Mod containing a Measured and Indicated Resource of 218 million tonnes ("Mt") at an average grade of 0.057% molybdenum, and 0.069% copper at a cut-off grade ("COG") of 0.04% molybdenum. This equates to 273.5 million pounds ("M lbs") of contained molybdenum and 330.7 M lbs of contained copper. In addition, there is a 168 Mt Inferred Resource at an average grade of 0.052% molybdenum and 0.065% copper, equating to a further 191.8 M lbs of contained molybdenum and 240.5 M lbs of contained copper.

In Q2 2023, Erdene commenced a 4,000-metre drill program at Zuun Mod. The first phase of the drill program, targeting 2,500 metres, is designed to identify areas at the fringes of the currently defined resource, where larger scale expansion drill programs could materially increase resources. Drilling will also test the orientation of higher-grade molybdenum and copper zones at depth. Erdene will complete further market, technical and economic studies as well as permitting work in the coming months, to build upon a conceptual assessment of the project completed by RPMGlobal in late 2021. Based on the studies, as well as the results from the exploration program underway, Erdene anticipates preparing a preliminary economic assessment for the project in the coming months.

Further details on the Zuun Mod resource can be found in the "Technical Report Zuun Mod Porphyry Molybdenum-Copper Project, South-Western Mongolia, National Instrument 43-101 Independent Technical Report" dated June 2011, filed on SEDAR.

Khuvyn Khar Copper-Silver Project

The Khuvyn Khar copper-silver project is located on the Khuvyn Khar license, approximately 2.2 kilometres north of the Zuun Mod molybdenum-copper porphyry deposit. Exploration work at Khuvyn Khar has included geological mapping, vein density mapping, geochemical sampling, geophysical surveys, and wide spaced drilling. Previous drilling intersected 34 metres of 1.3% copper and 9.24 g/t silver from 308 to 342 metres (ZMD-121). The Project has a very large copper mineralized zone trending over 900 metres with multiple zones in three drill holes returning assays in excess of 0.2% copper over significant widths (12 to 42 metres). Erdene intends to conduct follow-up exploration on the license in the second half of 2023.

Acquisitions

Mongolia’s Ministry of Mining and Heavy Industry periodically issues areas for exploration. Erdene has established the largest proprietary geologic database of Southwest Mongolia with a priority list of acquisition targets. The Company will participate in the tendering process as its priority targets are opened for tender. The Company has also been evaluating privately held licenses for acquisition. Through its Strategic Alliance with MMC, Erdene will be an active participant in tenders or license acquisitions in the KMD.

Erdene Resource Development Corp. | Management’s Discussion and Analysis | 14

Discussion of Operations

Three months ended March 31, 2023 and 2022

The tables below detail exploration and evaluation expenditures for the three months ended March 31, 2023 and 2022. The Bayan Khundii Gold Project was the focus of the Corporation’s efforts during these periods.

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Zuun Mod General &
Period ended Mar. 31, 2023 Bayan Khundii Altan Nar Ulaan & Other Admin Total
E&E expenditures
Exploration & field support $ 320,601 $ 18,243 $ 15,893 $ 70,979 $ - $ 425,716
Mining studies & pre-development costs 640,591 39,161 1,483 618 - 681,853
- - -
Mongolian office costs 222,390 222,390
- - -
Share-based compensation 12,910 12,910
Stakeholder relations 8,764 - - - 26,746 35,510
Travel & other 58,803 - - - - 58,803
Total exploration expenditures 1,028,759 57,404 17,376 71,597 262,046 1,437,182
Capitalized expenditures (1,019,995) (57,404) (1,495) - - (1,078,894)
Expensed exploration costs 2023 $ 8,764 $ - $ 15,881 $ 71,597 $ 262,046 $ 358,288
E&E assets, January 1, 2023 $ 36,183,734 $ 4,257,954 $ 1,688,477 $ 923,991 $ - $ 43,054,156
Additions 1,019,995 57,404 1,495 - - 1,078,894
Effect of movements in exchange rates (470,284) (54,550) (21,510) (19,417) - (565,761)
E&E assets, March 31, 2023 $ 36,733,445 $ 4,260,808 $ 1,668,462 $ 904,574 $ - $ 43,567,289
Zuun Mod General &
Period ended Mar. 31, 2022 Bayan Khundii Altan Nar Ulaan & Other Admin Total
E&E expenditures
-
Exploration & field support $ 637,838 $ 44,586 $ 36,301 $ 62,296 $ $ 781,021
Mining studies & pre-development costs 1,325,240 69,198 25,169 662 - 1,420,269
- - -
Mongolian office costs 303,646 303,646
- - -
Share-based compensation 19,553 19,553
Stakeholder relations 206,134 156,370 - - - 362,504
Travel & other 10,254 687 1,219 5,419 - 17,579
Total exploration expenditures 2,179,466 270,841 62,689 68,377 323,199 2,904,572
Capitalized expenditures (2,006,368) (114,854) (1,726) - - (2,122,948)
Expensed exploration costs 2022 $ 173,098 $ 155,987 $ 60,963 $ 68,377 $ 323,199 $ 781,624
E&E assets, January 1, 2022 $ 30,910,999 $ 4,246,301 $ 1,797,500 $ 973,653 $ - $ 37,928,453
Additions 2,006,368 114,854 1,726 - - 2,122,948
Effect of movements in exchange rates (959,070) (127,065) (52,782) (45,806) - (1,184,723)
E&E assets, March 31, 2022 $ 31,958,297 $ 4,234,090 $ 1,746,444 $ 927,847 $ - $ 38,866,678
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Exploration and evaluation expenditures, including capitalized expenditures, totaled $1,437,182 for the three months ended March 31, 2023, compared to $2,904,572 for the three months ended March 31, 2022.

Exploration & field support expenses in the first quarter of 2023 were $355,305 less than prior year quarter as the camp was closed for most of the first quarter in 2023 but was open for approximately two months of the first quarter of 2022 in support of community and stakeholder programs.

Mining studies & pre-development costs for the three months ended March 31, 2023, were $738,416 less than for the three months ended March 31, 2022, primarily due to a reduction in consulting activity related to project controls and procurement while the Erdene and MMC teams integrate, as well as the impact of a $266,000 deposit for the purchase of the elution circuit in early 2022, that did not recur in the Q1 2023.

Mongolian office costs for the three months ended March 31, 2023, were $81,256 lower than the prior year period primarily due to a reduction of expenditures on government relations and community engagement.

Erdene Resource Development Corp. | Management’s Discussion and Analysis | 15

Stakeholder relations costs for the three months ended March 31, 2023, were $326,994 less than for the three months ended March 31, 2022, due to the timing of payments under the Local Cooperation Agreement with local communities in support of the Bayan Khundii Gold Project.

Travel & other costs for the current year quarter were $41,224 greater than the prior year quarter due to an increase in international travel in support of the MMC Strategic Alliance.

Erdene began capitalizing exploration costs for its Altan Nar Project in 2015 and commenced capitalizing costs for its Bayan Khundii Gold Project in 2016. For the three months ended March 31, 2023 and 2022, Erdene capitalized all exploration costs associated with these projects; however, exploration and evaluation expenditures associated with its Ulaan property were expensed in 2022 and 2021, consistent with Company’s capitalization policy.

The following table summarizes corporate and administration expenses for the three months ended March 31, 2023 and 2022.

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For the three months ended March 31,
2023 2022 Change
Administrative services $ 181,171 $ 142,890 $ 38,281
Depreciation and amortization 9,380 9,520 (140)
Directors fees and expenses 34,072 26,250 7,822
Investor relations and marketing 83,486 23,413 60,073
Office and sundry 25,794 24,802 992
Professional fees 103,177 74,155 29,022
Regulatory compliance 62,325 81,303 (18,978)
Share-based compensation 44,321 56,860 (12,539)
Travel and accommodations 37,385 6,253 31,132
$ 581,111 $ 445,446 $ 135,665
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Corporate and administrative expenses totaled $581,111 for the three months ended March 31, 2023, compared to $445,446 for the three months ended March 31, 2022.

Administrative services expenditures for the three months ended March 31, 2023, were $38,281 higher than those in the three months ended March 31, 2022, due to cost-of-living salary increases and changes in share-based compensation for key executives and directors. This variance was partially offset by the $12,539 variance versus the comparative prior year period in share-based compensation.

Investor relations and marketing expenditures for the three months ended March 31, 2023, were $60,073 greater than in the comparative prior year period due to an increase in investor relations activity associated with the announcement of the MMC Strategic Alliance.

Professional fees for the three months ended March 31, 2023, were $29,022 greater than the prior year due to the engagement of financial advisors to assist with capital markets support and marketing of the MMC Strategic Alliance.

Regulatory compliance expenditures for the three months ended March 31, 2023, were $18,978 lower than those in the prior year quarter as the comparative period included a TSX fee related to the Company’s equity-based compensation plans.

Travel and accommodations costs were $31,132 greater than the prior year due to an increase in international travel related to the negotiation and marketing of the MMC Strategic Alliance.

Depreciation and amortization, Directors fees and expenses and Office and sundry expenditures for the three months ended March 31, 2023, were not materially different from those incurred in the prior year comparative period.

Erdene Resource Development Corp. | Management’s Discussion and Analysis | 16

Summary of Quarterly Results

Expressed in thousands of Canadian dollars except per share amounts

	Fiscal 2023		Fiscal	2022			Fiscal 2021
	Q1	Q4	Q3	Q2	Q1	Q4	Q3	Q2
	Mar	Dec	Sep	Jun	Mar	Dec	Sep	Jun
Net loss	$1,139	$1,077	$1,980	$1,698	$1,231	$2,356	$1,936	$1,279
Basic loss per share	$0.00	$0.00	$0.01	$0.01	$0.00	$0.01	$0.01	$0.00
Total assets	$57,401	$52,533	$47,785	$42,495	$44,230	$46,544	$42,319	$42,411

For the three months ended March 31, 2023, the Corporation recognized a net loss of $1,138,937 compared to a net loss of $1,231,156 for the same period in 2022.

The Corporation’s expenditures vary from quarter to quarter, largely due to the seasonal timing of its Mongolian exploration and evaluation programs. The Corporation is not aware of any other specific trends which account for fluctuations in financial results from period to period.

Liquidity and Capital Resources

At the date of this MD&A, the Corporation had approximately $17.3 million of cash and $5.0 million in working capital, calculated as current assets less current liabilities, including US$10 million of convertible promissory notea related to the MMC Strategic Alliance.

Funds raised have been used to advance the Corporation’s projects in Mongolia and to meet administrative costs in support of those programs (see Development and Exploration Projects and Discussion of Operations). The ability of the Corporation to continue with its exploration and development programs is contingent upon securing additional funds through asset sales, formation of alliances, option and/or joint venture agreements and equity or debt financing. The timing and availability of additional financing will be determined largely by market conditions and the results of the Corporation’s ongoing exploration and development programs.

The Corporation has minimal sources of income. It is therefore difficult to identify any meaningful trends or develop an analysis from the Corporation’s cash flows. The Corporation is dependent primarily on the issuance of share capital and debt to finance its exploration and development programs.

Other than as discussed herein, the Corporation is not aware of any trends, demands, commitments, events or uncertainties that may result in the Corporation’s liquidity or capital resources materially increasing or decreasing at present or in the foreseeable future other than planned expenditures. Material increases or decreases in the Corporation’s liquidity and capital resources will be substantially determined by the success of the Corporation’s Mongolian exploration and development programs and its ability to obtain sufficient financing.

Outstanding Share Data

Authorized

An unlimited number of common shares with no par value.

Issued and Outstanding Share Capital

Issued and Outstanding Share Capital
	May 3, 2023	December 31, 2022
Common shares issued and outstanding	344,400,376	344,300,376
Options outstanding	17,205,000	17,555,000
Warrants outstanding	25,264,122	25,264,122
DSU's oustanding	7,446,245	7,287,272
Total instruments outstanding	394,315,743	394,406,770

Erdene Resource Development Corp. | Management’s Discussion and Analysis | 17

Contractual Obligations

The following table summarizes the maturity of the Corporation’s contractual obligations at March 31, 2023:

			Less than	Less than		1 - 2
		Total		oneyear		years
Office leases	$	68,394	$	53,796	$	14,598
Accounts payable and accrued liabilites		335,881		335,881		-
Convertiblepromissorynote		6,930,895		6,930,895		-
	$	7,335,170	$	7,320,572	$	14,598

Other Financing Arrangements and Commitments

MMC Strategic Alliance

In January 2023, Erdene entered a Strategic Alliance with MMC where MMC agreed to invest a total of US$40 million for a 50% interest in Erdene’s Mongolian subsidiary, Erdene Mongol LLC. This investment has been structured as a series of three promissory notes, that will be converted into an equity interest in EM following a BK construction decision, and certain other conditions.

On January 16, 2023, the Corporation executed a US$5 million convertible note agreement with MMC under the terms of the Investment Agreement. The note bears interest at a rate equal to the secured overnight financing rate (“SOFR”) established by the Federal Reserve Bank of New York as at the date the amount is advanced plus 8%. The convertible note, and any accrued interest, is expected to be converted to a 6.25% equity interest in Erdene Mongol LLC, the Corporation’s Mongolian subsidiary, upon the Third Closing of the Investment Agreement, anticipated in Q3 2023.

On May 2, the Corporation executed a second US$5 million convertible note agreement with MMC under the terms of the Investment Agreement. Consistent with the convertible note agreement executed in January 2023, the note bears interest at a rate equal to the secured overnight financing rate (“SOFR”) established by the Federal Reserve Bank of New York as at the date the amount is advanced plus 8%. The convertible note, and any accrued interest, is expected to be converted to a further 6.25% equity interest in Erdene Mongol LLC, the Corporation’s Mongolian subsidiary, upon the Third Closing of the Investment Agreement, anticipated in Q3 2023.

The final convertible note agreement for US$30M is expected to be executed in Q3 2023.

In the event that the Corporation and MMC do not complete the Third Closing, the notes, and any accrued interest, shall be payable on the earlier of January 10, 2024, or 60 days following the termination of the Investment Agreement.

Sandstorm Gold Ltd. Royalty Agreement

Sandstorm Gold Ltd. (“Sandstorm”) holds a 1% net smelter returns royalty (“NSR Royalty”) on Erdene’s Altan Nar, Khundii and Ulaan licenses. Sandstorm has been given a right of first refusal on future stream or royalty financings related to these licenses.

Other

Sandbox Royalties Corp. holds a 1.5% NSR Royalty on Erdene’s Zuun Mod license. Erdene has the option to buy down a portion of the royalty if certain production milestones are achieved.

Off-Balance Sheet Arrangements

As at March 31, 2023, the Corporation had no off-balance sheet arrangements such as guarantee contracts, contingent interests in assets transferred to an entity, derivative instruments obligations or any obligations that trigger financing, liquidity, market or credit risks to the Corporation.

Critical Accounting Estimates

The preparation of financial statements in conformity with IFRS requires Erdene to establish accounting policies and to make estimates that affect both the amount and timing of the recording of assets, liabilities, revenues and expenses. Some of these estimates require judgments about matters that are inherently uncertain.

Erdene Resource Development Corp. | Management’s Discussion and Analysis | 18

A detailed summary of the Corporation’s significant accounting policies and the key sources of estimation uncertainty that have a risk of resulting in a material adjustment to the carrying amount of assets and liabilities within the next twelve months are included in Note 2 to the consolidated financial statements for the year ended December 31, 2022. While all of the key sources are important to the Corporation’s consolidated financial statements, the following key sources have been identified as being critical:

• Recoverability of exploration and evaluation assets; and

• Share-based compensation.

Recoverability of exploration and evaluation assets

In accordance with the Corporation’s accounting policy, at the end of each reporting period, the Corporation assesses its exploration and evaluation assets to determine whether any indication of impairment exists. Judgment is required in determining whether indicators of impairment exist, including factors such as the period for which the Corporation has the right to explore, expected renewals of exploration rights, whether substantive expenditures on further exploration and evaluation of resource properties are budgeted and results of exploration and evaluation activities on the exploration and evaluation assets.

Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the greater of the fair value less cost of disposal and value in use. The impairment analysis requires the use of estimates and assumptions, such as long-term commodity prices, discount rates, future capital expenditures, exploration potential and operating costs. Fair value of exploration and evaluation assets is generally determined as the present value of estimated future cash flows arising from the continued use of the asset, which includes estimates such as the cost of future expansion plans and eventual disposal, using assumptions that an independent market participant may take into account. Cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and risks to the asset. If the Corporation does not have sufficient information about a particular mineral resource property to meaningfully estimate future cash flows, the fair value is estimated by management through comparison to similar market assets and, where available, industry benchmarks.

Share-based payments

Equity-settled share-based payments issued to employees and directors are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant. Fair value is measured using the Black-Scholes pricing model and requires the exercise of judgment in relation to variables such as expected volatilities and expected lives based on information available at the time the fair value is measured. The Corporation charged a total of $57,232 of non-cash share-based compensation to the statement of comprehensive loss for the three months ended March 31, 2023 (2022 - $76,413).

Adoption of New Accounting Standards and Future Changes in Accounting Policies

Erdene has adopted the following new and revised standards, along with any consequential amendments, effective January 1, 2023. These changes were made in accordance with applicable transitional provisions.

IAS 1 – Presentation of Financial Statements

On January 23, 2020, the IASB issued an amendment to IAS 1 Presentation of Financial Statements providing a more general approach to the classification of liabilities. The amendment clarifies that the classification of liabilities as current or noncurrent depends on the rights existing at the end of the reporting period as opposed to the expectations of exercising the right for settlement of the liability. The amendments further clarify that settlement refers to the transfer of cash, equity instruments, other assets, or services to the counterparty. The application of the amendment has been made on a prospective basis and did not have an impact on the Corporation.

Financial Instruments and Other Risks

Financial Instruments

The fair values of the Corporation’s financial instruments are considered to approximate the carrying amounts. Financial instruments, including cash and cash equivalents, receivables, and trade and other payables are measured at amortized cost on the Corporation’s financial statements.

Erdene Resource Development Corp. | Management’s Discussion and Analysis | 19

Credit Risk

The Corporation manages credit risk by holding the majority of its corporate cash and cash equivalents with high quality financial institutions, where management believes the risk of loss to be low.

Liquidity Risk

Liquidity risk is the risk that the Corporation will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Corporation’s approach to managing liquidity is to ensure, to the extent possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions.

Market Risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.

Interest rate risk

The Corporation has cash balances and interest-bearing debt. The Corporation's current policy is to invest excess cash in interest bearing savings accounts. The convertible promissory note held by MMC bears interest based on the SOFR rate, for which a 1% increase or decrease would result in an increase or decrease of annual interest expense of approximately $67,500.

Foreign Currency Risk

The functional currency of the Corporation is the Canadian dollar, and the functional currency of the Corporation’s subsidiaries is the Mongolian tugrik. Additionally, the Corporation incurs expenses in US dollars. Consequently, fluctuations of the Canadian dollar in relation to other currencies impacts the fair value of financial assets, liabilities and operating results. Financial assets and liabilities subject to currency translation risk primarily include US dollar denominated cash, accounts payable and accrued liabilities, as well as the Corporation’s net investment in its Mongolian subsidiaries. The Corporation maintains US dollar bank accounts in Canada.

The Corporation is also exposed to foreign exchange risk on its US dollar denominated convertible promissory notes. If the MMC Strategic Alliance is terminated prior to conversion, the balance outstanding on the convertible promissory notes, as well as any capitalized interest, is due within 60 days. Accordingly, the Corporation is subject to risks associated with fluctuations in the Canadian/US dollar exchange rate that may make the convertible promissory note more costly to repay.

The Corporation’s exposure to US dollar currency risk was $834,255 as at March 31, 2023 (December 31, 2022 - $95,635). A 10% change in the US dollar exchange rate would affect net loss and comprehensive loss and deficit by approximately $83,400 (December 31, 2022 - $9,600).

The Corporation’s exposure to Mongolian Tugrik currency risk was $63,410 as at March 31, 2023 (December 31, 2022 - $43,479). A 10% change in the Mongolian Tugrik would affect net loss and comprehensive loss and deficit by approximately $6,300 (December 31, 2022 - $4,300).

Price Risk

The Corporation’s financial instruments are not exposed to direct price risk other than that associated with commodity price fluctuations impacting the mineral exploration and mining industries as the Corporation has no significant revenues.

Other Risks

In conducting its business, the principal risks and uncertainties faced by the Corporation relate primarily to exploration results, permitting, financing and, to a lesser extent, metal and commodity prices. Exploration for minerals and development of mining operations involve many risks, many of which are outside the Corporation’s control. In addition to the normal and usual risks of exploration and mining, the Corporation works in remote locations that lack the benefit of infrastructure and easy access. More information on risks is available in the Corporation’s Annual Information Form available on SEDAR at www.sedar.com.

Erdene Resource Development Corp. | Management’s Discussion and Analysis | 20

Disclosure Controls and Internal Controls over Financial Reporting

Erdene has established and maintains disclosure controls and procedures over financial reporting, as defined under the rules adopted by the Canadian Securities Regulators in instrument 52-109. The Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) have evaluated the design and effectiveness of Erdene’s disclosure controls and procedures as of March 31, 2023 and have concluded that such procedures are adequate and effective to provide reasonable assurance that material information relating to Erdene and its consolidated subsidiaries would be made known to them by others within those entities to allow for accurate and complete disclosures in annual filings.

The Management of Erdene, with the participation of the CEO and CFO (collectively “Management”), is responsible for establishing and maintaining adequate internal controls over financial reporting. Erdene’s internal controls over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and preparation of financial statements in accordance with IFRS.

Management evaluated the design and effectiveness of Erdene’s internal controls over financial reporting as of March 31, 2023. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in its report “Internal Control – Integrated Framework (2013). This evaluation included reviewing controls in key risk areas, assessing the design of these controls, testing these controls to determine their effectiveness, reviewing the results and then developing an overall conclusion.

Based on management’s evaluation, the CEO and the CFO have concluded that as of March 31, 2023, Erdene’s internal controls over financial reporting were effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS.

However, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness in future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Qualified Person

Peter Dalton, P.Geo. (Nova Scotia) is a qualified person under NI 43-101 and supervises all of the Corporation’s exploration programs. Samples are assayed at SGS Laboratory in Ulaanbaatar, Mongolia or Tianjin China, Central Geological Laboratory in Ulaanbaatar, Blue Coast Research Ltd in Parksdale British Columbia, Canada, or ALS Chemex in Vancouver, Canada. In addition to internal checks by SGS Laboratory, Central Geological Laboratory and ALS Chemex, the Corporation incorporates a QA/QC sample protocol utilizing prepared standards, field and laboratory splits, and blanks.

The disclosure in this MD&A of scientific or technical information about mineral projects on Erdene’s properties has been reviewed and approved by Peter Dalton, P. Geo, who is not independent of the Corporation.

The information in this MD&A that relates to the financial models for the BK FS is based on information compiled and reviewed by Kenny Li, CFA, who is an employee of ROMA Group Ltd. The information in this MD&A that relates to the capital and operating cost estimation for the BK FS is based on information compiled and reviewed by Julien Lawrence, who is a FAusIMM and the Director of O2 Mining Ltd. The information in this MD&A that relates to the process design and recovery methods for the BK FS is based on information compiled and reviewed by Jeffrey Jardine, who is a FAusIMM. and is engaged through O2 Mining Ltd. The information in this MD&A that relates to the BK resource estimate is based on information compiled and reviewed by Mr. Cam Norton, who is a P. Geo, and is an employee of Tetra Tech Inc. The information in this MD&A that relates to the BK reserve estimate is based on information compiled and reviewed by Mr. Anthony Keers, who is an MAusIMM (CP Mining) and a Director, Auralia Mining Consulting. Each of Mr. Li, Mr. Lawrence, Mr. Jardine, Mr. Norton and Mr. Keers has sufficient experience, which is relevant to the style of mineralization and type of deposit under consideration and to the activity which they have undertaken to qualify as a Qualified Person, as that term is defined by National Instrument 43-101. Each of Mr. Li, Mr. Lawrence, Mr. Jardine, Mr. Norton and Mr. Keers is not aware of any potential for a conflict of interest in relation to this work with Erdene.

Other Information

Additional information regarding the Corporation, including the Corporation’s Annual Information Form, is available on SEDAR at www.sedar.com and on the Corporation’s website at www.erdene.com.

Erdene Resource Development Corp. | Management’s Discussion and Analysis | 21