Erdene Resource Development Corporation

For Q2 2026, Erdene Mongol generated USD 53 million of revenue, or CAD 75 million, from sales of nearly 12,000 ounces of gold and over 3,300 ounces of silver at average realized prices of USD 4,493 per ounce of gold and USD 72 per ounce of silver. Total cost of revenue was USD 24 million, or CAD 33 million, approximately USD 2,000 per ounce sold, and management said this was about 20% lower than Q1; all-in sustaining costs were described as not materially different from that figure because sustaining capex was minimal in the first year of operations. On the consolidated basis, Erdene reported net income of $10 million, or $0.15 per share, versus $4.8 million, or $0.07 per share, in Q1. The company ended Q2 with $28 million of corporate cash, while Erdene Mongol ended the quarter with USD 40 million of cash and about USD 120 million of project debt; after quarter-end, the JV made a USD 10 million debt repayment. For full-year 2026, management is targeting approximately 50,000 ounces of gold and expects production grade to improve toward 3.5 g/t by year-end and into 2027; the CFO also said cost per ounce should come down in the back half of the year, with ASIC potentially around USD 1,500 per ounce if grades improve as planned.

Peter Akerley struck an upbeat but measured tone, saying Bayan Khundii is becoming a steady-state foundation asset and that the company is building a multi-mine, multi-commodity district around it. He emphasized that grade control, dilution, and pit sequencing are improving, and said the 3.5 g/t target is achievable by year-end with potential upside if Dark Horse is accelerated. He also framed Zuun Mod, Altan Nar, and the wider Khundii district as long-duration growth opportunities that could extend mine life beyond 10 years and add optionality through heap leach, gravity, and additional open-pit development.

Robert Jenkins focused on the improving economics of the JV and the balance sheet. He highlighted USD 53 million of revenue, USD 24 million of cost of revenue, and cost per ounce of about USD 2,000, then said unit costs should decline in the second half as grades improve; if that happens, ASIC could approach USD 1,500 per ounce. He also noted the JV had USD 40 million of cash, about USD 120 million of project debt, and had already made a USD 10 million repayment, while Erdene itself held $28 million of corporate cash and launched a normal course issuer bid, buying back almost 100,000 shares at an average price of $5.20.

Analysts focused on whether the mine could sustain the 3.5 g/t target, how dilution and reconciliation were progressing, and whether the plant could operate above nameplate capacity. Management said the grade model is now starting to line up with mill results, dilution has improved from roughly 30%–40% early on to 20% or less, and the plant can likely run a bit higher in steady state, though mine sequencing and rock hardness remain variables. Questions also centered on the heap leach timeline, with management saying a 2027 investment decision could lead to 2028 start-up, and on Zuun Mod financing, where management said offtake and regional bank discussions are active and that gold expansion projects should largely be self-funded inside the JV.