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EBRD Funds US$5,000,000 Convertible Loan to Erdene Resource Development Corp.

LONDON, Nov. 26, 2019 (GLOBE NEWSWIRE) -- The European Bank for Reconstruction and Development (the “EBRD”) announces that, further to the press release issued by Erdene Resource Development Corp. (the “Company” or “Erdene”) on 15 October 2019, the EBRD has advanced an aggregate amount of US$5,000,000 (the “Loan”) to the Company pursuant to the convertible loan agreement it entered into with the Company on 11 October 2019 (the “Convertible Loan Agreement”).

The Loan bears interest at an annual rate of 10% and matures 36 months after the date of the Convertible Loan Agreement. The Loan and any unpaid Commitment Charges (as defined in the Convertible Loan Agreement) are convertible at the option of the EBRD at any time into common shares of Erdene at a conversion price per share of C$0.1995 plus the applicable Conversion Premium (as defined in the Convertible Loan Agreement). Interest and any default interest is convertible at the option of the EBRD at any time into common shares at a conversion price per share of the volume weighted average price on the Toronto Stock Exchange (“TSX”) of the shares for the five trading days ending on the trading day immediately preceding the delivery date of the conversion notice plus the applicable Conversion Premium, and subject to TSX approval.

The EBRD currently holds no common shares of the Company. If the EBRD converted the entire Loan plus currently accrued interest into common shares of Erdene, the EBRD would acquire ownership of and control over 33,407,129 common shares of the Company, representing approximately 15% of the Company’s post conversion issued and outstanding common shares (assuming (i) a conversion price of C$0.1995 for the principal and interest, (ii) no Conversion Premium payable, and (iii) an exchange rate of US$1 = C$1.3287, which was the Bank of Canada closing rate on November 22, 2019).

If the EBRD converted the entire Loan plus interest into common shares, the EBRD would acquire ownership of and control over 43,859,619 common shares of Erdene, representing approximately 19% of the Company’s then issued and outstanding common shares (assuming (i) a conversion price of CAD$0.1995 for the principal and the interest, (ii) no Conversion Premium payable, (iii) an exchange rate of US$1 = CAD$1.3287, which was the Bank of Canada closing rate on November 22, 2019, and (iv) that the Loan plus all interest were converted at maturity).

The EBRD has entered into the Convertible Loan Agreement for investment purposes. Depending on market conditions and other factors, the EBRD may from time to time acquire and/or dispose of securities of the Company or continue to hold its current position.

A copy of the early warning report required to be filed with the applicable Canadian securities commissions in connection with the transaction will be available under the Company’s profile on SEDAR at www.sedar.com and can be obtained by contacting Khangai Tserenraash at +976 11 317 974. EBRD’s head office is at One Exchange Square, London EC2A 2JN, United Kingdom.