Erdene Resource Development Corp.
(“Erdene” or the “Company”) (TSX:ERD) is pleased to provide
an update on the 2012 project activities in Mongolia.

Highlights

– Gold-bearing surface quartz veins
and breccias at Altan Nar have now been identified over a strike length of
greater than 5 kilometres

– An expanded gradient array
geophysical survey at Altan Nar has defined multiple new targets coincident
with rock and soil geochemical anomalies that require drill testing

– Northern extension of Altan Nar
target area has returned multiple samples exceeding 5g/t gold along 2.6
kilometre strike in area untested by drilling

– A second, contiguous mining
license that hosts 17.8% of the 168 million tonne Inferred Resource at Zuun Mod
was issued on July 20; all resources are now under long-term license

– An Environmental Impact Study for
the Zuun Mod project, prepared by EcoTrade LLC, has been approved by the
Mongolian Ministry of the Environment

– A rock geochemical survey has
identified a new high-grade gold and silver discovery at Altan Arrow, 15 kilometres
south-southeast of Altan Nar, along a 1 kilometre strike length

Altan Nar

Exploration work at Erdene”s 100%
owned Altan Nar project in southwestern Mongolia continues to expand the areal
extent of mineralization. The target is now defined over an area 1.5 kilometres
wide and 5 kilometres in strike length, based on an expanded surface-rock
geochemical sampling program of gold-bearing veins and breccias. Although
detailed work to date has been restricted to the Discovery Zone, the recent
exploration success demonstrates the potential for multiple zones similar to
the initial discovery area. The Discovery Zone measures approximately 300
metres by 150 metres defined by significant gold-silver mineralization
associated with epithermal quartz veins and breccias.

On average, the Discovery Zone
drilling has returned mineralized zones totalling greater than 30 metres of
greater than 1 g/t gold and remains open at depth and along trend to the
northeast. Since October 2011, 33 relatively shallow holes, totalling 5,742
metres have been drilled over a one square kilometre area of the Altan Nar
prospect and anomalous gold-bearing mineralized zones have been intersected in
24 of the 33 holes, confirming the continuity and widespread nature of the
Altan Nar mineralized system. Results included 29 meters averaging 4.3 g/t gold
and 24.1 g/t silver from hole TND-19 which was drilled 50 metres below the
mineralization intersected in TND-09, 55 meters of 1.02 g/t gold and 12 g/t
silver. The Discovery Zone appears to be structurally displaced to the south
but is open at depth and to the north where a broad mineralized zone
intersected 74 metres of 0.6 g/t gold with 29 metres of 1.1 g/t gold with
higher grades zones including 4 metres of 10.5 g/t and 56 g/t silver in an adjacent
hole.

Results from the new northwest
extension include an area where 10 of 15 samples returned an average of 5.95
g/t gold and 23.1 g/t silver. Multiple other areas returned rock samples with
assays of greater than 1 g/t gold and up to 11.9 g/t gold. This rock
geochemical survey was part of the 2012 exploration program at Altan Nar, which
included expanded geochemical and geophysical surveys along trend from the
Discovery Zone.

The areal extent of geophysical
surveys at Altan Nar has also been expanded, including IP gradient array and
magnetic coverage. Preliminary results received for the gradient array survey
have identified multiple new targets coincident with rock and soil geochemical
anomalies that require drill testing. The Altan Nar prospect now consists of a
large 1.5 by 5 kilometre zone of gold-bearing epithermal-style quartz veins and
breccias with an associated polymetallic-gold-in-soil anomaly.

Metallurgical and petrographic
studies are currently being carried out to characterize the ore mineralogy. The
metallurgical work is being carried out by ALS Ammtec in Australia. Additional
results from soil geochemical sampling and IP gradient array and magnetic
geophysical surveys are pending.

A presentation outlining the Altan
Nar project 2012 exploration results is available under the Featured Items
section of the company website at www.erdene.com.

Zuun Mod Molybdenum-Copper Project

The Zuun Mod molybdenum-copper
project, located approximately 40 kilometres east of Altan Nar in southwestern
Mongolia, is an advanced, 100% Erdene-owned development project, subject to a
1.5% net smelter royalty. During the second quarter 2012, the Environmental
Impact Study for the Zuun Mod project, as prepared by Mongolia-based EcoTrade
LLC, was approved by the Mongolian Ministry of the Environment. Also during the
second quarter, the Company”s independent technical consultant,
Minarco-MineConsult (“MMC”), part of the Runge Group, was finalizing
a pit optimization study. Once completed, this study will provide high-level
production scheduling, a review of operating and capital costs, and economic
modeling and will be used to determine the parameters of future pre-feasibility
level studies. In June 2011, the Company was granted a 30-year mining license
for 6,041 hectares, covering most of the Zuun Mod project, by the Mongolian
government. A second mining license, located south of the June 2011 mining
license, was received on July 20, 2012. This mining license covers a 358
hectare area that hosts 17.8% of the 168 million tonne Inferred Resource at
Zuun Mod. All of the reported Zuun Mod molybdenum and copper resources lie
within the boundaries of the two contiguous mining licenses.

Khuvyn Khar

The Zuun Mod licence areas cover a
large porphyry system with multiple exploration targets beyond the main Zuun
Mod molybdenum-copper deposit. One such target is the Khuvyn Khar copper
prospect located 2.2 kilometres northwest of the Zuun Mod deposit. Previous
drilling in 2011 at Khuvyn Khar intersected 34 metres of 1.3% copper and 9.24 g/t
silver from 308 meters to 342 meters. This hole lies within a very large copper
mineralized zone trending over 900 meters with multiple zones in three drill
holes returning assays in excess of 0.2% copper. This zone remains untested to
the south where it trends under andesite cover.

In late 2011, an orientation
mobile-metal-ion (“MMI”) soil survey, designed to identify
sub-surface mineralization, was carried out over the Khuvyn Khar prospect. This
survey successfully identified copper and silver anomalies previously
intersected in drilling. In June 2012, an expanded MMI survey was carried out
over a one square-kilometre area at Khuvyn Khar and results are pending.
Additional 2012 work included a review of all technical data, reprocessing of
geophysical data, as well as a review of all surface and drill-hole geological
data. The goal of this work is to identify targets for a follow-up drilling
program.

Altan Arrow

Early-stage surface exploration on a
new prospect, located on the 100% Company-owned Altan Arrow exploration licence
15 kilometres south-southeast of Altan Nar, has identified significant gold and
silver mineralization associated with epithermal quartz veins over a one square
kilometre area. Results include an average grade from rock chip samples of 3.5
g/t gold and 60 g/t silver over a one kilometre strike length, including
samples with up to 57 g/t gold and 416 g/t silver. Additional prospecting and
geophysical surveys will be carried out at Altan Arrow in the third quarter.

Marketwire – Aug. 22, 2012