Erdene Resource Development Corp. (TSX: ERD) has finalized plans to split
its Donkin coal project and its Mongolian minerals exploration projects into
two separate publically-traded companies.

Under the current corporate structure, Erdene’s principle assets consist of
the near-production Donkin coal project in Cape Breton, a joint-venture with
global mining giant Xstrata Coal, and several exploration-stage gold and copper
projects in Mongolia, including Altan Nar, one of the most extensive gold
discoveries in Mongolia’s recent history.

Despite the strong portfolio, Erdene has been underperforming and trailing
its peers in terms of shareprice. By dividing the company, president and CEO
Peter Akerley is hoping to allow each new standalone company to focus more
closely on strategic priorities and allocate its resources appropriately.

“The split will provide investors with a clearer framework to assess the
investment opportunity and provide management with greater flexibility in the
advancement of specific projects.”

Under the arrangement, the outstanding shares of Erdene will effectively be
split on a 50/50 basis, with half going to Erdene and half going to the newly
formed Morien Resources Corp. The arrangement will result in two strategically
positioned public companies, with Morien focused on North America (i.e. the
Donkin coal project) and Erdene focused on metal exploration and development
opportunities in Mongolia, a resource-rich country that currently has the
world’s fastest growing economy.

The restructuring, seen by many as a transformational milestone for Erdene,
is intended to unlock significant value for current shareholders and for those
shareholders who purchase Erdene stock prior to the completion of the split.
According to Erdene management, it is anticipated the company separation will
be completed on or before October 31, subject to final shareholder
approval. 

The move comes several months after Xstrata Coal announced plans to sell its
75 per cent interest in the Donkin project. The Xstrata sale process is
expected to be completed in 2012, resulting in a new Donkin ownership structure
later this year, with coal production from the mine by 2014. Donkin is currently
recognized as the largest undeveloped coking coal project in North
America. 

John Budreski, director of Erdene since January 2012 and former vice
chairman of Cormark Securities Inc., will lead the new Morien Resources Corp.
as its CEO, and Peter Akerley will be CEO of the new Erdene Resources Corp.

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