The PFS also included an updated resource statement for the project, accompanied by a separate updated preliminary economic assessment on the Altan Nar deposit, showcasing the "significant upside" the Khundii Gold District holds.

Prepared by consulting engineering firm Tetra Tech, the PFS calculated an after-tax net present value, using a 5% discount rate, of US$97 million and a 42% internal rate of return. It is expected to produce life-of-mine EBITDA of $211 million.

"With exceptionally high gold grades, a growing resource and low capital and operating costs, the Khundii gold project will generate significant returns for all stakeholders," said CEO Peter Akerley.

Based on a 20% improvement on the September 2018 resource statement, the PFS used measured and indicated resources of 520,700oz gold grading 3.16 grams per tonne. Of this, 422,000oz grading 3.7g/t is in the proven and probable reserve categories.

The Altan Nar PEA supports a second phase of Bayan Khundii development. The 11-year Bayan Khundii master plan entails one year of construction, six years of production from Bayan Khundii, followed by three years of production from Altan Nar and a final year for mine closure and remediation.

The Altan Nar PEA contributes 1.8Mt at an average head grade of 3.46g/t gold and 17g/t silver, of which 66% are in the indicated resource category. The PEA attached a $24 million and 92% NPV and IRR to Altan Nar, respectively.

The studies outlined average annual LOM gold output of 61,000oz from Bayan Khundii and 45,300oz of gold and 205,000oz silver from Altan Nar.

All-in sustaining costs have been pegged at $746/oz for the entire project and $931/oz on a gold-equivalent basis.

Pre-production capex is $40 million for Bayan Khundii and another $2 million for Altan Nar.

The European Bank for Reconstruction and Development last week backed a $6.05 million finance package to fund the Bayan Khundii feasibility study, as well as engineering and permitting work required to reach a development decision in 2020.

"Erdene is targeting first gold production in 2021, as the first step in our journey to become a major regional gold producer. The Khundii Gold District remains largely unexplored and we see the potential for significant growth through continued exploration and acquisition," said Akerley.

Erdene shares (TSX:ERD) have traded in a band between C16c-28c over the past 12 months, closing at 19c on Monday, which gives it a market value of $35 million.