Xstrata Coal Acquires 9.8% Stake in Erdene

http://investor.shareholder.com/erd/releasedetail.cfm?ReleaseID=187441 Conference Call at 9:30 am ET Today February 14, 2006 - Halifax, Nova Scotia - Erdene Gold Inc. (TSX:ERD) today announced it has entered into an alliance agreement with Xstrata Coal Canada Limited (Xstrata Coal), a subsidiary of Xstrata plc (London Stock Exchange: XTA.L; Zurich Stock Exchange: XTA.S), pursuant to which Xstrata Coal will subscribe for 3,000,000 common shares of Erdene at $1.00/share resulting in Xstrata Coal owning a 9.8% equity interest in Erdene. The transaction is expected to close February 16, 2006, subject receipt of all necessary regulatory approvals. "This agreement with Xstrata Coal marks a pivotal point in the growth of Erdene and is great news for our shareholders," said Peter Akerley, Erdene President and CEO. "It will allow us to more aggressively test advanced projects and continue with the creation of new opportunities with an initial focus on coal. This partnership combines Erdene's strong pipeline of strategically located, early stage properties in Mongolia with Xstrata's established relationships in Asia and ability to invest in and support world class projects." "With this investment in Erdene, Xstrata Coal gains exposure to a strong inventory of projects and a senior management team with established local knowledge of mineral resources in Mongolia. We look forward to working with Erdene in helping advance their many exciting opportunities," said Xstrata Coal Chief Executive, Peter Coates. Highlights of the Alliance Agreement Xstrata Coal will be granted a first option to enter into a joint venture and earn a 75% interest in any coal opportunity in Mongolia identified by Erdene by funding all work through completion of a feasibility study. Should Erdene elect to develop or pursue third party participation in any non-coal projects or properties in Mongolia or elsewhere, Xstrata Coal will have a 60-day right to review all supporting project information and, if it wishes to participate in the project, to negotiate the terms of its participation before Erdene may make the opportunity available to another party or develop the property itself. Xstrata Coal will have the right to name a nominee to the Board of Directors of Erdene. The rights granted to Xstrata Coal under the Alliance Agreement expire if Xstrata does not maintain a 5% equity position in Erdene although parties' rights and obligations for any established joint venture survive. Conference Call and Webcast Management of Erdene will hold a conference call at 9:30 a.m. ET today to discuss the agreement and answer questions. Participants can access the call by dialing 1-800-814-4862 or 416-644-3414. The call will also be webcast live at www.erdene.com. A replay of the call will be available until midnight on March 1, 2006 by dialing 1-877-289-8525 or 416-640-1917 and entering passcode 21177079#. About Erdene Gold Inc. Erdene Gold Inc. is a diversified mineral exploration company focused on Mongolia with over 20 mineral exploration projects that include 68 licenses and cover approximately four million acres. Significant projects include the Zuun Mod molybdenum-copper project, the Central Basin Uranium Projects (International Uranium Corporation Joint Venture), the Ikh Tal-Erdenet Mine copper exploration program where high priority targets have been identified adjacent to Mongolia's largest mining complex, the Tsenkher Gol Gold project targeting a granite hosted disseminated gold target, the Galshar coal program, where programs are underway to determine coal quality and thickness and the Temuujin copper-gold porphyry project in the South Gobi Mineral Belt. Erdene is well funded with a working capital position of approximately $4.0 million as of December 31, 2005. Erdene has 27,599,933 common shares issued and outstanding (before the issuance to Xstrata Coal) and a fully diluted share position of 32,188,910 common shares. About Xstrata Coal Xstrata Coal is a wholly owned subsidiary of Xstrata Coal Pty Limited, one of the Xstrata plc group of companies. It is amongst the world's largest producers of export thermal coal and a significant producer of coking coal. Xstrata Coal has interests in a diverse portfolio of over 30 coal mines located in Australia and South Africa with a project in Canada, and employs around 10,000 people, including contractors. Xstrata plc is a major global diversified mining group, listed on the London and Swiss stock exchanges and is listed in the FTSE Top 50. The Group is headquartered in Zug, Switzerland and has approximately 24,000 employees world-wide, including contractors. Xstrata maintains a meaningful position in six major international commodity markets: copper, coking coal, thermal coal, ferrochrome, vanadium and zinc, with additional exposures to gold, lead and silver. The Group's operations and projects span five continents and eight countries: Australia, Canada, South Africa, Spain, Germany, Argentina, Peru and the UK. Forward-Looking Statements Certain information regarding the Company contained herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond the Company's control, and that future events and results may vary substantially from what the Company currently foresees. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration results, continued availability of capital and financing and general economic, market or business conditions. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The information contained herein is stated as of the current date and subject to change after that date. For more information: Peter C. Akerley, President and CEO or Ken W. MacDonald, Vice-President and CFO Phone: (902) 423-6419 For additional information visit Erdene's website at www.erdene.com or contact the company via email at info@erdene.com. 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