Mongolia ranks 83rd out of 175 on Transparency International's corruption index and 97th out of 178 on the Heritage Foundation's Index of Economic Freedom. Those are really poor conditions in which to operate a foreign-owned business. I remember the last time some mining executive (at another company) tried to tell me they knew the inner workings of Mongolia so well that their project could navigate any political pressures. They were blindsided when Mongolia rolled up their project "for the good of the people," as kleptocrats always describe such actions.
The management bios show a geologist CEO who also holds leadership roles in other TSX-listed resource companies. I am usually very skeptical of top executives who take a "lottery ticket" approach to stakes in other producers rather than focus exclusively on making one project succeed. Other folks on the management team also have geology degrees, which is nice.
Erdene has several projects in Mongolia. They have located deposits of gold, silver, molybdenum, and copper in various places. They're also looking for coal. The 43-101 compliant information they posted is of limited use if it only discusses MII resources at low ore grades. I am not ready to invest in any resource company that cannot demonstrate comprehensive 2P reserves at economically viable grades.
Check out the financial reports on their website. Their quarterly statement for June 30, 2014 shows a net loss more than 3x their cash on hand. Erdene must continue to raise capital just to stay in business, putting their shareholders at risk of further dilution.
The stock trades in the pennies for pretty good reasons. All of the geology expertise on the planet means little in an inhospitable political climate. The best thing to come out of Mongolia so far has been the Mongolian BBQ cooking style.
Full disclosure: No position in this company, ever.