Resource World Magazine

46 www.resourceworld.com A P R I L / M A Y 2 0 1 9 Australian Update by Greg Barns M ongolia is mineral rich; it is host to one of the world's larg- est copper-gold deposits, the Oyu Tolgoi deposit, described by its owner Rio Tinto as "one of the most exciting developments in copper and gold mining for several decades." Xanadu Mines Ltd. [XAM-TSX, ASX; XANAF-OTC] is excited about another deposit in the same part of Mongolia, the Kharmagtai copper-gold project. The company also has two other projects in Mongolia: Red Mountain and Yellow Mountain. The Kharmagtai Project is about 120 km from Oyu Tolgoi and Xanadu Mining is encouraged by the project's large, low- grade, open pit potential and high-grade, underground potential. Xanadu Mine's Geologist, Mat Brown, thinks Newcrest's very successful Australian mine – Cadia- Ridgeway – is a comparison that can be made with Kharmagtai. The project is located in the southern part of Mongolian Omnogovi Province, approximately 420 km southeast of Ulaanbaatar. It is within the South Gobi porphyry copper province and is described by Xanadu Mines as an advanced mineral project. In October last year, the company announced a massive upgrade of resources at the project. The indicated resource is 129.3 Mt grad - ing 0.54% CuEq (0.36% Cu and 0.36 g/t Au) and the inferred resource is 468.9 Mt grading 0.41% CuEq (0.31% Cu and 0.19 g/t Au). This resource upgrade increases copper tonnages by 400% and gold by 249% at the project. The new resource estimate results in a total of 1.936 million tonnes of copper and 4.311 million ounces of gold. The company says that the shal - low, open pit, high-grade mineralization averages 54Mt of 0.86 CuEq for 317Kt cop- per and 1.13 Moz gold. On February 28 this year, Xanadu Mines announced some welcome news on the porphyry front. Drilling results revealed the discovery of "a significant new zone of high-grade mineralization outside the current open pit resource." Results from drilling included 352 metres of 0.41% Cu and 0.58 g/t Au (0.78% eCu or 1.22 g/t eAu) from 448 metres; including 102 metres of 1.00% Cu and 1.67 g/t Au (2.06% eCu or 3.23 g/t eAu) from 572 metres; including 78 metres of 1.14% Cu and 2.06 g/t Au (2.45% eCu or 3.85 g/t eAu) from 594 metres; including 14 metres of 1.51% Cu and 3.36 g/t Au (3.66% eCu or 5.73 g/t eAu) from 622 metres; and 10 metres of 2.24% Cu and 5.28 g/t Au (5.60% eCu or 8.78 g/t eAu) from 658 metres." In its February 28 release, the company said that this "discovery has revealed a transition to a zone of higher tem - perature sulphide mineral assemblages, i.e. bornite, in the intrusive root to the deposit" and that the new results "are expected to enhance the mining economics significantly." Follow-up drilling is currently taking place and targeting high-grade miner - alization associated with the causative copper and gold porphyry at depth. Xanadu Geologist Mat Brown told Resource World results should be available over the next few weeks. Xanadu Mines is looking to release an open pit Scoping Study/Preliminary Economic Assessment at Kharmagtai some - time between April and June this year. The company says its "strategy involves demonstrating that an open pit project is strongly cash generative and just the start of a much bigger, longer life copper-gold operation." Xanadu says that "as part of the PEA, metallurgical studies are being final - ized, with the results expected to confirm that the copper-gold mineralization yields high recoveries through standard process- ing at low costs and produces a very clean concentrate that should be highly sought after in Asian growth markets." Xanadu Mines' success is attracting the attention of the investment market. In December last year, Western Australian- based broking house Argonaut Securities identified Xanadu Mines as a stock to watch. Its mining analyst, Matt Keane, said, "To date, XAM has defined at least eight mineralised porphyry centres, dem - onstrating an outstanding strike rate on the 19 prospective targets identified on the project." Keane noted that "these por- phyry systems are intact and mineralised from surface which could facilitate cheap open pit starter pits followed by bulk underground mining." n Xanadu Mines discovers copper and gold in Mongolia MONGOLIA IS MINERAL RICH; IT IS HOST TO ONE OF THE WORLD'S LARGEST COPPER-GOLD DEPOSITS, THE OYU TOLGOI DEPOSIT, DESCRIBED BY ITS OWNER RIO TINTO AS "ONE OF THE MOST EXCITING DEVELOPMENTS IN COPPER AND GOLD MINING FOR SEVERAL DECADES."

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