Xanadu Mines has tabled a staggering resource estimate upgrade for its Kharmagtai copper-gold project in Mongolia, jumping to 1.3 billion tonnes with 3.4 million tonnes of contained copper and 8.5 million gold ounces.
The updated estimate represents a 12 per cent increase in tonnes, a 15 per cent surge in contained copper and a 9 per cent bounce in contained gold, with 63 per cent of the resource now classified in the higher-confidence “indicated” category. The JORC-compliant figure was independently prepared by Spiers Geological Consultants and is based on drilling results from the past two years, including 162 diamond drill holes for 58,259m.
Management says the latest figure also represents a 25 per cent increase in the higher-grade zone at the project from 100 million tonnes to 125 million tonnes, which will add early value to the operation during the prefeasibility study (PFS) phase. The Mongolia-based explorer previously delivered a maiden mineral resource at Kharmagtai of 1.1 billion tonnes for 3 million tonnes of contained copper and 8 million ounces of gold back in 2021.
Xanadu says there is still plenty of exploration upside to the project, with mineralisation remaining open to the east, west, south and at depth. All six deposits within the updated resource are open and require additional drilling to determine their respective boundaries.
The company has identified its Stockwork Hill deposit as an area for considerable expansion opportunities, while White Hill represents the deposit with the most significant growth potential.
Management says only a small portion of the potentially mineralised Kharmagtai intrusive complex has been drill-tested, with most drilling focused on expanding existing deposits and high-grade targets within and around known mineralisation.
Xanadu Mines managing director and executive chairman Colin Moorhead said: “This completes the largest data acquisition step in the Kharmagtai PFS, and we are now commencing trade-off studies to select a single go-forward project design. Our next step is enterprise optimisation, using the new resource model to maximise value from the increase in higher-grade zone material and to build in technology uplift in the form of electrification and advanced haulage. The optimised scheduling will then inform design & engineering works for both our mine and process plant, on track to deliver a Maiden Ore Reserve and completed PFS in Q3 CY2024.”
Earlier this year, the company completed two phases of its strategic partnership with Chinese copper giant Zijin Mining, giving it access to funding for its current round of exploration.
The deal saw Zijin invest US$35 million (AU$52 million), funds which will also be used to complete the Kharmagtai prefeasibility study. A 50:50 joint venture has been created between the two partners at a project level, with Xanadu the operator on the ground.
The partnership has allocated 18 months to knock over its PFS, while an earlier scoping study identified several upside opportunities that could materially upgrade the economics of the project.
Today, Xanadu also revealed it had issued a second tranche placement to Zijin of more than 15 million shares at the premium price of 5.5 cents per share, compared to yesterday’s close of 4.9 cents. Following the completion of the second tranche, Zijin will own 19.42 per cent of Xanadu’s total issued share capital.
The latest share deal with Zijin follows a first tranche of almost 63 million shares, with the combined placement aimed at raising about $4.3 million.
While an upgrade of 12 per cent in tonnes, 15 per cent in contained copper and 9 per cent in contained gold may not seem like enormous figures, the massive size of Kharmagtai’s maiden resource should be taken into account. All eyes will now be on Xanadu delivering a maiden ore reserve, its PFS and a decision to mine, which are scheduled for the third quarter of next year.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Michael Philipps
