|Drilling eastward under shallow cover from outcropping Altan Tolgoi stockwork.|
FOLLOWING the success of its first 2014 campaign Xanadu Mines staged a supplementary exploration program at Kharmagtai Copper-Gold Project in the South Gobi region in the final quarter of 2014. The program comprised 2500 metres of diamond core drilling targeting areas of particular potential identified in the first campaign.
Drilling commenced on November 4 and was expected to be completed by mid-December. It mainly targeted the enlargement of higher grade zones, specifically: Potential extensions to porphyry copper-gold mineralization at Altan Tolgoi; Connections between the stockwork and tourmaline breccia-hosted copper-gold mineralization at Altan Tolgoi; and A new fourth area of mineralization not included in the current exploration target.
The company believes the results will add useful insights to the geological model in areas of higher grade mineralization and should contribute to the resource estimate for Kharmagtai.
Xanadu’s managing director George Lloyd says, “We have taken the project a long way since its acquisition earlier in the year and this supplementary program allows us to progress this understanding still further ahead of a more substantive program planned in 2015.”
The earlier 2014 campaign demonstrated the exploration upside of Kharmagtai. The drilling intersected further high-grade tourmaline breccia hosted copper-gold mineralization. It also materially increased the mineralized envelope at Altan Tolgoi prospect with the discovery of a mineralized tourmaline breccia zone.
Drilling at Tsagaan Sudal and Zesen Uul prospects delineated mineralized zones of good grades. These prospects are within a 700 metre radius of each other, start from surface and sit within a broad zone of lower grade mineralization.
Four holes intersected broad zones of stockwork and tourmaline breccia mineralization at East Altan Tolgoi. One intersected 342 metres grading 0.41% copper and 0.45 grams/tonne gold from 216 metres, including 108 metres @ 0.65% copper and 0.76 grams/tonne gold from 350 metres. Another intersected visible copper sulphides from 28.1 metres to 114.0 metres and from 223 metres to at least 423 metres.
Xanadu says the project continues to demonstrate its highly prospective and largely untested exploration potential. All defined prospects remain open, especially the tourmaline breccia mineralization to the east of Altan Tolgoi, which may be part of a much larger system extending for several kilometres.
The company recently entered binding subscription agreements with a private vehicle and two equity funds managed by Asia Capital & Advisors and Kahn Investment Management to raise Aus$13.6 million. Xanadu conducted a pro rate non-renounceable rights issue at the same price prior to the allotment of new shares to the new investors in order to allow existing shareholders to participate.
The funds will be primarily applied to Kharmagtai for exploration and evaluation activities, to prepare a resource statement and pay-down the deferred consideration for the acquisition.