Ongoing drilling has demonstrated the exploration upside of Xanadu Mines’ Kharmagtai Copper-Gold Project in the South Gobi region. The drilling has intersected further high-grade tourmaline breccia hosted copper-gold mineralization.
It has also materially increased the mineralized envelope at Altan Tolgoi prospect with the discovery of a mineralized tourmaline breccia zone. Additional drilling at the Tsagaan Sudal and Zesen Uul prospects continues to delineate 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 recently completed holes all intersected broad zones of stockwork and tourmaline breccia mineralization at East Altan Tolgoi. One hole 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 hole has intersected visible copper sulphides from 28.1 metres to 114.0 metres and from 223 metres to the current hole depth of 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 in an east-west direction.
It says there is also excellent potential for the discovery of new porphyry centres which would add significant scale to the project that is not captured in the current JORC exploration target.
The company’s exploration plan aims to prove up a resource estimate and identify new mineralization outside the exploration target. Drilling was suspended during September while two diamond drill rigs were winterized. Exploration drilling was expected to resume by mid-October.
The company also 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 at a subscription price of 12.26 cents per share. Xanadu intends to conduct 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 in the fund raising activity.
The new funds will be primarily applied to the Kharmagtai project for exploration and evaluation activities, to prepare a JORC-compliant resource statement and pay-down the deferred consideration for the Kharmagtai acquisition.