Xanadu Mines is resuming drilling at its flagship Kharmagtai Copper-Gold Project in South Gobi province. The multi-drill rig exploration program is fully funded and will comprise approximately 10,000 metres of diamond core drilling.
The program aims to define near-surface strike extensions of current deposits and to investigate several high priority targets under shallow cover that have the same geophysical response and geometry as existing deposits within the Kharmagtai project.
Kharmagtai is one of the most advanced porphyry projects in Asia with an indicated and inferred resource of 1.53 billion pounds of copper and 2.18 million ounces of gold. It is in the under-explored South Gobi porphyry copper province which hosts the world-class Oyu Tolgoi copper-gold operation, the Tsagaan Suvarga porphyry copper-molybdenum development and Xanadu’s Oyut Ulaan copper-gold exploration project.
Xanadu and partner Mongol Metals acquired a 90% stake in the project in February 2014. It has the right to earn an 85% interest in the joint venture by funding acquisition and exploration costs. This is equivalent to a 76.5% effective interest in the project.
Xanadu has completed 12,500 metres of diamond drilling that extended mineralization around the three central outcropping prospects - Altan Tolgoi, Tsagaan Sudal and Zesen Uul. This also intersected the first significant copper-gold mineralization associated with tourmaline breccia mineralization at Altan Tolgoi that is analogous with the world-class Rio Blanco–Los Bronces copper system.
Altan Tolgoi has shallow, gold-rich stockwork and mineralized breccia units. Drilling had resulted in multiple 200 metre intercepts grading 1% copper equivalent. The high grade core is increasing in size and remains open.
About 75% of the complex is located under unexplored shallow cover giving potential to host multiple porphyry centres.
Preliminary metallurgical testing indicates high recoveries for the copper with gold likely to be a significant by-product.
Xanadu’s chief executive officer Andrew Stewart says, “We are delighted that drilling has recommenced at our Kharmagtai project. Our team is keen to pick-up from where we finished off last year at Kharmagtai and believe further drilling will continue to unlock the true potential of this highly mineralised and underexplored porphyry copper-gold project.”
The company recently completed a $15.3 million capital raising that included Noble Group further subscribing for $700,000 worth of shares under the rights issue. Together with its exit from non-performing and non-core projects, the company’s improved balance sheet underpins its growth strategy.