New Higher Grade Zones Found in Kharmagtai Infill Drilling

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Figure 1

Kharmagtai copper-gold district showing currently defined mineral deposits and planned Phase One Resource infill drill holes.
Kharmagtai copper-gold district showing currently defined mineral deposits and planned Phase One Resource infill drill holes.

Figure 2

Cross section through the Stockwork Hill deposit showing drill hole KHDDH594.
Cross section through the Stockwork Hill deposit showing drill hole KHDDH594.

Figure 3

Four diamond drill rigs drilling at White Hill.
Four diamond drill rigs drilling at White Hill.

TORONTO, June 07, 2023 (GLOBE NEWSWIRE) — Xanadu Mines Ltd (ASX: XAM, TSX: XAM) (Xanadu, XAM or the Company) and its joint venture partner Zijin Mining Group Co., Ltd. (Zijin) are pleased to provide an update for the Kharmagtai Prefeasibility Study (PFS) infill drilling program underway.

Highlights

  • Approximately 15,000m of Phase One diamond drilling has been completed (out of 30,000m total) at the Kharmagtai Stockwork Hill and White Hill deposits.
  • Assay results returned for thirty-one drill holes. Exceptional highlights include:
    • Several holes delivered grades materially better than current resource grades for each deposit, and
    • Newly identified higher-grade zones demonstrate potential to enhance the 2021 Mineral Resource Estimate (MRE), currently 3Mt copper and 8Moz gold (1.98Mt CuEq Indicated, 2.33Mt CuEq Inferred).1
  • Updated MRE expected Q4 CY2023, expected to deliver improved grade relative to 2021 MRE and to add newly identified higher-grade zones.
  • Upgrades to Kharmagtai PFS production and economics expected after incorporating the updated MRE.
  • Parallel, high impact Kharmagtai discovery exploration drilling program (two rigs) progressing well. Assay results soon to be reported for shallow holes targeting new resource at five unexplored porphyry clusters.
  • Kharmagtai JV is funding US$35M PFS completion and discovery exploration, aiming towards a decision to mine in Q4 CY2024

Xanadu’s Executive Chairman and Managing Director, Mr Colin Moorhead, said, “Our extensional and infill drilling program has progressed efficiently and is demonstrating results in line with or materially better than the 2021 Mineral Resource Estimate. Pleasingly we’ve intersected new high-grade zones at Stockwork Hill within the existing Resource boundary, which will undoubtedly have a positive impact on the PFS. Given we are only halfway through Phase 1, we are very excited on the drilling results to come and look forward to providing regular updates as we progress both infill and exploration drilling programs at Kharmagtai.”

Infill Drilling Results to Date

Approximately 15,000m diamond drilling completed, as part of the 30,000m Phase One infill drilling program (Figures 1 and 2; Appendix 1). Assay results have been returned for thirty-one drill holes, with results better than, or in line with, 2021 MRE grades.

Kharmagtai copper-gold district showing currently defined mineral deposits and planned Phase One Resource infill drill holes.

Figure 1: Kharmagtai copper-gold district showing currently defined mineral deposits and planned Phase One Resource infill drill holes.

Cross section through the Stockwork Hill deposit showing drill hole KHDDH594.

Figure 2: Cross section through the Stockwork Hill deposit showing drill hole KHDDH594.

Several holes encountered materially better grade relative to resource grade. Significant drill intersections from Stockwork Hill, include:

Hole ID Interval (m) Cu (%) Au (g/t) CuEq (%) From (m)
KHDDH594 294 0.32 0.26 0.46 122
including 75 0.35 0.80 0.76 128
including 48 0.43 1.05 0.96 133
including 12 0.77 1.82 1.70 145
including 34 1.10 0.10 1.15 285
KDDH601 9.5 0.35 2.07 1.40 79.9
KDDH603 71 0.47 0.14 0.55 306
including 20 0.82 0.26 0.95 331
KDDH607 22 0.95 0.12 1.01 411
including 4.1 3.82 0.24 3.94 427
KDDH608 53.5 0.31 0.49 0.56 59
including 11.2 0.56 1.26 1.21 99
KDDH613 272 0.31 0.30 0.46 199
including 48 0.45 0.47 0.69 237
including 42 0.41 0.47 0.66 506
including 34 0.45 0.53 0.72 510

Significant drill intersections from White Hill, include:

Hole ID Interval (m) Cu (%) Au (g/t) CuEq (%) From (m)
KHDDH623 44 0.27 0.16 0.35 72
KHDDH624 30 0.31 0.22 0.42 183


Extension of Higher Grade Zones at Stockwork Hill

Significantly, drill hole KHDDH594, drilled into the central portion of Stockwork Hill, has encountered higher-grade zones of tourmaline breccia mineralisation (Figure 2) adding vertical extension to known higher grade zones. Principally, drilling intercepted a highly encouraging zone grading 34m @ 1.10% Cu and 0.10g/t Au (1.15% CuEq) from 285m, significantly exceeding the 2021 MRE block model prediction for 0.3% CuEq mineralisation. This intercept is approximately 120m above the closest high-grade tourmaline breccia drilled in this area, highlighting potential for significant grade boosts relative to the existing MRE. Additional drilling is now planned to test for further extensions of these higher-grade zones and aimed for inclusion in the upcoming MRE update.

Four diamond drill rigs drilling at White Hill.

Figure 3: Four diamond drill rigs drilling at White Hill.


PFS Data Acquisition

Xanadu are using cutting edge technology to acquire accurate and consistent data for the PFS. All drill core is being run through two Boxscan devices that scan the drill core to acquire ultra high-resolution imagery, laser scan topology, short-wave infrared data and magnetic susceptibility. With this dataset, advanced machine learning algorithms are logging the core for rock type, alteration, sulphide distribution (size and shape), rock quality data (RQD), vein types and densities, mineralogical composition as well as taking structural measurements. These data are being used to build the geological, geometallurgical and geotechnical domain models for input into the PFS and aimed at positioning the future Kharmagtai mine for operational readiness.

About the Infill Drilling Program

Four diamond drill rigs are currently focussed on Kharmagtai infill drilling, with overarching objective to target areas with potential for future Mineral Resource to Ore Reserve conversion. Totalling ~30,000 metres, the infill drilling program is planned to specifically increase the Resource confidence category from Inferred to Indicated. As such, the planned drill holes aim to remove any mineralisation knowledge gaps around the edges of existing deposits.

Kharmagtai currently has an Inferred and Indicated Resource of 1.1Bt containing 3Mt Cu and 8Moz Au2. As part of the Kharmagtai PFS, the Resource will be upgraded to Indicated classification, enabling a maiden, JORC compliant Ore Reserve to be reported. To achieve this, the infill drilling program is designed to upgrade and extend strike length of the shallow open pit Resource areas and selected deeper high-grade zones (Figure 1), including investigation of near-mine, higher-grade extensions.

About Xanadu Mines

Xanadu is an ASX and TSX listed Exploration company operating in Mongolia. We give investors exposure to globally significant, large-scale copper-gold discoveries and low-cost inventory growth. Xanadu maintains a portfolio of exploration projects and remains one of the few junior explorers on the ASX or TSX who jointly control a globally significant copper-gold deposit in our flagship Kharmagtai project. Xanadu is the Operator of a 50-50 JV with Zijin Mining Group in Khuiten Metals Pte Ltd, which controls 76.5% of the Kharmagtai project.

For further information on Xanadu, please visit: www.xanadumines.com or contact:

Colin Moorhead
Executive Chairman & Managing Director
E: [email protected]
P: +61 2 8280 7497
Spencer Cole
Chief Financial & Development Officer
E: [email protected]
P: +61 2 8280 7497

This Announcement was authorised for release by Xanadu’s Board of Directors.

Appendix 1: Drilling Results

Note that true widths will generally be narrower than those reported. See disclosure in JORC explanatory statement attached.

Table 1: Drill hole collar

Hole ID Prospect East North RL Azimuth (°) Inc (°) Depth (m)
KHDDH594 Stockwork Hill 592501 4877730 1292 0 -60 565.0
KHDDH595 White Hill 592500 4877453 1294 0 -60 200.0
KHDDH597 Stockwork Hill 592609 4877783 1284 0 -60 525.0
KHDDH598 Stockwork Hill 592609 4878114 1284 0 -60 350.0
KHDDH599 Stockwork Hill 592581 4877924 1287 0 -60 411.2
KHDDH600 Stockwork Hill 592708 4878069 1283 180 -75 821.4
KHDDH601 Stockwork Hill 592800 4877990 1283 0 -90 375.0
KHDDH602 White Hill 592609 4877592 1289 180 -60 450.0
KHDDH603 Stockwork Hill 592900 4877646 1280 0 -70 475.9
KHDDH604 Stockwork Hill 593000 4877824 1282 0 -70 275.0
KHDDH605 Stockwork Hill 593000 4877629 1285 0 -60 60.0
KHDDH605A Stockwork Hill 593000 4877629 1285 0 -70 325.0
KHDDH606 Stockwork Hill 593069 4877824 1281 90 -60 400.2
KHDDH607 Stockwork Hill 592376 4877578 1292 0 -60 600.1
KHDDH608 Stockwork Hill 592310 4877840 1291 0 -55 400.0
KHDDH609 Stockwork Hill 592270 4877913 1293 270 -60 410.0
KHDDH610 Stockwork Hill 592250 4877654 1292 0 -60 325.0
KHDDH611 Stockwork Hill 592189 4877919 1291 180 -70 275.0
KHDDH612 Stockwork Hill 592126 4878051 1291 0 -60 100.0
KHDDH613 Stockwork Hill 592800 4877742 1283 0 -90 573.6
KHDDH614 Stockwork Hill 592126 4877846 1295 0 -60 175.0
KHDDH615 Stockwork Hill 592126 4877755 1295 0 -60 200.0
KHDDH616 White Hill 591501 4877401 1304 0 -60 150.0
KHDDH617 White Hill 591501 4877300 1307 0 -60 231.0
KHDDH618 White Hill 591501 4877101 1307 0 -60 444.3
KHDDH619 White Hill 591501 4877000 1309 0 -60 634.1
KHDDH620 White Hill 591626 4877452 1303 0 -60 175.0
KHDDH621 Stockwork Hill 592900 4877901 1282 0 -70 420.7
KHDDH623 White Hill 591626 4877353 1304 0 -60 250.0
KHDDH624 White Hill 591626 4877247 1306 0 -60 423.6
KHDDH626 White Hill 591626 4877149 1306 0 -60 596.0
KHDDH627 White Hill 591626 4877051 1308 0 -60 672.8
KHDDH628 Stockwork Hill 592250 4878102 1289 0 -60 125.0
KHDDH629 Stockwork Hill 592126 4877950 1291 0 -60 125.0
KHDDH631 White Hill 591626 4876953 1310 0 -60 705.6
KHDDH632 White Hill 592819 4877517 1274 160 -60 350.0
KHDDH633 White Hill 591751 4877477 1302 0 -60 375.6
KHDDH634 White Hill 591751 4876901 1310 0 -60 826.5
KHDDH637 White Hill 591751 4877255 1303 0 -60 360.1
KHDDH644 White Hill 591876 4877532 1301 0 -60 200.0


Table 2: Significant drill results

Hole ID Prospect From (m) To (m) Interval
(m)
Au (g/t) Cu (%) CuEq (%) AuEq (g/t)
KHDDH594 Stockwork Hill 11 15 4 0.10 0.06 0.12 0.23
and   122 416 294 0.26 0.32 0.46 0.89
including   128 203 75 0.80 0.35 0.76 1.49
including   133 181 48 1.05 0.43 0.96 1.88
including   145 157 12 1.82 0.77 1.70 3.33
including   249 257 8 0.14 0.23 0.30 0.58
including   285 329 44 0.14 0.89 0.96 1.88
including   285 319 34 0.10 1.10 1.15 2.25
including   285 317 32 0.10 1.11 1.16 2.28
including   356 386 30 0.06 0.43 0.46 0.90
including   378 386 8 0.11 0.80 0.86 1.68
including   378 384 6 0.13 0.80 0.86 1.68
and   426 442 16 0.06 0.11 0.14 0.28
and   464 476 12 0.06 0.05 0.08 0.15
and   496 555 59 0.23 0.10 0.22 0.43
including   524 544 20 0.35 0.15 0.33 0.64
KHDDH595 White Hill 3 89 86 0.04 0.11 0.13 0.25
and   131 141 10 0.09 0.07 0.11 0.22
KHDDH597 Stockwork Hill 5 134 129 0.08 0.16 0.20 0.40
including   61 81 20 0.15 0.25 0.33 0.64
and   144 164 20 0.06 0.11 0.14 0.28
and   195 448 253 0.08 0.17 0.21 0.41
including   222 226 4 0.07 0.30 0.34 0.66
including   240 244 4 0.14 0.30 0.36 0.71
including   324 356 32 0.20 0.24 0.34 0.67
including   366 402 36 0.12 0.26 0.32 0.63
and   488 509 21 0.10 0.08 0.13 0.26
KHDDH598 Stockwork Hill 1.2 75 73.8 0.06 0.13 0.16 0.31
including   9 17 8 0.23 0.23 0.35 0.68
KHDDH599 Stockwork Hill 3.2 75 71.8 0.12 0.17 0.23 0.45
including   20 34 14 0.11 0.23 0.28 0.55
including   44.5 54 9.5 0.38 0.36 0.55 1.07
and   85 294 209 0.13 0.20 0.26 0.52
including   99 160 61 0.21 0.29 0.40 0.78
including   142 154 12 0.39 0.47 0.66 1.30
including   180 220 40 0.18 0.26 0.35 0.69
and   321 325 4 0.03 0.13 0.15 0.29
KHDDH600 Stockwork Hill 12 38 26 0.15 0.12 0.19 0.37
and   83 99 16 0.07 0.06 0.10 0.19
and   165 199 34 0.25 0.11 0.23 0.46
including   167 177 10 0.72 0.05 0.41 0.81
including   167 177 10 0.72 0.05 0.41 0.81
and   211 220.7 9.7 0.02 0.10 0.11 0.21
and   263 273 10 0.06 0.05 0.08 0.16
and   369 382 13 0.10 0.08 0.13 0.25
and   392.3 470 77.7 0.12 0.18 0.24 0.47
including   435.3 448 12.7 0.29 0.56 0.71 1.39
including   442 448 6 0.46 0.79 1.02 2.00
and   480 494 14 0.05 0.07 0.10 0.20
and   566 590 24 0.10 0.06 0.11 0.21
and   600 754 154 0.19 0.16 0.25 0.49
including   608 652 44 0.38 0.22 0.41 0.81
including   620 626 6 1.34 0.34 1.02 1.99
including   622 626 4 1.60 0.36 1.17 2.29
including   662 668 6 0.48 0.24 0.48 0.94
including   724 728 4 0.23 0.28 0.40 0.78
and   772 778 6 0.09 0.08 0.13 0.26
and   788 821.4 33.4 0.07 0.19 0.22 0.43
including   792 802 10 0.10 0.25 0.30 0.60
KHDDH601 Stockwork Hill 32 52 20 0.02 0.10 0.11 0.21
and   79.9 89.4 9.5 2.07 0.35 1.40 2.74
including   79.9 86 6.1 3.09 0.53 2.11 4.13
KHDDH602 White Hill 216.21 324.6 108.39 0.06 0.12 0.15 0.29
KHDDH603 Stockwork Hill 28 32 4 0.06 0.10 0.13 0.26
and   105 109 4 0.11 0.09 0.15 0.29
and   121 145 24 0.03 0.08 0.09 0.18
and   176.3 186 9.7 0.05 0.07 0.09 0.18
and   206 475.9 269.9 0.10 0.26 0.32 0.62
including   214 222 8 0.09 0.22 0.27 0.52
including   240 296 56 0.12 0.26 0.32 0.63
including   262 268 6 0.28 0.67 0.81 1.58
including   306 377 71 0.14 0.47 0.55 1.07
including   308 317 9 0.18 0.45 0.54 1.05
including   331 351 20 0.26 0.82 0.95 1.86
including   337 351 14 0.33 0.90 1.07 2.10
including   440.1 454.1 14 0.13 0.23 0.29 0.58
including   468 474.2 6.2 0.45 0.34 0.57 1.12
KHDDH604 Stockwork Hill 35 49 14 0.10 0.05 0.10 0.20
and   246 250 4 0.22 0.01 0.12 0.23
KHDDH605A Stockwork Hill 41 45 4 0.26 0.06 0.19 0.37
and   139.4 155 15.6 0.03 0.07 0.09 0.17
and   195 199 4 0.28 0.08 0.22 0.43
and   209 283.92 74.92 0.19 0.23 0.32 0.63
including   226 243.43 17.43 0.23 0.35 0.46 0.91
including   228 232 4 0.52 0.78 1.04 2.03
including   254 268 14 0.43 0.44 0.66 1.29
including   258 266 8 0.55 0.49 0.77 1.50
including   278 283.92 5.92 0.34 0.13 0.31 0.61
KHDDH607 Stockwork Hill 9 19 10 0.03 0.13 0.15 0.30
and   106 112 6 0.06 0.10 0.13 0.26
and   121.7 149 27.3 0.07 0.10 0.14 0.27
and   159 193 34 0.04 0.09 0.11 0.22
and   214.2 222 7.8 0.10 0.06 0.12 0.23
and   234 238 4 0.09 0.07 0.11 0.22
and   252 284 32 0.07 0.07 0.10 0.20
and   296 307 11 0.06 0.09 0.12 0.23
and   330.85 434.9 104.05 0.08 0.27 0.31 0.61
including   411 433 22 0.12 0.95 1.01 1.98
including   426.9 431 4.1 0.24 3.82 3.94 7.71
and   445 449 4 0.14 0.08 0.14 0.28
and   492.9 501.3 8.4 0.35 0.18 0.35 0.69
including   492.9 497 4.1 0.53 0.26 0.53 1.04
and   512 568 56 0.11 0.18 0.23 0.46
including   524 542 18 0.11 0.25 0.30 0.59
and   578 586.2 8.2 0.04 0.14 0.16 0.32
KHDDH608 Stockwork Hill 0.35 112.5 112.15 0.27 0.21 0.35 0.68
including   59 112.5 53.5 0.49 0.31 0.56 1.09
including   99 110.2 11.2 1.26 0.56 1.21 2.36
and   129.7 148 18.3 0.13 0.17 0.23 0.46
including   129.7 135.87 6.17 0.29 0.31 0.46 0.89
and   166 270 104 0.12 0.13 0.19 0.38
including   224 230 6 0.28 0.30 0.44 0.86
and   282 400 118 0.07 0.13 0.16 0.32
including   318 322 4 0.11 0.27 0.32 0.62
KHDDH609 Stockwork Hill 10 18 8 0.07 0.07 0.11 0.21
and   28 322 294 0.08 0.10 0.14 0.27
including   81 89 8 0.06 0.21 0.24 0.46
including   207 237 30 0.18 0.15 0.24 0.46
and   334 350 16 0.32 0.08 0.24 0.48
including   336 348 12 0.39 0.08 0.28 0.54
and   378 394 16 0.05 0.05 0.08 0.16
KHDDH610 Stockwork Hill 3.5 46 42.5 0.06 0.10 0.13 0.25
and   55 88 33 0.08 0.11 0.15 0.29
and   204 212 8 0.07 0.07 0.10 0.20
and   294 325 31 0.08 0.10 0.13 0.26
KHDDH611 Stockwork Hill 3 115 112 0.10 0.09 0.14 0.28
and   125 137 12 0.13 0.06 0.12 0.24
and   171.85 214 42.15 0.07 0.09 0.12 0.23
and   255 275 20 0.04 0.11 0.13 0.26
KHDDH612 Stockwork Hill 8 98 90 0.10 0.13 0.18 0.36
including   58 68 10 0.14 0.30 0.37 0.73
KHDDH613 Stockwork Hill 17 25 8 0.19 0.12 0.22 0.43
and   39 111.35 72.35 0.08 0.13 0.17 0.34
including   70.9 87.8 16.9 0.18 0.20 0.29 0.57
including   97.6 106 8.4 0.14 0.26 0.33 0.64
and   121 495.6 374.6 0.25 0.26 0.40 0.77
including   141 149 8 0.14 0.18 0.25 0.49
including   159 180.6 21.6 0.25 0.31 0.44 0.86
including   199 471 272 0.30 0.31 0.46 0.90
including   237 285 48 0.47 0.45 0.69 1.36
including   409 419 10 0.57 0.56 0.85 1.66
including   409 413 4 0.80 0.80 1.21 2.37
including   441 451 10 1.14 0.37 0.96 1.87
including   443 451 8 1.25 0.38 1.02 1.99
and   506 548 42 0.47 0.41 0.66 1.28
including   507.6 548 40.4 0.48 0.42 0.67 1.31
including   510 544 34 0.53 0.45 0.72 1.41
including   540 544 4 1.42 1.29 2.01 3.94
KHDDH614 Stockwork Hill 2.85 39 36.15 0.09 0.09 0.14 0.27
and   138 174 36 0.08 0.10 0.14 0.28
KHDDH615 Stockwork Hill 2.4 16 13.6 0.08 0.06 0.10 0.20
and   28 173.8 145.8 0.15 0.13 0.21 0.40
including   46 68 22 0.30 0.18 0.33 0.65
including   84.1 102 17.9 0.22 0.21 0.32 0.63
KHDDH616 White Hill 25 150 125 0.08 0.13 0.17 0.33
including   25 38 13 0.20 0.17 0.28 0.54
KHDDH617 White Hill 0 231 231 0.08 0.15 0.19 0.37
including   94 112 18 0.12 0.24 0.30 0.59
including   144 154 10 0.13 0.20 0.26 0.52
including   168 172 4 0.31 0.23 0.38 0.75
KHDDH618 White Hill 67 354 287 0.07 0.17 0.20 0.39
including   232 275.2 43.2 0.08 0.25 0.29 0.57
including   304 328 24 0.10 0.22 0.27 0.52
including   342 350 8 0.15 0.26 0.34 0.66
assays pending
KHDDH619 White Hill 135 634.1 499.1 0.07 0.18 0.22 0.43
including   313.9 349 35.1 0.10 0.28 0.33 0.65
including   387 405.3 18.3 0.18 0.36 0.45 0.89
including   417.2 435.9 18.7 0.12 0.25 0.32 0.62
including   495 503 8 0.10 0.28 0.32 0.63
including   523.2 531 7.8 0.13 0.28 0.34 0.67
including   621 625 4 0.07 0.33 0.36 0.71
KHDDH620 White Hill 0.5 175 174.5 0.05 0.14 0.16 0.32
KHDDH621 White Hill assays pending
KHDDH623 White Hill 0 250 250 0.11 0.18 0.24 0.46
including   28 34 6 0.37 0.22 0.41 0.80
including   72 116 44 0.16 0.27 0.35 0.69
including   230 246 16 0.17 0.24 0.33 0.64
KHDDH624 White Hill 0 397 397 0.10 0.18 0.24 0.46
including   85 139.2 54.2 0.15 0.26 0.33 0.65
including   149 166.7 17.7 0.17 0.24 0.32 0.63
including   183 212.6 29.6 0.22 0.31 0.42 0.82
including   229 238.1 9.1 0.14 0.27 0.35 0.68
including   321.6 330 8.4 0.18 0.32 0.41 0.81
including   340 362.7 22.7 0.20 0.30 0.40 0.79
and   411 423.6 12.6 0.08 0.14 0.18 0.35
KHDDH626 White Hill assays pending
KHDDH627 White Hill assays pending
KHDDH628 Stockwork Hill assays pending
KHDDH629 Stockwork Hill assays pending
KHDDH631 White Hill assays pending
KHDDH632 White Hill assays pending
KHDDH633 White Hill assays pending
KHDDH634 White Hill assays pending
KHDDH637 White Hill assays pending
KHDDH644 White Hill assays pending


Appendix 2: Statements and Disclaimers

Competent Person Statement

The information in this announcement that relates to Mineral Resources is based on information compiled by Mr Robert Spiers, who is responsible for the Mineral Resource estimate. Mr Spiers is a full time Principal Geologist employed by Spiers Geological Consultants (SGC) and is a Member of the Australian Institute of Geoscientists. He has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as the Qualified Person as defined in the CIM Guidelines and National Instrument 43-101 and as a Competent Person under JORC Code 2012. Mr Spiers consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

The information in this announcement that relates to exploration results is based on information compiled by Dr Andrew Stewart, who is responsible for the exploration data, comments on exploration target sizes, QA/QC and geological interpretation and information. Dr Stewart, who is an employee of Xanadu and is a Member of the Australasian Institute of Geoscientists, has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as the Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves and the National Instrument 43-101. Dr Stewart consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

Mineral Resources and Ore Reserves Reporting Requirements

The 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code 2012) sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves. The Information contained in this Announcement has been presented in accordance with the JORC Code 2012.

The information in this Announcement relates to the exploration results previously reported in ASX Announcements which are available on the Xanadu website at:

https://www.xanadumines.com/site/investor-centre/asx-announcements

The Company is not aware of any new, material information or data that is not included in those market announcements.

Copper Equivalent Calculations

The copper equivalent (CuEq) calculation represents the total metal value for each metal, multiplied by the conversion factor, summed and expressed in equivalent copper percentage with a metallurgical recovery factor applied.

Copper equivalent (CuEq) grade values were calculated using the formula: CuEq = Cu + Au * 0.60049 * 0.86667.

Where Cu – copper grade (%); Au – gold grade (g/t); 0.60049 – conversion factor (gold to copper); 0.86667 – relative recovery of gold to copper (86.67%).

The copper equivalent formula was based on the following parameters (prices are in USD): Copper price 3.4 $/lb; Gold price 1400 $/oz; Copper recovery 90%; Gold recovery 78%; Relative recovery of gold to copper = 78% / 90% = 86.67%.

Forward-Looking Statements

Certain statements contained in this Announcement, including information as to the future financial or operating performance of Xanadu and its projects may also include statements which are ‘forward‐looking statements’ that may include, amongst other things, statements regarding targets, estimates and assumptions in respect of mineral reserves and mineral resources and anticipated grades and recovery rates, production and prices, recovery costs and results, capital expenditures and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions. These ‘forward-looking statements’ are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Xanadu, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies and involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward‐looking statements.

Xanadu disclaims any intent or obligation to update publicly or release any revisions to any forward‐looking statements, whether as a result of new information, future events, circumstances or results or otherwise after the date of this Announcement or to reflect the occurrence of unanticipated events, other than required by the Corporations Act 2001 (Cth) and the Listing Rules of the Australian Securities Exchange (ASX) and Toronto Stock Exchange (TSX). The words ‘believe’, ‘expect’, ‘anticipate’, ‘indicate’, ‘contemplate’, ‘target’, ‘plan’, ‘intends’, ‘continue’, ‘budget’, ‘estimate’, ‘may’, ‘will’, ‘schedule’ and similar expressions identify forward‐looking statements.

All ‘forward‐looking statements’ made in this Announcement are qualified by the foregoing cautionary statements. Investors are cautioned that ‘forward‐looking statements’ are not guarantee of future performance and accordingly investors are cautioned not to put undue reliance on ‘forward‐looking statements’ due to the inherent uncertainty therein.

For further information please visit the Xanadu Mines’ Website at www.xanadumines.com.

Appendix 2: Kharmagtai Table 1 (JORC 2012)

Set out below is Section 1 and Section 2 of Table 1 under the JORC Code, 2012 Edition for the Kharmagtai project. Data provided by Xanadu. This Table 1 updates the JORC Table 1 disclosure dated 8 December 2021.

JORC TABLE 1 – SECTION 1 – SAMPLING TECHNIQUES AND DATA
(Criteria in this section apply to all succeeding sections).

Criteria Commentary
Sampling techniques
  • Representative ½ core samples were split from PQ, HQ & NQ diameter diamond drill core on site using rock saws, on a routine 2m sample interval that also honours lithological/intrusive contacts.
  • The orientation of the cut line is controlled using the core orientation line ensuring uniformity of core splitting wherever the core has been successfully oriented.
  • Sample intervals are defined and subsequently checked by geologists, and sample tags are attached (stapled) to the plastic core trays for every sample interval.
  • Reverse Circulation (RC) chip samples are ¼ splits from one meter (1m) intervals using a 75%:25% riffle splitter to obtain a 3kg sample
  • RC samples are uniform 2m samples formed from the combination of two ¼ split 1m samples.
Drilling techniques
  • The Mineral Resource Estimation has been based upon diamond drilling of PQ, HQ and NQ diameters with both standard and triple tube core recovery configurations, RC drilling and surface trenching with channel sampling.
  • All drill core drilled by Xanadu has been oriented using the “Reflex Ace” tool.
Drill sample recovery
  • Diamond drill core recoveries were assessed using the standard industry (best) practice which involves removing the core from core trays; reassembling multiple core runs in a v-rail; measuring core lengths with a tape measure, assessing recovery against core block depth measurements and recording any measured core loss for each core run.
  • Diamond core recoveries average 97% through mineralisation.
  • Overall, core quality is good, with minimal core loss. Where there is localised faulting and or fracturing core recoveries decrease, however, this is a very small percentage of the mineralised intersections.
  • RC recoveries are measured using whole weight of each 1m intercept measured before splitting
  • Analysis of recovery results vs grade shows no significant trends that might indicate sampling bias introduced by variable recovery in fault/fracture zones.
Logging
  • All drill core is geologically logged by well-trained geologists using a modified “Anaconda-style” logging system methodology. The Anaconda method of logging and mapping is specifically designed for porphyry Cu-Au mineral systems and is entirely appropriate to support Mineral Resource Estimation, mining and metallurgical studies.
  • Logging of lithology, alteration and mineralogy is intrinsically qualitative in nature. However, the logging is subsequently supported by 4 Acid ICP-MS (48 element) geochemistry and SWIR spectral mineralogy (facilitating semi-quantitative/calculated mineralogical, lithological and alteration classification) which is integrated with the logging to improve cross section interpretation and 3D geological model development.
  • Drill core is also systematically logged for both geotechnical features and geological structures. Where drill core has been successfully oriented, the orientation of structures and geotechnical features are also routinely measured.
  • Both wet and dry core photos are taken after core has been logged and marked-up but before drill core has been cut.
Sub-sampling techniques and sample preparation
  • All drill core samples are ½ core splits from either PQ, HQ or NQ diameter cores. A routine 2m sample interval is used, but this is varied locally to honour lithological/intrusive contacts. The minimum allowed sample length is 30cm.
  • Core is appropriately split (onsite) using diamond core saws with the cut line routinely located relative to the core orientation line (where present) to provide consistency of sample split selection.
  • The diamond saws are regularly flushed with water to minimize potential contamination.
  • A field duplicate ¼ core sample is collected every 30th sample to ensure the “representivity of the in-situ material collected”. The performance of these field duplicates is routinely analysed as part of Xanadu’s sample QC process.
  • Routine sample preparation and analyses of DDH samples were carried out by ALS Mongolia LLC (ALS Mongolia), who operates an independent sample preparation and analytical laboratory in Ulaanbaatar.
  • All samples were prepared to meet standard quality control procedures as follows: Crushed to 75% passing 2mm, split to 1kg, pulverised to 85% passing 200 mesh (75 microns) and split to 150g sample pulp.
  • ALS Mongolia Geochemistry labs quality management system is certified to ISO 9001:2008.
  • The sample support (sub-sample mass and comminution) is appropriate for the grainsize and Cu-Au distribution of the porphyry Cu-Au mineralization and associated host rocks.
Quality of assay data and laboratory tests
  • All samples were routinely assayed by ALS Mongolia for gold
  • Au is determined using a 25g fire assay fusion, cupelled to obtain a bead, and digested with Aqua Regia, followed by an atomic absorption spectroscopy (AAS) finish, with a lower detection (LDL) of 0.01 ppm.
  • All samples were also submitted to ALS Mongolia for the 48-element package ME-ICP61 using a four-acid digest (considered to be an effective total digest for the elements relevant to the Mineral Resource Estimate (MRE)). Where copper is over-range (>1% Cu), it is analysed by a second analytical technique (Cu-OG62), which has a higher upper detection limit (UDL) of 5% copper.
  • Quality assurance has been managed by insertion of appropriate Standards (1:30 samples – suitable Ore Research Pty Ltd certified standards), Blanks (1:30 samples), Duplicates (1:30 samples – ¼ core duplicate) by XAM.
  • Assay results outside the optimal range for methods were re-analysed by appropriate methods.
  • Ore Research Pty Ltd certified copper and gold standards have been implemented as a part of QC procedures, as well as coarse and pulp blanks, and certified matrix matched copper-gold standards.
  • QC monitoring is an active and ongoing processes on batch by batch basis by which unacceptable results are re-assayed as soon as practicable.
  • Prior to 2014: Cu, Ag, Pb, Zn, As and Mo were routinely determined using a three-acid-digestion of a 0.3g sub-sample followed by an AAS finish (AAS21R) at SGS Mongolia. Samples were digested with nitric, hydrochloric and perchloric acids to dryness before leaching with hydrochloric acid to dissolve soluble salts and made to 15ml volume with distilled water. The LDL for copper using this technique was 2ppm. Where copper was over-range (>1% Cu), it was analysed by a second analytical technique (AAS22S), which has a higher upper detection limit (UDL) of 5% copper. Gold analysis method was essentially unchanged.
Verification of sampling and assaying
  • All assay data QA/QC is checked prior to loading into XAM’s Geobank data base.
  • The data is managed by XAM geologists.
  • The data base and geological interpretation is managed by XAM.
  • Check assays are submitted to an umpire lab (SGS Mongolia) for duplicate analysis.
  • No twinned drill holes exist.
  • There have been no adjustments to any of the assay data.
Location of data points
  • Diamond drill holes have been surveyed with a differential global positioning system (DGPS) to within 10cm accuracy.
  • The grid system used for the project is UTM WGS-84 Zone 48N
  • Historically, Eastman Kodak and Flexit electronic multi-shot downhole survey tools have been used at Kharmagtai to collect down hole azimuth and inclination information for the majority of the diamond drill holes. Single shots were typically taken every 30m to 50m during the drilling process, and a multi-shot survey with readings every 3-5m are conducted at the completion of the drill hole. As these tools rely on the earth’s magnetic field to measure azimuth, there is some localised interference/inaccuracy introduced by the presence of magnetite in some parts of the Kharmagtai mineral system. The extent of this interference cannot be quantified on a reading-by-reading basis.
  • More recently (since September 2017), a north-seeking gyro has been employed by the drilling crews on site (rented and operated by the drilling contractor), providing accurate downhole orientation measurements unaffected by magnetic effects. Xanadu have a permanent calibration station setup for the gyro tool, which is routinely calibrated every 2 weeks (calibration records are maintained and were sighted)
  • The project Digital Terrain Model (DTM) is based on 1m contours from satellite imagery with an accuracy of ±0.1 m.
Data spacing and distribution
  • Holes spacings range from <50m spacings within the core of mineralization to +500m spacings for exploration drilling. Hole spacings can be determined using the sections and drill plans provided.
  • Holes range from vertical to an inclination of -60 degrees depending on the attitude of the target and the drilling method.
  • The data spacing and distribution is sufficient to establish anomalism and targeting for porphyry Cu-Au, tourmaline breccia and epithermal target types.
  • Holes have been drilled to a maximum of 1,304m vertical depth.
  • The data spacing and distribution is sufficient to establish geological and grade continuity, and to support the Mineral Resource classification.
Orientation of data in relation to geological structure
  • Drilling is conducted in a predominantly regular grid to allow unbiased interpretation and targeting.
  • Scissor drilling, as well as some vertical and oblique drilling, has been used in key mineralised zones to achieve unbiased sampling of interpreted structures and mineralised zones, and in particular to assist in constraining the geometry of the mineralised hydrothermal tourmaline-sulphide breccia domains.
Sample security
  • Samples are delivered from the drill rig to the core shed twice daily and are never left unattended at the rig.
  • Samples are dispatched from site in locked boxes transported on XAM company vehicles to ALS lab in Ulaanbaatar.
  • Sample shipment receipt is signed off at the Laboratory with additional email confirmation of receipt.
  • Samples are then stored at the lab and returned to a locked storage site.
Audits or reviews
  • Internal audits of sampling techniques and data management are undertaken on a regular basis, to ensure industry best practice is employed at all times.
  • External reviews and audits have been conducted by the following groups:
  • 2012: AMC Consultants Pty Ltd. was engaged to conduct an Independent Technical Report which reviewed drilling and sampling procedures. It was concluded that sampling and data record was to an appropriate standard.
  • 2013: Mining Associates Ltd. was engaged to conduct an Independent Technical Report to review drilling, sampling techniques and QAQC. Methods were found to conform to international best practice.
  • 2018: CSA Global reviewed the entire drilling, logging, sampling, sample shipping and laboratory processes during the competent persons site visit for the 2018 MRE and found the systems and adherence to protocols to be to an appropriate standard.


JORC TABLE 1 – SECTION 2 – REPORTING OF EXPLORATION RESULTS
(Criteria in this section apply to all succeeding sections).

Criteria Commentary
Mineral
tenement
and land
tenure
status
  • The Project comprises 2 Mining Licences (MV-17129A Oyut Ulaan and (MV-17387A Kharmagtai):
    • Xanadu now owns 90% of Vantage LLC, the 100% owner of the Oyut Ulaan mining licence.
    • The Kharmagtai mining license MV-17387A is 100% owned by Oyut Ulaan LLC. Xanadu has an 85% interest in Mongol Metals LLC, which has 90% interest in Oyut Ulaan LLC. The remaining 10% in Oyut Ulaan LLC is owned by Quincunx (BVI) Ltd (“Quincunx”).
  • The Mongolian Minerals Law (2006) and Mongolian Land Law (2002) govern exploration, mining and land use rights for the project.
Exploration
done by
other
parties
  • Previous exploration at Kharmagtai was conducted by Quincunx Ltd, Ivanhoe Mines Ltd and Turquoise Hill Resources Ltd including extensive drilling, surface geochemistry, geophysics, mapping.
  • Previous exploration at Red Mountain (Oyut Ulaan) was conducted by Ivanhoe Mines.
Geology

  • The mineralisation is characterised as porphyry copper-gold type.
  • Porphyry copper-gold deposits are formed from magmatic hydrothermal fluids typically associated with felsic intrusive stocks that have deposited metals as sulphides both within the intrusive and the intruded host rocks. Quartz stockwork veining is typically associated with sulphides occurring both within the quartz veinlets and disseminated thought out the wall rock. Porphyry deposits are typically large tonnage deposits ranging from low to high grade and are generally mined by large scale open pit or underground bulk mining methods. The deposits at Kharmagtai are atypical in that they are associated with intermediate intrusions of diorite to quartz diorite composition; however, the deposits are in terms of contained gold significant, and similar gold-rich porphyry deposits.
Drill hole 
Information
  • Diamond drill holes are the principal source of geological and grade data for the Project.
  • See figures in this ASX/TSX Announcement.
Data Aggregation
methods
  • The CSAMT data was converted into 2D line data using the Zonge CSAMT processing software and then converted into 3D space using a UBC inversion process. Inversion fit was acceptable, and error was generally low.
  • A nominal cut-off of 0.1% CuEq is used in copper dominant systems for identification of potentially significant intercepts for reporting purposes. Higher grade cut-offs are 0.3%, 0.6% and 1% CuEq.
  • A nominal cut-off of 0.1g/t eAu is used in gold dominant systems like Golden Eagle for identification of potentially significant intercepts for reporting purposes. Higher grade cut-offs are 0.3g/t, 0.6g/t and 1g/t eAu.
  • Maximum contiguous dilution within each intercept is 9m for 0.1%, 0.3%, 0.6% and 1% CuEq.
  • Most of the reported intercepts are shown in sufficient detail, including maxima and subintervals, to allow the reader to make an assessment of the balance of high and low grades in the intercept.
  • Informing samples have been composited to two metre lengths honouring the geological domains and adjusted where necessary to ensure that no residual sample lengths have been excluded (best fit).

The copper equivalent (CuEq) calculation represents the total metal value for each metal, multiplied by the conversion factor, summed and expressed in equivalent copper percentage with a metallurgical recovery factor applied. The copper equivalent calculation used is based off the CuEq calculation defined by CSA Global in the 2018 Mineral Resource Upgrade.

Copper equivalent (CuEq) grade values were calculated using the following formula:

    CuEq = Cu + Au * 0.62097 * 0.8235,

Gold Equivalent (eAu) grade values were calculated using the following formula:

    eAu = Au + Cu / 0.62097 * 0.8235.

Where:

Cu – copper grade (%)

Au – gold grade (g/t)

0.62097 – conversion factor (gold to copper)

0.8235 – relative recovery of gold to copper (82.35%)

The copper equivalent formula was based on the following parameters (prices are in USD):

  • Copper price – 3.1 $/lb (or 6834 $/t)
  • Gold price        – 1320 $/oz
  • Copper recovery – 85%
  • Gold recovery – 70%
  • Relative recovery of gold to copper = 70% / 85% = 82.35%.
Relationship between mineralisation on widths and intercept
lengths
  • Mineralised structures are variable in orientation, and therefore drill orientations have been adjusted from place to place in order to allow intersection angles as close as possible to true widths.
  • Exploration results have been reported as an interval with ‘from’ and ‘to’ stated in tables of significant economic intercepts. Tables clearly indicate that true widths will generally be narrower than those reported.
Diagrams
  • See figures in the body of this ASX/TSX Announcement.
Balanced reporting
  • Resources have been reported at a range of cut-off grades, above a minimum suitable for open pit mining, and above a minimum suitable for underground mining.
Other substantive 
exploration data
  • Extensive work in this area has been done and is reported separately.
Further Work
  • The mineralisation is open at depth and along strike.
  • Current estimates are restricted to those expected to be reasonable for open pit mining. Limited drilling below this depth (-300m RLl) shows widths and grades potentially suitable for underground extraction.
  • Exploration on going.


JORC TABLE 1 – SECTION 3 – ESTIMATION AND REPORTING OF MINERAL RESOURCES

Mineral Resources are not reported so this is not applicable to this Announcement. Please refer to the Company’s ASX Announcement dated 1 December 2021 for Xanadu’s most recent reported Mineral Resource Estimate and applicable Table 1, Section 3.

JORC TABLE 1 – SECTION 4 – ESTIMATION AND REPORTING OF ORE RESERVES

Ore Reserves are not reported so this is not applicable to this Announcement.

______________________

1 ASX/TSX Announcement 08 December 2021 – Kharmagtai resource grows to 1.1 billion tonnes, containing 3Mt Cu and 8Moz Au
2 ASX/TSX Announcement 08 December 2021 – Kharmagtai resource grows to 1.1 billion tonnes, containing 3Mt Cu and 8Moz Au

Photos accompanying this announcement are available at:

https://www.globenewswire.com/NewsRoom/AttachmentNg/82834f59-4f35-49e5-bcf4-f39774f81baa

https://www.globenewswire.com/NewsRoom/AttachmentNg/6cc21b32-b939-4489-98c6-c8a3031189d4

https://www.globenewswire.com/NewsRoom/AttachmentNg/2a8f72c4-2ca7-4b37-8892-e0969e31ca30

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