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Mining
Xanadu is building scale in Mongolia, after defining a large extension to its White Hill deposit.
Xanadu Mines (ASX:XAM) is continuing its three-prong strategy at the Kharmagtai project, which includes resource expansion at White Hill and Zaraa, high-grade definition at Stockwork Hill and discovery, with drilling ongoing in between known mineralised areas.
June was a great month for Xanadu, with drilling results just released from its flagship Kharmagtai project delivering hits of 697m at 0.38% copper equivalent from 443m, including 172m at 0.51% copper equivalent from 570m and 208m at 0.52% copper equivalent from 754m at White Hill.
CEO Dr Andrew Stewart says the latest drill results from hole KHDDH569 add more than 300m of mineralisation to the south, which is a significant increase in copper tonnage and moves Xanadu closer to its >1 billion tonne objective.
At the Zaraa deposit, resource drilling has now been finalised with a maiden resource estimate due in Q4 which will form a considerable contribution to the global resource.
At Stockwork Hill drilling has passed between higher grade bornite compartments on Fifty-Fifty Fault, revising the high-grade targeting program.
“At Stockwork Hill, KHDDH571 indicates the high-grade bornite zone has a larger offset on either side of the Fifty-Fifty fault, which refines our models as we zero in on our >100-million-tonne high-grade objective,” Stewart said.
Additionally, the company has outlined a potential new discovery with drilling between White Hill and Zaraa entering visible porphyry mineralisation. KHDDH574 is currently at 850m and entered porphyry mineralisation at 550m.
Xanadu is in porphyry country.
The Kharmagtai copper-gold project lies within the South Gobi porphyry copper province, which hosts most of the known porphyry deposits in the South Gobi region of Mongolia, including Rio Tinto’s (ASX:RIO) famous Oyu Tolgoi copper-gold mine, one of the largest known copper and gold deposits in the world.
These massive deposits are responsible for ~60 per cent of the world’s copper, most of its molybdenum, and significant amounts of gold and silver.
They can produce a lot of metal, and make a lot of money, over a long period of time.
Argonaut analyst George Ross said the recent drill results would undoubtedly add significant tonnages to Xanadu’s existing global resource.
“XAM are on track to define a >1 billion tonne resource tonnage that is likely to grade between 0.4-0.5% copper equivalent,” he said.
“Achieving this tonnage target will enable XAM to evaluate feasibility of a large-scale (~20Mt), long life (20-30 year) operation.”
Argonaut has placed a 9c share price target on Xanadu, which is well over double the current share price.
Ross said in a research report earlier this year that Argonaut believed the main high-grade bornite zone (HGBZ) had a good chance of supporting a block cave mine, which would be viewed as an attractive proposition for development partners.
Three rigs are currently on-site testing extensions to White Hill and Zaraa and high-grade zones at Stockwork Hill.
This article was developed in collaboration with Xanadu Mines, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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