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.

Kharmagtai District Long Section – known mineralisation

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.

Xanadu Mines (ASX:XAM) share price chart:




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.