Resource update shows Xanadu has its foot on a monster in Mongolia
Mining & Resources
Special report: Xanadu Mines has confirmed its Kharmagtai project in Mongolia’s South Gobi Desert as one of the largest undeveloped copper and gold assets in the world with the release of a new resource estimate.
And there’s more to come, with the company describing the resource update announced last Wednesday as an “interim” step ahead of delivering a larger global resource update for the project.
Following the interim update, indicated and inferred resources at Kharmagtai now stand at 598 million tonnes containing 1.9 million tonnes of copper and 4.3 million ounces of gold (2.6 million tonnes of copper equivalent metal or ).
Within the broader resource is a shallow, higher grade core of 54 million tonnes grading 0.86% copper equivalent, 61% of which is in the higher-confidence “indicated” category.
The new resource represents a 400% increase in contained copper and a 249% increased in contained gold compared to the maiden Kharmagtai resource published by the company in March 2015 and will serve as the basis for a scoping study on a shallow, high grade starter pit development, the results of which are expected this quarter.
“We are extremely delighted with the new results, particularly the substantial increase in the open pit, shallow resource base at Kharmagtai,” Xanadu managing director Andrew Stewart said.
“With a 400% increase in contained copper, we are confident that the upcoming scoping study will show a financially robust starter project that will pave the way for Kharmagtai to develop into another high-quality Mongolian mining operation.”
The global resource update will include the Zaraa discovery made earlier this year, which has been labelled by Xanadu as a potential game changer.
Zaraa, where mineralisation has been intersected to a depth of 1,200 metres and remains open, is expected to have a significant positive impact on the overall scale and grade of the Kharmagtai resource.
“To go from discovery to a maiden mineral resource estimate at Zaraa in a short space of time will not only validate the exploration methodology used by Xanadu but highlight the speed at which projects can be advanced in Mongolia,” Stewart said.
There are multiple other shallow drill targets within the Kharmagtai leases that will be assessed systematically by Xanadu with a view to discovering additional porphyry deposits to add to the project’s growing resource base.
Based on contained copper equivalent metal, Kharmagtai is currently just over one-third the size of Solgold’s Cascabel project in Ecuador, which has attracted corporate interest from BHP and Newcrest Mining.
The mineralisation at Kharmagtai starts at surface and appears amenable to open pit mining, whereas Cascabel will need to be mined from underground.
Xanadu shares closed at 12c on Friday, capitalising the company at $77.8 million.
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