Special report: A sharp pull-back in the share price of Mongolian-focused copper explorer and developer Xanadu Mines has prompted two of the company’s directors to top up their personal holdings as a show of confidence.

Managing director Andrew Stewart and non-executive director Daryl Clark both bought Xanadu shares on market over the past two weeks as a combination of institutional selling and a weakening copper price drove the stock as low as 10c.

As shown in Change of Director’s Interest notices filed with the ASX, Mr Stewart paid $19,865 for an additional 137,000 shares, taking his personal holding to 4,292,083 shares.

Mr Clark paid $25,000 for 200,000 shares, lifting his holding to 1,921,500 shares.

The Xanadu share price lost about 35 per cent from August 6 to August 21, dropping from 16c to 10c.

Helped by the buying from the two directors, the stock rose 45 per cent to 14.5c. It’s now trading at about 12.5c.

Xanadu Mines shares (ASX:XAM) over the opast year
Xanadu Mines shares (ASX:XAM) over the opast year

Mr Stewart told Stockhead the dip to 10c was the combined result of two funds on the share register calling in redemptions and the price of copper pulling back towards $US2.60 a pound.

The funds did not sold out completely and the fundamentals of the company’s flagship Kharmagtai project were unchanged, he said.

“Kharmagtai is arguably the premier large-scale undeveloped copper-gold project in Asia and nothing has changed in that regard,” he said.

“if anything, the fundamentals have improved in recent months with the discovery of a fourth porphyry deposit at Zaraa that appears to have near-term development potential.”

Kharmagtai’s current Mineral Resource, which is contained within the Stockwork Hill, Copper Hill and White Hill deposits, stands at 1.5 million pounds of copper and 2.2 million ounces of gold.

Fast-tracked program

Xanadu is fast-tracking a program of resource drilling that is expected to result in a significant upgrade to the resource early in the December quarter.

At around the same time, the company expects to release the results of a preliminary economic assessment of a low-strip ratio, higher grade open pit starter project at Stockwork Hill/White Hill.

The progress at Kharmagtai comes amid renewed interest in Mongolia from major miners such as Chile’s Codelco and Rio Tinto.

Last year Codelco, the world’s second largest copper producer, said it was aiming to make “medium-term investments” in Mongolia due to the country’s apparent untapped copper potential.

Rio Tinto, which already operates the giant Oyu-Tolgoi copper mine in Mongolia, resumed exploration in the country last year after a five-year hiatus and earlier this year established a new exploration office in the capital Ulaanbaatar.


This special report is brought to you by Xanadu Mines.

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