Xanadu hits drilling paydirt with Mongolian copper-gold

Xanadu Mines has hit paydirt with results from its most recent drilling at the Kharmagtai project in Mongolia it shares with China’s Zijin Mining Group.

The company says it has expanded the new, higher-grade copper-gold mineralised zone at its White Hill deposit and doubled the mineral resource grade at its Golden Eagle prospect – and now believes it may be onto a significant copper-gold system.

Management says its latest work demonstrates progressive growth in higher-grade material at the base of the project’s previously optimised open pits.

With an upgrade late last year to Xanadu’s resource inventory, aided by some 58,000m of diamond drilling since its 2021 resource update, the resource now sits with a robust confidence of 63 per cent classified in the indicated category and a current mineral resource estimate of 1.3 billion tonnes containing 3.4 million tonnes of copper and 8.5 million ounces of gold.

The figures represent a tidy 15 per cent increase in copper and a 9 per cent increase in gold, while the higher-grade core jumped by a striking 25 per cent to now sit at 125 million tonnes at 0.75 per cent copper equivalent.

Xanadu Mines executive chairman Colin Moorhead said: “Bulking up the White Hill higher grade core will improve the new open pit designs and yield additional copper within range of open-pit mining.”

The company’s latest resource figure comprises 272km of re-logged diamond drilling, which has allowed for standardisation of the geology and generation of a high-quality 3D model. In turn, it has allowed for better understanding of the geology to separate mineralised zones and further predict extensions to the deposit to be explored.

The new round of results from step-out and exploration drilling expands on the high-grade core zone at White Hill. It is below the scoping study pit designs of 2022 and outside the late 2023 resource estimate.

Overall, it has expanded the high-grade core by more than 1 per cent copper equivalent, which management says will subsequently expand the 2023 estimate and deepen the scoping study pit shells.

The project sits in the South Gobi region of Mongolia in the Kharmagtai copper-gold district. The area is an underexplored, mineral-rich landscape offering vast opportunity for explorers.

The Central Asian Orogenic Belt runs through Mongolia, which is host to some of the biggest deposits in the world, as seen in Kazakhstan and China. That has driven Moorhead, who believes the only reason Mongolia has not followed suit is because no one has looked for deposits there until now.

With a slow and steady approach from the days of its maiden drilling program into bedrock in 2016, the project delivered immediate success with copper and gold mineralisation discovered within 50m of surface and has now grown into a billion-tonne resource estimate – and there could be more to come.

Step-out drilling at Golden Eagle has more than doubled the prospect’s mineral resource estimate grade and extended the mineralisation in the shallow domain. One intercept returned a whopping interval of 153.4m at 0.43 grams per tonne gold and 0.13 per cent copper from 41.6m.

Since early December, Xanadu has completed an impressive 5307m of infill diamond drilling and 9302m of extensional and exploration drilling at Golden Eagle and the Zephyr deposit, adjacent to the north of Golden Eagle.

Deep drilling between the separate pit shells at the Stockwork Hill and Zaraa deposits intersected two broad zones of porphyry and tourmaline breccia-style mineralisation and the company says it may indicate the edges of a big copper-gold system – and that is music to anyone’s ears.

Xanadu is driven to growth-focussed discovery exploration drilling at Kharmagtai and that is proving to be successful as it continues to discover new shallow mineralisation that will enhance the open-pit mining and deep mineralisation potential for future underground mining.

With a tidy sum of US$35 million (AU$52.9 million) injected into the Kharmagtai joint venture (JV) to complete the prefeasibility study (PFS) in the third quarter of this year and to fund more discovery exploration, management is aiming towards a decision to mine in the final quarter. That would trigger potential for sulphide production in 2027 once permitting and approvals are in place.

Of particular interest will be the deep drilling assay results that are due in the coming months.

The company has committed itself to a strict focus on exploration in Mongolia and has stuck by its guns. With this slow and steady approach, and a management team with a stellar track record, there are surely big things in store for Xanadu.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au