Xanadu launches aggressive campaign at key Mongolian site

Xanadu Mines has begun an 18,000m discovery exploration drilling campaign at its Kharmagtai copper-gold project in Mongolia, with results set to be incorporated into an ongoing prefeasibility study.

The program includes two additional diamond drill rigs, with one set to cover 8000m of deep exploration targeting high-grade and large-scale mineralisation at depth. A further 6000m is planned, depending on results of its phase-one campaign.

The company’s second diamond rig is set to drill 10,000m of shallow holes, aiming to identify open pit-style resources in five unexplored porphyry clusters within the wider Kharmagtai area.

The latest drill program builds on an ongoing 30,000m, four-rig infill diamond drill campaign at the operation. Xanadu now has a total of six rigs operating at the project with a massive 54,000m of assays to come if the additional 6000m goes ahead.

The shallow exploration program will test several high-priority targets identified from a geochemical survey in 2016 that highlighted the company’s Golden Eagle, Zephyr and Zaraa prospects.

Management says its deep drill holes have been designed to ensure that a potential high-grade, large-scale and deeper “Oyu Tolgoi”-style deposit is discovered early in the study process. That Rio Tinto-run operation is regarded as being one of the world’s biggest copper and gold deposits.

Xanadu Mines executive chairman and managing director Colin Moorhead said: “We are very excited to kick off discovery drilling at Kharmagtai, an aggressive and systematic programme that underpins our growth strategy. It aims to realise the significant growth potential at Kharmagtai, beyond its existing world-class resource.”

Kharmagtai has a mineral resource estimate of 1.1 billion tonnes for 3 million tonnes of contained copper and 8 million ounces of gold. Management expects to provide an updated mineral resource before the end of this year, while its prefeasibility study is due to be completed during the second half of next year.

Metallurgical studies are also underway, with Xanadu investigating sulphide flotation for the bulk of the orebody, ore comminution, gold deportment and oxide leaching testwork. Its key objective is to explore opportunities to increase recoveries, optimise crushing and grinding and to deliver the most economic ore processing flowsheet.

In March, Xanadu completed two phases of its strategic partnership with Chinese copper giant Zijin Mining, giving it access to funding for exploration. The deal saw Zijin invest US$35 million (AU$52 million) and the funds will be partly used to complete the Kharmagtai prefeasibility study. A 50-50 joint venture has been created between the two partners at a project level, with Xanadu the operator on the ground.

With significant funding available to cover the costs of its huge drill program, the market will be keen to see if the company can unearth further mineralisation at its already impressive Kharmagtai project. And with its hard-work ethic, Xanadu is clearly a company that will not die wondering.

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