Xanadu Mines has revealed a significant increase in the mineral resource estimate for its flagship Kharmagtai copper-gold project in Mongolia, reporting a 463,000-tonne increase in contained copper and a 746,000-ounce rise in contained gold. The boost has been driven by both the results of new drilling at the White Hill deposit and a refined pit design generated as part of the company’s current prefeasibility studies.
Xanadu Mines has revealed a significant increase in the mineral resource estimate for its flagship Kharmagtai copper-gold project in Mongolia, reporting a 463,000-tonne increase in contained copper and a 746,000-ounce rise in contained gold.
The company says the boost has been driven by both the results of new drilling at its White Hill deposit and a refined pit design generated as part of its current prefeasibility studies. As the operator of the Kharmagtai project in the South Gobi region, Xanadu enlisted Spiers Geological Consultants (SGC) to update the resource estimate and its work has led to an increase in its contained copper by 14 per cent and gold by nine per cent – bringing the operation’s total to 3.8 million tonnes of copper and 9.3 million ounces of gold.
The improvement of 123,000 tonnes of copper and 156,000 ounces of gold came as a result of incorporating new drilling data from 7300m of work spread across 11 holes at the White Hill and Golden Eagle deposits and the balance – 340,000 tonnes of copper and 590,000 ounces of gold – from adjustments to the refined resource model, which now includes the newly-defined pit-shells generated in the ongoing prefeasibility study (PFS) that is expected to be delivered this quarter.
Xanadu Mines executive chairman and managing director Colin Moorhead said: “We are keeping all planned infrastructure outside of the revenue factor 1.4 pit-shells to ensure flexibility for the open pits to grow in the future. There is therefore a reasonable expectation that mineralisation falling within those pits may eventually be extracted by open pit mining and it is appropriate that this Mineral Resource is reported to cut-off grades that are consistent with this.”
Moorhead says it is clear that White Hill remains open at depth, supporting management’s exploration model that is targeting potential underground opportunities beyond the scope of the PFS. Much of the resource growth is attributed to the discovery of a higher-grade copper and gold zone at White Hill.
In April 2022, Xanadu formed a strategic partnership with Chinese mining giant Zijin Mining Group to advance its Kharmagtai copper-gold project. Zijin is one of China's biggest mining firms with operations across 14 of that country’s provinces and 13 countries worldwide and is primarily focused on copper and gold production.
The company’s investment at Kharmagtai, totalling some AU$64 million, includes the total funding required for the PFS and further exploration. The deal involved Zijin acquiring up to a 19.99 per cent stake in Xanadu and establishing a 50:50 joint venture (JV) for Kharmagtai in exchange for an additional US$35 million (AU$54 million) at project level.
The arrangement has left Xanadu to manage the project until the delivery of the PFS. Once completed, Xanadu has agreed to hand the operating reins to Zijin and it can then choose to fund construction, sell its stake to Zijin, or partially sell with a loan carry option.
Mongolia has long boasted the occurrence of massive gold-copper projects within its borders, with the huge Oyu Tolgoi mine regarded as one of its best-known deposits. Discovered by mining billionaire Robert Friedland and now jointly-owned by Rio Tinto and the Mongolian Government, it is one of the biggest known copper and gold deposits in the world, hosting 42 million tonnes of copper and a massive 60 million ounces of gold.
Kharmagtai may not be up to those numbers, but with a PFS due any day now and plenty of exploration upside, the project appears to be shaping up to be a development of almost biblical proportions.
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