August 24, 2022 07:00 ET | Source: Xanadu Mines Ltd. Xanadu Mines Ltd.

TORONTO, Aug. 24, 2022 (GLOBE NEWSWIRE) -- Xanadu Mines Ltd (ASX: XAM, TSX: XAM) (Xanadu or the Company) is pleased to announce the restart of exploration work at our 100% owned Red Mountain project located in the South Gobi region of Mongolia (Figure 1).

Xanadu’s Executive Chairman & Managing Director, Colin Moorhead said:  “Red Mountain has delivered several exciting, shallow, high-grade gold, silver and copper drilling results, which led us to rethink how we tackle this large and highly prospective tenement. With a renewed focus on multiple near surface targets, we are now ready to ramp exploration back-up at Red Mountain. This will include extensive trenching to define targets for the forthcoming drill program. By following a systematic program, we will be able to characterise the nature and mineral potential of Red Mountain, and we look forward to sharing results as this very exciting program progresses.”

FIGURE 1: Location of Red Mountain in the South Gobi region of Mongolia - https://www.globenewswire.com/NewsRoom/AttachmentNg/35dead47-4b8c-4d34-aab1-5397f8caaf65

Red Mountain trenching in 2022 will include 6,500 horizontal metres, designed to test strike extent, and develop targets for follow-up diamond drilling program. Surface trenching has proven to be a rapid and economic target definition approach prior to diamond drilling, and this program will include extensive trenching over new, gold, silver and copper targets.

Trenching forms part of a disciplined and systematic exploration program. The program will include:

Xanadu’s Red Mountain porphyry copper-gold-silver project is located within the Dornogovi Province of southern Mongolia, approximately 420km southeast of Ulaanbaatar (Figure 1), and 70km west from the provincial centre of Sainshand. The project has a granted 30-year mining licence and comprises an underexplored porphyry district (covering approximately 57km²).

Red Mountain mineralisation is associated with late-stage monzonite and quartz diorite porphyry dykes and stocks emplaced on the flanks of the Red Mountain Intrusive Complex (Figure 2). This consists of multiple co-genetic porphyry gold and copper centres, mineralised tourmaline breccia pipes, gold and copper base metal magnetite skarns and epithermal gold veins.

Previous exploration at Red Mountain has defined several broad zones of strongly mineralised quartz stockwork veining associated with high-grade gold and increasing alteration strength, with the mineralisation style suggesting strong likelihood for depth extensions.

Shallow gold-rich and silver-rich copper mineralisation has been identified in numerous zones, located within a 4.5km long and 300m wide prospective mineralisation zone. This mineralisation is primarily located in Bavuu, Stairy, Diorite, Target 33, Nowie and Stockwork (Figure 2). Broad spaced drilling has confirmed gold mineralisation is hosted by hematite-quartz veins with coarse visible gold, occurring as multiple stacked arrays. Veins are typically narrow, but very high-grade with gold assays ranging from 1 g/t to >30 g/t gold over widths of 0.5m to 1.5m. Mineralised veins are characterised by banded and crustiform quartz and abundant sulphides. All these features are commonly found in the lower boiling zone of epithermal system, where bonanza grades are expected.

In addition to shallow, high-grade mineralisation, Red Mountain has potential for large-scale porphyry at depth. Highly anomalous geochemistry corresponds to broad zones of porphyry mineralisation from trenching, zoned porphyry alteration, overlapping with large-scale magnetic and gravity anomalies, representing a compelling string of very large porphyry targets over 6km strike (Figure 2). Initial deeper drilling in 2017 encountered 200-300m wide zones of porphyry style mineralisation at Target 10.

FIGURE 2: Red Mountain Mining Licence, showing ground Landsat data and priority target locations - https://www.globenewswire.com/NewsRoom/AttachmentNg/d0616a49-addf-410c-a6ad-c9c70653fb59

Previous diamond and reverse circulation (RC) drilling at Red Mountain have returned significant, gold, silver and copper results. Some highlights are below.

OUDDH035 - 6.3m @ 6.67g/t Au from 15m 2

OUDDH040 - 6m @ 21.57g/t Au from surface 2

OUDDH043 - 9.5m @ 21.06g/t Au from surface, including 3m @ 47g/t Au from 2m 3

OUDDH044 - 6m @ 15.43g/t Au from surface, including 1.2m @ 21.34g/t Au from 3.3m 3

OURC043 - 22m @ 1.82g/t Au from 40m, including 10m @ 3.7g/t Au from 50m 4

OURC055 - 16m @ 1.13g/t Au from 42m, including 8m @ 1.7g/t Au from 42m 4

OUDDH115 - 4m @ 7.34% Cu, 29.3g/t Ag from 60m, including 1m @ 28.9% Cu, 114g/t Ag from 62m5

OUDDH119 - 8m @ 1.31% Cu, 7.00g/t Ag from 94m 5

OUDDH112 - 4m @ 1.98% Cu, 9.15g/t Ag from 40m 5

FIGURE 3: Target 33 Plan View, Including Prior Trench and Drill Results 4 - https://www.globenewswire.com/NewsRoom/AttachmentNg/996e76e6-63a0-4294-8a3a-ffb536786839

In April 2022, Xanadu announced a strategic partnership with Zijin, a global mining major and Top-10 copper producer operating in 14 countries and based in China. This included a staged, 3 phase investment of A$11 million placement into Xanadu and US$35 million into the Kharmagtai project, providing Zijin with 19.99% of Xanadu shares and 38.25% of the Kharmagtai project.6

Funds from this strategic partnership will be used to progress exploration at both Red Mountain and Kharmagtai projects and to complete the Pre-Feasibility Study at Kharmagtai leading to a formal Decision to Construct. Phase 1 included a A$5.6 million placement of 139,000,000 shares (9.8%) in Xanadu and was completed on 27 April 2022.

Phases 2 and 3 will provide the balance of funding upon receipt of Australia and Chinese regulatory approvals and Xanadu shareholder approval. Zijin has informed Xanadu that a no objection notification from Australia Foreign Investment Review Board (FIRB) was received on 11 August 2022.7 Xanadu anticipates the completion of remaining approvals and full funding during December 2022 Quarter.

Xanadu is an ASX and TSX listed Exploration company operating in Mongolia. We give investors exposure to globally significant, large-scale copper-gold discoveries and low-cost inventory growth. Xanadu maintains a portfolio of exploration projects and remains one of the few junior explorers on the ASX or TSX who control a globally significant copper-gold deposit in our flagship project. For information on Xanadu visit: www.xanadumines.com

Colin Moorhead Executive Chairman & Managing Director  Xanadu Mines Ltd  info@xanadumines.com  +61 2 8280 7497

This Announcement was authorised for release by Xanadu’s Executive Chairman & Managing Director.

The information in this Announcement that relates to exploration results is based on information compiled by Dr Andrew Stewart, who is responsible for the exploration data, comments on exploration target sizes, QA/QC and geological interpretation and information. Dr Stewart, who is an employee of Xanadu and is a Member of the Australasian Institute of Geoscientists, has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as the “Competent Person” as defined in the 2012 Edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012) and the National Instrument 43-101. Dr Stewart consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

Certain statements contained in this Announcement, including information as to the future financial or operating performance of Xanadu and its projects may also include statements which are ‘forward‐looking statements’ that may include, amongst other things, statements regarding targets, estimates and assumptions in respect of mineral reserves and mineral resources and anticipated grades and recovery rates, production and prices, recovery costs and results, capital expenditures and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions. These ‘forward-looking statements’ are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Xanadu, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies and involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward‐looking statements.

Xanadu disclaims any intent or obligation to update publicly or release any revisions to any forward‐looking statements, whether as a result of new information, future events, circumstances or results or otherwise after the date of this Announcement or to reflect the occurrence of unanticipated events, other than required by the Corporations Act 2001 (Cth) and the Listing Rules of the Australian Securities Exchange (ASX) and Toronto Stock Exchange (TSX). The words ‘believe’, ‘expect’, ‘anticipate’, ‘indicate’, ‘contemplate’, ‘target’, ‘plan’, ‘intends’, ‘continue’, ‘budget’, ‘estimate’, ‘may’, ‘will’, ‘schedule’ and similar expressions identify forward‐looking statements.

All ‘forward‐looking statements’ made in this Announcement are qualified by the foregoing cautionary statements. Investors are cautioned that ‘forward‐looking statements’ are not guarantee of future performance and accordingly investors are cautioned not to put undue reliance on ‘forward‐looking statements’ due to the inherent uncertainty therein.

For further information please visit the Xanadu Mines’ Website at www.xanadumines.com. 

Appendix 3: Red Mountain Table 1 (JORC 2012)

Set out below is Section 1 and Section 2 of Table 1 under the JORC Code, 2012 for the Red Mountain project. Data provided by Xanadu. This Table 1 updates the JORC Table 1 disclosure dated 28 September 2021.8

1.1   JORC TABLE 1 - SECTION 1 - SAMPLING TECHNIQUES AND DATA

1.2   JORC TABLE 1 - SECTION 2 - REPORTING OF EXPLORATION RESULTS (Criteria in this section apply to all succeeding sections).

1.3   JORC TABLE 1 - SECTION 3 ESTIMATION AND REPORTING OF MINERAL RESOURCES

Mineral Resources are not reported so this is not applicable to this report.

1.4   JORC TABLE 1 - SECTION 4 ESTIMATION AND REPORTING OF ORE RESERVES

Ore Reserves are not reported so this is not applicable to this report.

1 ASX/TSX Announcement 19 April 2022 – Strategic Partnership with Zijin Mining Group 2 ASX Announcement 9 June 2016 - Latest Drilling Results Underpin Significant Gold Discovery at Oyut Ulaan 3 ASX Announcement 30 June 2016 - Further High-Grade Gold Intercepts at Oyut Ulaan 4 ASX Announcement 28 June 2017 – Oyut Ulaan Exploration Update: Strong Drill Results Across the District 5 ASX Announcement 28 September 2021 - New High Grade Bornite Intersections at Red Mountain 6 ASX/TSX Announcement 19 April 2022 – Strategic Partnership with Zijin Mining Group 7 ASX/TSX Announcement 22 August 2022 – Foreign Investment Review Board Approves Zijin Investment in Xanadu 8 ASX/TSX Announcement 28 September 2021 – New High-Grade Bornite Intersections at Red Mountain