Xanadu Mines Ltd (
ASX: XAM |
TSX: XAM) (
Xanadu or the
Company) is pleased to announce a significant
expansion to mineralisation at the Company’s Kharmagtai copper and
gold Project, located within the South Gobi, Mongolia. Kharmagtai
is an emerging copper and gold project, within the highly
prospective South Gobi Desert, which the Company believes has the
potential to be a globally significant, gold rich copper project.
Highlights
- Phase 1 program
has completed 17,000 metres out of a 23,000 metre plan, resulting
in significant expansion to the mineralised system at Kharmagtai,
with ~9,800 metres of assays still pending.
- Includes drilling
at the Zaraa Prospect which intersected extensive zones of
anomalous copper and gold mineralisation, more than
doubling the size of the immediate target
zone.
- Also includes
drilling at Stockwork Hill which has identified a potential
structural repeat of mineralisation below the currently defined
Mineral Resource.
- Discovery drilling
nearby at the Pechko target area has also identified a large scale,
potentially mineralised tourmaline breccia system.
- The Kharmagtai
Mineral Resource is currently estimated to contain 1.9 million
tonnes of copper and 4.3 million ounces of gold (as announced to
ASX on 31 October 2018). An updated Mineral Resource Estimate is
planned in H1 CY2021. An updated “Mining Options Study” is also
planned.
- Increased news
flow from Phase 1 drilling results expected through Q1 CY21 to
support a planned Resource Update.
Xanadu’s Chief Executive Officer, Dr
Andrew Stewart, said “Kharmagtai is an emerging, globally
significant, gold rich porphyry copper system. It contains large
zones of relatively higher-grade mineralisation that may represent
opportunities to unlock real value. Our exploration strategy
remains focused on defining these higher grade zones whilst growing
the Mineral Resource through extensions to known deposits such as
Stockwork Hill and discovery of new deposits such as Zaraa and
potentially Pechko.”
Execution – Phase 1
Underway
The Kharmagtai exploration strategy is
constructed in two components, with Phase 1 designed to understand
the scale of the mineralised system through extensional drilling
with several large step-outs from known zones, following broad
geological and geochemical trends. Phase 2 will use the outcomes
from Phase 1 to design and execute a more surgical drill program to
better define higher-grade zones.
Phase 1 commenced in August 2020 as a program of
approximately 23,000 metre diamond core drilling. New geophysical
data (see ASX/TSX announcement dated April 15, 2020) revealed that
the mineral system is disrupted by a series post-mineral faults
that displace higher-grade zones. The resulting structural
interpretation was successfully incorporated into the Phase 1
targeting (Figures 1 to 3). Specific objectives
were to do the following.
- Test
extensions to the known mineralised envelope;
- Find new,
internal high-grade zones within that envelope; and
- Test
other known copper-gold mineralisation and co-incident geophysical
and geochemical anomalies within the Kharmagtai Mining
License.
Figure
1. Kharmagtai
Mining Lease Plan View
with
existing,
current, and target drilling
areas is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/17438e23-a682-45b1-a9f0-10b5428c802b
Figure 2 Kharmagtai Mining Lease Long
Section with existing, current, and target
drilling areas is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/f0776109-8658-43cd-8349-f220d369c275
Figure 3
Long Section through Copper Hill, White
Hill & Stockwork Hill showing
target zones is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/9f140ce4-80c1-4001-919f-767b2f55f9d2
Since August 2020, approximately 17,000 metres
of the 23,000 metre Phase 1 program have been drilled
(Table 1).
Table 1. Phase 1
Exploration Program Status
Prospect |
Objective |
Phase 1 Metres Planned |
Metres Drilled to Date (at 3 Dec 2020) |
Assays Returned |
Assays Pending |
Stockwork Hill, Copper Hill and White Hill |
Step Out Extensions |
8,000m |
4,876m |
1,651m |
3,225m |
Zaraa Prospect |
Step Out Extensions, Find New High Grade Zones, Test at Depth |
8,000m |
6,468m |
2,918m |
4,475m |
Pechko and Camarillo Targets |
Identify New High Grade Zones |
3,118m |
3,118m |
2,234m |
794m |
Other Kharmagtai Targets |
Identify New High Grade Zones |
3,989m |
2.542m |
1,211m |
1,330m |
Total Phase 1 |
|
23,000m |
17,004m |
8,014m |
9,824m |
Stockwork Hill
Four diamond drill holes have been drilled at
Stockwork Hill totalling 4,100m. Three drill holes have targeted
along strike of the higher grade bornite zone. These holes have
encountered several low angle structures that have offset
mineralisation and have identified the potential offset to the
northern Stockwork Zone at depth. This suggests the higher-grade
zone has been shifted to beneath White Hill. Geological models are
being updated to incorporate these results. Assays for two holes
have been returned (Tables
2 and 3) and
assays for the remaining holes are awaited. Once these results are
returned final models will be developed and additional drill
planned.
Zaraa
Prospect
Recent drilling at the Zaraa prospect has been
designed to test the dimensions and extensions to the large,
mineralised envelope as well as any internal high-grade zones. This
mineralised zone is not currently included in the Kharmagtai
Mineral Resource Estimate and has the potential to add significant
value to the project.
The current drill program has made significant
progress in these objectives, with five holes completed. Zaraa
mineralisation has been expanded 200m to the south, 200m to the
north and 150m to the west. New modelling of these results show
that Zaraa is now 700m long, 300m wide and 650m deep and remains
open along strike and at depth (Figure
4). This has approximately doubled the size of the
Zaraa system. Assay results have been returned for KHDDH534, 534a
(previously reported) and partial results for KHDDH542 and KHDDH543
(Table 2). Assays are pending for
the remaining holes.
Detailed structural observations made during
this program have provided a structural framework which indicates
additional extensions may be found (Figure
4). When this structural framework is layered with
the existing 3D IP data, a clear offset target is
identified. The current drilling identified two large
structures. The offset on these structures can be clearly seen in
the geology and geochemistry and when the 3D Induced Polarization
data is shown a significant target to expand Zaraa is observed.
Additional drilling is currently being planned
for Zaraa and will target the offset IP chargeability anomaly in
Figure 4 to confirm the location of the large offset zone of
interpreted mineralisation.
Figure
4 The Zaraa region
showing Zaraa, Sandstorm, Zephyr and Golden Eagle is
available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/ab514b3c-3bc8-43b3-a90a-04f481eeec27
Discovery
Drilling
Pechko
Four diamond drill holes have been drilled at
Pechko for a total of 1,900m of drilling. Drill hole KHDDH537 was
collared targeting a surface geochemical and sub-surface
geophysical target and encountered over 225m of sulphide bearing
tourmaline breccia. A 150m step back hole KHDDH538 was drilled to
test for higher grade copper beneath KHDDH537 and showed a zonation
of increasing copper down plunge. A scissor hole was drilled
(KHDDH540) to test the depth continuity of mineralisation. Partial
assays have been returned for KHDDH537 and KHDDH538
(Tables 2
and 3), remaining assays are
awaited. These results will be combined, and collated and
geological models created to vector towards a possible higher-grade
core of the tourmaline breccia system.
Camarillo
Two diamond drill holes totalling 1,700m have
been collared at Camarillo targeting a new porphyry centre. Drill
hole KHDDH539 encountered over 200m of porphyry style veining
towards the end of the hole and represents a near miss to a
porphyry system. Assay results have been returned for KHDDH539
(Tables 2
and 3) and assays are pending for
the second drill hole KHDDH546.
Copper Hill
Two diamond drill holes totalling 770m have been
collared at Copper Hill targeting offset extensions. Both holes
encountered porphyry veining but only weak mineralisation. Assays
are pending for both holes.
Target 10
Two diamond drill holes totalling 800m have been
collared at Target 10 targeting a Copper Hill style magnetic
feature associated with surface copper and gold anomalism. Both
holes encountered porphyry veining but only weak mineralisation.
Assays have been returned for KHDDH533 and are pending for KHDDH548
(Tables 2
and 3).
Geological Modelling
The drilling results are continually used to
update the >0.2g/t eCu cut-off model. This indicates a there are
two large clusters of mineralisation, one (western) surrounding
Stockwork Hill, White Hill and Copper HiIl and one (eastern)
surrounding Zaraa, Sandstorm, Zephyr and Golden Eagle
(Figure 1). The Western Cluster displays
copper-gold mineralisation of over 2,000m north-south strike
length, 2,000m wide and more than 800m vertically. The Eastern
Cluster displays copper-gold mineralisation of over 1,000m
north-south strike length, 1,000m wide and more than 800m
vertically Drilling continues to expand the footprint of Kharmagtai
and remains open to the northwest, south and at depth and confirms
Kharmagtai is shaping up to be a large, tier one gold-copper
porphyry project.
Red Mountain
Two diamond drill holes have been started at Red
Mountain in the past month totalling 193m. The program has been
temporarily suspended due a small cluster of COVID-19 cases in a
nearby town. Drilling is anticipated to recommence in early January
2021.
Upcoming News Flow
The Company plans to provide several drilling
and operational updates over the coming weeks following strong
advancement across multiple work streams at Kharmagtai, including
the following:
- Drilling
Program Phase 1 Results (Q1 CY21)
-
Exploration Target Review and Mining Concepts Study (Q1 CY21)
- Resource
Update (H1 CY21)
- Drilling
Program Phase 2 Results (Q1 to Q3 CY21)
- Updated
Concept Study and Gating Decision (Q4 CY21 to Q1 CY22)
COVID in Mongolia
On 11 November 2020, the Government of Mongolia
announced measures to halt community transmission of COVID-19,
following positive tests outside of quarantine in Ulaanbaatar. This
includes an initial lockdown across the country, currently
scheduled to finish on 11 December 2020.
The Government of Mongolia has taken a
conservative approach to managing COVID-19, closing its borders
early in the year, and to date the Mongolian economy has remained
largely open. The action announced by the Government is consistent
with this conservative approach.
Mining and exploration facilities have been able
to continue operation through this period, however a temporary
reduction in assay lab capacity in Ulaanbaatar will likely delay
drilling results and news flow. The Kharmagtai operation continues
its exploration activities, currently operating two diamond drill
rigs. The Red Mountain exploration program is anticipated to
commence in the January quarter.
Extraordinary General
Meeting
Xanadu has scheduled an Extraordinary General
Meeting (EGM) on 23 December 2020 to request
shareholder approval to add a share price vesting condition to
option grants for Executive Directors. Please refer to the Notice
of Meeting available on the Xanadu website. These share price
vesting conditions will also apply to Executives under the Employee
Share Option Plan. Xanadu recognises the timing of this EGM just
prior to the holiday break and encourages all shareholders to vote
their proxies prior to the meeting.
About Xanadu Mines
Xanadu is an ASX and TSX listed Exploration
company that discovers and defines globally significant porphyry
copper-gold assets in Mongolia. We give investors exposure to large
scale copper-gold discoveries and low-cost inventory growth, and we
create liquidity events for shareholders at peak value points in
the mining life cycle. Xanadu maintains a portfolio of exploration
projects and remains one of the few junior explorers on the ASX or
TSX who control an emerging Tier 1 copper-gold deposit in our
flagship Kharmagtai project. For information on Xanadu visit:
www.xanadumines.com.
Andrew StewartCEO Xanadu Mines Ltd
Andrew.stewart@xanadumines.com+61 409 819 922
This Announcement was authorised for release by
Xanadu’s Board of Directors.
Appendix 1:
Drilling Results
Table 2:
Recent Drill hole details (KH prefix =
Kharmagtai, OU prefix = Red Mountain)
Hole ID |
Prospect |
East |
North |
RL |
Azimuth (°) |
Inc (°) |
Depth (m) |
KHDDH541 |
Pechko |
597689 |
4877039 |
1267 |
140 |
-60 |
402.7 |
KHDDH542 |
Zaraa |
594259 |
4877549 |
1273 |
135 |
-60 |
1264.2 |
KHDDH543 |
Zaraa |
594500 |
4877000 |
1273 |
95 |
-60 |
771.2 |
KHDDH544 |
Stockwork Hill |
592368 |
4877377 |
1295 |
0 |
-70 |
1182.7 |
KHDDH545 |
Pechko |
598581 |
4877446 |
1265 |
140 |
-60 |
339.7 |
KHDDH546 |
Camarillo |
596148 |
4877090 |
1268 |
115 |
-60 |
454.7 |
KHDDH547 |
Zaraa |
594604 |
4877715 |
1267 |
150 |
-65 |
1156.2 |
KHDDH548 |
Target 10 |
594332 |
4874850 |
1290 |
140 |
-60 |
303.2 |
KHDDH549 |
Zesen Uul |
592271 |
4876331 |
1311 |
0 |
-65 |
297.1 |
KHDDH550 |
Stockwork Hill |
592032 |
4877741 |
1295 |
0 |
-60 |
414.7 |
KHDDH551 |
Stockwork Hill |
592830 |
4877363 |
1290 |
0 |
-70 |
1078.5 |
KHDDH552 |
Zesen Uul |
592272 |
4876153 |
1311 |
0 |
-65 |
477.1 |
KHDDH553 |
Zaraa |
594395 |
4877199 |
1273 |
130 |
-67 |
1093.2 |
KHDDH554 |
Zephyr |
595660 |
4877587 |
1260 |
0 |
-60 |
343.0 |
KHDDH555 |
Zephyr |
595389 |
4877519 |
1261 |
0 |
-60 |
420.1 |
KHDDH556 |
Zephyr |
595503 |
4877598 |
1260 |
0 |
-65 |
513.0 |
KHDDH557 |
Zaraa |
594174 |
4877088 |
1277 |
130 |
-67 |
1000.0 |
KHDDH558 |
Zephyr |
595846 |
4877566 |
1260 |
0 |
-65 |
600.0 |
OUDDH098 |
Bavuu |
376100 |
4938900 |
1088 |
0 |
-75 |
374.7 |
OUDDH099 |
Vein 10 |
377250 |
4940400 |
1088 |
0 |
-75 |
18.0 |
Table 3: Kharmagtai
significant drill results
Hole ID |
Prospect |
From (m) |
To (m) |
Interval (m) |
Au (g/t) |
Cu (%) |
CuEq (%) |
AuEq (g/t) |
KHDDH541 |
Pechko |
155 |
256 |
101 |
0.11 |
0.06 |
0.12 |
0.23 |
and |
|
272 |
277.7 |
5.7 |
0.08 |
0.06 |
0.11 |
0.21 |
and |
|
288 |
296 |
8 |
0.11 |
0.06 |
0.12 |
0.23 |
and |
|
318 |
362 |
44 |
0.07 |
0.11 |
0.14 |
0.28 |
KHDDH542 |
Zaraa |
30 |
54 |
24 |
0.26 |
0.03 |
0.16 |
0.32 |
including |
|
34 |
38 |
4 |
0.65 |
0.04 |
0.37 |
0.72 |
and |
|
64 |
75 |
11 |
0.11 |
0.09 |
0.14 |
0.28 |
and |
|
85 |
107 |
22 |
0.07 |
0.09 |
0.12 |
0.24 |
and |
|
119 |
131.2 |
12.2 |
0.19 |
0.09 |
0.19 |
0.37 |
and |
|
161 |
285.1 |
124.1 |
0.09 |
0.12 |
0.17 |
0.33 |
including |
|
277 |
285.1 |
8.1 |
0.18 |
0.26 |
0.35 |
0.69 |
and |
|
314.6 |
327 |
12.4 |
0.10 |
0.11 |
0.16 |
0.32 |
Assays pending |
KHDDH543 |
Zaraa |
46 |
50 |
4 |
0.24 |
0.04 |
0.16 |
0.32 |
and |
|
166 |
170 |
4 |
0.09 |
0.11 |
0.15 |
0.30 |
Assays pending |
and |
|
427 |
771.2 |
344.2 |
0.09 |
0.15 |
0.19 |
0.37 |
including |
|
502 |
539.2 |
37.2 |
0.17 |
0.23 |
0.32 |
0.62 |
including |
|
551 |
557 |
6 |
0.13 |
0.22 |
0.29 |
0.56 |
including |
|
646 |
654 |
8 |
0.16 |
0.25 |
0.33 |
0.64 |
KHDDH544 |
Stockwork Hill |
3.7 |
225 |
221.3 |
0.11 |
0.20 |
0.26 |
0.50 |
including |
|
6 |
10 |
4 |
0.18 |
0.30 |
0.39 |
0.76 |
including |
|
68 |
80 |
12 |
0.11 |
0.22 |
0.27 |
0.53 |
including |
|
96 |
102 |
6 |
0.16 |
0.27 |
0.35 |
0.69 |
including |
|
112 |
146 |
34 |
0.31 |
0.41 |
0.57 |
1.11 |
including |
|
112 |
136 |
24 |
0.38 |
0.48 |
0.67 |
1.32 |
including |
|
126 |
134 |
8 |
0.62 |
0.70 |
1.02 |
1.99 |
Assays pending |
KHDDH545 |
Pechko |
67 |
109 |
42 |
0.07 |
0.08 |
0.12 |
0.23 |
Assays pending |
KHDDH546 |
Camarillo |
Assays pending |
KHDDH547 |
Zaraa |
Assays pending |
KHDDH548 |
Target 10 |
Assays pending |
KHDDH549 |
Zesen Uul |
Assays pending |
KHDDH550 |
Stockwork Hill |
Assays pending |
KHDDH551 |
Stockwork Hill |
Assays pending |
KHDDH552 |
Zesen Uul |
Assays pending |
KHDDH553 |
Zaraa |
Assays pending |
KHDDH554 |
Zephyr |
Assays pending |
KHDDH555 |
Zephyr |
Assays pending |
KHDDH556 |
Zephyr |
Assays pending |
KHDDH557 |
Zaraa |
Assays pending |
KHDDH558 |
Zephyr |
Assays pending |
OUDDH098 |
Bavuu |
Assays pending |
OUDDH099 |
Vein 10 |
Assays pending |
Appendix 2:
Statements and Disclaimers
Mineral Resources and
Ore Reserves Reporting Requirements
The 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves (the JORC Code 2012) sets out minimum
standards, recommendations and guidelines for Public Reporting in
Australasia of Exploration Results, Mineral Resources and Ore
Reserves. The Information contained in this Announcement has been
presented in accordance with the JORC Code 2012.
Competent Person
Statement
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 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.
Copper Equivalent
Calculations
The copper equivalent (eCu) calculation
represents the total metal value for each metal, multiplied by the
conversion factor, summed and expressed in equivalent copper
percentage with a metallurgical recovery factor applied. The copper
equivalent calculation used is based off the eCu calculation
defined by CSA in the 2018 Mineral Resource Upgrade.
Copper equivalent (eCu) grade values were
calculated using the following formula:
eCu = Cu + Au * 0.62097 * 0.8235,Where Cu = copper grade
(%); Au = gold grade (gold per tonne
(g/t)); 0.62097 = conversion factor (gold to
copper); and 0.8235 = relative recovery of gold to copper
(82.35%).The copper equivalent formula was based on the following
parameters (prices are in USD): Copper price = 3.1 $/lb (or 6,834 $
per tonne ($/t)); Gold price = 1,320 $ per ounce
($/oz); Copper recovery = 85%; Gold recovery =
70%; and Relative recovery of gold to copper = 70% / 85% =
82.35%. |
Forward-Looking Statements
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: Kharmagtai Table 1 (JORC 2012)
Set out below is Section 1 and Section 2 of
Table 1 under the JORC Code, 2012 Edition for the Kharmagtai
project. Data provided by Xanadu. This Table 1 updates the JORC
Table 1 disclosure dated 11 April 2019.
JORC TABLE 1 - SECTION 1
- SAMPLING TECHNIQUES AND
DATA
Criteria |
Commentary |
Samplingtechniques |
- The CSAMT Survey at Kharmagtai was
conducted by OGC LLC, an external Geophysical Contractor.
- The transmitter system used was a
Zonge GGT-30 transmitter and GDP-32 receiver.
- Transmitter was set up +10km for
the survey grid and receiver stations were spaced at 200m along
oblique lines roughly perpendicular to the geological trend. Line
locations and lengths can be seen in the text of the document.
- The relevant QAQC was conducted to
ensure measurements give a representative sample for this type of
survey.
- Representative 2 metre samples were
taken from ½ HQ diamond core for assay.
- Only assay result results from
recognised, independent assay laboratories were used after QAQC was
verified.
- The IP Survey at Red Mountain was
conducted by OGC LLC, an external Geophysical Contractor.
- The IP transmitter system used was
a Zonge GGT-30 transmitter and GDP-32 receiver.
- Transmitter and receiver stations
were spaced at 200m along north south lines. Line locations and
lengths can be seen in the text of the document.
- The relevant QAQC was conducted to
ensure measurements give a representative sample for this type of
survey.
|
Drilling techniques |
- Diamond Drill Hole
(DDH) drilling has been the primary drilling
method. Some RC (reverse circulation) is conducted. RC holes are
denoted by the KHRC prefix. Diamond Drill Holes are denoted by the
KHDDH prefix.
|
Drillsamplerecovery |
- DDH core recoveries have been very
good, averaging between 95% and 99% for all of the deposits. In
localised areas of faulting and/or fracturing the recoveries
decrease; however, this is a very small percentage of the overall
mineralised zones.
- Recovery measurements were
collected during all DDH and RC programs. The methodology used for
measuring recovery is standard industry practice.
- Analysis of recovery results vs.
grade indicates no significant trends. Indicating bias of grades
due to diminished recovery and / or wetness of samples.
|
Logging |
- Drill and trench samples are logged
for lithology, mineralisation and alteration and geotechnical
aspects using a standardised logging system, including the
recording of visually estimated volume percentages of major
minerals.
- Drill core was photographed after
being logged by a geologist.
- The entire interval drilled and
trenched has been logged by a geologist.
|
Sub-sampling techniques and sample
preparation |
- DDH Core is cut in half with a
diamond saw, following the line marked by the geologist. The rock
saw is regularly flushed with fresh water.
- Sample intervals are generally a
constant 2m interval down-hole in length unless subdivided at
geological contacts.
- Routine sample preparation and
analyses of DDH samples were carried out by ALS Mongolia LLC
(ALS Mongolia), who operates an independent sample
preparation and analytical laboratory in Ulaanbaatar.
- All samples were prepared to meet
standard quality control procedures as follows: crushed to 90%
passing 3.54 mm, split to 1kg, pulverised to 90% - 95% passing 200
mesh (75 microns) and split to 150g.
- Certified reference materials
(CRMs), blanks and pulp duplicate were randomly
inserted to manage the quality of data.
- Sample sizes are well in excess of
standard industry requirements.
|
Quality ofassay
dataandlaboratorytests |
- All samples were routinely assayed
by ALS Mongolia for gold
- Au is determined using a 25g fire
assay fusion, cupelled to obtain a bead, and digested with Aqua
Regia, followed by an atomic absorption spectroscopy
(AAS) finish, with a lower detection limit
(LDL) of 0.01 ppm.
- All samples were submitted to ALS
Mongolia for the package ME-ICP61 using a four acid digest. Where
copper is over-range (>1% Cu), it is analysed by a second
analytical technique (Cu-OG62), which has a higher upper detection
limit (UDL) of 5% copper.
- Quality assurance was provided by
introduction of known certified standards, blanks and duplicate
samples on a routine basis.
- Assay results outside the optimal
range for methods were re-analysed by appropriate methods.
- Ore Research Pty Ltd certified
copper and gold standards have been implemented as a part of QA/QC
procedures, as well as coarse and pulp blanks, and certified matrix
matched copper-gold standards.
- QAQC monitoring is an active and
ongoing processes on batch by batch basis by which unacceptable
results are re-assayed as soon as practicable.
|
Verificationof
samplingandassaying |
- All assay data QA/QC is checked
prior to loading into the Geobank data base.
- The data is managed by Xanadu
geologists.
- The database and geological
interpretation is collectively managed by Xanadu.
|
Location ofdata points |
- CSAMT transmitter and receivers
were located using a handheld GPS
- Diamond drill holes have been
surveyed with a differential global positioning system
(DGPS) to within 10cm accuracy.
- All diamond drill holes have been
down hole surveyed to collect the azimuth and inclination at
specific depths. Two principal types of survey method have been
used over the duration of the drilling programs including Eastman
Kodak and Flexit.
- UTM WGS84 48N grid.
- The digital terrain model
(DTM) is based on 1m contours with an accuracy of
±0.01m.
|
Dataspacinganddistribution |
- CSAMT receiver nodes were place at
200m spacings to allow a potential maximum depth penetration of
1000m.
- Holes spacings range from 50m
spacings within the core of mineralization to +500m spacings for
exploration drilling. Hole spacings can be determined using the
sections and drill plans provided
- Holes range from vertical to an
inclination of -60 degrees depending on the attitude of the target
and the drilling method.
- The data spacing and distribution
is sufficient to establish anomalism and targeting for both
porphyry, tourmaline breccia and epithermal target types.
|
Orientationof data
inrelation
togeologicalstructure |
- Drilling is conducted in a
predominantly regular grid to allow unbiased interpretation and
targeting.
- Sample lines for the CSAMT survey
were conducted roughly perpendicular to the gross geological
trend
|
Sample security |
- Samples are dispatched from site
through via company employees and secure company vehicles to the
Laboratories.
- Samples are signed for at the
Laboratory with confirmation of receipt emailed through.
- Samples are then stored at the lab
and returned to a locked storage site.
|
Audits or reviews |
- CSAMT data from the survey was
reviewed and audited by Barry de Wet, an external consultant.
- Internal audits of sampling
techniques and data management on a regular basis, to ensure
industry best practice is employed at all times.
|
JORC TABLE 1 - SECTION 2 - REPORTING OF
EXPLORATION RESULTS
(Criteria in this section apply to all succeeding sections).
Criteria |
Commentary |
Mineraltenementand
landtenurestatus |
- The Project comprises 2 Mining
Licences (MV-17129A Oyut Ulaan and (MV-17387A Kharmagtai):
- Xanadu now owns 90% of Vantage LLC,
the 100% owner of the Oyut Ulaan mining licence.
- The Kharmagtai mining license
MV-17387A is 100% owned by Oyut Ulaan LLC. Xanadu has an 85%
interest in Mongol Metals LLC, which has 90% interest in Oyut Ulaan
LLC. The remaining 10% in Oyut Ulaan LLC is owned by Quincunx (BVI)
Ltd (“Quincunx”).
- The Mongolian Minerals Law (2006)
and Mongolian Land Law (2002) govern exploration, mining and land
use rights for the project.
|
Explorationdone
byotherparties |
- Previous exploration at Kharmagtai
was conducted by Quincunx Ltd, Ivanhoe Mines Ltd and Turquoise Hill
Resources Ltd including extensive drilling, surface geochemistry,
geophysics, mapping.
- Previous exploration at Red
Mountain (Oyut Ulaan) was conducted by Ivanhoe Mines.
|
Geology |
- The mineralisation is characterised
as porphyry copper-gold type.
- Porphyry copper-gold deposits are
formed from magmatic hydrothermal fluids typically associated with
felsic intrusive stocks that have deposited metals as sulphides
both within the intrusive and the intruded host rocks. Quartz
stockwork veining is typically associated with sulphides occurring
both within the quartz veinlets and disseminated thought out the
wall rock. Porphyry deposits are typically large tonnage deposits
ranging from low to high grade and are generally mined by large
scale open pit or underground bulk mining methods. The deposits at
Kharmagtai are atypical in that they are associated with
intermediate intrusions of diorite to quartz diorite composition;
however the deposits are in terms of contained gold significant,
and similar gold-rich porphyry deposits.
|
Drill holeInformation |
- Diamond drill holes are the
principal source of geological and grade data for the Project.
- See figures in this ASX/TSX
Announcement.
|
DataAggregation methods |
- The CSAMT data was converted into
2D line data using the Zonge CSAMT processing software and then
converted into 3D space using a UBC inversion process. Inversion
fit was acceptable, and error was generally low.
- A nominal cut-off of 0.1% eCu is
used in copper dominant systems for identification of potentially
significant intercepts for reporting purposes. Higher grade
cut-offs are 0.3%, 0.6% and 1% eCu.
- A nominal cut-off of 0.1g/t eAu is
used in gold dominant systems like Golden Eagle for identification
of potentially significant intercepts for reporting purposes.
Higher grade cut-offs are 0.3g/t, 0.6g/t and 1g/t eAu.
- Maximum contiguous dilution within
each intercept is 9m for 0.1%, 0.3%, 0.6% and 1% eCu.
- Most of the reported intercepts are
shown in sufficient detail, including maxima and subintervals, to
allow the reader to make an assessment of the balance of high and
low grades in the intercept.
- Informing samples have been
composited to two metre lengths honouring the geological domains
and adjusted where necessary to ensure that no residual sample
lengths have been excluded (best fit).
The copper equivalent (eCu) calculation represents
the total metal value for each metal, multiplied by the conversion
factor, summed and expressed in equivalent copper percentage with a
metallurgical recovery factor applied. The copper equivalent
calculation used is based off the eCu calculation defined by CSA in
the 2018 Mineral Resource Upgrade.Copper equivalent
(CuEq or eCu) grade values were
calculated using the following formula:
eCu or CuEq = Cu + Au * 0.62097 *
0.8235,Gold Equivalent (eAu) grade values were
calculated using the following formula:
eAu = Au + Cu / 0.62097 *
0.8235.Where:Cu - copper grade (%)Au - gold grade (g/t)0.62097 -
conversion factor (gold to copper)0.8235 - relative recovery of
gold to copper (82.35%)The copper equivalent formula was based on
the following parameters (prices are in USD):
- Copper price - 3.1 $/lb (or 6834
$/t)
- Gold
price - 1320
$/oz
- Copper recovery - 85%
- Gold recovery - 70%
- Relative recovery of gold to copper
= 70% / 85% = 82.35%.
|
Relationship between mineralisationon
widthsand
interceptlengths |
- Mineralised structures are variable
in orientation, and therefore drill orientations have been adjusted
from place to place in order to allow intersection angles as close
as possible to true widths.
- Exploration results have been
reported as an interval with 'from' and 'to' stated in tables of
significant economic intercepts. Tables clearly indicate that true
widths will generally be narrower than those reported.
|
Diagrams |
- See figures in the body of the
report.
|
Balancedreporting |
- Resources have been reported at a
range of cut-off grades, above a minimum suitable for open pit
mining, and above a minimum suitable for underground mining.
|
Othersubstantiveexplorationdata |
- Extensive work in this area has
been done and is reported separately.
|
FurtherWork |
- The mineralisation is open at depth
and along strike.
- Current estimates are restricted to
those expected to be reasonable for open pit mining. Limited
drilling below this depth (-300m RLl) shows widths and grades
potentially suitable for underground extraction.
- Exploration on going.
|
JORC TABLE 1 -
SECTION 3 - ESTIMATION
AND REPORTING OF MINERAL RESOURCES
(Criteria listed in section 1, and where relevant in section 2,
also apply to this section.)
Criteria |
Commentary |
Databaseintegrity |
- The database is a Geobank data base
system.
- Data is logged directly into an
Excel spread sheet logging system with drop down field lists.
- Validation checks are written into
the importing program ensures all data is of high quality.
- Digital assay data is obtained from
the Laboratory, QAQC checked and imported
- Geobank exported to Access and
connected directly to the GemcomSurpac Software.
- Data was validated prior to
resource estimation by the reporting of basic statistics for each
of the grade fields, including examination of maximum values, and
visual checks of drill traces and grades on sections and
plans.
|
Site visits |
- Andrew Vigar of Mining Associates
Pty Ltd visited the site from 24 and 25 October 2014.
- The site visit included a field
review of the exploration area, an inspection of core, sample
cutting and logging procedures and discussions of geology and
mineralisation with exploration geologists.
|
Geologicalinterpretation |
- Mineralisation resulted in the
formation of comprises quartz-chalcopyrite-pyrite-magnetite
stockwork veins and minor breccias.
- The principle ore minerals of
economic interest are chalcopyrite, bornite and gold, which occur
primarily as infill within these veins. Gold is intergrown with
chalcopyrite and bornite.
- The ore mineralised zones at
Stockwork Hill, White HIll and Copper Hill are associated with a
core of quartz veins that were intensely developed in and the
quartz diorite intrusive stocks and/or dykes rocks. These vein
arrays can be described as stockwork, but the veins have strong
developed preferred orientations.
- Sulphide mineralisation is zoned
from a bornite-rich core that zone outwards to chalcopyrite-rich
and then outer pyritic haloes, with gold closely associated with
bornite.
- Drilling indicates that the
supergene profile has been oxidised to depths up to 60 metres below
the surface. The oxide zone comprises fracture controlled copper
and iron oxides; however there is no obvious depletion or
enrichment of gold in the oxide zone.
|
Dimensions |
- Stockwork Hill comprises two main
mineralised zones, northern and southern stockwork zones (SH-N and
SH-S) which are approximately 100 metres apart and hosted in
diorite and quartz diorite porphyries.
- The SH-S is at least 550 metres
long, 600 metres deep and contains strong
quartz-chalcopyrite-pyrite stockwork veining and associated high
grade copper-gold mineralisation. The stockwork zone widens
eastward from a 20 to 70 metres wide high-grade zone in the western
and central sections to a 200 metres wide medium-grade zone in the
eastern most sections. Mineralisation remains open at depth and
along strike to the east.
- The SH-N consists of a broad halo
of quartz that is 250 metres long, 150 metres wide long and at
least 350 metres deep.
- WH consists of a broad halo of
quartz veins that is 850 metres long, 550 metres wide long and at
least 500 metres deep, and forms a pipe like geometry.
- CH forms a sub vertical body of
stockwork approximately 350 × 100 metres by at least 200 metres and
plunges to the southeast.
|
Estimation
andmodellingtechniques |
- The estimate Estimation Performed
using Ordinary Kriging.
- Variograms are reasonable along
strike.
- Minimum & Maximum Informing
samples is 5 and 20 (1st pass), Second pass is 3 and 20.
- Copper and Gold Interpreted
separately on NS sections and estimated as separate domains.
- Halo mineralisation defined as
0.12% Cu and 0.12g/t Au Grade.
- The mineralised domains were
manually digitised on cross sections defining mineralisation.
Three-dimensional grade shells (wireframes) for each of the metals
to be estimated were created from the sectional interpretation.
Construction of the grade shells took into account prominent
lithological and structural features. For copper, grade shells were
constructed for each deposit at a cut-off of 0.12% and 0.3% Cu. For
gold, wireframes were constructed at a threshold of 0.12g/t and 0.3
g/t. These grade shells took into account known gross geological
controls in addition to broadly adhering to the above mentioned
thresholds.
- Cut off grades applied are
copper-equivalent (CuEq) cut off values of 0.3% for appropriate for
a large bulk mining open pit and 0.5% for bulk block caving
underground.
- A set of plans and cross-sections
that displayed colour coded drill holes were plotted and inspected
to ensure the proper assignment of domains to drill holes.
- The faulting interpreted to have
had considerable movement, for this reason, the fault surface was
used to define two separate structural domains for grade
estimation.
- Six metre down-hole composites were
chosen for statistical analysis and grade estimation of Cu and Au.
Compositing was carried out downhole within the defined
mineralisation halos. Composite files for individual domains were
created by selecting those samples within domain wireframes, using
a fix length and 50% minimum composite length.
- A total of 4,428 measurements for
specific gravity are recorded in the database, all of which were
determined by the water immersion method. The average density of
all samples is 2.74 t/m3. In detail there are some differences in
density between different rock types, but since the model does not
include geological domains a single pass Inverse Distance
(ID2) interpolation was applied.
- Primary grade interpolation for the
two metals was by ordinary kriging of capped 6m composites. A
two-pass search approach was used, whereby a cell failing to
receive a grade estimate in a previous pass would be resubmitted in
a subsequent and larger search pass.
- The Mineral Resource Estimate meets
the requirements of JORC 2012 and has been reported considering
geological characteristics, grade and quantity, prospects for
eventual economic extraction and location and extents. Mineral
Resources are sub-divided, in order of increasing geological
confidence, into Inferred, Indicated and Measured categories using
relevant copper-equivalent cut-off values.
- The copper equivalent
(eCu) calculation represents the total metal value
for each metal, multiplied by the conversion factor, summed and
expressed in equivalent copper percentage with a metallurgical
recovery factor applied. The copper equivalent calculation used is
based off the eCu calculation defined by CSA in the 2018 Mineral
Resource Upgrade.
- Copper equivalent
(CuEq or eCu) grade values were
calculated using the following formula:eCu or CuEq = Cu + Au *
0.62097 * 0.8235,Gold Equivalent (eAu) grade
values were calculated using the following formula:eAu = Au + Cu /
0.62097 * 0.8235.Where:Cu - copper grade (%)Au - gold grade
(g/t)0.62097 - conversion factor (gold to copper)0.8235 - relative
recovery of gold to copper (82.35%)The copper equivalent formula
was based on the following parameters (prices are in USD):Copper
price - 3.1 $/lb (or 6834 $/t)Gold price - 1320 $/ozCopper recovery
- 85%Gold recovery - 70%Relative recovery of gold to copper = 70% /
85% = 82.35%.
|
Moisture |
- All tonnages are reported on a dry
basis.
|
Cut-offparameters |
- Cut off grades applied are
copper-equivalent (CuEq) cut off values of 0.3%
for possible open pit and 0.5% for underground.
|
Miningfactors
orassumptions |
- No mining factors have been applied
to the in-situ grade estimates for mining dilution or loss due to
the grade control or mining process.
- The deposit is amenable to large
scale bulk mining.
- The Mineral Resource is reported
above an optimised pit shell. (Lerch Grossman algorithm),
mineralisation below the pit shell is reported at a higher cut-off
to reflect the increased costs associated with block cave
underground mining
|
Metallurgicalfactors
orassumptions |
- No metallurgical factors have been
applied to the in-situ grade estimates.
|
Environmentalfactors or
assumptions |
- An environmental baseline study was
completed in 2003 by Eco Trade Co. Ltd. of Mongolia in cooperation
with Sustainability Pty Ltd of Australia. The baseline study report
was produced to meet the requirements for screening under the
Mongolian Environmental Impact Assessment (EIA)
Procedures administered by the Mongolian Ministry for Nature and
Environment (MNE).
|
Bulk density |
- A total of 4,428 measurements for
specific gravity are recorded in the database, all of which were
determined by the water immersion method.
- The average density of all samples
is approximately 2.74 t/m3. In detail there are some differences in
density between different rock types, but since the model does not
include geological domain, an ID2 was applied to a density
attribute.
- There is no material impact on
global tonnages, but it should be noted that density is a function
of both lithology and alteration (where intense magnetite/sulphide
is present).
|
Classification |
- The Mineral Resource classification
protocols, for drilling and sampling, sample preparation and
analysis, geological logging, database construction, interpolation,
and estimation parameters are described in the ASX/TSX Announcement
above have been used to classify the 2015 resource.
- The Mineral Resource statement
relates to global estimates of in situ tonnes and grade
- The Mineral Resource Estimate has
been classified in accordance with the JORC Code, 2012 Edition
using a qualitative approach. The classifications reflect the
competent person’s view of the Kharmagtai Copper Gold Project.
|
Audits orreviews |
- Xanadu’s internal review and audit
of the Mineral Resource Estimate consisted of data analysis and
geological interpretation of individual cross-sections, comparing
drill-hole data with the resource estimate block model.
- Good correlation of geological and
grade boundaries was observed
- 2013 - Mining Associates Ltd. was
engaged to conduct an Independent Technical Report to review
drilling, sampling techniques, QA/QC and previous Resource
estimates. Methods were found to conform to international best
practice.
|
Discussion
ofrelativeaccuracy/confidence |
- An approach to the resource
classification was used which combined both confidence in
geological continuity (domain wireframes) and statistical analysis.
The level of accuracy and risk is therefore reflected in the
allocation of the measured, indicated, and inferred resource
categories.
- Resource categories were
constrained by geological understanding, data density and quality,
and estimation parameters. It is expected that further work will
extend this considerably.
- Resources estimates have been made
on a global basis and relates to in situ grades.
- Confidence in the Indicated Mineral
Resources is sufficient to allow application of Modifying Factors
within a technical and economic study. The confidence in Inferred
Mineral Resources is not sufficient to allow the results of the
application of technical and economic parameters.
- The deposits are not currently
being mined.
- There is surface evidence of
historic artisanal workings.
- No production data is
available.
|
JORC TABLE 1 -
SECTION 4 -
ESTIMATION AND REPORTING OF ORE
RESERVES
Ore Reserves are not reported so this is not
applicable to this announcement.
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