Xanadu Mines Ltd (ASX:XAM) has commenced a ramped-up second phase of exploration including 3,000 metres of drilling at its 90% owned Oyut Ulaan copper-gold project located in Mongolia.
Recent diamond drilling confirmed high-grade oxide gold mineralisation extends to depths of at least 25 metres with grades measuring up to 47.2 g/t gold.
Original trenching discovered bonanza grade assays of up to 589.96 g/t gold.
The new drilling will test both strike and vertical extensions of the high-grade epithermal gold mineralisation within a large prospective area that is 4.5 kilometres long and 300 metres wide.
Dr Andrew Stewart, CEO, commented: “This comprehensive program will go a long way to characterising the discovery and allow assessment of the potential for a simple, low-cost mining operation at Oyut Ulaan which could generate meaningful cash flow.”
Oyut Ulaan gold project
The 90% owned Oyut Ulaan project is located within the South Gobi Copper Belt, which hosts the world class Oyu Tolgoi copper-gold project.
Exploration has now discovered at least four zones of gold mineralisation within a prospective area - Stockwork, Bavuu, Diorite and Hulan.
The ongoing exploration at Oyut Ulaan represents an opportunity for Xanadu to define a shallow gold resource capable of being economically mined.
District exploration strategy
In addition to the drill program, the company intends to complete the following exploration work at Oyut Ulaan in 2016:
- Detailed geologic mapping;
- Detailed metallurgical test work and mineralogical studies to better understand gold mineralisation and alteration and the characteristics of, and controls on, mineralisation;
- Infill geochemical surveys over specific target areas and expand surveys over the entire licence;
- Additional infill magnetic geophysical surveys;
- Additional trenching to test continuity and extent of mineralisation at surface; and
- Various technical studies in support of preliminary economic evaluation including hydrology and
environmental base line studies.
Diamond drilling details
The most recent drill program of 19 shallow diamond holes tested four areas of gold mineralisation identified by trenching.
Highlights from the diamond drilling include:
- 6.0 metres at 21.57 g/t gold from surface;
- 6.3 metres at 6.67 g/t gold from 15 metres depth;
- 9.5 metres at 21.06 g/t gold from surface, including 3 metres at 47 g/t gold; and
- 6 metres at 15.43 g/t gold from surface.
The fast-tracked second phase of exploration at Oyut Ulaan represents an opportunity for Xanadu to get closer to defining a shallow gold resource capable of being economically mined.
Previous trenching and drilling has already confirmed the presence of multiple zones of high grade gold mineralisation.
With multiple near surface gold targets and exploration in motion, Xanadu remains leveraged to exploration success.
The share price is up 70% year to date, currently trading at $0.19 per share.
Xanadu maintains support from an Australia-wide broker who has a Speculative Buy recommendation and price target of $0.51 per share.
The district exploration that will be running alongside the drilling campaign will provide Xanadu with opportunity for news flow outside of the expected drill assays.
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