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Xanadu Mines reveals new gold-rich porphyry zone at Mongolian project, shares up

The deep diamond hole has extended mineralisation in the central portion of the Stockwork Hill deposit at Kharmagtai.

Drill trucks at Kharmagtai project
Follow-up drilling is underway in the area to further define the new zone

Xanadu Mines Ltd (ASX:XAM) (TSE:XAM) is confident that the discovery of a zone of bornite gold-rich porphyry mineralisation at the Kharmagtai Copper-Gold Project in Mongolia will result in a resource increase.

Investors share the company’s confidence with stock rising almost 15% in early trade to 13.2 cents.

The new high-grade zone revealed in results from a diamond drill hole occurs outside the open pit resource.

“One of the best intersections”

Xanadu’s managing director and CEO Dr Andrew Stewart said: “After two and a half years of intensive exploration, it is remarkable that our drilling has intersected a significant new zone of bornite-rich porphyry which has produced one of the best intersections of copper and gold mineralisation encountered on the property.

“Like most classic gold-rich porphyry systems, the target is the bornite zone which correlates with high copper values, but significantly also a higher gold-to-copper ratio.

“[The] hole has demonstrated the existence of high-grade mineralisation along strike and at depth of the current open pit resource.”

New results show a 352-metre intersection from 448 metres grading 0.41% copper and  0.58 g/t gold, which represents 0.78% copper equivalent or 1.22 g/t gold equivalent.

Within this was 102 metres at 1.00% copper and 1.67 g/t gold from 572 metres while a 10-metre intercept from 658 metres assayed 2.24% copper and 5.28 g/t gold.

A long section at Stockwork Hill showing results from the deep diamond hole.

Further assays expected

Remaining assay results from the hole are expected in the coming weeks.

READ: Xanadu Mines gets 2019 Kharmagtai copper-gold results flowing with broad bornite observed

Results to date reveal a transition to a zone of higher temperature sulphide mineral assemblages in the intrusive root to the deposit and are expected to enhance the mining economics.

There is a significant increase in the gold-to-copper ratio associated with increasing bornite.

The current drilling is targeting high-grade mineralisation associated with the causative copper and gold porphyry at depth.

The Kharmagtai licence showing ground magnetic data and location of the deposits.

“Expanding a new zone”

Stewart said: “This represents an exciting new development for the project following the release of an interim open pit resource last year and we are particularly excited with the new results from this hole which are expanding a new zone of bornite porphyry mineralisation.

“We are very confident these results will provide the basis for a significant increase in the size and grade of the overall Kharmagtai deposit and have a positive impact on ongoing economic studies.”

READ: Xanadu Mines technical review backs major resource update

Follow-up drilling is underway to further quantify the positive impacts.

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