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Xanadu Mines hits wide zones of strong oxide gold, potential for low-cost starter operation

All four diamond holes at the high-grade Copper Hill deposit intersected shallow oxide and transitional gold mineralisation.

Xanadu Mines Ltd - Xanadu Mines hits wide zones of strong oxide gold, potential for low-cost starter operation
Kharmagtai is in the same region that hosts the giant Oyu Tolgoi Copper-Gold Project

Xanadu Mines Ltd (ASX:XAM) (TSX:XAM) has intersected wide zones of strong oxide gold mineralisation above the resource at Copper Hill deposit within the flagship Kharmagtai project in southern Mongolia.

Four shallow diamond drill holes have been completed and all intersected oxide gold mineralisation.

Best results:

  • 61 metres at 1.08 g/t gold from 9 metres, including 23 metres at 2.37 g/t from 47 metres; and
  • 47 metres at 2.39 g/t from 28 metres, including 35 metres at 3.04 g/t from 40 metres, which in turn included 20 metres at  4.69 g/t from 55 metres.

Potential for oxide resource

The results are encouraging and demonstrate the potential for a shallow oxide resource that could be developed as part of a starter operation for the larger copper-gold project at Kharmagtai.

Xanadu’s chief executive officer Dr Andrew Stewart said, “We are very pleased by the first drill results from the oxide zone at Copper Hill.

“What encourages us most by what we see at Stockwork Hill, Golden Eagle and now Copper Hill is the grade and potential scale and strike extent of the oxide system.”

4-hole diamond program

The 4-hole program was aimed at expanding the gold-rich core, confirming continuity of oxide gold mineralisation and gaining an understanding of the oxide-transitional zone mineralogy and distribution so that accurate metallurgy can be obtained.

Copper Hill consists of the highest-grade zone of copper-gold mineralisation at Kharmagtai where very high-density vein hosted sulphide mineralisation occurs over a 200 by 100-metre pod that plunges to around 300 metres in depth.

The Kharmagtai mining licence showing the deposits and areas being investigated for oxide gold.

Near-surface mineralisation has been largely undrilled as previous drilling is stepped back from the surface to target the deeper sulphide.

As such the oxide and transitional gold potential of the deposit is yet to be assessed.

“Just scratched the surface”

Stewart said, “While further drilling is required across the resource as the project advances, these new intersections of significant widths of shallow oxide mineralisation highlight the potential and show that we have just scratched the surface in terms of the broader resource potential.

“Further, it represents the opportunity for a low-cost, high-value gold gravity and leach operation which could be run early in the development life of Kharmagtai, injecting significant cash into the project to offset the cost of developing a large-scale copper-gold mine.

“Given Kharmagtai sits on a granted mining lease with a registered water resource and an established power supply nearby, we have the ability to move quickly on an oxide gold project, and our current strategy of seeking high-return options via an oxide gold project is focused on providing the capital needed to advance the larger-scale copper and gold project.”

Location of the Kharmagtai project in the South Gobi porphyry copper belt.

Metallurgy tests planned

Xanadu’s current drill program has confirmed the presence of both oxide and transitional gold.

The next steps will be to conduct metallurgy to assess the viability of gravity separation versus leaching.

Quick facts: Xanadu Mines Ltd

Price: 0.043 AUD

Market: ASX
Market Cap: $35.48 m

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Full interview: Xanadu Mines boosts flagship Kharmagtai project in Mongolia...

Xanadu Mines Ltd (ASX:XAM) (TSE:XAM) chief executive officer and managing director Dr Andrew Stewart tells Proactive about the increasing oxide gold being found following a recent scoping study at the company’s flagship Kharmagtai Copper-Gold Project in Mongolia. Dr Stewart says the top of...

on 4/9/19

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