Xanadu Mines Ltd (ASX:XAM) (TSE:XAM) (FRA:02X) remains focused on its flagship Kharmagtai Copper-Gold Project in Mongolia with optimisation and metallurgical work completed in the December 2019 quarter leading to potential value uplifts.
Activities during the December 2019 quarter focused on a review of sulphide flotation metallurgical results and the generation of a large-scale copper-gold exploration target beyond the 2018 mineral resource aiming to highlight the growing potential at Kharmagtai.
A geophysical drilling program has been designed to convert the exploration target into inferred mineral resources.
The first phase would consist of a tenement-wide seismic survey conducted in parallel with a similar spaced deep magnetotellurics (MT) program.
Xanadu had A$1.2 million in cash at the end of 2019 prior to the receipt of A$2.58 million placement funds on January 20, 2020.
“Large-scale copper-gold potential”
Chief executive officer Andrew Stewart said: “We have always had a strong belief in the large-scale copper-gold potential of the Kharmagtai district.
“This upgraded global exploration target outlines the areas we are aiming to convert to resources in the near to mid-term.
“Additionally, our geologists have highlighted a series of compelling geochemical and geophysical vectors which suggest mineralisation within this exploration target is just the tip of a much larger porphyry system at depth.
“We know these systems exist in Mongolia as the giant Oyu Tolgoi is currently being developed some 120 kilometres to the south, which we believe is a similar type of system to Kharmagtai.”
Met results “better than expected”
He added the company was pleased with new metallurgical results, which were better than expected at this stage in the project’s life.
The new results, which were received in December 2019 improved copper recoveries by around 4.5% to an average recovery of 89.5% for the two main metallurgical composites.
“We are comfortable that additional improvements can be made further down the track.
“These early-stage flotation test results are very encouraging and indicate that a standard crushing, grinding and flotation process will be enough to deliver good extraction of the economic minerals from the deposit.
“In combination with the low content of deleterious elements, we foresee no significant hurdles to producing a high-quality concentrate through standard processing pathways that will be in high demand from all the major global copper smelters, at a time the time of production.”
In January 2020 the company completed a non-brokered placement raising A$2.58 million.
The placement was conducted at A3.3 cents per share and resulted in 78.32 million new shares being issued.
Shareholder approval was not required for the placement, which was undertaken under Xanadu’s ASX Listing Rule 7.1 15% capacity.
New shares were issued to Precious Capital Gold Mining & Metals Fund (PCG), managed by SSI Asset Management AG, a Zurich-based fund.
Following completion of the raising, PCG holds approximately 9.9% of Xanadu.