ASX-listed explorer puts pedal to the metal at Mongolian copper-gold project

Tue 23 May 23, 12:21pm (AEST)
Traditional yurts set up on Mongolian grassland
Source: Unsplash

Key Points

  • Two diamond drills have been added to the project, bringing the total drill rig count to six.
  • Management hopes to include new high-grade discoveries in decision-making that will follow completion of the pre-feasibility study.
  • Prior research indicates the project’s 3 million tonnes of copper and 8 million ounces of gold reserves are just the tip of the iceberg.

Xanadu Mines (ASX: XAM) flagship copper-gold project, Kharmagtai is situated in Mongolia’s Omnogovi Province, 440km from the Mongolian capital of Ulaanbaatar. 

Targeting 18,000 metres of drilling, two additional diamond drill rigs focused on making new discoveries have been added to the project, bringing the total onsite to six. Of the new additions:

  • One will drill 8,000 metres in Phase 1 of deep exploration, targeting high-grade, large-scale mineralisation with characteristics comparable to those at Oyu Tolgoi.

  • The other will drill 10,000 metres of shallow holes targeting unexplored porphyry clusters within the Kharmagtai district. The objective is to identify open pit-style mineral resources that could potentially be economically extracted.

(For context, Oyu Tolgoi - which is owned by Rio Tinto – is one of the world’s largest known copper and gold deposits, located in the South Gobi region of Mongolia.)

The remaining four diamond drill rigs are “infill rigs,” which collect additional data and samples that feed into the PFS’s assessment of the project’s economic viability.

Targeting a combined total of 54,000 metres of drilling, this breaks down into:

  • 30,000 metres of infill.

  • 18,000 metres of exploration.

  • 6,000 metres of drilling that depends on the outcome of phase 1 findings.

“We’re very excited to kick off discovery drilling at Kharmagtai, an aggressive and systematic program that underpins our growth strategy,” says Colin Moorhead, Xanadu’s executive chairman and managing director.

“By running the exploration program in conjunction with PFS infill drilling, we can incorporate potential new, high-grade, large-scale discoveries into key PFS decision-making, which could be a material value driver at Kharmagtai.”

What’s at stake?

Prior studies indicate 1.1 billion tonnes of mineralisation at Kharmagtai, which itself is likely only the “surface expression” of a much larger underground porphyry system.

The known mineralisation consists of:

  • 3 million tonnes of copper.

  • 8 million ounces of gold.

Kharmagtai Project - Deep exploration drilling

Kharmagtai Project - Deep exploration drilling, satellite image
Satellite image of Kharmagtai copper-gold district showing currently defined mineral deposits and planned deep exploration holes. (Source: Supplied)

The latest update from Xanadu management states: “Deep drill holes have been designed to ensure that a potential high-grade, large-scale and deeper ‘Oyu Tolgoi’-style deposit is discovered early in the PFS process, allowing optimal infrastructure decisions to be made, without sterilising what could be the major value driver at Kharmagtai.”

Porphyry deposits at other locations within the Kharmagtai area - at Stockwork Hill, White Hill, and Copper Hill – have been studied in greater detail. Research and samples from each of these suggest the movement of fluids associated with porphyry systems is driven by deeper sources.

Additionally, a “tourmaline breccia” mineralisation system at Stockwork Hill provides further positive indications about the likely presence of viable deposits of copper and gold.

Screenshot 2023-05-23 at 12.13.24 pm

DisclaimerMarket Index helps small-cap ASX-listed companies connect with Australian investors through clear and concise articles on key developments. Xanadu Mines was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice.

Written By

Glenn Freeman

Content Editor

Glenn is a Content Editor at Livewire Markets and Market Index. Glenn has almost 20 years’ experience in financial services writing and editing. Glenn’s journalistic experience also spans energy and automotive, in both Australia and abroad – including the Middle East – where he edited an oil and gas publication in the United Arab Emirates.

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