Xanadu Mines (ASX:XAM) is today reporting its geotech team’s discovery of broad gold mineralisation relatively shallow to the surface at its Red Mountain copper-gold project in Mongolia’s Dornogovi Province, some 420km southeast of capital Ulaanbaatar.
The project landed on the radar of Chinese mining giant Zijin, which now holds a 10% stake in the project. In April, the company saw Zijin pick up a 9.98% share in Xanadu through the acquisition of 139m ordinary fully paid shares at 4c for $5.56m.
Zijin has since moved to pick up more of the company.
While a gentle relationship building process remains underway between the relatively new Albanese ALP government, and that of Xi Jinping’s, industrial collaboration between the Australian and Chinese private sectors remains robust as ever through 2022.
Zijin is pouring millions into the copper-gold project, which boasts a strong ESG focus.
This focus prompted the company to use a novel downstream refining technique requiring less liquid cyanide than usually utilised in gold operations.
Xanadu notes negotiations surrounding the pending acquisition of a 10% stake remain ongoing.
Today’s discovery of broad shallow gold has been evidenced in assay results for the first 1,170m of assay results from a 6,500m trenching program on-site—those assays provide data from a prospect area the team is targeting called ‘Target 33.’
Trenching target OUTR109 is highlighted in today’s results, posting the below grade information.
Note investor information provider Undervalued Equity describes high grade gold as concentrations over 5 grams per tonne of ore (5g/t); many Australian projects at 4g/t are also considered high grade.
18m @ 0.81g/t gold from 50m depth
32m @ 0.60g/t gold from 50m depth
10m @ 1.23g/t gold from 58m depth
All results come from Trench OUTR109, but each reflects a different drillhole.
While grades may fall short of high-grade cutoffs published by Undervalued Equity, it’s worth remembering that projects with shallow mid-grade gold can be more profitable than operations with small amounts of high-grade gold at significant depth.
With that in mind, it’s worth highlighting historical assay data from Red Mountain (outside OUTR109,) which included substantially more eye-catching results in four drill holes:
6.0m @ 21.57g/t gold from surface (OUDDH040)
6.3m @ 6.67g/t gold from 15m depth (OUDDH035)
9.5m @ 21.06g/t from surface (OUDDH043)
6.0m @ 15.43g/t from surface (OUDDH044)
“We are encouraged by this solid start to the Red Mountain program” Xanadu Mines MD Colin Moorhead said.
“Initial results from T33 outline a zone of strongly anomalous gold at surface, more than 0.2g/t, that extends for 350m along strike and 80m wide.”
“Within this zone, in turn, is a higher-grade core greater than 1g/t. We look forward to the remaining trenching assays, which will define future drilling.”
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