Xanadu restarts exploration at Red Mountain following Zijin’s greenlight to boost investment

The geotech team at Xanadu Mines (ASX:XAM) have a busy few weeks ahead as the company recommences exploration at its Red Mountain project in the South Gobi. 

The copper-gold project occupies the same region of the Gobi desert region as its flagship Kharmagtai development, another copper-gold play. 

The recommencement of work is due in part to Canberra’s Foreign Investment Review Board (FIRB) approving Chinese mining giant Zijin to boost its stake in Xanadu Mines to 19.99%, a decision made earlier this week. 

Previous RC success 

The company has already stumbled across promising early stage evidence of significant mineralisation in prior RC drilling at Red Mountain. 

Many Australian projects boasting gold grades of 4 grams per tonne (4g/t) are considered high grade, while investor information provider Undervalued Equity places ‘high-grade’ qualifications at above 5g/t. 

Compare that to past results from Red Mountain:

• 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)

Ground exploration underway 

At this current time, boots are on the ground surface mapping at Red Mountain to help build 3D geophys models, as well as digging out trenches to test the extent of shallow mineralisation. 

From trenching, Xanadu’s geotechs intend to log priority targets for diamond drilling, which is set to get underway in Q4 of 2022. 

The trenching program will include 6,500 horizontal metres over new gold, silver, and copper targets; those returning early-stage evidence of mineralisation will likely be slated for the drill run later this year. 

The project, which boasts a 30 year licence under Mongolian resources law, has previously been explored by former constituents; those entities found several broad zones of quartz possessing traits often found alongside gold mineralisation. 

Backup targets ready; ESG committed

A prospective 4.5km x 300m area of interest is already logged by the company thought to contain a significant copper system with high counts of both gold and silver, though, this ultimately waits for diamond drilling to start before being further confirmed.

Also worth noting is Xanadu Mines' strong desire to implement meaningful ESG credentials to its neighbouring Mongolian project.

At the start of August, the company noted it had recovered over 90% of gold from ore products at Kharmagtai using a Western Australian-made refining process that uses less liquid cyanide, often a crucial ingredient of gold refining.

A look at Xanadu Mines' six month charts

Disclaimer: Market 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.