Xanadu Mines Ltd (
ASX: XAM, TSX: XAM)
(
Xanadu or the
Company) is
pleased to advise that it has further enhanced the prospectivity of
the Kharmagtai copper and gold Project (
Figures 1 and
2), located within the South Gobi region of Mongolia,
following receipt of highly encouraging new geophysical data.
Highlights
- New data from Controlled Source Audio Magneto-Tellurics (CSAMT)
reveals a large-scale system dissected by a series low-angle faults
controlling high-grade mineralisation
- Extensional targets identified adjacent to existing resources
at Stockwork Hill and Copper Hill
- New targets identified stretching the full +7km length of the
Kharmagtai Intrusive Complex
- Drilling program expanded, with a fourth diamond drill rig
added to test new targets
Xanadu’s Chief Executive Officer, Dr
Andrew Stewart, said “This new data provides a step-change
in unravelling the structural controls and targeting high-grade
mineralisation at Kharmagtai. It expands the potential of the
system and shows that historical drilling may not have been deep
enough to effectively test the extent of mineralisation. We’re
excited by these findings and are mobilising a fourth drill rig
from next week specifically to test these new drill targets in a
progressive and systematic manner.”
Survey Overview
The objective of the geophysical CSAMT survey
was to identify the key low-angle structures across the Project to
allow a 3D structural framework to be developed, from which
high-grade targets can be easily defined.
These low-angle structures are observed to both
offset and control the high-grade mineralisation. Structural
analysis of mineralisation from the existing deposits, focusing on
high-grade mineralisation has demonstrated that low angle
structures not only dislocate zones of mineralisation slightly (up
to 100m) but at some stage during their history have acted as
feeder zones for the very high-grade copper and gold event
(Figure 3). Understanding the structural framework
for the district has become a key to unlocking the full potential
of the Kharmagtai Project.
A total of 60.5-line kilometres of CSAMT has
been conducted in 19 lines and 603 stations (Figure
2). Receiver spacings were set at mainly 100m spacings to
allow a high-resolution product and a depth of investigation up to
1,000m from surface (Figures 4 and 5).
All key previously identified faults are visible
in the CSAMT data and numerous other structures are visible and are
being validated using the existing drilling, surface mapping and
other geophysical datasets. Critically, the low angle structures
related to high-grade mineralisation at Stockwork Hill and Copper
Hill are clearly mapped and can be traced across the lease. From
this data, a 3D structural and geological model is being developed
and the drill targets in the current drill program refined to
target where the mineralised intrusives are bisected by the
structures controlling high-grade mineralisation (Figures 6
and 7).
Current Drill Program
Xanadu is focused on expanding known high-grade
zones of mineralisation and discovering new, previously undrilled
zones of copper and gold, aiming to define Kharmagtai as a
world-class copper and gold project. The first phase of this
strategy is underway, designed to understand the scale of the
mineralised system through extensional drilling with several large
step-outs from known zones. This phase will map the mineral system
by following broad geological/geochemical trends, allowing for more
surgical drill targeting in the second phase.
A project-scale 23,000m drilling programme is
underway with drill rigs being expanded to test these new targets,
with an extra diamond drill rig scheduled to arrive next week.
Response to COVID-19
Currently, COVID-19 has had minimal impact on
the Company’s exploration activities in Mongolia. All necessary
health and safety precautions are being taken and the Company
remains well-funded to continue operations throughout this
period.
Correction
Xanadu’s ASX | TSX Announcement issued on 31
August 2020, included the following in the ‘Highlights’ section:
Copper Hill CSAMT geophysical survey has commenced with results
expected by early August. Xanadu advises that this should have read
early September.
About Xanadu Mines
Xanadu is an ASX and TSX listed Exploration
company that discovers and defines globally significant porphyry
copper-gold assets in Mongolia. We give investors exposure to large
scale copper-gold discoveries and low-cost inventory growth, and we
create liquidity events for shareholders at peak value points in
the mining life cycle. Xanadu maintains a portfolio of exploration
projects and remains one of the few junior explorers on the ASX or
TSX who control an emerging Tier 1 copper-gold deposit in our
flagship Kharmagtai project. For information on Xanadu
visit: www.xanadumines.com.
Andrew StewartCEOXanadu Mines
LtdAndrew.stewart@xanadumines.com+61 409 819 922
This Announcement was authorised for release by
Xanadu’s Board of Directors.
Figures and Tables
FIGURE 1 is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/6fa02fb6-1b5f-4a62-aca8-3a3ab966a4e1
FIGURE 2 is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/5e854075-3cf0-4184-b590-c92f19166335
FIGURE 3 is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/6842fed1-9697-471f-adc8-818146df3526
FIGURE 4 is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/f6c18c9d-331b-4c35-a242-1cf35b41fb04
FIGURE 5 is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/5476996e-5b67-41c6-ab95-03b83c905cc7
FIGURE 6 is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/ba151fd1-8849-4d7d-b835-ff645e0db7d2
FIGURE 7 is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/d602571e-5059-4e37-96c3-6369fc3d5ff4
Statements and Disclaimers
Mineral Resources and Ore Reserves
Reporting Requirements
The 2012 Edition of the Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore
Reserves (the JORC Code 2012) sets out minimum
standards, recommendations and guidelines for Public Reporting in
Australasia of Exploration Results, Mineral Resources and Ore
Reserves. The Information contained in this Announcement has been
presented in accordance with the JORC Code 2012.
Competent Person Statement
The information in this announcement that
relates to exploration results is based on information compiled by
Dr Andrew Stewart, who is responsible for the exploration data,
comments on exploration target sizes, QA/QC and geological
interpretation and information. Dr Stewart, who is an employee of
Xanadu and is a Member of the Australasian Institute of
Geoscientists, has sufficient experience relevant to the style of
mineralisation and type of deposit under consideration and to the
activity he is undertaking to qualify as the “Competent Person” as
defined in the 2012 Edition of the Australasian Code for Reporting
Exploration Results, Mineral Resources and Ore Reserves and the
National Instrument 43-101. Dr Stewart consents to the inclusion in
the report of the matters based on this information in the form and
context in which it appears.
Copper Equivalent
Calculations
The copper equivalent (eCu)
calculation represents the total metal value for each metal,
multiplied by the conversion factor, summed and expressed in
equivalent copper percentage with a metallurgical recovery factor
applied. The copper equivalent calculation used is based off the
eCu calculation defined by CSA in the 2018 Mineral Resource
Upgrade.
Copper equivalent (eCu) grade
values were calculated using the following formula:
eCu = Cu + Au * 0.62097 * 0.8235,
Where Cu = copper grade (%); Au
= gold grade (gold per tonne (g/t)); 0.62097 =
conversion factor (gold to copper); and 0.8235 = relative recovery
of gold to copper (82.35%).
The copper equivalent formula was based on the
following parameters (prices are in USD): Copper price = 3.1 $/lb
(or 6,834 $ per tonne ($/t)); Gold price = 1,320 $
per ounce ($/oz); Copper recovery = 85%; Gold
recovery = 70%; and Relative recovery of gold to copper = 70% / 85%
= 82.35%.
Forward-Looking Statements
Certain statements contained in this
Announcement, including information as to the future financial or
operating performance of Xanadu and its projects may also include
statements which are ‘forward‐looking statements’ that may include,
amongst other things, statements regarding targets, estimates and
assumptions in respect of mineral reserves and mineral resources
and anticipated grades and recovery rates, production and prices,
recovery costs and results, capital expenditures and are or may be
based on assumptions and estimates related to future technical,
economic, market, political, social and other conditions. These
‘forward-looking statements’ are necessarily based upon a number of
estimates and assumptions that, while considered reasonable by
Xanadu, are inherently subject to significant technical, business,
economic, competitive, political and social uncertainties and
contingencies and involve known and unknown risks and uncertainties
that could cause actual events or results to differ materially from
estimated or anticipated events or results reflected in such
forward‐looking statements.
Xanadu disclaims any intent or obligation to
update publicly or release any revisions to any forward‐looking
statements, whether as a result of new information, future events,
circumstances or results or otherwise after the date of this
Announcement or to reflect the occurrence of unanticipated events,
other than required by the Corporations Act 2001 (Cth) and the
Listing Rules of the Australian Securities Exchange
(ASX) and Toronto Stock Exchange
(TSX). The words ‘believe’, ‘expect’,
‘anticipate’, ‘indicate’, ‘contemplate’, ‘target’, ‘plan’,
‘intends’, ‘continue’, ‘budget’, ‘estimate’, ‘may’, ‘will’,
‘schedule’ and similar expressions identify forward‐looking
statements.
All ‘forward‐looking statements’ made in this
Announcement are qualified by the foregoing cautionary statements.
Investors are cautioned that ‘forward‐looking statements’ are not
guarantee of future performance and accordingly investors are
cautioned not to put undue reliance on ‘forward‐looking statements’
due to the inherent uncertainty therein.
For further information please visit the Xanadu
Mines’ Website at www.xanadumines.com.
Kharmagtai JORC Table 1 (JORC
2012)
Set out below is Section 1 and Section 2 of
Table 1 under the JORC Code, 2012 Edition for the Kharmagtai
project. Data provided by Xanadu. This Table 1 updates the JORC
Table 1 disclosure dated 18 September 2017.
JORC Table 1 - Section 1 – Sampling
Techniques and Data
Criteria |
Commentary |
Samplingtechniques |
- The CSAMT Survey at Kharmagtai was conducted by OGC LLC, an
external Geophysical Contractor.
- The transmitter system used was a Zonge GGT-30 transmitter and
GDP-32 receiver.
- Transmitter was set up +10km from the survey grid and receiver
stations were spaced at 200m and 100m along oblique lines roughly
perpendicular to the geological trend. Line locations and lengths
can be seen in the text of the document.
- The relevant QAQC was conducted to ensure measurements give a
representative sample for this type of survey.
- Representative 2 metre samples were taken from ½ HQ diamond
core for assay.
- Only assay result results from recognised, independent assay
laboratories were used after QAQC was verified.
|
Drilling techniques |
- Diamond Drill Hole (“DDH”) drilling has been the primary
drilling method. Some RC (reverse circulation) is conducted. RC
holes are denoted by the KHRC prefix. Diamond Drill Holes are
denoted by the KHDDH prefix.
|
Drillsamplerecovery |
- DDH core recoveries have been very good, averaging between 95%
and 99% for all of the deposits. In localised areas of faulting
and/or fracturing the recoveries decrease; however, this is a very
small percentage of the overall mineralised zones.
- Recovery measurements were collected during all DDH and RC
programs. The methodology used for measuring recovery is standard
industry practice.
- Analysis of recovery results vs. grade indicates no significant
trends. Indicating bias of grades due to diminished recovery and /
or wetness of samples.
|
Logging |
- Drill and trench samples are logged for lithology,
mineralisation and alteration and geotechnical aspects using a
standardised logging system, including the recording of visually
estimated volume percentages of major minerals.
- Drill core was photographed after being logged by a
geologist.
- The entire interval drilled and trenched has been logged by a
geologist.
|
Sub-samplingtechniquesand samplepreparation |
- DDH Core is cut in half with a diamond saw, following the line
marked by the geologist. The rock saw is regularly flushed with
fresh water.
- Sample intervals are generally a constant 2m interval down-hole
in length unless subdivided at geological contacts.
- Routine sample preparation and analyses of DDH samples were
carried out by ALS Mongolia LLC (“ALS Mongolia”), who operates an
independent sample preparation and analytical laboratory in
Ulaanbaatar.
- All samples were prepared to meet standard quality control
procedures as follows: crushed to 90% passing 3.54 mm, split to
1kg, pulverised to 90% - 95% passing 200 mesh (75 microns) and
split to 150g.
- Certified reference materials (CRMs), blanks and pulp duplicate
were randomly inserted to manage the quality of data.
- Sample sizes are well in excess of standard industry
requirements.
|
Quality ofassay
dataandlaboratorytests |
- All samples were routinely assayed by ALS Mongolia for
gold
- Au is determined using a 25g fire assay fusion, cupelled to
obtain a bead, and digested with Aqua Regia, followed by an atomic
absorption spectroscopy (AAS) finish, with a lower detection limit
(“LDL”) of 0.01 ppm.
- All samples were submitted to ALS Mongolia for the package
ME-ICP61 using a four acid digest. Where copper is over-range
(>1% Cu), it is analysed by a second analytical technique
(Cu-OG62), which has a higher upper detection limit (UDL) of 5%
copper.
- Quality assurance was provided by introduction of known
certified standards, blanks and duplicate samples on a routine
basis.
- Assay results outside the optimal range for methods were
re-analysed by appropriate methods.
- Ore Research Pty Ltd certified copper and gold standards have
been implemented as a part of QA/QC procedures, as well as coarse
and pulp blanks, and certified matrix matched copper-gold
standards.
- QAQC monitoring is an active and ongoing processes on batch by
batch basis by which unacceptable results are re-assayed as soon as
practicable.
|
Verificationof
samplingandassaying |
- All assay data QA/QC is checked prior to loading into the
Geobank data base.
- The data is managed by Xanadu geologists.
- The database and geological interpretation is collectively
managed by Xanadu.
|
Location ofdata points |
- CSAMT transmitter and receivers were located using a handheld
GPS
- Diamond drill holes have been surveyed with a differential
global positioning system (“DGPS”) to within 10cm accuracy.
- All diamond drill holes have been down hole surveyed to collect
the azimuth and inclination at specific depths. Two principal types
of survey method have been used over the duration of the drilling
programs including Eastman Kodak and Flexit.
- UTM WGS84 48N grid.
- The digital terrain model (“DTM”) is based on 1m contours with
an accuracy of ±0.01m.
|
Dataspacinganddistribution |
- CSAMT receiver nodes were place at 100m and 200m spacings to
allow a potential maximum depth penetration of 1000m.
- Holes spacings range from 50m spacings within the core of
mineralization to +500m spacings for exploration drilling. Hole
spacings can be determined using the sections and drill plans
provided
- Holes range from vertical to an inclination of -60 degrees
depending on the attitude of the target and the drilling
method.
- The data spacing and distribution is sufficient to establish
anomalism and targeting for both porphyry, tourmaline breccia and
epithermal target types.
|
Orientationof data
inrelation
togeologicalstructure |
- Drilling is conducted in a predominantly regular grid to allow
unbiased interpretation and targeting.
- Sample lines for the CSAMT survey were conducted roughly
perpendicular to the gross geological trend.
|
Sample security |
- Samples are dispatched from site through via company employees
and secure company vehicles to the Laboratories.
- Samples are signed for at the Laboratory with confirmation of
receipt emailed through.
- Samples are then stored at the lab and returned to a locked
storage site.
|
Audits or reviews |
- CSAMT data from the survey was reviewed and audited by Barry de
Wet, an external consultant and an expert in the field.
- Internal audits of sampling techniques and data management on a
regular basis, to ensure industry best practice is employed at all
times.
|
JORC Table 1 – Section 2 – Reporting of
Exploration Results
(Criteria in this section apply to all
succeeding sections).
Criteria |
Commentary |
Mineraltenement andland tenurestatus |
- The Project comprises 1 Mining Licence (MV-17387A).
- The Kharmagtai mining license MV-17387A is 100% owned by Oyut
Ulaan LLC. Xanadu has an 85% interest in Mongol Metals LLC, which
has 90% interest in Oyut Ulaan LLC. The remaining 10% in Oyut Ulaan
LLC is owned by Quincunx (BVI) Ltd
(Quincunx).
- The Mongolian Minerals Law (2006) and Mongolian Land Law (2002)
govern exploration, mining and land use rights for the
project.
|
Explorationdone by otherparties |
- Detailed exploration was conducted by Quincunx Ltd, Ivanhoe
Mines Ltd and Turquoise Hill Resources Ltd including extensive
surface mapping, trenching, diamond drilling, surface geochemistry
and geophysics.
|
Geology |
- The mineralisation is characterised as porphyry copper-gold
type.
- Porphyry copper-gold deposits are formed from magmatic
hydrothermal fluids typically associated with felsic intrusive
stocks that have deposited metals as sulphides both within the
intrusive and the intruded host rocks. Quartz stockwork veining is
typically associated with sulphides occurring both within the
quartz veinlets and disseminated thought out the wall rock.
Porphyry deposits are typically large tonnage deposits ranging from
low to high grade and are generally mined by large scale open pit
or underground bulk mining methods. The prospects at Kharmagtai are
atypical in that they are associated with intermediate intrusions
of diorite to quartz diorite composition; however the deposits are
significant in terms of gold:copper ratio, and similar to other
gold-rich porphyry deposits.
|
Drill holeInformation |
- Diamond holes, RC holes and trenches are the principal source
of geological and grade data for the Project.
|
Timing |
RC Holes |
Metre |
DDH Holes |
Metre |
RC & DDH |
Metre |
Trench |
Metre |
Drilling <2015 |
155 |
24553 |
252 |
88511 |
0 |
0 |
106 |
39774 |
Drilling >2015 |
68 |
13107 |
116 |
57876 |
22 |
5323 |
17 |
5618 |
Total |
223 |
37660 |
368 |
146387 |
22 |
5323 |
123 |
45392 |
- See figures in main report.
|
Dataaggregationmethods |
- Weighted averages have not been used in this work.
- Some compositing has been used in this resource but with
statistically relevant techniques that do not include internal
dilution.
The copper equivalent (eCu) calculation represents
the total metal value for each metal, multiplied by the conversion
factor, summed and expressed in equivalent copper percentage with a
metallurgical recovery factor applied. The copper equivalent
calculation used is based off the eCu calculation defined by CSA in
the 2018 Mineral Resource Upgrade. Copper equivalent (CuEq or eCu)
grade values were calculated using the following formula: eCu or
CuEq = Cu + Au * 0.62097 * 0.8235, Gold Equivalent
(eAu) grade values were calculated using the
following formula: eAu = Au + Cu / 0.62097 * 0.8235. Where: Cu -
copper grade (%) Au - gold grade (g/t) 0.62097 - conversion factor
(gold to copper) 0.8235 - relative recovery of gold to copper
(82.35%) The copper equivalent formula was based on the following
parameters (prices are in USD): Copper price - 3.1 $/lb (or 6834
$/t) Gold price - 1320 $/oz Copper recovery - 85% Gold recovery -
70% Relative recovery of gold to copper = 70% / 85% = 82.35%. |
Relationshipbetweenmineralisationwidths
andinterceptlengths |
- Mineralised structures are variable in orientation, and
therefore drill orientations have been adjusted from place to place
in order to allow intersection angles as close as possible to true
widths.
- Exploration results have been reported as an interval with
'from' and 'to' stated in tables of significant economic
intercepts. Tables clearly indicate that true widths will generally
be narrower than those reported.
|
Diagrams |
- See figures in main report.
|
Balancedreporting |
- Resources have been reported at a range of cut-off grades,
above a minimum suitable for open pit mining, and above a minimum
suitable for underground mining.
|
Othersubstantiveexplorationdata |
- Extensive work in this area has been done and is reported
separately. See the company website for significant announcements
and milestones. Work that has been done includes; relogging of
core, structural studies, alteration studies, geotechnical studies
and preliminary metallurgical test works. The project has been
subject to various geophysical studies including aeromagnetic,
radiometric surveys and electromagnetic surveys over discrete
targets.
|
Further work |
- The mineralisation is open at depth and along strike.
- Current estimates are restricted to those expected to be
reasonable for open pit mining. Limited drilling below this depth
(- 300m rl) shows widths and grades potentially suitable for
underground extraction.
- Exploration is on-going.
|
JORC Table 1 - Section 3 Estimation of
Reporting of Mineral Resources
Mineral Resources are not reported so this is not applicable to
this report.
JORC Table 1 - Section 4 Estimation and
Reporting of Ore Reserves
Ore Reserves are not reported so this is not
applicable to this report.
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