Xanadu Mines Ltd (
ASX: XAM, TSX: XAM) (“Xanadu” or
“the Company”) is pleased to provide final assay results from Drill
hole KHDDH565 previously reported in the Company’s ASX/TSX
Announcement dated 20 April 2021 from the Kharmagtai porphyry
copper and gold project in the South Gobi region of Mongolia
(
Figures 1 and 2).
Highlights
- Drill hole
KHDDH565 expands the higher grade zone of chalcopyrite and bornite
mineralisation south of the Stockwork Hill resource both in width
and significantly along strike.
- KHDDH565
intersects 499m @ 0.31% Cu and 0.39 g/t Au (0.51% eCu) from
656m
Including
235m @ 0.36% Cu and 0.48g/t Au (0.60% eCu) from 686m
Including
101m @ 0.45% Cu and 0.52g/t Au (0.72% eCu) from 728m
- While KHDDH565
intersected grades higher than the current resource, this hole
passed outside the targeted high grade bornite zone.
- Follow ups to
KHDDH565 include two scissor holes (KHDDH567 and KHDDH568), which
are currently underway targeting the high grade bornite zone
(Figure 3).
- A third diamond
drill rig will be added in June 2021. Xanadu will provide a
separate ASX/TSX Announcement outlining the Kharmagtai Phase 2
exploration strategy including anticipated near term drill
targets.
Xanadu’s Chief Executive Officer, Dr
Andrew Stewart, said “The laboratories in Ulaanbaatar are
back at full capacity and we are excited to update the market with
assay results for KHDDH565 to support the visual logs we reported
in April. We are very encouraged by the presence of bornite, the
style of mineralisation and the length of the intercept. This drill
hole expands our interpreted zone of mineralisation along strike
and gives us critical information for future targeting. We’re
following up now with scissor holes aiming to expand the high grade
zone and look forward to reporting those results as soon as
available.”
About KHDDH565
The purpose of KHDDH565 was to identify the
structure bounding the high-grade bornite zone to the east and to
test the western extensions of the high-grade bornite zone. A small
offsetting fault was located on the eastern margin of the
mineralised zone and this structure is being modelled in 3D to
determine the location of the eastern extensions to mineralisation.
Mineralisation in the bornite zone was extended some 200m to the
west and follow up drilling is planned to test these extensions.
Minor structures oblique to the drill hole orientation pushed
KHDDH565 slightly offline, and the hole passed through the outside
halo of mineralisation rather than directly through the highest
grade zone (Figures 1 and 2).
Hole ID |
From |
Interval |
Cu |
Au |
eCu |
KHDDH565 |
656m |
499m |
0.31% |
0.39g/t |
0.51% |
including |
686m |
235m |
0.36% |
0.48g/t |
0.60% |
including |
728m |
101m |
0.45% |
0.52g/t |
0.72% |
including |
783m |
10m |
0.57% |
0.92g/t |
1.04% |
including |
878m |
15m |
0.41% |
1.10g/t |
0.98% |
including |
1,024m |
23m |
0.80% |
1.23g/t |
1.43% |
and |
1,345.5m |
17.5m |
0.19% |
1.09g/t |
0.74% |
Including |
1,348m |
4m |
0.26% |
2.59g/t |
1.59% |
and |
1,427m |
12m |
0.18% |
1.08g/t |
0.73% |
A full list of intercepts can be found in
Table 2.
These zones of higher grade gold illustrate
potential to extend the bornite zone to the west. Scissor holes are
underway (Figure 3) and being planned to test this
strike potential.
About KHDDH566
Drill hole KHDDH566 was designed as a scissor
hole to cross the bornite zone (Figures 1 and 2).
Final assays have been received and KHDDH566 has returned the
following.
Hole ID |
From |
Interval |
Cu |
Au |
eCu |
KHDDH566 |
592.1m |
217.9m |
0.32% |
0.47g/t |
0.56% |
including |
594.2m |
72.8m |
0.32% |
0.51g/t |
0.58% |
including |
684m |
74m |
0.47% |
0.77g/t |
0.86% |
including |
684m |
24m |
0.80% |
1.71g/t |
1.67% |
Results from this hole indicate that the hole
passed through a narrower part of the bornite zone and anticipated
follow up drilling will test the shape further.
Third Diamond Drill Rig
A third diamond drill rig will be added at
Kharmagtai in June 2021, following the recent successful $10.2
million equity placement (see the Company’s ASX/TSX Announcement
dated 23 April 2021). This will facilitate the Kharmagtai Phase 2
drilling program in line with Xanadu’s objective to define high
grade blocks to unlock the next stage of development for the
project.
Xanadu expects to communicate details of the
Kharmagtai Phase 2 drilling program in the coming weeks.
Figure 1 is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/48919056-13f5-45dd-9c0b-f829dae3b1cc
Figure 2 is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/7af3b4ad-9b4a-415e-be3b-1615e4a3dd45
Figure 3 is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/79eedb3e-10e6-495b-b2c3-9b13e4d5c8c1
About Xanadu Mines
Xanadu is an ASX and TSX listed Exploration
company operating in Mongolia. We give investors exposure to
globally significant, large scale copper-gold discoveries and
low-cost inventory growth. 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 StewartCEO Xanadu Mines Ltd
Andrew.stewart@xanadumines.com+61 409 819 922
This Announcement was authorised for release by
Xanadu’s Board of Directors.
Appendix 1: Drilling Results
Table 1: Drill hole collar
Hole ID |
Prospect |
East |
North |
RL |
Azimuth (°) |
Inc (°) |
Depth (m) |
KHDDH565 |
Stockwork Hill |
593133 |
4877888 |
1280 |
233 |
-55 |
1609.4 |
KHDDH566 |
Stockwork Hill |
592652 |
4877345 |
1295 |
0 |
-70 |
922.4 |
Table 2: Significant drill
results
Hole ID |
Prospect |
From (m) |
To (m) |
Interval (m) |
Au (g/t) |
Cu (%) |
CuEq(%) |
AuEq(g/t) |
KHDDH565 |
Stockwork Hill |
69 |
79 |
10 |
0.12 |
0.05 |
0.12 |
0.23 |
and |
|
183 |
215 |
32 |
0.19 |
0.12 |
0.22 |
0.43 |
including |
|
197 |
211 |
14 |
0.32 |
0.17 |
0.33 |
0.65 |
and |
|
247 |
263 |
16 |
0.05 |
0.07 |
0.10 |
0.19 |
and |
|
323 |
482 |
159 |
0.21 |
0.31 |
0.41 |
0.81 |
including |
|
361 |
427 |
66 |
0.37 |
0.52 |
0.70 |
1.38 |
including |
|
369 |
395 |
26 |
0.56 |
0.77 |
1.06 |
2.07 |
including |
|
369 |
377 |
8 |
0.64 |
1.18 |
1.51 |
2.94 |
including |
|
389 |
395 |
6 |
0.83 |
0.83 |
1.26 |
2.46 |
including |
|
409 |
425 |
16 |
0.40 |
0.48 |
0.68 |
1.33 |
including |
|
445 |
453 |
8 |
0.37 |
0.83 |
1.02 |
2.00 |
including |
|
445 |
451 |
6 |
0.40 |
0.97 |
1.17 |
2.30 |
and |
|
511.5 |
538 |
26.5 |
0.22 |
0.17 |
0.29 |
0.56 |
including |
|
526 |
538 |
12 |
0.41 |
0.29 |
0.50 |
0.99 |
and |
|
558 |
640 |
82 |
0.03 |
0.16 |
0.18 |
0.34 |
including |
|
614 |
632 |
18 |
0.03 |
0.35 |
0.36 |
0.71 |
and |
|
656 |
1155 |
499 |
0.39 |
0.31 |
0.51 |
1.00 |
including |
|
686 |
921 |
235 |
0.48 |
0.36 |
0.60 |
1.18 |
including |
|
728 |
829 |
101 |
0.52 |
0.45 |
0.72 |
1.41 |
including |
|
783 |
793 |
10 |
0.92 |
0.57 |
1.04 |
2.03 |
including |
|
839 |
843 |
4 |
0.46 |
0.37 |
0.61 |
1.19 |
including |
|
853 |
893 |
40 |
0.92 |
0.40 |
0.87 |
1.70 |
including |
|
855 |
862 |
7 |
0.83 |
0.57 |
0.99 |
1.94 |
including |
|
878 |
893 |
15 |
1.10 |
0.41 |
0.98 |
1.91 |
including |
|
935 |
979 |
44 |
0.15 |
0.20 |
0.28 |
0.55 |
including |
|
1000 |
1147 |
147 |
0.46 |
0.37 |
0.60 |
1.17 |
including |
|
1024 |
1047 |
23 |
1.23 |
0.80 |
1.43 |
2.80 |
including |
|
1028 |
1047 |
19 |
1.32 |
0.88 |
1.56 |
3.04 |
including |
|
1059 |
1097 |
38 |
0.52 |
0.42 |
0.68 |
1.33 |
including |
|
1139 |
1147 |
8 |
0.32 |
0.27 |
0.43 |
0.85 |
and |
|
1167 |
1201 |
34 |
0.08 |
0.08 |
0.12 |
0.24 |
and |
|
1221 |
1245 |
24 |
0.08 |
0.08 |
0.12 |
0.24 |
and |
|
1343 |
1371 |
28 |
0.72 |
0.14 |
0.51 |
1.00 |
including |
|
1345.5 |
1363 |
17.5 |
1.09 |
0.19 |
0.74 |
1.45 |
including |
|
1348 |
1352 |
4 |
2.59 |
0.26 |
1.59 |
3.11 |
and |
|
1415 |
1441 |
26 |
0.56 |
0.14 |
0.43 |
0.84 |
including |
|
1427 |
1439 |
12 |
1.08 |
0.18 |
0.73 |
1.43 |
and |
|
1463 |
1485 |
22 |
0.11 |
0.10 |
0.15 |
0.30 |
and |
|
1495 |
1505 |
10 |
0.07 |
0.09 |
0.13 |
0.25 |
and |
|
1562 |
1585.4 |
23.4 |
0.06 |
0.11 |
0.14 |
0.27 |
KHDDH566 |
Stockwork Hill |
1 |
15 |
14 |
0.13 |
0.07 |
0.14 |
0.27 |
and |
|
125.5 |
134 |
8.5 |
0.03 |
0.14 |
0.15 |
0.30 |
and |
|
190.5 |
264 |
73.5 |
0.04 |
0.11 |
0.13 |
0.25 |
and |
|
324 |
334 |
10 |
0.10 |
0.04 |
0.10 |
0.19 |
and |
|
592.1 |
810 |
217.9 |
0.47 |
0.32 |
0.56 |
1.10 |
including |
|
594.2 |
667 |
72.8 |
0.51 |
0.32 |
0.58 |
1.13 |
including |
|
603.1 |
667 |
63.9 |
0.58 |
0.34 |
0.64 |
1.25 |
including |
|
684 |
758 |
74 |
0.77 |
0.47 |
0.86 |
1.69 |
including |
|
684 |
708 |
24 |
1.71 |
0.80 |
1.67 |
3.27 |
including |
|
684 |
703.7 |
19.7 |
1.91 |
0.87 |
1.85 |
3.62 |
including |
|
744 |
756 |
12 |
0.52 |
0.38 |
0.64 |
1.26 |
including |
|
780 |
804 |
24 |
0.21 |
0.33 |
0.44 |
0.86 |
including |
|
786 |
792 |
6 |
0.35 |
0.48 |
0.66 |
1.29 |
and |
|
846 |
922.4 |
76.4 |
0.08 |
0.16 |
0.21 |
0.40 |
including |
|
846 |
852 |
6 |
0.06 |
0.26 |
0.29 |
0.57 |
Appendix 2: 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.
Appendix 3: Kharmagtai 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 11 April 2019.
JORC TABLE 1 - SECTION 1 - SAMPLING
TECHNIQUES AND DATA
(Criteria in this section apply to all succeeding sections).
Criteria |
JORC Code explanation |
Commentary |
Sampling techniques |
- Nature and quality of sampling (eg
cut channels, random chips, or specific specialised industry
standard measurement tools appropriate to the minerals under
investigation, such as down hole gamma sondes, or handheld XRF
instruments, etc). These examples should not be taken as limiting
the broad meaning of sampling.
- Include reference to measures taken
to ensure sample representivity and the appropriate calibration of
any measurement tools or systems used.
- Aspects of the determination of
mineralisation that are Material to the Public Report.
- In cases where ‘industry standard’
work has been done this would be relatively simple (e.g. ‘reverse
circulation drilling was used to obtain 1 m samples from which 3 kg
was pulverised to produce a 30 g charge for fire assay’). In other
cases, more explanation may be required, such as where there is
coarse gold that has inherent sampling problems. Unusual
commodities or mineralisation types (e.g. submarine nodules) may
warrant disclosure of detailed information.
|
- Representative ½
core samples were split from PQ, HQ & NQ diameter diamond drill
core on site using rock saws, on a routine 2m sample interval that
also honours lithological/intrusive contacts.
- The orientation
of the cut line is controlled using the core orientation line
ensuring uniformity of core splitting wherever the core has been
successfully oriented.
- Sample intervals
are defined and subsequently checked by geologists, and sample tags
are attached (stapled) to the plastic core trays for every sample
interval.
- RC chip samples
are ¼ splits from one meter intervals using a 75%:25% riffle
splitter to obtain a 3kg sample
- RC samples are
uniform 2m samples formed from the combination of two ¼ split 1m
samples.
|
Drilling techniques |
- Drill type (e.g. core, reverse
circulation, open-hole hammer, rotary air blast, auger, Bangka,
sonic, etc.) and details (e.g. core diameter, triple or standard
tube, depth of diamond tails, face-sampling bit or other type,
whether core is oriented and if so, by what method, etc).
|
- The Mineral
Resource estimation has been based upon diamond drilling of PQ, HQ
and NQ diameters with both standard and triple tube core recovery
configurations, RC drilling and surface trenching with channel
sampling.
- All drill core
drilled by Xanadu has been oriented using the “Reflex Ace”
tool.
|
Drill sample recovery |
- Method of recording and assessing
core and chip sample recoveries and results assessed.
- Measures taken to maximise sample
recovery and ensure representative nature of the samples.
- Whether a relationship exists
between sample recovery and grade and whether sample bias may have
occurred due to preferential loss/gain of fine/coarse
material.
|
- Diamond drill
core recoveries were assessed using the standard industry (best)
practice which involves: removing the core from core trays;
reassembling multiple core runs in a v-rail; measuring core lengths
with a tape measure, assessing recovery against core block depth
measurements and recording any measured core loss for each core
run.
- Diamond core
recoveries average 97% through mineralization.
- Overall, core
quality is good, with minimal core loss. Where there is localized
faulting and or fracturing core recoveries decrease, however, this
is a very small percentage of the mineralized intersections.
- RC recoveries
are measured using whole weight of each 1m intercept measured
before splitting
- Analysis of
recovery results vs grade shows no significant trends that might
indicate sampling bias introduced by variable recovery in
fault/fracture zones.
|
Logging |
- Whether core and chip samples have
been geologically and geotechnically logged to a level of detail to
support appropriate Mineral Resource estimation, mining studies and
metallurgical studies.
- Whether logging is qualitative or
quantitative in nature. Core (or costean, channel, etc)
photography.
- The total length and percentage of
the relevant intersections logged.
|
- All drill core
is geologically logged by well-trained geologists using a modified
“Anaconda-style” logging system methodology. The Anaconda method of
logging and mapping is specifically designed for porphyry Cu-Au
mineral systems and is entirely appropriate to support Mineral
Resource Estimation, mining and metallurgical studies.
- Logging of
lithology, alteration and mineralogy is intrinsically qualitative
in nature. However, the logging is subsequently supported by 4 Acid
ICP-MS (48 element) geochemistry and SWIR spectral mineralogy
(facilitating semi-quantitative/calculated mineralogical,
lithological and alteration classification) which is integrated
with the logging to improve cross section interpretation and 3D
geological model development.
- Drill core is
also systematically logged for both geotechnical features and
geological structures. Where drill core has been successfully
oriented, the orientation of structures and geotechnical features
are also routinely measured.
- Both wet and dry
core photos are taken after core has been logged and marked-up but
before drill core has been cut.
|
Sub-sampling techniques and sample
preparation |
- If core, whether cut or sawn and
whether quarter, half or all core taken.
- If non-core, whether riffled, tube
sampled, rotary split, etc and whether sampled wet or dry.
- For all sample types, the nature,
quality and appropriateness of the sample preparation
technique.
- Quality control procedures adopted
for all sub-sampling stages to maximise representivity of
samples.
- Measures taken to ensure that the
sampling is representative of the in situ material collected,
including for instance results for field duplicate/second-half
sampling.
- Whether sample sizes are appropriate
to the grain size of the material being sampled.
|
- All drill core
samples are ½ core splits from either PQ, HQ or NQ diameter cores.
A routine 2m sample interval is used, but this is varied locally to
honour lithological/intrusive contacts. The minimum allowed sample
length is 30cm.
- Core is
appropriately split (onsite) using diamond core saws with the cut
line routinely located relative to the core orientation line (where
present) to provide consistency of sample split selection.
- The diamond saws
are regularly flushed with water to minimize potential
contamination.
- A field
duplicate ¼ core sample is collected every 30th sample to ensure
the “representivity of the in situ material collected”. The
performance of these field duplicates are routinely analysed as
part of Xanadu’s sample QC process.
- 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 75% passing 2mm, split to 1kg, pulverised to 85% passing
200 mesh (75 microns) and split to 150g sample pulp.
- ALS Mongolia
Geochemistry labs quality management system is certified to ISO
9001:2008.
- The sample
support (sub-sample mass and comminution) is appropriate for the
grainsize and Cu-Au distribution of the porphyry Cu-Au
mineralization and associated host rocks.
|
Quality of assay data and laboratory tests |
- The nature, quality and
appropriateness of the assaying and laboratory procedures used and
whether the technique is considered partial or total.
- For geophysical tools,
spectrometers, handheld XRF instruments, etc, the parameters used
in determining the analysis including instrument make and model,
reading times, calibrations factors applied and their derivation,
etc.
- Nature of quality control procedures
adopted (eg standards, blanks, duplicates, external laboratory
checks) and whether acceptable levels of accuracy (ie lack of bias)
and precision have been established.
|
- 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 (LDL) of 0.01
ppm.
- All samples were
also submitted to ALS Mongolia for the 48 element package ME-ICP61
using a four acid digest (considered to be an effective total
digest for the elements relevant to the MRE). 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 has been managed by insertion of appropriate Standards
(1:30 samples – suitable Ore Research Pty Ltd certified standards),
Blanks (1:30 samples), Duplicates (1:30 samples – ¼ core duplicate)
by XAM.
- 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 QC procedures, as well as coarse and pulp blanks, and
certified matrix matched copper-gold standards.
- QC monitoring is
an active and ongoing processes on batch by batch basis by which
unacceptable results are re-assayed as soon as practicable.
- Prior to 2014:
Cu, Ag, Pb, Zn, As and Mo were routinely determined using a
three-acid-digestion of a 0.3g sub-sample followed by an AAS finish
(AAS21R) at SGS Mongolia. Samples were digested with nitric,
hydrochloric and perchloric acids to dryness before leaching with
hydrochloric acid to dissolve soluble salts and made to 15ml volume
with distilled water. The LDL for copper using this technique was
2ppm. Where copper was over-range (>1% Cu), it was analysed by a
second analytical technique (AAS22S), which has a higher upper
detection limit (UDL) of 5% copper. Gold analysis method was
essentially unchanged.
|
Verification of sampling and assaying |
- The verification of significant
intersections by either independent or alternative company
personnel.
- The use of twinned holes.
- Documentation of primary data, data
entry procedures, data verification, data storage (physical and
electronic) protocols.
- Discuss any adjustment to assay
data.
|
- All assay data
QAQC is checked prior to loading into XAM’s Geobank data base.
- The data is
managed by XAM geologists.
- The data base
and geological interpretation is managed by XAM.
- Check assays are
submitted to an umpire lab (SGS Mongolia) for duplicate
analysis.
- No twinned drill
holes exist.
- There have been
no adjustments to any of the assay data.
|
Location of data points |
- Accuracy and quality of surveys used
to locate drill holes (collar and down-hole surveys), trenches,
mine workings and other locations used in Mineral Resource
estimation.
- Specification of the grid system
used.
- Quality and adequacy of topographic
control.
|
- Diamond drill
holes have been surveyed with a differential global positioning
system (DGPS) to within 10cm accuracy.
- The grid system
used for the project is UTM WGS-84 Zone 48N
- Historically,
Eastman Kodak and Flexit electronic multi-shot downhole survey
tools have been used at Kharmagtai to collect down hole azimuth and
inclination information for the majority of the diamond drill
holes. Single shots were typically taken every 30m to 50m during
the drilling process, and a multi-shot survey with readings every
3-5m are conducted at the completion of the drill hole. As these
tools rely on the earth’s magnetic field to measure azimuth, there
is some localised interference/inaccuracy introduced by the
presence of magnetite in some parts of the Kharmagtai mineral
system. The extent of this interference cannot be quantified on a
reading-by-reading basis.
- More recently
(since September 2017), a north-seeking gyro has been employed by
the drilling crews on site (rented and operated by the drilling
contractor), providing accurate downhole orientation measurements
unaffected by magnetic effects. Xanadu have a permanent calibration
station setup for the gyro tool, which is routinely calibrated
every 2 weeks (calibration records are maintained and were
sighted)
- The project DTM
is based on 1 m contours from satellite imagery with an accuracy of
±0.1 m.
|
Data spacing and distribution |
- Data spacing for reporting of
Exploration Results.
- Whether the data spacing and
distribution is sufficient to establish the degree of geological
and grade continuity appropriate for the Mineral Resource and Ore
Reserve estimation procedure(s) and classifications applied.
- Whether sample compositing has been
applied.
|
- 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 porphyry Cu-Au, tourmaline breccia and epithermal target
types.
- Holes have been
drilled to a maximum of 1,300m vertical depth.
- The data spacing
and distribution is sufficient to establish geological and grade
continuity, and to support the Mineral Resource
classification.
|
Orientation of data in relation to geological
structure |
- Whether the orientation of sampling
achieves unbiased sampling of possible structures and the extent to
which this is known, considering the deposit type.
- If the relationship between the
drilling orientation and the orientation of key mineralised
structures is considered to have introduced a sampling bias, this
should be assessed and reported if material.
|
- Drilling is
conducted in a predominantly regular grid to allow unbiased
interpretation and targeting.
- Scissor
drilling, as well as some vertical and oblique drilling, has been
used in key mineralised zones to achieve unbiased sampling of
interpreted structures and mineralised zones, and in particular to
assist in constraining the geometry of the mineralised hydrothermal
tourmaline-sulphide breccia domains.
|
Sample security |
- The measures taken to ensure sample
security.
|
- Samples are
delivered from the drill rig to the core shed twice daily and are
never left unattended at the rig.
- Samples are
dispatched from site in locked boxes transported on XAM company
vehicles to ALS lab in Ulaanbaatar.
- Sample shipment
receipt is signed off at the Laboratory with additional email
confirmation of receipt.
- Samples are then
stored at the lab and returned to a locked storage site.
|
Audits or reviews |
- The results of any audits or reviews
of sampling techniques and data.
|
- Internal audits
of sampling techniques and data management are undertaken on a
regular basis, to ensure industry best practice is employed at all
times.
- External reviews
and audits have been conducted by the following groups:
- 2012: AMC
Consultants Pty Ltd. was engaged to conduct an Independent
Technical Report which reviewed drilling and sampling procedures.
It was concluded that sampling and data record was to an
appropriate standard.
- 2013: Mining
Associates Ltd. was engaged to conduct an Independent Technical
Report to review drilling, sampling techniques and QAQC. Methods
were found to conform to international best practice.
- 2018: CSA Global
reviewed the entire drilling, logging, sampling, sample shipping
and laboratory processes during the competent persons site visit
for the 2018 MRe, and found the systems and adherence to protocols
to be to an appropriate standard.
|
JORC TABLE 1 - SECTION 2 - REPORTING OF
EXPLORATION RESULTS
(Criteria in this section apply to all succeeding sections).
Criteria |
Commentary |
Mineraltenementand
landtenurestatus |
- The Project comprises 2 Mining
Licences (MV-17129A Oyut Ulaan and (MV-17387A Kharmagtai):
- Xanadu now owns 90% of Vantage LLC,
the 100% owner of the Oyut Ulaan mining licence.
- 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
byotherparties |
- Previous exploration at Kharmagtai
was conducted by Quincunx Ltd, Ivanhoe Mines Ltd and Turquoise Hill
Resources Ltd including extensive drilling, surface geochemistry,
geophysics, mapping.
- Previous exploration at Red
Mountain (Oyut Ulaan) was conducted by Ivanhoe Mines.
|
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 deposits at
Kharmagtai are atypical in that they are associated with
intermediate intrusions of diorite to quartz diorite composition;
however the deposits are in terms of contained gold significant,
and similar gold-rich porphyry deposits.
|
Drill holeInformation |
- Diamond drill holes are the
principal source of geological and grade data for the Project.
- See figures in this ASX/TSX
Announcement.
|
DataAggregation methods |
- The CSAMT data was converted into
2D line data using the Zonge CSAMT processing software and then
converted into 3D space using a UBC inversion process. Inversion
fit was acceptable, and error was generally low.
- A nominal cut-off of 0.1% eCu is
used in copper dominant systems for identification of potentially
significant intercepts for reporting purposes. Higher grade
cut-offs are 0.3%, 0.6% and 1% eCu.
- A nominal cut-off of 0.1g/t eAu is
used in gold dominant systems like Golden Eagle for identification
of potentially significant intercepts for reporting purposes.
Higher grade cut-offs are 0.3g/t, 0.6g/t and 1g/t eAu.
- Maximum contiguous dilution within
each intercept is 9m for 0.1%, 0.3%, 0.6% and 1% eCu.
- Most of the reported intercepts are
shown in sufficient detail, including maxima and subintervals, to
allow the reader to make an assessment of the balance of high and
low grades in the intercept.
- Informing samples have been
composited to two metre lengths honouring the geological domains
and adjusted where necessary to ensure that no residual sample
lengths have been excluded (best fit).
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%.
|
Relationship between mineralisationon
widthsand
interceptlengths |
- 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 the body of the
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.
|
FurtherWork |
- 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 RLl) shows widths and grades
potentially suitable for underground extraction.
- Exploration on going.
|
JORC TABLE 1 - SECTION 3 - ESTIMATION
AND REPORTING OF MINERAL RESOURCES
(Criteria listed in section 1, and where relevant in section 2,
also apply to this section.)
Criteria |
Commentary |
Databaseintegrity |
- The database is a Geobank data base
system.
- Data is logged directly into an
Excel spread sheet logging system with drop down field lists.
- Validation checks are written into
the importing program ensures all data is of high quality.
- Digital assay data is obtained from
the Laboratory, QAQC checked and imported
- Geobank exported to Access and
connected directly to the GemcomSurpac Software.
- Data was validated prior to
resource estimation by the reporting of basic statistics for each
of the grade fields, including examination of maximum values, and
visual checks of drill traces and grades on sections and
plans.
|
Site visits |
- Andrew Vigar of Mining Associates
Pty Ltd visited the site from 24 and 25 October 2014.
- The site visit included a field
review of the exploration area, an inspection of core, sample
cutting and logging procedures and discussions of geology and
mineralisation with exploration geologists.
|
Geologicalinterpretation |
- Mineralisation resulted in the
formation of comprises quartz-chalcopyrite-pyrite-magnetite
stockwork veins and minor breccias.
- The principle ore minerals of
economic interest are chalcopyrite, bornite and gold, which occur
primarily as infill within these veins. Gold is intergrown with
chalcopyrite and bornite.
- The ore mineralised zones at
Stockwork Hill, White HIll and Copper Hill are associated with a
core of quartz veins that were intensely developed in and the
quartz diorite intrusive stocks and/or dykes rocks. These vein
arrays can be described as stockwork, but the veins have strong
developed preferred orientations.
- Sulphide mineralisation is zoned
from a bornite-rich core that zone outwards to chalcopyrite-rich
and then outer pyritic haloes, with gold closely associated with
bornite.
- Drilling indicates that the
supergene profile has been oxidised to depths up to 60 metres below
the surface. The oxide zone comprises fracture controlled copper
and iron oxides; however there is no obvious depletion or
enrichment of gold in the oxide zone.
|
Dimensions |
- Stockwork Hill comprises two main
mineralised zones, northern and southern stockwork zones (SH-N and
SH-S) which are approximately 100 metres apart and hosted in
diorite and quartz diorite porphyries.
- The SH-S is at least 550 metres
long, 600 metres deep and contains strong
quartz-chalcopyrite-pyrite stockwork veining and associated high
grade copper-gold mineralisation. The stockwork zone widens
eastward from a 20 to 70 metres wide high-grade zone in the western
and central sections to a 200 metres wide medium-grade zone in the
eastern most sections. Mineralisation remains open at depth and
along strike to the east.
- The SH-N consists of a broad halo
of quartz that is 250 metres long, 150 metres wide long and at
least 350 metres deep.
- WH consists of a broad halo of
quartz veins that is 850 metres long, 550 metres wide long and at
least 500 metres deep, and forms a pipe like geometry.
- CH forms a sub vertical body of
stockwork approximately 350 × 100 metres by at least 200 metres and
plunges to the southeast.
|
Estimation
andmodellingtechniques |
- The estimate Estimation Performed
using Ordinary Kriging.
- Variograms are reasonable along
strike.
- Minimum & Maximum Informing
samples is 5 and 20 (1st pass), Second pass is 3 and 20.
- Copper and Gold Interpreted
separately on NS sections and estimated as separate domains.
- Halo mineralisation defined as
0.12% Cu and 0.12g/t Au Grade.
- The mineralised domains were
manually digitised on cross sections defining mineralisation.
Three-dimensional grade shells (wireframes) for each of the metals
to be estimated were created from the sectional interpretation.
Construction of the grade shells took into account prominent
lithological and structural features. For copper, grade shells were
constructed for each deposit at a cut-off of 0.12% and 0.3% Cu. For
gold, wireframes were constructed at a threshold of 0.12g/t and 0.3
g/t. These grade shells took into account known gross geological
controls in addition to broadly adhering to the above mentioned
thresholds.
- Cut off grades applied are
copper-equivalent (CuEq) cut off values of 0.3% for appropriate for
a large bulk mining open pit and 0.5% for bulk block caving
underground.
- A set of plans and cross-sections
that displayed colour coded drill holes were plotted and inspected
to ensure the proper assignment of domains to drill holes.
- The faulting interpreted to have
had considerable movement, for this reason, the fault surface was
used to define two separate structural domains for grade
estimation.
- Six metre down-hole composites were
chosen for statistical analysis and grade estimation of Cu and Au.
Compositing was carried out downhole within the defined
mineralisation halos. Composite files for individual domains were
created by selecting those samples within domain wireframes, using
a fix length and 50% minimum composite length.
- A total of 4,428 measurements for
specific gravity are recorded in the database, all of which were
determined by the water immersion method. The average density of
all samples is 2.74 t/m3. In detail there are some differences in
density between different rock types, but since the model does not
include geological domains a single pass Inverse Distance
(ID2) interpolation was applied.
- Primary grade interpolation for the
two metals was by ordinary kriging of capped 6m composites. A
two-pass search approach was used, whereby a cell failing to
receive a grade estimate in a previous pass would be resubmitted in
a subsequent and larger search pass.
- The Mineral Resource Estimate meets
the requirements of JORC 2012 and has been reported considering
geological characteristics, grade and quantity, prospects for
eventual economic extraction and location and extents. Mineral
Resources are sub-divided, in order of increasing geological
confidence, into Inferred, Indicated and Measured categories using
relevant copper-equivalent cut-off values.
- 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%. |
Moisture |
- All tonnages are reported on a dry
basis.
|
Cut-offparameters |
- Cut off grades applied are
copper-equivalent (CuEq) cut off values of 0.3%
for possible open pit and 0.5% for underground.
|
Miningfactors
orassumptions |
- No mining factors have been applied
to the in-situ grade estimates for mining dilution or loss due to
the grade control or mining process.
- The deposit is amenable to large
scale bulk mining.
- The Mineral Resource is reported
above an optimised pit shell. (Lerch Grossman algorithm),
mineralisation below the pit shell is reported at a higher cut-off
to reflect the increased costs associated with block cave
underground mining
|
Metallurgicalfactors
orassumptions |
- No metallurgical factors have been
applied to the in-situ grade estimates.
|
Environmentalfactors or
assumptions |
- An environmental baseline study was
completed in 2003 by Eco Trade Co. Ltd. of Mongolia in cooperation
with Sustainability Pty Ltd of Australia. The baseline study report
was produced to meet the requirements for screening under the
Mongolian Environmental Impact Assessment (EIA)
Procedures administered by the Mongolian Ministry for Nature and
Environment (MNE).
|
Bulk density |
- A total of 4,428 measurements for
specific gravity are recorded in the database, all of which were
determined by the water immersion method.
- The average density of all samples
is approximately 2.74 t/m3. In detail there are some differences in
density between different rock types, but since the model does not
include geological domain, an ID2 was applied to a density
attribute.
- There is no material impact on
global tonnages, but it should be noted that density is a function
of both lithology and alteration (where intense magnetite/sulphide
is present).
|
Classification |
- The Mineral Resource classification
protocols, for drilling and sampling, sample preparation and
analysis, geological logging, database construction, interpolation,
and estimation parameters are described in the ASX/TSX Announcement
above have been used to classify the 2015 resource.
- The Mineral Resource statement
relates to global estimates of in situ tonnes and grade
- The Mineral Resource Estimate has
been classified in accordance with the JORC Code, 2012 Edition
using a qualitative approach. The classifications reflect the
competent person’s view of the Kharmagtai Copper Gold Project.
|
Audits orreviews |
- Xanadu’s internal review and audit
of the Mineral Resource Estimate consisted of data analysis and
geological interpretation of individual cross-sections, comparing
drill-hole data with the resource estimate block model.
- Good correlation of geological and
grade boundaries was observed
- 2013 - Mining Associates Ltd. was
engaged to conduct an Independent Technical Report to review
drilling, sampling techniques, QA/QC and previous Resource
estimates. Methods were found to conform to international best
practice.
|
Discussion
ofrelativeaccuracy/confidence |
- An approach to the resource
classification was used which combined both confidence in
geological continuity (domain wireframes) and statistical analysis.
The level of accuracy and risk is therefore reflected in the
allocation of the measured, indicated, and inferred resource
categories.
- Resource categories were
constrained by geological understanding, data density and quality,
and estimation parameters. It is expected that further work will
extend this considerably.
- Resources estimates have been made
on a global basis and relates to in situ grades.
- Confidence in the Indicated Mineral
Resources is sufficient to allow application of Modifying Factors
within a technical and economic study. The confidence in Inferred
Mineral Resources is not sufficient to allow the results of the
application of technical and economic parameters.
- The deposits are not currently
being mined.
- There is surface evidence of
historic artisanal workings.
- No production data is
available.
|
JORC TABLE 1 - SECTION 4 - ESTIMATION
AND REPORTING OF ORE RESERVES
Ore Reserves are not reported so this is not
applicable to this announcement.
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