Xanadu Mines Ltd (
ASX: XAM, TSX: XAM)
(
Xanadu or the
Company) is
pleased to update the market on its on-going exploration program
for porphyry copper and gold deposits at the Kharmagtai District in
the South Gobi region of Mongolia.
Highlights
- High-grade
intercept from drill hole KHDDH573 at Stockwork Hill extends
gold-rich bornite zone by 40 metres up-dip and 40 metres down-dip
returning:
- 240m @
1.36% eCu from 474m
- including
130m @ 1.75% eCu
- including
26m @ 2.22% eCu
- Step-out drill
holes demonstrate potential to grow the gold-rich bornite zone,
with copper and gold grades that materially exceed those estimated
in the 2018 Mineral Resource Estimate
- 3 active diamond
drill rigs are targeting extensions of the higher-grade bornite
core at Stockwork Hill
- Xanadu is currently
targeting an updated Mineral Resource Estimate for Kharmagtai in Q4
2021
Xanadu’s Chief Executive Officer, Dr
Andrew Stewart, said “The results from KHDDH573 continue
to grow the higher-grade copper and gold core at Stockwork Hill,
and build toward our >100Mt @ >0.8% eCu
objective. It’s also exciting to see a
continuation of the increasing gold to copper ratio as we drill
deeper into the core of the system, which bears a growing
resemblance to other world class deposits such as Oyu Tolgoi and
Cadia Valley.
Drilling out a large porphyry system is a
marathon, not a sprint and given the structurally complexity of the
Kharmagtai system it is a credit to our team that they continue to
steadily unravel the knot and continue to deliver such high-quality
results that enhance project economics.”
Full intercepts and drill hole details for
KHDDH573 can be found in Appendix 1, Tables 1 and
2.
Drill Hole KHDDH573
Drill hole KHDDH573 (see Figure 1, 2
& 3) was designed to target vertical extensions to the
higher-grade core at the Stockwork Hill deposit, largely dominated
by gold-rich bornite mineralisation. It intercepted wide zones of
mineralisation, grading up to 0.91% copper (Cu)
and 2.56g/t gold (Au) within a broader intercept
of 240m grading 1.36% eCu from 474m.
Hole ID |
Interval |
Cu |
Au |
eCu |
From |
KHDDH573 |
240m |
0.72% |
1.24g/t |
1.36% |
474m |
including |
130m |
0.94% |
1.58g/t |
1.75% |
534m |
including |
26m |
0.91% |
2.56g/t |
2.22% |
678m |
Note that true widths will generally be narrower
than those reported. See disclosure in JORC explanatory statement
attached.
Drill hole KHDDH573 extended the higher-grade
bornite zone (>1% eCu) by 40 metres up-dip and 40 metres
down-dip at Stockwork Hill, which represents an increase to the
interpreted tonnage of higher-grade material at Stockwork Hill.
Current drill holes have been adapted to consider a greater
vertical distribution of bornite. Furthermore, future drill program
design and geological modelling will ensure vertical extent of
bornite mineralisation is a key consideration.
Assays are returned to 728m; the final 257m are
expected in the coming weeks and are not expected to materially
impact the findings in this announcement.
Core slabs (see Figure 4)
illustrate visible bornite and massive chalcopyrite in
KHDDH573.
Figure 1. Stockwork Hill plan
view, drill hole KHDDH573 and interpreted grade shells is available
at https://www.globenewswire.com/NewsRoom/AttachmentNg/ec23b300-4ec1-42ef-a517-032de2e01724
Figure 2. Stockwork Hill plan view
showing drill hole KHDDH573 and interpreted grade shells is
available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/4ef0f324-7d19-49e3-ae78-b89577dc4635
Figure 3. Stockwork Hill cross
section, drill hole KHDDH573 and interpreted grade shells is
available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/92c6c65c-01f6-4d98-b817-1a9eef666b8f
Figure 4. Core Slab of KHDDH573
demonstrating bornite and massive chalcopyrite is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/3f663e03-6a79-46e6-bf04-8c2c54efea51
Current Drilling
Xanadu is currently operating 3 diamond drill
rigs at Kharmagtai, which are targeting extensions of the
higher-grade core at Stockwork Hill (Figure 1, 2 &
3), taking into account the greater vertical extension of
bornite demonstrated in KHDDH573.
- KHDDH577 is
completed and pending assay results and was designed to test
extensions to the west of the southern bornite zone;
- KHDDH578 is ongoing
and tests extensions to the east of the central and southern
zone;
- KHDDH579 is ongoing
and tests extensions to the west of the central bornite zone;
and
- KHDDH580 is ongoing
and tests extensions to the west of the southwest bornite
zone.
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 a globally significant 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) |
KHDDH573 |
Stockwork Hill |
592584 |
4877603 |
1289 |
80 |
-80 |
983.1 |
Table 2: Significant drill
results
Hole ID |
Prospect |
From (m) |
To (m) |
Interval (m) |
Au (g/t) |
Cu (%) |
eCu(%) |
eAu(g/t) |
KHDDH573 |
Stockwork Hill |
452.2 |
459.5 |
7.3 |
0.17 |
0.14 |
0.22 |
0.43 |
and |
|
474 |
714 |
240 |
1.24 |
0.72 |
1.36 |
2.65 |
including |
|
474 |
712 |
238 |
1.25 |
0.73 |
1.37 |
2.67 |
including |
|
490 |
498 |
8 |
0.49 |
0.23 |
0.48 |
0.94 |
including |
|
508 |
512 |
4 |
0.25 |
0.53 |
0.65 |
1.28 |
including |
|
522 |
706 |
184 |
1.54 |
0.87 |
1.65 |
3.23 |
including |
|
534 |
664 |
130 |
1.58 |
0.94 |
1.75 |
3.42 |
including |
|
678 |
704 |
26 |
2.56 |
0.91 |
2.22 |
4.34 |
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.
The information in this Announcement relates to
the exploration results previously reported in ASX Announcements
which are available on the Xanadu website
at:http://www.xanadumines.com/irm/content/announcements.aspx.
The Company is not aware of any new, material
information or data that is not included in those market
announcements.
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 (CuEq or
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 (see ASX Announcement dated 31 October 2018).
Copper equivalent grade values were calculated
using the 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%).
These equivalent formulas were 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 13 July 2021.
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 (e.g.
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 1m samples from which 3kg
was pulverised to produce a 30g 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.
- Reverse
Circulation (RC) chip samples are ¼ splits from
one meter (1m) 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 is 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 (e.g. standards, blanks, duplicates, external laboratory
checks) and whether acceptable levels of accuracy (i.e. 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 Mineral Resource Estimate
(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
Digital Terrain Model (DTM) is based on 1m
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
widths and
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 this
ASX/TSX Announcement.
|
Balanced reporting |
- 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
Mineral Resources are not reported so this is
not applicable to this Announcement. Please refer to ASX
Announcement dated 31 October 2018 for Xanadu’s most recent
reported Mineral Resource Estimate and applicable Table 1, Section
3.
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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