Xanadu Mines Ltd (
ASX: XAM, TSX: XAM)
(
Xanadu,
XAM or the
Company) is pleased to report an updated Mineral
Resource Estimate (
Resource, Mineral Resource or
MRE) for its flagship copper-gold project at Kharmagtai,
in the South Gobi region of Mongolia (
Table 1).
The Company has successfully delivered
its stated aspirational target to grow the
Kharmagtai Resource to >1.0Bt including a
higher-grade component of >100Mt. This updated
Resource positions Kharmagtai as one of the largest undeveloped
copper assets held by a listed junior globally.
Highlights
-
Significant increase in Kharmagtai Resource to
1.1Bt containing 3Mt Cu and 8Moz
Au representing a >50% increase in contained copper
(Cu) and >80% increase in contained gold metal
(Au).
Table 1: Comparison 2021 vs
2018 Resource1
Resource |
Cutoff(% CuEq) |
Classification |
Tonnes (Mt) |
Grades |
Contained Metal |
CuEq (%) |
Cu (%) |
Au (g/t) |
CuEq (Mlbs) |
CuEq (kt) |
Cu (kt) |
Au (koz) |
2021 |
0.2 (OC)0.3 (UG) |
Indicated |
487 |
0.4 |
0.3 |
0.2 |
4,375 |
1,980 |
1,330 |
3,900 |
Inferred |
664 |
0.3 |
0.2 |
0.2 |
5,140 |
2,330 |
1,680 |
4,100 |
2018 |
0.3 (OC)0.5 (UG) |
Indicated |
129 |
0.5 |
0.4 |
0.4 |
1,570 |
710 |
480 |
1,500 |
Inferred |
469 |
0.4 |
0.3 |
0.2 |
4,350 |
1,970 |
1,500 |
2,930 |
-
Updated Mineral Resource is classified as Indicated and Inferred,
and notionally constrained with open pit mineralisation commencing
from surface, and underground starting below 720m RL; depth
constraint is specific for each deposit.
-
Material upgrade of higher-grade core to 100Mt @ 0.8%
copper equivalent (CuEq) at a 0.55% CuEq cut off.
- Since 2018 Resource
update2, the Company has completed 120 diamond drill holes for
69,479 metres and has grown the resource at a rate of approximately
100Mlbs CuEq per month.
-
Scoping study underway to model the project, leveraging key
advantages of Kharmagtai such as:
-
Cohesive higher-grade zones to drive early payback of initial
capital and strong project economics
-
Lower relative capital intensity driven by low-altitude, flat
topography, easy access and good nearby infrastructure including
water, power, road and rail transport
-
Potential very competitive timeframe to first production due to low
population density, strong community relations and favourable
environmental, social and governance (ESG).
-
Located close to markets, with probable high quality copper
concentrate product with strong gold credits and no deleterious
elements (including arsenic) based on test-work to date.
-
Strong exploration upside remains, with mineralisation open to the
north and at depth, and updated Resource covering only 30% of the
8km long Kharmagtai Intrusive Complex.
The Mineral Resource Estimate was prepared by
independent consultants Spiers Geological Consultants
(SGC) and is reported in accordance with the 2012
Edition of the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (JORC Code
2012) and National Instrument 43-101 Standards of
Disclosure for Mineral Projects (NI 43-101).
Xanadu’s Chief Executive Officer, Dr
Andrew Stewart, said “This is a major milestone for Xanadu
and positions Kharmagtai as one of the largest undeveloped copper
and gold resources on ASX, and one of the biggest globally.
Importantly, we have now successfully delivered our medium-term
aspirational targets for Kharmagtai with total Resource growth to
>1.0Bt, including the higher-grade component of >100Mt.
The higher-grade zones (>0.8% CuEq) have
grown from approximately 58Mt in the previous estimate to just on
100Mt with this update. This could be a real game-changer for
project economics, with better defined and larger high-grade zones,
setting the project apart from similarly sized orebodies, with the
higher-grade component potentially unlocking project scenarios that
could pave the way to put Kharmagtai into production. A significant
increase in gold to copper ratios, has resulted in a greater than
80% increase in contained gold, which means higher by-product
credits that will be reflected in lower all-in sustaining costs.
The high-grade core and high gold to copper ratios of the
Kharmagtai system are likely to be very important to future project
economics, as they provide a degree of optionality for mine
development that is not often seen in mining projects of this
nature.
Many of the largest copper projects worldwide,
peers to Kharmagtai, have logistical and social challenges, leading
to significant delays and increased capital costs. Some projects
have been stuck in red tape for so long that their impact on future
copper supply is now in doubt. By comparison, Kharmagtai has
advantages in both areas. Logistically the South Gobi is flat
terrain with ready access to industrial water, nearby power, rail
and road infrastructure, and proximity to the largest consumers of
copper in Asia. Socially Xanadu has a strong social license to
operate and Kharmagtai is in a very low population area. Further,
the Mongolian regulators support mining development; it’s important
to remember that the Oyu Tolgoi pit was able to move from discovery
to production in approx. 5 years, an incredible outcome given the
time it takes large mining projects to get off the ground
elsewhere.
Importantly, however, the discovery journey is
not over. The updated Resource covers only approx. 30% of the 8km
strike length of the Kharmagtai Mineralised Complex. The known
deposit is open to the north and at depth, and recent drilling has
already intercepted high-grade bornite outside the Resource.
Step-out drilling continues down-plunge.
Given the scale of the system, gold credits,
infrastructure, logistics and social advantages, Kharmagtai clearly
has the potential to become a leading global supplier of copper and
a part of the solution to the looming global copper shortage, as
the world electrifies and moves towards a carbon neutral
future.”
INTERIM MINERAL RESOURCE ESTIMATE
OVERVIEW
Xanadu engaged independent consultants, Spiers
Geological Consultants (SGC), to prepare an
updated Resource for Kharmagtai. The Resource has been reported in
accordance with the JORC Code 2012 and NI 43-101, is effective as
of 8 December 2021, and is shown in full in Tables 2 and
3.
This Resource is the first update to the
Resource announced on 31 October 20183 with 120 diamond drill holes
and 69,479 metres of drilling completed since 2018. The open pit
resources are reported above nominated meters Relative Level
(mRL), which is unique to each deposit area.
Levels are based on preliminary optimisation analysis and a 0.2%
CuEq cut-off grade. The underground Resource is reported below the
nominated mRL’s levels based on preliminary optimisation analysis
and a 0.3% CuEq cut-off grade.
SGC considers that data collection techniques
are consistent with industry best practice and are suitable for use
in the preparation of a Resource to be reported in accordance with
JORC Code 2012 and NI 43-101. Available quality assurance and
quality control (QA/QC) data supports the use of
the input data provided by Xanadu.
The Resource is considered to have reasonable
prospects for eventual economic extraction (RPEEE)
on the following basis:
- the
deposit is located in a favourable mining jurisdiction, with no
known impediments to land access or tenure status; and
- the
volume, orientation and grade of the Resource is amenable to mining
extraction via traditional open-pit and underground methods;
The Resource models are well understood and
there is substantial upside potential to be realised by better
understanding the economics of the deposit. As demonstrated in the
images below, significant volumes of mineralisation have been
modelled that fall outside of the constraining pit wireframe. These
parts of the model will be targeted for further investigation
through economic studies to assess if more of this material can be
brought into the Mineral Resource.
Figure 1: Plan view of the
Kharmagtai district, displaying the Mineral Resource Estimate is
available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/7fb34ef0-7c7f-4a06-b6d6-6f50101d8c27
Figure 2: Long-section of the
Kharmagtai district, displaying the Mineral Resource Estimate
extents in relation to drilling, showing notional 720mRL split
between potential open pit and underground is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/97c3ed85-3d47-4bf0-b116-d04a43f25168
Figure 3: Kharmagtai CuEq
grade-tonnage curve for pit-constrained mineralisation on a CuEq
cut-off grade basis is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/78464405-5ce8-4d21-811d-e498155c91d2
Figure 4: Kharmagtai CuEq
grade-tonnage curve for underground-constrained mineralisation on a
CuEq cut-off grade basis is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/98d5c594-0f2e-45de-aa03-0a1a88bff5c0
Figure 5: Long section of the
Stockwork Hill Deposit, displaying the Mineral
Resource Estimate extents in relation to drilling is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/a0de94b1-39b5-441d-a192-3afba19e21bb
Figure 6: Long section of the
Copper Hill Deposit, displaying the Mineral
Resource Estimate extents in relation to drilling is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/b591cdab-074e-4af0-bfa6-5ea8c07a35ab
Figure 7: Long section of the
White Hill Deposit, displaying the Mineral
Resource Estimate extents in relation to drilling is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/d7179e83-897d-4a9c-bbe4-88a68535b8b5
Figure 8: Long section of the
Zaraa Deposit, displaying the Mineral Resource
Estimate extents in relation to drilling is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/9b502777-d891-4141-b030-6430cc1da827
Table 2: Kharmagtai updated Mineral Resource
Estimate (JORC 2012 & 43:101). Total Open Pit Mineral Resource
Estimates - Reported at a 0.2% CuEq cut-off grade and inside
reporting solid 0.1%CuEq above nominated mRL by deposit area -
Resources as at 8 December 2021.
Deposit |
Classification |
Tonnes (Mt) |
Grades |
Contained Metal |
CuEq (%) |
Cu (%) |
Au (g/t) |
CuEq (Mlbs) |
CuEq (kt) |
Cu (kt) |
Au (koz) |
SH |
Indicated |
158 |
0.4 |
0.3 |
0.3 |
1,534 |
700 |
460 |
1,500 |
WH |
188 |
0.3 |
0.2 |
0.2 |
1,424 |
650 |
460 |
1,100 |
CH |
17 |
0.5 |
0.4 |
0.4 |
200 |
90 |
60 |
200 |
ZA |
9 |
0.3 |
0.1 |
0.2 |
51 |
20 |
10 |
100 |
GE |
3 |
0.3 |
0.1 |
0.4 |
25 |
10 |
- |
- |
ZE |
9 |
0.3 |
0.1 |
0.2 |
51 |
20 |
10 |
100 |
Total Indicated |
384 |
0.4 |
0.3 |
0.2 |
3,285 |
1,490 |
1,000 |
3,000 |
SH |
Inferred |
52 |
0.3 |
0.2 |
0.2 |
343 |
160 |
100 |
300 |
WH |
211 |
0.3 |
0.2 |
0.1 |
1,418 |
640 |
490 |
1,000 |
CH |
3 |
0.3 |
0.2 |
0.1 |
20 |
10 |
10 |
- |
ZA |
13 |
0.2 |
0.1 |
0.2 |
73 |
30 |
20 |
100 |
GE |
51 |
0.3 |
0.1 |
0.3 |
325 |
150 |
70 |
500 |
ZE |
44 |
0.3 |
0.1 |
0.3 |
270 |
120 |
70 |
400 |
Total Inferred |
374 |
0.3 |
0.2 |
0.2 |
2,449 |
1,110 |
760 |
2,300 |
Notes:
-
CuEq accounts for Au value and CuEq kt must not be totalled to Au
ounces
-
Figures may not sum due to rounding
-
Significant figures do not imply an added level of precision
-
Resource constrained by 0.1%CuEqRec reporting solid in-line with
geological analysis by XAM
-
Resource constrained by open cut above nominated mRL level by
deposit as follows SH>=720mRL, WH>=915mRL, CH>=1100mRL,
ZA>=920mRL, ZE>=945mRL and GE>=845mRL
-
CuEq equation (CuEq=Cu+Au*0.60049*0.86667) where Au at USD$1400/oz
and Cu at USD$3.4/lb was employed according to the Clients' (XAM)
direction.
-
Au recovery is relative with Cu rec=90% and Au rec=78% (rel Au
rec=78/90=86.667% with number according to the Clients' (XM)
direction
Table 3: Kharmagtai updated
Mineral Resource Estimate (JORC 2012 & 43:101). Total
underground Mineral Resource Estimates - Reported at a 0.3% CuEq
cut-off grade and inside reporting solid 0.1%CuEq area - Resources
as at 8 December 2021.
Deposit |
Classification |
Tonnes (Mt) |
Grades |
Contained Metal |
CuEq (%) |
Cu (%) |
Au (g/t) |
CuEq (Mlbs) |
CuEq (kt) |
Cu (kt) |
Au (koz) |
SH |
Indicated |
25 |
0.6 |
0.4 |
0.5 |
323 |
150 |
90 |
400 |
WH |
21 |
0.4 |
0.4 |
0.2 |
199 |
90 |
70 |
100 |
CH |
3 |
0.4 |
0.3 |
0.2 |
24 |
10 |
10 |
- |
ZA |
27 |
0.5 |
0.3 |
0.3 |
272 |
120 |
80 |
200 |
GE |
- |
- |
- |
- |
- |
- |
- |
- |
ZE |
27 |
0.5 |
0.3 |
0.3 |
272 |
120 |
80 |
200 |
Total Indicated |
103 |
0.5 |
0.3 |
0.3 |
1,090 |
490 |
330 |
900 |
SH |
Inferred |
21 |
0.4 |
0.3 |
0.3 |
197 |
90 |
60 |
200 |
WH |
138 |
0.4 |
0.3 |
0.1 |
1,266 |
570 |
470 |
600 |
CH |
2 |
0.3 |
0.3 |
0.2 |
12 |
10 |
- |
- |
ZA |
129 |
0.4 |
0.3 |
0.2 |
1,214 |
550 |
390 |
1,000 |
GE |
- |
0.3 |
0.1 |
0.3 |
- |
- |
- |
- |
ZE |
- |
0.4 |
0.1 |
0.6 |
3 |
- |
- |
- |
Total Inferred |
290 |
0.4 |
0.3 |
0.2 |
2,692 |
1,220 |
920 |
1,800 |
Notes:
-
CuEq accounts for Au value and CuEq kt must not be totalled to Au
ounces
-
Figures may not sum due to rounding
-
Significant figures do not imply an added level of precision
-
Resource constrained by 0.1%CuEqRec reporting solid in line with
geological analysis by XAM
-
Resource constrained by underground below nominated mRL level by
deposit as follows SH<720mRL, WH<915mRL, CH<1100mRL,
ZA<920mRL, ZE<945mRL and GE<845mRL
-
CuEq equation (CuEq=Cu+Au*0.60049*0.86667) where Au at USD$1400/oz
and Cu at USD$3.4/lb was employed according to the Clients' (XAM)
direction.
-
Au recovery is relative with Cu rec=90% and Au rec=78% (rel Au
rec=78/90=86.667% with number according to the Clients' (XM)
direction
Figure 9: Long Section through the
Zephyr Deposit showing resource grown potential is
available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/dd94afdb-e1d5-4074-937c-e32e03f4cfc9
RESOURCE GROWTH POTENTIAL
All six deposits within the updated Mineral
Resource Estimate for Kharmagtai are open and require additional
drilling to determine the boundaries of each deposit.
At Stockwork Hill the deposit comprises numerous
areas on the edges of the resource where high-grade blocks are not
closed off by drilling (Figure 5). These areas
represent significant expansion opportunities.
White Hill represents the deposit with the most
significant expansion potential. The resource is completely open to
the south and the west and at depth (Figure 7) and
the drilling to date in the lower portions of the deposit is broad
enough to allow numerous blocks of unknown high-grade material to
exist. Further drilling will significantly expand the White Hill
Deposit.
At Zaraa, the deposit is open at depth and along
strike to the north and south (Figure 8).
Additional drilling is likely to add significant tonnes to the
Zaraa Resource.
The Zephyr deposit is open to the west and the
east and at depth. The highest-grade blocks within the resource sit
at either end of the deposit with no drilling along strike
(Figure 9).
GEOLOGY AND GEOLOGICAL
INTERPRETATION
A step change has occurred in the understanding
of the geological controls on mineralisation at Kharmagtai since
the 2018 MRE. Each deposit in the 2021 MRE has been based on a
detailed 3D geological model to constrain populations of grade with
hard or soft boundaries determined using statistical analysis. This
approach allows for a much more realistic and accurate
estimate.
The model is based on a complete re-logging of
the 214km of diamond drilling completed at Kharmagtai. This
relogging has standardised the geology across the deposits and many
phases of drilling/previous loggers, allowing a high-quality 3D
model to be generated. Detailed lithogeochemical analyses and
modelling were used to refine the intrusive phase categories and
separate out mineralised versus unmineralised phases, allowing for
more accurate resource domains to be generated. This model not only
forms a robust framework for the Mineral Resource update but allows
predictions as to extensions to the deposits to be identified and
drilled.
3D geological wireframes were developed for all
geological units within the deposits, including country rock, all
porphyry phases, andesite dykes and breccia bodies. These
wireframes were constrained to within a detailed 3D structural
model of each deposit. This structural model was built to define
the boundaries between the main populations of grade. Individual
lithology and mineralisation style wireframes were generated for
each fault block, and then each solid geology fault block combined
into a complete deposit model. The base of oxidation surface was
generated using a combination of geological logging and geochemical
data. Wireframes were generated for various cut-off grade shells
using statistical changes in the grade data. Separate wireframes
were generated for tourmaline breccia mineralisation, both
moderately mineralised and high-grade tourmaline breccia bodies. In
some areas of the deposit wireframes for high-density veining were
used to constrain very high-grade blocks of mineralisation, such as
the High-Grade Bornite Zone.
The additional drilling since the last Mineral
Resource and other exploration and evaluation programs such as -
relogging of historical core, detailed short wave infrared data
collection, geophysical review and geochemistry studies have
delivered superior understanding of the deposit geometry. This has
led to greater confidence in the geological and grade continuity
and has infilled several areas of the deposits. The programs have
collectively allowed us to deliver a more robust and larger Mineral
Resource.
The Mineral Resources have been estimated using
all available analytical data. This has included diamond core
drilling (NQ, PQ and HQ), reverse circulation percussion drilling
and in some areas channel samples taken at surface. Additional data
on drilling and sampling procedures is provided in Table 1,
Appendix 3.
Significant drilling has taken place since the
last Resource in 2018 which has driven the increase in Resources.
Table 4 shows the drilling meter difference
between the 2018 and 2021 Resource.
Table 4: Drill Hole Summary
Timing |
Reverse Circulation (RC) Holes |
RC Metres |
Diamond Core Holes |
Diamond Core Meters |
RC & Diamond Holes |
RC and Diamond Core Metres |
Poly-crystalline Diamond (PCD) Holes |
PCD Metres |
Trenches |
Trench Metres |
Drilling < 2018 |
216 |
35,725 |
364 |
144,936 |
21 |
5,022 |
664 |
26,137 |
123 |
45,393 |
Drilling > 2018 |
12 |
3,049 |
120 |
69,479 |
3 |
1,640 |
0 |
0 |
0 |
0 |
Total |
228 |
38,774 |
484 |
214,415 |
24 |
6,663 |
664 |
23,137 |
123 |
45,393 |
ESTIMATE METHODOLOGY
The Kharmagtai resource models have been
estimated by Ordinary Kriging (OK) using third
party software and are post processed in SGC’s preferred software.
An internal process review was conducted by SGC and no third party
modelling was undertaken at this time.
Data searches were aligned consistent with the
strike, dip and plunge (where appropriate) of the mineralisation
consistent with the domain and geometry modelling as a result of
the detailed geological investigation put forth by Xanadu (the
Client).
According to the Client’s interpretation, the
mineralisation host exhibit geometries which are consistent with
those geometries defined by the spatial analysis of grade (in this
instance Copper, Gold, Molybdenum and Sulphur).
A nominal composite length of 4 metre down hole
was used for inputs which was settled upon during consultation with
the Client and the Client’s preferred Geological Consultant
team.
Where appropriate data was transformed and
geometry modelling and variograms of the variables were calculated
and modelled.
Several iterations of the modelling process were
undertaken to assess the sensitivity of estimates to estimation
parameters. Post processing, model validation and reporting were
undertaken in SGC’s preferred third party software in-line with the
Client’s end use.
Ordinary kriging of the variables was performed
in the UTM_47N grid. Block dimensions were selected in line with
data density and modelling methodology as well as taking into
account potential mining methodologies. Search and data criteria
were assessed and implemented, in-line with modelling strategy.
Models were constructed and iteration undertaken to assess
modelling sensitivities to data and search criteria.
The block estimates were validated against the
informing data to ensure that they were consistent with the
original informing data in a three-dimensional sense and within the
search neighbourhood via data analysis.
The block estimates were exported to SGC’s
preferred third party software and where appropriate, a topographic
surface was applied as were other surfaces and solids which may
have acted upon the estimates. Each model area was then compiled
into a global model where all fields underwent secondary validation
and data/s were assigned (where deemed appropriate by SGC in
consultation with the Client’s geological team) as well as coding
for primary domain and the calculation of CuEq% and CuEq% were
completed.
Final densities were assigned where necessary
and model validation completed ahead of final report
preparation.
Individual blocks in the resource models (within
the Global Kharmagtai Resource Model) have been allocated a
resource classification of Indicated and Inferred confidence
category based on the consideration of the number and location of
data used to estimate the grade of each block in-line with the
modelling approach established during the week-long collaboration
between XAM staff, SGC and a third-party representative on behalf
of XAM. In addition, further consideration incorporated into the
resource classification discussion included (but not limited to)
the following aspects, quality control and assurances (both
internal to XAM and the associated laboratories employed as well as
third party laboratory analysis) relating to sampling, sample
handling, sample preparation and analysis, database administration
and validation. The resource classification also takes into account
structural complexity and the associated geological models and
constraining solids, as well as population distributions and
geometry.
EXPLORATION UPSIDE
Only a small portion of the potentially
mineralised Kharmagtai Intrusive Complex has been drill tested.
Most of the drilling since 2018 MRE has focused on expanding
existing deposits and high-grade targets within and around known
mineralisation. There are more than 20 exploration targets
identified across the lease, which have been ranked and will be
tested by drilling in the coming 12 months (Figure
10). These targets have been identified from surface
geochemistry, geophysics, and the presence of the key features of
porphyry deposits (veining, alteration and mineralisation).
Figure 10: Kharmagtai copper-gold
district showing currently defined mineral deposits and exploration
targets is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/2691b234-dc3a-492a-a287-abf6c10d9bda
NEXT STEPS
Xanadu has commenced a Scoping
Study to evaluate development options for the Kharmagtai
District and compare to previous studies. This will include
evaluation of mining, metallurgy and processing, engineering and
infrastructure, marketing, logistics and the regulatory
environment. Study will aim to leverage the known advantages of
Kharmagtai, including:
- Targeting
higher-grade core with high gold-copper ratio to drive short
payback of capital
- Bulk
mining of large resource, delivering a long mine life following
capital payback
- Strong
recoveries with metallurgy amenable to conventional crushing,
milling and flotation
-
Conventional tailings and mine waste management leveraging flat and
stable topography
- Leverage
nearby infrastructure including regional power and industrial water
sources
-
Simplified logistics with local rail and road access and proximity
to smelters
- Saleable
Cu concentrates with strong gold credits no known deleterious
elements
A positive outcome of this Scoping Study in 2022
would lead to a gating decision and potential commencement of a
Pre-Feasibility Study (PFS).
Recognising Kharmagtai still has significant
exploration upside, Xanadu plans to continue exploration in
parallel with the Scoping Study, including discovery
drilling across several identified targets.
APPENDIX 1: COMPETENT PERSON’S
STATEMENT
Mr Robert Spiers is a full time Principal
Geologist employed by Spiers Geological Consultants
(SGC), 2-6 Byrne Street, Mount Martha, Victoria,
Australia. Mr Spiers is contracted on a consulting basis by Xanadu
Mines.
Mr Spiers graduated with a Bachelor of Science
(BSc) Honours and a double Major of Geology and Geophysics from
Latrobe University, Melbourne, Victoria, Australia and has been a
member of the Australian Institute of Geoscientists for 26 years;
working as a Geologist for in-excess of 30 years since
graduating.
Mr Spiers has sufficient experience that is
relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaking to qualify as a
Competent Person as defined in the JORC Code, 2012. Mr Spiers
consents to the inclusion in the report to which this statement is
to be attached of the matters based on his information in the form
and context in which it appears.
The information in the report to which this
statement is to be attached that relates to Mineral Resources is
based on information compiled by Mr Robert Spiers, a Competent
Person who is a Member of the Australian Institute of Geoscientists
or a ‘Recognised Professional Organisation’ (RPO)
included in a list posted on the ASX website from time to time.
Mr Spiers consents to the disclosure of this
information on the page/s in the form and context in which it
appears.
To the best of Mr Spiers’, knowledge,
information and belief, neither SGC, himself and / or other related
parties have any conflict of interest with by Xanadu Mines in
accordance with the transparency principle set out by the JORC Code
2012 and supported by ASX rulings.
In relation to the above statement, Mr Spiers
holds 750,000 ordinary shares in the ASX listed XAM entity
purchased on market in accordance with XAM’s Securities Trading
Policy (ASX Guidance Note 27 Trading Policies). The aforementioned
shareholding does not constitute a material holding in Xanadu.
Mr Spiers has read the definition of “competent
person” set out in the JORC Code 2012 and guidelines for the
reporting of Mineral Resource Estimates and certify that by reason
of his education, affiliation with a professional association
(MAIG) and past relevant work experience, that he fulfils the
requirements of a “Competent Person” for the purposes of JORC Code
2012.
As of the date of this Announcement, to the best
of Mr Spiers’ knowledge, information and belief, the Public Release
/ Technical Report to which this statement is to be attached (in
relation to the Reporting of the Kharmagtai Mineral Resource
Estimation December 2021) contains all the scientific and technical
information that is required to be disclosed in relation to the
Mineral Resources to make the Public Release / Technical Report not
misleading with respect to the sections for which Mr Spiers is
responsible.
Dated the 8th day of December
2021
/s/ Robert Spiers
Robert Spiers, BSc Hons, MAIG
Our Customer
This Report has been produced by or on behalf of
Spiers Geological Consultants (SGC) for the sole
use by Xanadu Mines Ltd (XAM or the
Customer). The Customer’s use and disclosure of
this report is subject to the terms and conditions under which SGC
prepared the report. All items in the Report must if used in a
third-party report be taken in context and consent from SGC must be
sought on each occasion.
Notice to Third Parties
- SGC prepared this Report for the Customer only. If you are not
the Customer:
- SGC have prepared this Report having regard to the particular
needs and interests of the Customer, and in accordance with the
Customer’s instructions. It did not draft this Report having regard
to any other person’s particular needs or interests. Your needs and
interests may be distinctly different to the Customer’s needs and
interests, and the Report may not be sufficient, fit or appropriate
for your purposes.
- SGC does not make and expressly disclaims from making any
representation or warranty to you – express or implied regarding
this Report or the conclusions or opinions set out in this Report
(including without limitation any representation or warranty
regarding the standard of care used in preparing this Report, or
that any forward-looking statements, forecasts, opinions or
projections contained in the report will be achieved, will prove to
be correct or are based on reasonable assumptions).
- SGC expressly disclaim any liability to you and any duty of
care to you.
- SGC does not authorise you to rely on this Report. If you
choose to use or rely on all or part of this Report, then any loss
or damage you may suffer in so doing is at your sole and exclusive
risk.
Inputs, subsequent changes, and no duty
to update
SGC have created this Report using data and
information provided by or on behalf of the Customer (and
Customer’s agents and contractors). Unless specifically stated
otherwise, SGC has not independently verified that data and
information unless expressly noted. SGC accepts no liability for
the accuracy or completeness of that data and information, even if
that data and information has been incorporated into or relied upon
in creating this report (or parts of it).
The conclusions and opinions contained in this
Report apply as at the date of the Report. Events (including
changes to any of the data and information that SGC used in
preparing the Report) may have occurred since that date which may
impact on those conclusions and opinions and make them unreliable.
SGC is under no duty to update the Report upon the occurrence of
any such event, though it reserves the right to do so.
Mining Unknown Factors
The ability of any person to achieve
forward-looking production and economic targets is dependent on
numerous factors that are beyond SGC’s control and that SGC cannot
anticipate. These factors include, but are not limited to,
site-specific mining and geological conditions, management and
personnel capabilities, availability of funding to properly operate
and capitalize the operation, variations in cost elements and
market conditions, developing and operating the mine in an
efficient manner, unforeseen changes in legislation and new
industry developments. Any of these factors may substantially alter
the performance of any mining operation.
APPENDIX 2: ADDITIONAL 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:
https://www.xanadumines.com/site/investor-centre/asx-announcements
The Company is not aware of any new, material
information or data that is not included in those market
announcements.
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.
Copper equivalent (CuEq or eCu) grade values
were calculated using the following formula:
eCu or CuEq = Cu + Au * 0.60049 * 0.86667,
Gold Equivalent (eAu) grade values were
calculated using the following formula:
eAu = Au + Cu / 0.60049 * 0.86667.
Where:
Cu - copper grade (%)
Au - gold grade (g/t)
0.60049 - conversion factor (gold to copper)
0.86667 - relative recovery of gold to copper (86.67%)
The copper equivalent formula was based on the following
parameters (prices are in USD):
- Copper price - 3.4 $/lb
- Gold price - 1400 $/oz
- Copper recovery - 90%
- Gold recovery - 78%
Relative recovery of gold to copper = 78% / 90%
= 86.67%.
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 1st December 2021.
JORC TABLE 1 - SECTION 1 - SAMPLING
TECHNIQUES AND DATA
(Criteria in this section apply to all succeeding sections).
Criteria |
Commentary |
Sampling techniques |
- 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 |
- 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 |
- 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 mineralisation.
- Overall, core
quality is good, with minimal core loss. Where there is localised
faulting and or fracturing core recoveries decrease, however, this
is a very small percentage of the mineralised 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 |
- 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 |
- 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 |
- 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 |
- All assay data
QA/QC 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 |
- 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 |
- 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 1,400m 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 |
- 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 |
- 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 |
- 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 100% 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 |
- 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 (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. Copper equivalent (CuEq
or eCu) grade values were calculated using the
following formula:eCu or CuEq = Cu + Au * 0.60049 * 0.86667,Gold
Equivalent (eAu) grade values were calculated
using the following formula:eAu = Au + Cu / 0.60049 *
0.86667.Where:Cu - copper grade (%)Au - gold grade (g/t)0.60049 -
conversion factor (gold to copper)0.86667 - relative recovery of
gold to copper (86.67%)The copper equivalent formula was based on
the following parameters (prices are in USD):
- Copper price - 3.4 $/lb
- Gold
price - 1400
$/oz
- Copper recovery - 90%
- Gold recovery - 78%
- Relative recovery of gold to copper
= 78% / 90% = 86.67%.
|
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 this
ASX/TSX Announcement.
|
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 |
Commentary |
Database integrity |
- The database is
managed using Micromine Geobank software. 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, QA/QC checked and imported. Geobank exported
to CSV TEXT and imported directly to the Micromine software used
for the MRE.
- The combined
database was provided for the MRE.
- Validation of
the data import include checks for the following:
- Duplicate drill
hole or trench names,
- One or more
drill hole collar or trench coordinates missing in the collar
file,
- FROM or TO
missing or absent in the assay file,
- FROM > TO in
the assay file,
- Sample intervals
overlap in the assay file,
- First sample is
not equal to 0 m in the assay file,
- First depth is
not equal to 0 m in the survey file,
- Several downhole
survey records exist for the same depth,
- Azimuth is not
between 0 and 360° in the survey file,
- Dip is not
between 0 and 90° in the survey file,
- Azimuth or dip
is missing in survey file,
- Total depth of
the holes is less than the depth of the last sample,
- Total length of
trenches is less than the total length of all samples.
- Negative sample
grades.
- No logical
errors were identified in the analytical data.
|
Site visits |
- Site visits were
not conducted by SGC at the time of the resource estimation due to
COVID restriction on international travel for Australian
residents.
- It is envisaged
that at the first possible opportunity SGC representatives will
make a visit to site in order to verify all aspects at the source
during the 2022 field season.
|
Geological interpretation |
- Geological data
has been collected in a consistent manner that has allowed the
development of geological models to support the Mineral Resource
estimate. Copper and gold mineralisation is controlled by porphyry
phases, oxidation zone, the level of veining, breccia, country
rocks and barren dykes.
- Solid geological
models were generated in Leapfrog for each of the six deposits
using the following methodology
- Composite copper
and gold grades to 10m intervals
- Define cut-offs
using changes in slope of histograms and cumulative log plots
- Create raw grade
shells for these using implicit numeric modelling (e.g. 800, 1500
and 4000ppm Cu)
- Define the main
dividing features/structures between populations (clusters of
grade)
- Build these
structures in detail using grade, lithology, and structural
information
- For each
compartment/fault block
- Group the main
lithologies into “like units”
- Build geological
shapes from these units
- Re-build the grade
shells within each compartment using information from the
geological shapes to help constrain the grade shapes
- Once each
compartment was built, they were assessed in context with each
other and refined so that the models made geological sense.
- Geological
interpretation and wireframing were based on sampling results of
drill holes and trenches, which were logged at 2 m intervals
(average).
- SGC do not
believe that the effect of alternative interpretations will have a
material impact on the overall Mineral Resource Estimates.
- The geological
interpretation is considered robust & alternative
interpretations are not considered to have a material effect on the
Mineral Resource. No alternate interpretations are proposed as
geological confidence in the model is moderate to high. As
additional geological data is collected from additional drilling,
the geological interpretation will be continually updated.
- The factors
affecting continuity both of grade and geology are most likely to
be associated with structural controls and local complexity the
knowledge of which is considered at a moderate level with the
current spacing of information. The broad approach to the
mineralisation modelling is an attempt to model an unbiased
interpretation.
|
Dimensions |
- Stockwork Hill:
The strike length of the mineralised zone is about 1,350 m.
Width is up to 800 m, traced down dip to 1,250 m.
Mineralisation outcrops at the surface.
- White Hill: The
strike length of the mineralised zone is about 1,800 m. Width
is up to 830 m, traced down dip to 1,210 m.
Mineralisation outcrops at the surface.
- Copper Hill: The
strike length of the mineralised zone is about 630 m. Width is
up to 150 m with apparent plunging to SW at about 40 degrees.
traced down dip to 420 m dipping 70 degrees to SE.
Mineralisation is outcropped at the surface.
- Zaraa: The
strike length of the mineralised zone is about 1,300m. Width is up
to 600m with apparent plunging to SW at about 60 degrees. traced
down dip to 1,280m dipping. Mineralisation outcrops at the basement
surface, beneath 35m of Palaeozoic cover.
- Golden Eagle:
The strike length of the mineralised zone is about 400m. Width is
up to 400m. traced down dip to 450 m. Mineralisation outcrops
at the basement surface, beneath 35m of Palaeozoic cover.
- Zephyr: The
strike length of the mineralised zone is about 1,030 m. Width
is up to 310 m. Traced down dip to 350m. SE. Mineralisation
outcrops at the basement surface, beneath 30m of Palaeozoic
cover.
|
Estimation and modelling techniques |
- Ordinary Kriging
technique was employed using third party software based on low
coefficient of variation between samples in the mineralised
domain.
- Grade
interpolation and search ellipses were based on variography and
geometry modelling outcomes.
- Modelling was
conducted in three passes with block sizes being 20.0 m E by 20.0 m
N by 10.0 m RL; discretisation was 5x5x2 for all project areas
- In the first
pass data and octant criteria used were, Minimum Data=12, maximum
Data=32, Minimum Octants=4. Search radii was 55 mE by 75 mN by 10
mRL.
- An expansion
factor of 1 was applied so in the second pass saw the same data and
octants criteria with an expanded search to 110mE by 150mN by
20mRL.
- The third pass
saw Minimum Data=6, maximum Data=32, Minimum Octants=2. Search
radii was 110mE by 150mN by 20mRL.
- Top cutting was
applied to domains and elements which displayed a very strongly
skewed nature as summarise in the report reference and in
accordance with the prevailing coefficients of variation.
- Secondary
attributes including the modelling of density which was also
modelled on three passes (as above) which included the same data
and octant criteria as above.
- No dilution was
expressly added to the SGC model however domain was largely driven
by geological and grade domains created by the Client (XM) and
provided to SGC which tended to incorporated the full population
range in the geological domains and a constrained population range
in the grade domains in=line with the grade domain
constraints.
- No assumptions
were made by SGC regarding the recovery of by-products
- Copper, gold,
molybdenum and sulphur were modelled as elements.
- Blocks in the
model were defined based on the likely mining bench heights and the
domaining took into account the SMU proposed at the outset of 4 m E
by 4 m N by 2 m RL.
- The
interpretation or domain model was largely driven by the lithology
/ geology, oxidation state, and structural intervention and
mineralised trends observed over the various project areas. Grade
was used as a secondary domain driver for the definition of
boundarieswhere deemed appropriate by the XAM resource team.
- The model was
validated in a third party software using section and plan
comparisons back to original informing data as well as with the use
of swath plots to assess local grade variability between the model
and informing data.
|
Moisture |
- Tonnages are
estimated on a dry basis.
|
Cut-off parameters |
- Mineralised
domain interpreted on grade ≥ 0.1% CuEqRec inside the local
interpretation solids by area with reference to local
variability.
- Assumed to be
reasonable cut-off for open pit and underground propositions given
probability plot curve inflexions and grade population
distributions.
- Resources
estimated at a range of cut-offs and reported at a 0.2% CuEqRec
cut-off grade for open pit and 0.3% CuEqRec for underground public
reporting.
|
Mining factors or assumptions |
- This item is
beyond the scope of work for SGC as such this item details were not
addressed by SGC but will remain the responsibility of the Client
and Client’s representatives.
- Consideration
was given by SGC to SMU factors, blocks in the model were defined
based on the likely mining bench heights and the domaining took
into account the SMU proposed at the outset of 4 m E by 4 m N by 2
m RL.
|
Metallurgical factors or assumptions |
- No metallurgical
factors or assumptions used to restrict or modify the resource
estimation were employed by SGC proceeding or during the
construction of the model. Metallurgical recovery was not modelled
as an attribute of the model. To date preliminary historical
metallurgical recovery analysis has indicated recovery of Cu% to be
90% and Aug/t to be 78% overall.
- To the best of
SGC’s knowledge no further work has been conducted in regard to
metallurgical recovery which would indicate anything to the
contrary of the recovery numbers put forth by the Client.
|
Environmental factors or assumptions |
- No environmental
factors or assumptions were used to restrict or modify the resource
estimation.
|
Bulk density |
- All bulk density
samples were determined by the water immersion method.
- In all 13334
bulk density measurements were taken from non-specified drilling
samples by XAM site representatives during the period 2000 through
to 2021 drilling program. The remainder of the SG database is
historical in nature.
- Bulk density was
estimated into block models based on a matrix of oxidation and
lithology defined from a dataset of bulk density readings as
supplied by the Client.
|
Classification |
- The resource
classification was based on drilling density (and the availability
of data to present to the search neighbourhood, geological
modelling, oxidation and, density and recovery data as well as data
quality considerations
- The
classification criteria is deemed appropriate by SGC.
|
Audits or reviews |
- Other than those
noted in this report, to the best of SGC knowledge, no additional
public and formalised audits or reviews have been undertaken to
date concerning the Mineral Resource Estimates for Kharmagtai.
|
Discussion of relative accuracy/confidence |
- Outlines of
resource classifications were reviewed against drill-hole data
density and assays results and each block in the model has a
resource classification which indicates the relative (block to
block) confidence level.
- Mineral resource
estimate technique was deemed appropriate by an internal peer
review by SGC as were the estimates themselves.
- Total mineral
resource estimate based on global estimate.
- No production
data was available at the time the estimates were undertaken.
- The block model
was produced to represent global estimates; however, the model
honours the local grade distributions appropriately given the
drilling data provided and the domaining strategy employed.
- The relative
accuracy of the Mineral Resource estimate is reflected in the
reporting of the Mineral Resource as per the guidelines of the 2012
JORC Code.
|
JORC TABLE 1 - SECTION 4 - ESTIMATION
AND REPORTING OF ORE RESERVES
Ore Reserves are not reported so Section 4 is
not applicable to this Announcement.
__________________________________
1 ASX/TSX Announcement 18 December 2018 – Technical Report
Released to Support Kharmagtai Mineral Resource Estimate2 ASX/TSX
Announcement 31 October 2018 - Major increase in Kharmagtai Open
Cut Resource to 1.9Mt Cu & 4.3Moz Au 3 ASX/TSX Announcement 31
October 2018 - Major increase in Kharmagtai Open Cut Resource to
1.9Mt Cu & 4.3Moz Au
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