Xanadu Mines (ASX:XAM) had a strong June quarter with drilling at its Kharmagtai copper-gold project in Mongolia intersecting the highest grades over the longest intervals at the project to date.
Drilling continues to reinforce the potential of the Tourmaline Breccia unit to host high grade mineralisation on a large scale.
This along with the existing Resource of 203 million tonnes averaging 0.34% copper and 0.33 grams per tonne gold is transforming the growth potential of Kharmagtai.
Recent exploration drilling at the Oyut Ulaan copper-gold project has also delivered encouraging results from several different prospects, increasing its scale and potential.
Topping it off, Xanadu is well funded with $4.1 million in cash as at 30th June 2015.
Andrew Stewart, chief executive officer, told Proactive Investors:
“Discovery of the tourmaline breccia mineralisation has been a step change for the project, and next steps for the project are to understand the geometry and scale of mineralisation, and continue to step out and test the mineralisation undercover.
“At Oyut Ulaan, we plan to undertake some advanced 3D modelling of geological and geophysical data, this integration of many data sets into a common environment will help drill targeting.
“We are looking forward to getting back to Oyut Ulaan as soon as this work is completed to commence drilling again.
“We will be rich in news flow as exploration progresses at Kharmagtai.”
Kharmagtai Copper-Gold Project
The Kharmagtai project is located within the South Gobi porphyry copper province of Mongolia, approximately 420 kilometres south-southwest of Ulaanbaatar (Figure 1), and is one of the most advanced porphyry projects in Asia.
Exploration drilling is currently focused on defining near-surface strike extensions of current deposits and investigating several high-priority targets laying under shallow cover that have the same geophysical response and geometry as existing deposits within the Kharmagtai project.
Thirteen diamond holes have been completed for approximately 5,205 metres in the current phase of the drill program at Kharmagtai that commenced in late April.
Drilling has advanced the company’s understanding of the Kharmagtai project and clearly indicates potential for a large-scale mineralised breccia system along-side the established Resource.
Top results to date are:
- 415.2 metres at 0.63% copper and 0.24g/t gold (0.79% copper equivalent) from 88.8 metres including 243.8 metres at 0.81% copper and 0.32g/t gold (1% copper equivalent) from 242.2 metres;
- 50 metres at 1.84% copper and 0.73g/t gold (2.31% copper equivalent) from 374m including 27 metres at 2.55% copper and 0.94g/t gold (3.15% copper equivalent) from 384 metres; and
- 593 metres at 0.45% copper and 0.23g/t gold (0.6% copper equivalent) from 68 metres including 204 metres at 0.8% copper and 0.36g/t gold (1.03% copper equivalent) from 300 metres.
Importantly this style of breccia mineralisation has significant implications for the growth potential of Kharmagtai as it is a bulk-style of mineralisation with multi-high grade zones not previously identified at the project.
Oyut Ulaan copper-gold project
Xanadu recently completed 9 drill holes for approximately 2,049.6 metres of diamond drilling and other exploration activities at its 90%-owned Oyut Ulaan project within the Dornogovi Province of southern Mongolia.
It is strategically located within the South Gobi Copper Belt (which hosts the world class Oyu Tolgoi copper-gold project) and 260 kilometres east of Kharmagtai.
Oyut Ulaan is a large and underexplored porphyry district covering about 40 square kilometres and consists of multiple co-genetic porphyry copper-gold centres, mineralised tourmaline breccia pipes and copper-gold/base metal magnetite skarns, within the central part of Mining Licence.
Drilling extended known near-surface high-grade mineralisation at Diorite Hill, discovered shallow high-grade skarn mineralisation at Hulan and discovered new porphyry centre at Temee.
The results of this program are extremely encouraging and indicate Oyut Ulaan is developing into one of the most prospective districts in the South Gobi with a series of prospects at different stages of exploration.
Xanadu will continue its systematic, low cost exploration at Oyut Ulaan. Current drill holes are mostly shallow and widely spaced, and the existing licence is large and relatively unexplored.
The next phase of exploration will focus on identifying the ‘engine room’ to this large system.
Analysis
Xanadu Mines could significantly increase the mineral resource base at its Kharmagtai copper-gold project as drilling discovered bulk-style breccia mineralisation with multiple high grade zones.
Follow-up is scheduled to test the best targets in the second half of the 2015 drill program.
An objective is to target any near-surface, large scale porphyry copper potential within the Kharmagtai district.
Appointing well credentialed mining executive Marcus Engelbrecht, ex-BHP Billiton (ASX:BHP), ex-Oceania Gold (TSE:OGC) and ex-Archipelago Resources Plc (AIM:AR) as a Board member will bring further expertise to Xanadu.
Xanadu had $4.1 million in cash as at 30th June 2015.
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