Xanadu Mines has revealed four promising new high-grade copper targets at its Sant Tolgoi copper project in Western Mongolia, following geological mapping, surface rock-chip sampling, and geophysical surveys. The newly discovered targets exhibit surface copper grades as high as 2.1%, pointing to substantial potential for future mineral discovery.
These targets are located along a four-kilometer east-west shear zone, part of an extension of the Khangai Fault system. Geophysical data shows strong anomalies, including deep density contrasts and remnant magnetic features, suggesting the presence of mineralized intrusions beneath the surface.
To explore these targets, Xanadu plans a 3,000-meter reconnaissance drill program in the first half of next year, with a focus on testing the areas for massive sulphide copper and nickel deposits.
The exploration process at Sant Tolgoi follows a systematic approach. First, the team identified outcropping mafic intrusions, which were then validated by significant assay results. This was coupled with a geochemical survey and geophysical data, ensuring that each potential target was confirmed by multiple lines of evidence.
Detailed findings on the four targets
- Target One: This 500m by 300m zone showed the presence of copper oxides (malachite and azurite) typically associated with supergene mineralization, with copper grades reaching up to 1%. The magnetic, gravity, Induced Polarization (IP), and geochemical data strongly support the potential for a conductive zone, possibly indicating massive sulphide mineralization.
- Target Two: Located to the east, this target spans 300m by 50m and shows similar geophysical features to Target One. Surface rock-chip samples returned high-grade copper of 2.1%, further supported by robust geochemical indicators.
- Targets Three and Four: Both targets are considered blind, as they lie beneath cover, but their magnetic and gravity signatures are consistent with those of the other two targets. They are similar in size to Targets One and Two, making them attractive drilling prospects.
In January, Xanadu entered into a farm-in agreement with U.S.-based STSM LLC, which grants it the right to earn up to 80% of the Sant Tolgoi project, covering an area of 40 square kilometers. Under the terms, Xanadu can acquire 51% by spending US$1 million (AU$1.5 million) on exploration over the next 24 months, with the option to increase its stake to 80% by investing an additional US$10 million (AU$15 million) in exploration before converting the license into a mining lease.
Progress at the Kharmagtai copper-gold project
Xanadu is also advancing its flagship project, Kharmagtai, located in Mongolia’s South Gobi desert. A recent prefeasibility study revealed a pre-tax net present value of US$1.4 billion (AU$2.14 billion) for the asset, with a four-year payback period and initial capital expenditures of US$890 million (AU$1.32 billion). The project is expected to generate annual EBITDA of US$293.1 million (AU$435 million) over a 29-year mine life, based on conservative assumptions for gold and copper prices.
The study also forecasts production of 60,000 tonnes of copper and 170,000 ounces of gold annually over the first eight years, with production increasing to 80,000 tonnes of copper and 165,000 ounces of gold annually over the following two decades. Xanadu holds a 38.25% stake in the project, which is a joint venture with Chinese mining giant Zijin Mining.
Strategic focus on Mongolia
Xanadu’s exploration efforts at Sant Tolgoi reflect its commitment to Mongolia’s mining sector and its strategy to tap into the country’s rich mineral resources. With drilling expected to begin in the coming months, there is optimism that Xanadu will continue to build on its successes in the region.