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Xanadu Mines upgrades copper and gold exploration target at Kharmagtai project

An independent valuation by SRK has estimated a preferred value of US$173.6 million for the Kharmagtai Project.

Xanadu Mines Ltd - Xanadu Mines upgrades copper and gold exploration target at Kharmagtai project
Xanadu’s objective is to develop Mongolia’s next large-scale copper gold deposit

Xanadu Mines Ltd (ASX:XAM) has upgraded the global copper and gold Exploration Target at its flagship Kharmagtai project in the south Gobi region of Mongolia.

The new global Exploration Target has been developed to highlight the large-scale copper-gold potential of the Kharmagtai project.

Additionally, an independent valuation has been completed by SRK for the Kharmagtai Mining Lease.

Xanadu managing director and chief executive officer Dr Andrew Stewart said: “We have always had a strong belief in the large-scale copper-gold potential of Kharmagtai.

“This Global Exploration Target outlines the areas we are aiming to convert to resources in the near to mid-term.

“Additionally, our geologists have highlighted a series of compelling geochemical and geophysical vectors which suggest mineralisaiton within this Exploration Target is just the tip of a much larger porphyry system.

“We know these systems exist in Mongolia as the giant Oyu Tolgoi is currently being mined some 120km to the south of Kharmagtai and we believe that Kharmagtai is a similar type of system.

The Kharmagtai Deposits (Stockwork Hill, White Hill, Copper Hill) and areas covered within the Global Exploration Target.

“Additionally, we are in the final stages of completing metallurgical work for the three existing sulphide deposits, which is aimed at increasing the already good recovery assumptions made in the 2018 mineral resource upgrade.

“Finally, an independent valuation of the Kharmagtai project has been completed by independent consultants, SRK.

“We commissioned this valuation to highlight to the market the disparity between the company’s current perceived value and the Kharmagtai project’s potential value.

SRK’s valuation summary

“Our long running objective is to develop Mongolia’s next large-scale copper gold deposit.

“Our current strategy of seeking high-return options via an oxide gold project is focused on providing the capital needed to advance that larger scale copper and gold project.”

Independent valuation by SRK

Based on its review of the values implied by the various valuation methodologies, SRK considers the market would pay in the range between US$108 million and US$233.6 million, with a preferred value of US$173.6 million for a 100% interest in the Kharmagtai Project.

After taking Xanadu’s effective and beneficial 76.5% interest into account, SRK considers Xanadu’s interest in the Kharmagtai Project would range between US$82.6 million and US$178.7 million, with a preferred value of US$132.8.0 million.

Quick facts: Xanadu Mines Ltd

Price: 0.032 AUD

ASX:XAM
Market: ASX
Market Cap: $22.81 m
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