TORONTO, Dec. 08, 2023 (GLOBE NEWSWIRE) -- Xanadu Mines Ltd (ASX: XAM, TSX: XAM) (Xanadu, XAM or the Company) is pleased to report a substantial increase in the Mineral Resource Estimate (Resource, Mineral Resource Estimate or MRE) for its flagship copper-gold project at Kharmagtai, in the South Gobi region of Mongolia (Table 1), being developed with the Company’s joint venture partner Zijin Mining Group Co., Ltd. (Zijin). The updated Resource materially increases both the tonnes and contained copper equivalent (CuEq) metal. This includes a 25% increase in the higher-grade component to >125Mt, which is expected to enhance project cashflows in the early years. Kharmagtai’s upgraded Resource cements its position as one of the largest undeveloped gold-rich copper assets globally and supports its rapid advance towards development with a Pre-Feasibility Study (PFS) and Maiden Ore Reserve, followed by and decision to mine in Q3 CY2024.
Highlights
- Significant increase in Kharmagtai Resource to 0.79Bt Indicated and 0.46Bt Inferred material, representing a 58% increase in indicated, contained copper (Cu) and 51% increase in indicated, contained gold metal (Au)1.
- Material 25% increase in the higher-grade core from 100Mt @ 0.76% CuEq2 to 125Mt @ 0.75% CuEq, at a 0.55% CuEq cut off. This is an important driver of early payback in Kharmagtai project economics.
- Since 2021 Resource update3, the Company has completed 162 diamond drill holes for 58,259 metres.
- 63% of the updated Resource is now classified in the higher confidence “indicated” category, demonstrating the robust nature of the deposit.
- Strong exploration upside remains, with mineralisation open to the east, west, south, and at depth.
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1 Average grades 0.27% Cu and 0.22g/t Au. Please refer to Table 1.
2 ASX/TSX Announcement 28 February 2022 – Kharmagtai Technical Report
3 ASX/TSX Announcement 8 December 2021 – Kharmagtai Resource Grows to 1.1 Billion Tonnes, containing 3Mt Cu and 8Mozu
Table 1: Comparison 2023 vs 2021 Resource4
Resource | Cutoff (% CuEq) | Classification | Tonnes (Mt) | Grades | Contained Metal | ||||||
CuEq (%) | Cu (%) | Au (g/t) | CuEq (Mlbs) | CuEq (kt) | Cu (kt) | Au (koz) | |||||
2023 | 0.20 (OC) 0.30 (UG) | Indicated | 790 | 0.38 | 0.27 | 0.22 | 6,700 | 3,000 | 2,100 | 5,600 | |
Inferred | 460 | 0.37 | 0.27 | 0.19 | 3,800 | 1,700 | 1,300 | 2,800 | |||
2021 | 0.20 (OC) 0.30 (UG) | Indicated | 450 | 0.40 | 0.28 | 0.25 | 4,100 | 1,900 | 1,300 | 3,700 | |
Inferred | 660 | 0.35 | 0.25 | 0.19 | 5,100 | 2,300 | 1,700 | 4,100 |
Notes:
- Figures may not sum due to rounding and significant figure do not imply an added level of precision.
- No Ore Reserves are included in this Mineral Resource
Xanadu’s Executive Chairman and Managing Director, Mr Colin Moorhead, said “This upgraded Resource is a major milestone for Xanadu and our joint venture partner Zijin Mining and reinforces Kharmagtai as one of the largest undeveloped copper and gold resources on ASX and globally. The result is in line with our expectations for both the tonnes and the grade, and it is materially better where it matters. The higher-grade zones (0.75% CuEq) that drive our project economics and capital payback are now 25% larger, and these well-defined, large, high value zones really set Kharmagtai apart from similarly sized orebodies. With 63% of the Mineral Resource Estimate now classified as “indicated” and holding together at rigorous cut-off grades, we have confidence in its ability to underpin a long life, profitable mine operation across a wide range of metals prices.
This completes the largest data acquisition step in the Kharmagtai PFS, and we are now commencing trade-off studies to select a single go-forward project design. Our next step is enterprise optimisation, using the new resource model to maximise value from the increase in higher-grade zone material and to build in technology uplift in the form of electrification and advanced haulage. The optimised scheduling will then inform design & engineering works for both our mine and process plant, on track to deliver a Maiden Ore Reserve and completed PFS in Q3 CY2024.
Importantly, the discovery journey is not over at Kharmagtai. We see significant potential for both growth of the existing Resource, which remains open to the east, west, south, and at depth, and for large-scale, new discovery. Recent drilling has already intercepted high-grade bornite outside the Resource, and step-out drilling continues down-plunge.
Given the quality of Resource, scale of the system, gold credits, infrastructure, logistics and social advantages, Kharmagtai has a clear 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.”
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4 ASX/TSX Announcement 28 February 2022 – Kharmagtai Technical Report
MINERAL RESOURCE ESTIMATE UPDATE 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 National Instrument 43-101 (NI 43-101)5, is effective as of 8 December 2021, and is shown in full in Tables 2 and 3.
Drilling results from the past 24 months (including 162 holes for 58k metres of drilling) have been incorporated into an updated JORC 2012 Mineral Resource Estimate (MRE) for the Kharmagtai Copper and Gold Deposit in Mongolia.
This Resource is the first update to the Resource announced on the 8th December 20216, with 162 diamond drill holes and 58,259 metres of drilling completed since 2021. 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, reported with inside a 0.1%CuEq reporting wireframe.
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. 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.
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5 Please refer to ASX/TSX Announcement 20 June 2022 – NI 43-101 Preliminary Economic Assessment Technical Report, for a discussion of risks to potential development. No material changes to those risks have been identified.
6 ASX/TSX Announcement 08 December 2021 - Kharmagtai Resource grows to 1.1 Billion Tonnes, containing 3Mt Cu and 8Mozu
Figure 1: Plan view of the Kharmagtai district, displaying the Mineral Resource Estimate.
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.
Figure 3: Kharmagtai CuEq grade-tonnage curve for pit-constrained mineralisation on a CuEq cut-off grade basis reported at a 0.55%CuEq Cut-off.
Figure 4: Kharmagtai CuEq grade-tonnage curve for underground-constrained mineralisation on a CuEq cut-off grade basis reported at a 0.55%CuEq Cut-off.
Table 2: Kharmagtai Project – Potential Open Pit Mineral Resource Estimates 2023 – by resource classification.
Deposit | Classification | Tonnes (Mt) | Grades | Contained Metal | |||||
CuEqRec (%) | Cu (%) | Au (g/t) | CuEqRec (Mlbs) | CuEqRec (Kt) | Cu (Kt) | Au (Koz) | |||
SH | Indicated | 190 | 0.43 | 0.28 | 0.28 | 1,800 | 810 | 540 | 1,700 |
WH | 340 | 0.33 | 0.25 | 0.17 | 2,600 | 1,100 | 850 | 1,900 | |
CH | 28 | 0.42 | 0.29 | 0.25 | 260 | 120 | 80 | 200 | |
ZA | 8.0 | 0.26 | 0.15 | 0.23 | 49 | 20 | 10 | 100 | |
GE | 42 | 0.28 | 0.13 | 0.30 | 260 | 120 | 50 | 400 | |
ZE | 21 | 0.31 | 0.18 | 0.26 | 140 | 60 | 40 | 200 | |
PE | |||||||||
Total Indicated | 640 | 0.36 | 0.25 | 0.22 | 5,000 | 2,300 | 1,600 | 4,500 | |
SH | Inferred | 31 | 0.30 | 0.18 | 0.23 | 210 | 100 | 60 | 200 |
WH | 93 | 0.28 | 0.21 | 0.13 | 570 | 260 | 200 | 400 | |
CH | 1.0 | 0.28 | 0.21 | 0.13 | 7.0 | - | - | - | |
ZA | 12 | 0.25 | 0.15 | 0.19 | 64 | 30 | 20 | 100 | |
GE | 27 | 0.26 | 0.12 | 0.26 | 160 | 70 | 30 | 200 | |
ZE | 19 | 0.26 | 0.14 | 0.24 | 110 | 50 | 30 | 100 | |
PE | |||||||||
Total Inferred | 180 | 0.27 | 0.18 | 0.18 | 1,100 | 510 | 340 | 1,000 |
Notes:
- Figure may not sum due to rounding.
- Significant figures do not imply an added level of precision.
- CuEq accounts for Au value and CuEqKt must not be totalled to Au ounces.
- 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.
- CuEqRec equation (CuEqRec=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.
- The above reported estimates have taken into account all earlier assumptions including but not limited to, updated long term metal price, foreign exchange and cost assumptions, and mining and metallurgy performance to inform cut-off grades and physical mining parameters used in the estimates in-line with the Clients analysis and direction to SGC.
- 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 6 December 2023.
Table 3: Kharmagtai Project – Potential Underground Mineral Resource Estimate 2023 – by resource classification.
Deposit | Classification | Tonnes (Mt) | Grades | Contained Metal | |||||
CuEqRec (%) | Cu (%) | Au (g/t) | CuEqRec (Mlbs) | CuEqRec (Kt) | Cu (Kt) | Au (Koz) | |||
SH | Indicated | 31 | 0.58 | 0.35 | 0.44 | 390 | 180 | 110 | 400 |
WH | 93 | 0.46 | 0.37 | 0.16 | 940 | 430 | 350 | 500 | |
CH | 3.0 | 0.37 | 0.28 | 0.18 | 26 | 10 | 10 | - | |
ZA | 27 | 0.46 | 0.32 | 0.28 | 270 | 120 | 80 | 200 | |
GE | - | - | - | - | - | - | - | - | |
ZE | - | - | - | - | - | - | - | - | |
PE | |||||||||
Total Indicated | 150 | 0.48 | 0.36 | 0.24 | 1,600 | 740 | 550 | 1,100 | |
SH | Inferred | 28 | 0.42 | 0.32 | 0.20 | 260 | 120 | 90 | 200 |
WH | 120 | 0.44 | 0.36 | 0.15 | 1,200 | 540 | 440 | 600 | |
CH | - | 0.33 | 0.26 | 0.15 | 4.0 | - | - | - | |
ZA | 130 | 0.43 | 0.30 | 0.25 | 1,200 | 550 | 390 | 1,000 | |
GE | - | - | - | - | - | - | - | - | |
ZE | - | 0.40 | 0.06 | 0.67 | 1.0 | - | - | - | |
PE | |||||||||
Total Inferred | 280 | 0.43 | 0.33 | 0.20 | 2,700 | 1,200 | 920 | 1,800 |
Notes:
- Figure may not sum due to rounding.
- Significant figures do not imply an added level of precision.
- CuEq accounts for Au value and CuEqKt must not be totalled to Au ounces.
- 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.
- CuEqRec equation (CuEqRec=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.
- Reported at a 0.3% CuEq cut-off grade and inside reporting solid 0.1%CuEq area - Resources as at 6 December 2023.
GEOLOGY AND GEOLOGICAL INTERPRETATION
A step change has occurred in the understanding of the geological controls on mineralisation at Kharmagtai since the 2021 Resource. Each deposit in the 2023 Resource has been based on an updated 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 272km 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. Additional data on drilling and sampling procedures is provided in Appendix 3, JORC Table 1, Section 3.
Significant drilling has taken place since the last Resource in 2021 which has driven the increase in Resources. Table 4 shows the drilling meter difference between the 2021 and 2023 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 before 2018 | 216 | 35,725 | 364 | 144,936 | 21 | 5,022 | 664 | 26,137 | 123 | 45,393 |
Drilling between 2018 and 2021 | 12 | 3,049 | 120 | 69,479 | 0 | 1,640 | 0 | 0 | 0 | 0 |
Drilling After 2021 Resource | 0 | 0 | 162 | 58,250 | 0 | 0 | 0 | 0 | 0 | 0 |
Total | 228 | 38,774 | 646 | 272,665 | 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 Cu% 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.
Figures 5-6 illustrate the resource classification within the 2022 Scoping Study pit shells7.
Figure 5. 2023 Resource Classification at Stockwork Hill
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7 ASX/TSX Announcement 6 April 2022 – Scoping Study Kharmagtai Copper-Gold Project
Figure 6. 2023 Resource Classification at White Hill
NEXT STEPS - 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 7). 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 8) 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.
Figure 7: Long section of the Stockwork Hill Deposit, displaying the Mineral Resource Estimate extents in relation to drilling.
Figure 8: Cross section of the White Hill Deposit, displaying the Mineral Resource Estimate extents in relation to drilling and high-grade potential extension.
NEXT STEPS - EXPLORATION UPSIDE
Only a small portion of the potentially mineralised Kharmagtai Intrusive Complex has been drill tested. Most of the drilling since 2021 Resource has focused on expanding existing deposits and high-grade targets within and around known mineralisation. There are more than 5 porphyry clusters identified across the lease, which have been ranked and will be tested by drilling in the coming 12 months (Figure 9). These targets have been identified from surface geochemistry, geophysics, and the presence of the key features of porphyry deposits (veining, alteration and mineralisation).
Figure 9: Kharmagtai copper-gold district showing currently defined mineral deposits and planned and completed shallow exploration drill holes in 2023. Grey outlines are 2021 scoping study open pit designs and white dashed outlines define porphyry cluster target areas.
NEXT STEPS – PRE-FEASIBILITY STUDY
Xanadu and its JV partner Zijin are actively progressing a Pre-Feasibility Study (PFS) at Kharmagtai, which includes data acquisition, trade-off studies, and engineering to +/-25% confidence, leading to a Maiden Ore Reserve and full PFS report in Q3 CY2024, for a decision to mine and commencing final engineering and construction in Q4 CY2024.
This PFS builds on the 2022 Scoping Study8, which confirmed the project as a potential world class, low-cost, long life mine with an estimated 20% IRR (range 16-25%), US$630 million NPV at 8% (range US$ 405-850 million) and 4-year payback (range 4-7 years) over 30-year life of mine. This included first quartile all in sustaining costs and projected production ranges from 30-50ktpa copper and 50-110kozpa gold production during the first five years, operating a 15Mtpa plant for 5 years and then expanding to 30Mtpa from year 6.
Kharmagtai economics are driven by scale, gold by-product credits, a low ~1:1 strip ratio, and early payback from mining the higher-grade zone. The 25% increase in the higher-grade zone from 100Mt to 125Mt will add early value to the project in PFS stage.
This upgraded Resource, along with completion of ongoing metallurgical test results, will complete most of the PFS data acquisition stage. The next stage for the PFS will be to progress trade-off studies to select a single go-forward option. Some key trade-off studies include:
- Enterprise Optimisation – utilises updated grade, recovery, and material characteristics by domain to refine and optimise the mine staging and stockpiling requirements. This will maximise benefit from the increased higher-grade zones. Also builds in technology uplift scenarios such as hybrid, electrification and automated haulage systems.
- Mine Design & Engineering – utilises enterprise optimisation outcomes for detailed scale, sequencing, equipment selection, engineering, and technology evaluation to develop mine plan for PFS and Maiden Ore Reserve.
- Process Design & Engineering – builds flow sheet, technology, rates, scale and alternative streams based on updated scheduling, grade, recovery and material characteristics by domain.
Studies related to non-process infrastructure, power, water, tailings, environmental and operations design are also underway.
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8 ASX/TSX Announcement 6 April 2022 – Scoping Study Kharmagtai Copper-Gold Project
APPENDIX 1: COMPETENT PERSON’S STATEMENT
Mr Robert Spiers is a full time Principal Geologist employed by Spiers Geological Consultants (SGC), 4 Martin 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 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ and as defined in National Instrument 43-101 (NI 43-101).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 Mr Spiers knowledge, neither SGC, himself and / or other related parties have any conflict of interest with by XAM in accordance with the transparency principle set out by the JORC code 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 the XAM trading policy (guidance notes 27). The aforementioned shareholding does not constitute a material holding in the company in question.
Mr Spiers has read the definition of “competent person” set out in the JORC code and in NI 43-101 and guidelines for the reporting of Mineral Resource Estimates and certifies 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 2012 and NI 43-101.
As of the date of this document, 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 2023) 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 2nd day of December 2023
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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 (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.
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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 and NI 43-101.
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 grade values were calculated using the following formula:
CuEq or eCu = 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 8 December 2021.
JORC TABLE 1 - SECTION 1 - SAMPLING TECHNIQUES AND DATA
(Criteria in this section apply to all succeeding sections).
Criteria | Commentary |
Sampling techniques |
|
Drilling techniques |
|
Drill sample recovery |
|
Logging |
|
Sub-sampling techniques and sample preparation |
|
Quality of assay data and laboratory tests |
|
Verification of sampling and assaying |
|
Location of data points |
|
Data spacing and distribution |
|
Orientation of data in relation to geological structure |
|
Sample security |
|
Audits or reviews |
|
JORC TABLE 1 - SECTION 2 - REPORTING OF EXPLORATION RESULTS
(Criteria in this section apply to all succeeding sections).
Criteria | Commentary |
Mineral tenement and land tenure status |
|
Exploration done by other parties |
|
Geology |
|
Drill hole Information |
|
Data Aggregation methods |
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):
|
Relationship between mineralisation on widths and intercept lengths |
|
Diagrams |
|
Balanced reporting |
|
Other substantive exploration data |
|
Further Work |
|
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.
|
Site visits |
|
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.
|
Dimensions |
|
Estimation and modelling techniques |
|
Moisture |
|
Cut-off parameters |
|
Mining factors or assumptions |
|
Metallurgical factors or assumptions |
|
Environmental factors or assumptions |
|
Bulk density |
|
Classification |
|
Audits or reviews |
|
Discussion of relative accuracy/confidence |
|
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.
AUSTRALIA c/o Company Matters Pty Limited Level 12, 680 George Street Sydney NSW 2000 T: +612 8280 7497 | MONGOLIA Suite 23, Building 9B Olympic St, Sukhbaatar District Ulaanbaatar, Mongolia T: +967 7012 0211 | Xanadu Mines Ltd ACN 114 249 026 www.xanadumines.com | ||
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