Xanadu brings Mongolia’s resources to 1.1 billion tons
Xanadu Mines, listed on the ASX and TSX, has increased the mineral resources of its Kharmagtai project, in the South Gobi region of Mongolia, to more than one billion tonnes, including a higher grade component about 100 million tons.
Updated mineral resource estimates position Kharmagtai as one of the largest undeveloped copper assets held by a listed junior, the company said Wednesday.
Kharmagtai’s 1.1 billion tonne resource contains three million tonnes of copper and eight million ounces of gold, representing a 50% increase in contained copper and an 80% increase in contained gold compared to the previous resource estimate.
Higher grade zones of more than 0.8% copper equivalent fell from around 58 million tonnes in the previous estimate to just 100 million tonnes with the latest update.
“This could be a game-changer for the economics of the project, with better defined and larger high-grade zones distinguishing the project from similarly sized deposits, the higher-grade component potentially unlocking project scenarios that could open up the way to put Kharmagtai into production. A significant increase in gold/copper ratios has resulted in an over 80% increase in contained gold, which means higher by-product credits which will result 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 the future economics of the project, as they provide a degree of optionality for mining development that is not often seen. in mining projects of this nature,” said CEO Andrew Stuart.
He added that many of the largest copper projects in the world presented logistical and social challenges, leading to significant delays and increased capital costs.
“Some projects have been stuck in bureaucracy for so long that their impact on future copper supply is now in doubt. In comparison, Kharmagtai has advantages in both areas. Logistically, South Gobi is a flat land with easy access to industrial water, nearby electrical, rail and road infrastructure, and close to Asia’s largest copper consumers Socially, Xanadu has a strong social license to operate and Kharmagtai sits in an area with a very low population. Also, Mongolian regulators support mining development; it is important to remember that the Oyu Tolgoi pit was able to go from discovery to production in about five years, an incredible result given the time it takes to get big mining projects off the ground elsewhere,” said Stewart.
The updated resource covers only approximately 30% of the 8 km strike length of the Kharmagtai mineralized complex. The known deposit is open to the north and at depth, and recent drilling has already intersected high-grade bornite outside the resource.