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Mongolian tests show waste recovery potential for Xanadu

Xanadu Mines has competed metallurgical recoveries of up to 91 per cent gold and 46 per cent copper from preliminary glycine and cyanide leach testing at its Kharmagtai copper-gold project in Mongolia.

The tests were performed on partially oxidised material from surface to 30m depth and returned head grades between 0.52 and 2.25 grams per tonne gold and from 0.12 up to 0.67 per cent copper.

Xanadu says the results show a potential treatment path for about 90 million tonnes of oxidised material treated as waste in the company’s scoping study due to low flotation recovery.

The company added that if the material was processed as ore rather than pre-stripping, it could reduce waste rock production by around 10 per cent.

The base case assumed that all ore is processed through a standard sulphide circuit, which means that the partially oxidised material at the surface, which does not float, ends up being treated as zero value waste. If we can turn that material into cash generating ore by leaching with glycine and cyanide, it has potential to drive significant value uplift for the Kharmagtai project.

Four composite samples — coarse rejects of mixed oxide and sulphide material from previously drilled diamond core holes — were collected from the company’s Stockwork Hill, White Hill and Golden Eagle deposits that were identified as representations of each of the zones.

The leach tests aimed to determine metallurgical recovery of gold and copper and gauge the potential of additional glycine to enhance recovery and reduce cyanide consumption.

Xanadu says the results are the first step in evaluating a material uplift opportunity identified in the scoping study, to generate additional cash flow by leaching partially oxidised, near-surface material.

The latest test results follow an independent assessment by equities firm MST Access — paid for by Xanadu — that valued the company at 0.08c per share based on factors including the life of the Kharmagtai asset, the size of the resource and the company’s long-term strategy.

Xanadu shares are currently trading at 0.026c on the ASX, up more than 8 per cent on intraday trading.

Xanadu’s Kharmagtai project has a mineral resource estimate identified at a massive 1.1b tonnes for three million tonnes of contained copper and eight million ounces of gold.

Based on the company’s scoping study predictions for the first five years of production, Kharmagtai shows a diminutive strip ratio of just 0.9, an averaged milled copper grade of 0.29 per cent and the company expects to produce an average of 37,000 tonnes of copper per year.

Xanadu has also attracted the interest of Chinese copper miner Zijin Mining Group with planned investment from the deal to be delivered across three phases.

The first phase has been completed, with Zijin investing $5.6m for a total of 139 million fully paid ordinary shares, giving it a 9.9 per cent minority stake in Xanadu.

At phase two, Zijin will invest another $5.7 million to increase its stake to 19.99 per cent.

Through the third phase, Zijin will create a 50-50 joint venture with Khuiten Metals, currently wholly owned by Xanadu.

Khuiten owns a 76.5 per cent stake in the Kharmagtai mine.

The investment includes US$20 million to fully fund a prefeasibility study and an additional US$15 million to fund continued exploration at Kharmagtai.

Xanadu also has a 100 per cent share in its Red Mountain project in southern Mongolia, where early exploration has defined broad zones of strong quartz stockwork veining and associated high-grade gold mineralisation of about 0.5 to more than 5 grams per tonne gold and 0.3 to 1.5 per cent copper.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au

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