What is the latest news and updates from Xanadu Mines?

Approximately 6 months ago, we completed the Pre-Feasibility Study for our Kharmagtai project alongside our partner Zijin.  Zijin invested US$35 million following the completion of our scoping study, gaining a 50% share in the Kharmagtai JV, as well as A$12.8 million for 19.4% interest in the company. Our PFS described a large open-pit copper-gold project, which will produce approximately 75,000 t/y of copper and 165,000 oz/y of gold for the best part of 30 years. The project, therefore, has very promising financials and has allowed us to pass over operations for the last half year to Zijin. 

On the ground, we have been exploring water sources for the project, which is a pressing issue in the South Gobi. The deposit remains open at depth, and there exists significant potential for a discovery below the studied open pit, allowing for a potential underground future.

How is Xanadu Mines managing community relations at Kharmagtai?

I believe you only get one chance to make a first impression, and therefore, exploration companies like us need to put a lot of effort into this. The best way to do this is to be authentic, be clear in your plans, and back your words up with actions. Xanadu Mines has done a very good job at this through our in-country management, and a lot of effort has been put into maintaining good relations with local communities. Gaining a legal license to operate is usually straightforward, but a social license is just as important and is integral to moving a project forward.

What progress has been made on the Red Mountain and Sant Tolgoi projects?

Red Mountain is an advanced exploration project with a large copper-gold anomaly that extends beyond 13 km. It differs from Kharmagtai, as it is a series of smaller, higher-grade targets rather than large bulk-tonnage. About a year ago, we conducted some drilling on the property, and there are plans to follow up on that this year. 

Sant Tolgoi is a new project for Xanadu Mines in the northwest of Mongolia. It is a magmatic nickel-copper system with significant prospectivity, but has a very short field season due to the weather and altitude. Our last field season included geochemistry and geophysics to identify targets, which we will explore further in the coming summers, with a maiden drilling program.

How will the Bastion takeover bid affect Xanadu Mines and the Kharmagtai project?

Xanadu Mines is a small, Australian-listed exploration company with a business focus on finding copper-gold deposits, particularly in Mongolia. Our strategy was always to drill the resource, conduct the scoping study, use this to attract a funding partner, and then produce the PFS to progress through permitting. Our shareholders are looking to have a liquidity event and move on to the next discovery. The transaction with Bastion will replace the current management of the Kharmagtai project with a strong operational and political positioning in Mongolia, with the backing of Zijin to develop the mine cooperatively. 

The Bastion takeover will be good for Kharmagtai, as the project will have both significant Mongolian ownership, as well as partnering with Zijin, who have extensive experience developing large mines. It is also great for Mongolian exploration that a foreign company such as ours can explore a project and then secure a deal. Hopefully, this leads to an increased level of foreign entities investing in the country. 

What improvements can be made to make Mongolia more attractive for junior companies?

I believe the tender system needs improvement, because it is difficult to raise money to buy and secure land. Also, being able to advance and then trade properties with a clear understanding of the tax system would benefit projects at all stages. 

Looking ahead, what are your plans for the coming years?

A lot depends on the Bastion takeover bid. Given they are currently at 92% ownership, they can now begin to shape the company in their vision. The next step for Kharmagtai is clearly the Detailed Environmental Impact Assessment (DEIA) and Feasibility Study, which will support a confident investment decision. This decision totals about US$1 billion, and if it is made, it will be a net positive for all stakeholders involved.