Xanadu kicks off exploration at new Mongolian copper play

Xanadu Mines has launched into maiden field programs at its Sant Tolgoi copper-nickel project in northern Mongolia.

The company says detailed mapping and sampling programs are well underway at the site, with early indications of multiple shallow copper-nickel sulphide targets.

Management has identified the targets through several kilometres of strike at Sant Tolgoi. It believes its advanced exploration targets represent a genuine opportunity for new district-scale, magmatic intrusion-related copper-nickel systems in an underexplored mineral province.

Xanadu says there are signs of several mineralised systems in both historical and recent drilling, prompting the recent acquisition of high-resolution magnetic, gravity and electromagnetic data from the project. All current data acquisition is complete, with modelling and geological mapping now well underway.

The company expects first-stage sampling and geophysical results to filter through for Sant Tolgoi in the fourth quarter of this year.

This project represents an exciting green-fields opportunity. We believe this is potentially a new Magmatic Cu-Ni District in an under-explored mineral province of Western Mongolia and is an extension of fertile magmatic activity hosting a significant number of Ni-Cu-PGE deposits in the Central Asian Orogenic Belt.

The company has a history of copper exploration success in Mongolia at its flagship Kharmagtai copper-gold project in the country’s south. Late last year, it tabled a staggering resource estimate upgrade, jumping to a mammoth 1.3 billion tonnes with 3.4 million tonnes of contained copper and 8.5 million gold ounces.

The updated estimate represented a 12 per cent increase in tonnes, a 15 per cent surge in contained copper and a 9 per cent jump in contained gold.

Throughout last year, Xanadu completed two phases of its strategic partnership with Chinese copper giant Zijin Mining, giving it access to funding for its latest rounds of exploration. The deal with Zijin saw an investment of US$35 million (AU$52.5 million) to fund the completion of the Kharmagtai prefeasibility study (PFS).

A 50-50 joint venture has been created between the two partners at a project level, with Xanadu remaining the operator on the ground. The company has a remaining 10 months to knock over its PFS, while an earlier scoping study identified several upside opportunities that could materially upgrade the economics of the project.

Xanadu believes it could be onto another significant mineralised system at Sant Tolgoi as the project falls in a trend extension to the fertile magmatic activity hosting a significant number of nickel-copper-platinum group element (PGE) deposits in the Central Asian Orogenic Belt. Sant Tolgoi lies on the western extension of the deep-seated Khangai Fault systems.

While Kharmagtai remains the company’s major focus, the market will no doubt be keeping a close eye on the early-stage copper story emerging at Sant Tolgoi.

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