XANADU Mines has provided the independent expert and valuation reports for the Kharmagtai Copper-Gold Project in Omnogovi province of southeast Mongolia. The reports have been finalized to accompany the notice of meeting regarding the company proceeding with the Kharmagtai transaction. Shareholder approval is a condition precedent to Xanadu completing the acquisition of a 90% interest in Oyut Ulaan LLC, which owns the project.

Xanadu Mines personnel undertaking field work on a Xanadu property in southern Mongolia.
Xanadu Mines personnel undertaking field work on a Xanadu property in southern Mongolia.

The independent expert has concluded the transaction is fair and reasonable to non-associated shareholders. The independent valuation report has estimated a preferred valuation range of US$15 to $29 million for the project.

The valuation report notes that three historic mineral resource estimates have been undertaken at Kharmagtai. These estimates provide support to Xanadu’s exploration target of 200,000-450,000 tonnes @ 0.25-0.30 grams/tonne gold and 0.25%-0.30% copper, with a high grade target of 50,000-80,000 tonnes @ 0.60-0.80 grams/tonne gold and 0.40%-0.50% copper.

Xanadu has access to the Kharmagtai project camp site during the interim period up to completion of the transaction. Xanadu has commenced non-invasive exploration activities including visual re-logging, hand-held magnetic acquisition and alteration studies. The company is preparing for drilling to commence as soon as possible upon completion of the transaction.

Xanadu is also involved in discussions regarding the sale and lease back of its 64% interest in its Ulaanbaatar office building to Lkhagvasuren Ganbayar. The proposed transaction values Xanadu’s interest in the property at about Aus$700,000.

The company’s Board believes the capital employed in the building is better allocated to the advancement of its Kharmagtai and Oyut Ulaan exploration activities and working capital. Xanadu and Lkhagvasuren Ganbayar, an executive director of Xanadu, jointly developed the property over 2009 and 2010.

ASX-listed Xanadu has also completed the acquisition of a 90% interest in Vantage LLC, which owns the Oyut Ulaan porphyry copper-gold project in southern Mongolia. Oyut Ulaan is in Dornogovi province, about 70km west of the future industrial centre of Sainshand.

Xanadu has paid cash consideration of US$600,000 and will issue 5 million shares. It will also issue Series A & B performance share options contingent on the recognition of a JORC resource of up to 900,000 tonnes contained copper equivalent.

The shares will be issued to Aberdeen International, an investment company and merchant bank listed on the Toronto Stock Exchange. Aberdeen has a broad investment mandate in the resources sector with a depth of sector experience and an association with Forbes & Manhattan.

ASX-listed Xanadu is continuing its systematic, low-cost exploration program at Oyut Ulaan. Exploration is focusing on delineating potential shallow high-grade mineralization by exploring along strike from existing intersections and testing the many geophysical and geochemical anomalies remaining within the area as there is a strong possibility of discovering additional mineralized porphyry centres.

Resource Center Whitepapers, Videos, Case Studies