RECENT drilling for Xanadu Mines has confirmed the presence of a potentially significant new mineralized tourmaline breccia system to the east of the high-grade Altan Tolgoi system. The work is being carried out on the Kharmagtai porphyry copper-gold project in which Xanadu and joint venture partner Mongol Metals are acquiring a 90% interest from Turquoise Hill Resources.

Kharmagtai is in the under-explored South Gobi porphyry copper province which hosts the world-class Oyu Tolgoi copper-gold operation, Tsagaan Suvarga porphyry copper-molybdenum development and Xanadu's Oyut Ulaan copper-gold exploration project. Under the JV terms Xanadu has the right to earn an 85% interest in Mongol Metals, or the equivalent of a 76.5% effective project interest, by funding acquisition and exploration costs.

Two recently completed holes have intersected copper-gold mineralization. The most recent intersected 665.7 metres @ 0.37% copper and 0.28 grams/tonne gold from surface including 312 metres @ 0.49% copper and 0.40 grams/tonne gold from 274 metres. High-grade intersections include 36 metres from 372 metres @ 0.82% copper and 0.45 grams/tonne gold, 30 metres from 448 metres @ 0.62% copper and 0.62 grams/tonne gold, and 66 metres from 510 metres @ 0.47% copper and 0.70 grams/tonne gold.

The tourmaline breccias significantly contribute to mineralization and therefore represent a significant new exploration target. Mineralization intersected comprises narrow zones of variably brecciated tourmaline breccia separated by chlorite-epidote-sericite altered quartz monzodiorite porphyry which indicated that mineralization is proximal to the core of the breccia system.

The higher grade zones discovered in the previous hole, 242.7 metres from 358.3 metres @ 0.55% copper and 0.75 grams/tonne gold, will help located the centre of the system through continued exploration drilling.

This new tourmaline breccia east of Altan Tolgoi forms part of a much larger east-trending tourmaline breccia body which lies under shallow cover. Xanadu says the total extent may be related to a large geophysical anomaly extending up to 3.5km to the east.

A new hole has been collared a further 120 metres to the east of the most recent hole and about 170 metres east of the previous hole. As at mid-August it was at a depth of 670 metres and had intersected strong visible copper sulphides from 140 metres.

Another hole has been collared 50 metres to the west of the previous hole and the purpose is to test the continuity of high-grade mineralization between Altan Tolgoi and the newly discovered tourmaline breccia system at East Altan Tolgoi. In mid-August it was at a depth of 650 metres and had intersected visible copper sulphides from 150 metres. The prospect remains open to the west, east and at depth.

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