Xanadu Mines is nearing the completion of a prefeasibility study (PFS) for its Kharmagtai copper-gold project located in Mongolia’s South Gobi region.
The company has recently transferred operational responsibilities for this significant near-term project to its joint venture (JV) partner, Zijin Mining, a major Chinese corporation listed on the Shanghai and Hong Kong Stock Exchanges, with a market capitalization of approximately US$56.8 billion (AU$84 billion). This transition began on September 10, following the terms of their JV agreement. Together, they operate through Khuiten Metals, which controls 76.5% of the project, giving Xanadu a 38.25% stake in this potentially large-scale operation aimed at commencing concentrate production by late 2027 or early 2028.
Management has indicated that the PFS is currently undergoing final technical reviews and evaluations. The completion of mine design and independent reviews has taken extra time to ensure a higher standard. The PFS is expected to be released in about two weeks.
Xanadu is committed to delivering the PFS, which is fully funded by Zijin’s initial investment of US$35 million (AU$50.6 million) into the project, adhering to Australian and Canadian standards.
Planning for a bankable feasibility study (BFS) is underway, with management discussing potential funding sources and other interested parties to secure a robust stake in the project. The goal is to enter the final stages of pre-construction approvals and permitting next year, contingent upon approval and funding.
Recent metallurgical testwork has shown promising recovery rates of 80% from sulphide feed, yielding a high-grade concentrate with low impurities. The concentrate is expected to have grades of up to 25% copper and 25 grams per tonne gold from the porphyry deposits.
These test results, which will be included in the upcoming PFS, build on previous findings from a 2022 scoping study. Key objectives of the program included assessing ore hardness, optimal grind sizing, and recovery rates for both gravity gold and copper-gold via froth flotation. The comprehensive data from the PFS is intended to inform product quality, recovery levels, and process engineering design.
The combined process plant is projected to achieve average recoveries of about 81% copper and 80% gold from sulphide feed, with specific recoveries of 10% for gravity gold, and 81% copper and 63% gold through flotation. An additional 7% gold recovery is expected from carbon-in-leach (CIL) processes.
The Kharmagtai project currently has a mineral resource estimate of 3.8 million tonnes of copper and 9.3 million ounces of gold. It is anticipated to operate initially as a bulk-scale open-pit mine with a projected lifespan of 30 years.
The mining license covers a 40-square-kilometre district, and over 280 km of drilling has been conducted, with a significant portion of the resource classified in the indicated category.
The nearby Oyu Tolgoi mine, a joint venture between Rio Tinto and the Mongolian government, is renowned as one of the world’s largest copper-gold deposits and is also situated in the South Gobi Desert. Xanadu asserts that the open-pit potential of Kharmagtai is comparable to that of Oyu Tolgoi, albeit without the extensive underground development.
With copper prices up more than 26% this year and showing potential for further growth, Xanadu’s significant stake in Kharmagtai may represent a promising investment in the mining sector.
