Xanadu Mines Ltd (ASX, TSX: XAM) has announced highly encouraging first batch of assay results from its oxide gold drilling program at the Stockwork Hill prospect within its Kharmagtai project in southern Mongolia.
Significant shallow oxide gold intersects include 40m at 2.30g/t Au from surface including 19m @ 2.83g/t Au from 5m; and 40m at 0.81g/t Au from surface including 7m @ 1.21g/t Au from 6m.
The company reported that the results are very encouraging and demonstrate excellent potential for a shallow oxide resource.
XAM said that the assay results from a further six diamond holes drilled as part of the program are pending. The company reported that the follow-up drilling is currently underway.
Kharmagtai copper-gold project
The Kharmagtai copper-gold project is located in Omnogovi Province, approximately 420km southeast of Ulaanbaatar in Mongolia.
There are three deposits with resources at Kharmagtai, Stockwork Hill, White Hill, and Copper Hill.
Oxide gold drilling program at Stockwork Hill
The company had recently commenced an eight-hole drill program at Stockwork Hill prospect of Kharmagtai. XAM said that the first-pass diamond drill program was designed to extend both strike and depth to the significant shallow oxide gold mineralisation at Kharmagtai.
It may be noted that the previous drilling at Stockwork Hill has been focused on the sulphide copper and gold mineralisation.
Assays for two drill holes
The company announced that the drill results from the first two drill holes, KHDDH490, and KHDDH491 have been received.
XAM reported that the results were either in line with expectations or better than expected. Meanwhile, assays are currently pending from further six diamond holes.
The company said that the new results have significantly increased its confidence in the emerging oxide gold opportunity at Kharmagtai.
Xanadu said that Stockwork Hill is the first prospect to be drilled outside and above the Kharmagtai copper-gold deposit, highlighting the under-explored nature of the broader project.
High-grade results reported
The company announced that high-grade results were reported from the two dill holes.
XAM reported that the drill hole KHDDH490 returned 40m @ 0.81g/t Au from surface including 7m @ 1.21g/t Au from 6m and 5m @ 1.01g/t Au from 16m; while drill hole KHDDH491 returned 40m @ 2.30g/t Au from surface including 19m @ 2.83g/t Au from 5m and 10m @ 2.37g/t Au from 30m.
Wide zones of shallow oxide gold
XAM reported that surface data at Stockwork Hill, combined with the stepped off drilling data suggests the zone of oxide gold mineralisation is between 200 to 400m in length, 75 to 100m in width and will extend to between 30 and 40m in depth.
This zone is open in all directions and only includes material above the Southern Stockwork Zone. The Northern Stockwork Zone is yet to be assessed.
Updates and future plans
The company noted that the oxide gold potential at Stockwork Hill was highlighted in the recently completed scoping study.
XAM reported that the initial development of an oxide gold operation would be focused exclusively on mining and processing near-surface resources; with the low-cost drill program as the first step towards this goal.
Xanadu said that subject to further technical, environmental and social studies, the development of Kharmagtai’s extensive, deeper coppergold resources is expected to take place in the future.
The company reported that additional metallurgical work is planned for each of the oxide gold zones at Kharmagtai to optimise drill results and assess the potential for heap leach processing, rather that carbon-in-pulp (CIP).
Management comments
Xanadu’s Chief Executive Officer Andrew Stewart said “We are very pleased by these initial drill results from the mineralised oxide zone above the Stockwork Hill deposit.
Assays from the first two drill holes in the eight hole program confirm our belief that previous drilling within the oxide zone above the sulphide deposits has underestimated the gold contained.
These outstanding gold intercepts generated at Stockwork Hill show just how underexplored the broader Kharmagtai Project is for oxide gold mineralisation and validates the current plan of developing a low-cost, high-value gold starter project at Kharmagtai.
Our long running objective is to develop Mongolia’s next large-scale open pit copper and gold deposit. However, given Kharmagtai sits on a granted mining lease with a registered water resource and an established power supply nearby, we have the ability to move quickly on an oxide gold project and our current strategy of seeking high-return options via an oxide gold project is focused on providing the capital needed to advance that larger scale copper and gold project.”
