The Asia Miner

JAN-FEB 2018

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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10 | ASIA Miner | Volume 15 • Issue 1 | 2018 recognises is a highly desirable destination for the exploration and discovery of near-surface high-grade gold and copper projects." Amazing but tough terrain "It is an amazing, but tough terrain," Andrew Stewart says. "Be- cause it is a little older, which means that there is much work to do. It is not young terrain like South America, but it has mineralisation all the way from Erdenet in the north, which is younger, to the much older Silurian. There are multiple opportunities to find deposits. Chile is the opposite – Jurassic through to Cretaceous. In both there are big, long periods of mineralisation, which makes them attractive. "In Mongolia, however, the surface has only just been scratched and very few have walked the ground. There is generally a lot of cover and there are very few outcrops." Sam Spring says only 6% of the country has exploration ground available. "The government knows it needs to increase that and has plans to do it once it gets the process right. That is one of the things that helped Ecuador open it and be a bit of a hotspot. "For new entrants hoping to find a way in, if only 6% of the country is available, it is not enough, particularly now the commodity cycle has turned into a tailwind." A gold discovery with copper Andrew Stewart says it has been a little frustrating trying to get the market to understand what Xanadu is doing. "We liked Kharmagtai, because it had high-grade potential, was under-explored and im- portantly was shallow. It had all the right hallmarks of what you want to see, but was always going to take a few years to deliver on what we believed. "It is a project that requires a fair bit of drilling, which we are doing with three or four rigs. It is a gold discovery in drag – a gold discov- ery with copper. We have multiple zones of 400 metres at 2 g/t gold with a by-product. "Suddenly, ore bodies with 1 g/t gold are fashionable globally, whereas it used to be 5g/t. However, we are drilling holes with 2 g/t and have copper as well." Potential for discoveries Peter Akerley says the team at Erdene has been involved in Mongo- lia for 20 years, spending this time studying the country's geology and mineral potential. "Through this work, we have established an area of southwest Mongolia as an area that we believe provides us with the greatest potential for the discovery of high-grade gold deposits and signif- icant potential for porphyry copper opportunities, perhaps rivalling that of southeast Mongolia. "This work has generated three deposits and, given its high fertility, has the potential to be much more productive. This geologic under- standing, our competitive advantage – given the land position – and history in the belt, as well as our established base in that area and in those communities, will keep us focused in this region for many years to come." Xanadu extends White Hill Diamond drilling at Xanadu Mines' Kharmagtai Copper-Gold Proj- ect has extended mineralisation beneath the maiden resource at White Hill deposit. A drill hole has intersected 850 metres from surface at 0.32% copper and 0.2 g/t gold, or 0.45% copper equivalent. Drilling is targeting extensions of copper and gold mineralisation along strike and below the current resources. The 850-metre intersection included 282 metres from 560 metres at 0.44% copper and 0.16 g/t gold, or 0.55% copper equivalent. The hole added over 380 metres of previously unknown mineralisation. Deeper parts of the hole contained significant potassic alteration and bornite mineralisation, which suggests the hole is vectoring towards deeper, higher grade porphyry copper and gold mineral- isation. Additionally, the hole was terminated within a post mineral dyke, indicating mineralisation should be open at depth below this dyke. Andrew Stewart commented, "We are excited by this new drilling beneath the maiden White Hill resource, as it has extended the zone of mineralisation. More significantly, it has intersected bornite and extensive potassic alteration, which could be the precursor to the discovery of a higher-grade system adjacent to the established resources." White Hill is one of three porphyry deposits, all near each other, that make up the Kharmagtai project. The deposits have a com- bined JORC resource of 203 million tonnes at 0.34% copper and 0.33 g/t gold for around 1.1 million tonnes of copper equivalent. A reverse circulation rig at Kincora's East Tsagaan Survarga prospect. A number of deposits have been identified on Xanadu's Kharmagtai project.

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