Xanadu Mines: New High-Grade Zone Discovered at Kharmagtai

TORONTO, March 10, 2020 (GLOBE NEWSWIRE) -- Xanadu Mines Ltd (ASX: XAM, TSX: XAM) (“Xanadu” or “the Company”) is pleased to report that diamond drill hole KHDDH526, located to the immediate east of the Stockwork Hill deposit on the Company’s Kharmagtai porphyry copper and gold project in the south Gobi region of Mongolia (Figures 1 and 2), has intersected a significant new zone of mineralisation outside the defined resources. This new discovery significantly increases the potential strike of the Stockwork Hill Deposit.

HIGHLIGHTS

• Drill hole KHDDH526 intersects a broad zone of high-grade mineralisation east of the Stockwork Hill resource
  
  
• KHDDH526 intersects 117m @ 0.68% Cu and 0.58g/t Au from 555m
  
  including 62.8m @ 1.16% Cu and 1.04g/t Au from 607m

• Geophysical signature of the mineralisation can be traced for over 1,000m east of Stockwork Hill resource
  
  
• Drilling reinforces the potential of the Tourmaline Breccia unit to host high-grade mineralisation on a potentially large scale
  
  
• These drilling results confirm Kharmagtai as one of the most promising copper-gold projects globally

Xanadu’s Chief Executive Officer, Dr Andrew Stewart, said “KHDDH526 represents a pivotal drill hole for Xanadu at our Kharmagtai project. We have always believed that the high-grade tourmaline breccia at Stockwork Hill should extend to the east, but previous drilling had been unable to locate the eastern extensions of the mineralisation. KHDDH526 now confirms that mineralisation certainly extends beyond Billy’s Basalt Shear and may potentially extend all the way to the Sandstorm prospect over 1km away. These outstanding results support Xanadu’s interpretations that the porphyry-breccia complex at Kharmagtai has the potential to be a significant copper-gold system with similarities to other very strongly mineralised tourmaline breccia deposits globally”.

STOCKWORK HILL DRILLING PROGRAM

Three drill holes have been completed at Stockwork Hill; all holes were designed to extend the known high-grade mineralisation.

KHDDH525 was planned to bring the recently discovered bornite zone at Stockwork Hill towards surface (refer to Xanadu’s ASX/TSX announcement dated 28 February 2019; Targets 1 and 2 in Figure 3). This hole has encountered a shallow zone of bornite at 193m which is encouraging. The main zone of mineralisation was encountered between 600m and 900m and assays are pending.

KHDDH526 was planned to extend the high-grade tourmaline breccia zone at Stockwork Hill to the east of Billy’s Basalt Shear, the previous limit to mineralisation (Target 3 in Figure 3, 4 and 5). Three key observations highlighted the potential for a significantly larger zone of tourmaline breccia at Stockwork Hill.

The first of these was that mineralisation appeared to be offset by Billy’s Basalt Shear, a medium scale structure against which previously drilled mineralisation abuts. Structural models suggested this fault had an offset of less than 100m and pointed to the tourmaline breccia south and east of previous drilling.

The second observation was that the tourmaline breccia correlates with a discrete zone of magnetic destruction. This corridor of magnetic destruction extends some 1,000m to the Sandstorm Prospect (Figure 4). 

Finally, previous shallow drilling between Stockwork Hill and Sandstorm had encountered zones of tourmaline breccia with sulphide mineralisation reminiscent of the top of the known body of tourmaline breccia at Stockwork Hill. The tourmaline breccia at Stockwork Hill is vertically zoned from shallow tourmaline-chlorite infill, to deeper tourmaline-pyrite infill and then into copper bearing tourmaline-chalcopyrite-pyrite infill. These shallow holes displayed the tourmaline-chlorite and tourmaline-pyrite zones with minor chalcopyrite (Figure 4) which suggests copper mineralisation should be below these intercepts.

Partial assays have been returned for KHDDH526;

KHDDH526 - 117m @ 0.68% Cu & 0.59/t Au (0.98% eCu) from 555m,

including 70.8m @ 1.04% Cu and 0.93g/t Au (1.52% eCu) from 599m,

and         62.8m @ 1.16% Cu and 1.04g/t Au (1.69% eCu) from 607m.

Drill hole KHDDH527 has been drilled on the south western margin of Stockwork Hill (aimed at Target 5 in Figure 3). This hole has encountered mixed zones of high vein density stockwork, andesite dykes and tourmaline breccia (Figure 6). Assays are pending.

COMPETENT-QUALIFIED PERSON STATEMENT

The information in this announcement that relates to exploration results is based on information compiled by Dr Andrew Stewart, who is responsible for the exploration data, comments on exploration target sizes, QA/QC and geological interpretation and information.  Dr Stewart, who is an employee of Xanadu and is a Member of the Australasian Institute of Geoscientists, has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as the “Competent Person” as defined in the 2012 Edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves and the National Instrument 43-101.  Dr Stewart consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

COPPER EQUIVALENT CALCULATIONS

The copper equivalent (CuEq) calculation represents the total metal value for each metal, multiplied by the conversion factor, summed and expressed in equivalent copper percentage. Grades have been adjusted for metallurgical recoveries based off previous metallurgical work performed on the mineralisation in question. The copper/gold equivalent grades are of an exploration nature only and intended for summarising grade.  The copper/gold equivalent calculation is intended as an indicative value only.  The following copper equivalent conversion factors and long-term price assumptions have been adopted: Copper Equivalent Formula eCu or CuEq = Cu + Au * 0.62097 * 0.8235. Gold Equivalent Formula eAu = Au + Cu / 0.62097 * 0.8235.

Where:

Cu - copper grade (%)

Au - gold grade (g/t)

0.62097- conversion factor (gold to copper)

0.8235 - relative recovery of gold to copper (82.35%)

The copper/gold equivalent formula was based on the following parameters (prices are in USD):

Copper price - 3.1 $/lb (or 6834 $/t)

Gold price - 1320 $/oz

Copper recovery - 85%

Gold recovery - 70%

Relative recovery of gold to copper = 70% / 85% = 82.35%.

Table 1: Currently returned assay intercepts for Stockwork Hill

Intercepts are weighted averages to ensure different sample lengths do not skew the results. There is insufficient information to understand true widths at this stage. Due to the size of the system and current ambiguity around orientation of the drill hole relative to minor diluting intrusives, a larger than normal internal dilution of 9m has been used to calculate a geologically relevant intercept.

Table 2: Drill hole collar location

For further information, please contact:

Andrew Stewart
Chief Executive Officer
T:  +61 2 8280 7497
M: +61 409 819 922
E:  This email address is being protected from spambots. You need JavaScript enabled to view it.
W: www.xanadumines.com