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Xanadu Mines Ltd (ASX: XAM) is a metals and mining company having a primary interest in copper and gold. The company has several projects in Mongolia and have control over one of the porphyry copper-gold projects in Asia with Kharmagtai. It is aggressively increasing its budget and programs to seize the current and further opportunities.
Today, 17th April 2019, the company released updates on its quarterly activities for the march quarter. The Kharmagtai copper-gold is located inside Mongoliaâs South Gobi porphyry copper area.The activities initiated for the March quarter aimed at
- Metallurgical test work on oxide gold mineralisation at Golden Eagle
- Diamond drilling at Stockwork Hill to expand the high-grade bornite zone
- Completion of the first open pit Scoping Study at Kharmagtai
Kharmagtai open pit project
The Scoping Study commissioned which was based on current indicated and inferred mineral resources to judge the economic viability of the near-surface copper and gold mineralisation from this project. The study identifies additional upside opportunities from improving the life of the open pit mine. It also evaluates oxide gold potential near the surface at many locations and assesses higher-grade underground options. CSA Global Pty Ltd prepared the scoping study by taking inputs from reputable industry consultants Xanadu Mines and O2 Mining Limited. The study indicated there is a high potential to extract about fifty one percent of mineralisation. Based on the results, additional drilling at the project will be commenced.
Extension to the Stockwork Hill deposit discovered
The company is targeting the drilling towards below chalcopyrite?gold mineralisation which will help in testing for a higher-grade bornite core. Drill hole KHDDH488 revealed new zone of high-quality mineralisation (352m @ 0.41% Cu & 0.58g/t Au (0.78% eCu or 1.22g/t eAu) from 448m). Some of the drill result included are;
- 102m @ 1.00% Cu and 1.67g/t Au (2.06% eCu or 3.23g/t eAu) from 572m
- 78m @ 1.14% Cu and 2.06g/t Au (2.45% eCu or 3.85g/t eAu) from 594m
The diamond drill hole (KHDDH489) targeted the extensions to mineralisation to the south west of the main deposit. It expanded known mineralisation to the extent of approximately 540m.
Cashflow for the March quarter
The company has used net cash of A$2.16 million in operating activities, incurring highest cash expense towards exploration & evaluation. No investment activities or financing investments have been done in the March quarter. The company had net cash of A$3.08 million as at 31st March 2019. It also estimated the cash outflow of A$1.19 million in the next quarter (quarter ending June 30th, 2019) with the highest expense to be incurred on staff costs to the extent of A$550k
On March 27th 2019, the company announced the changes in the board to focus on Australian retail market.
Technical view
In the last six months, the stock has delivered a negative return of 30.7% while YTD return stands at 18.1%. The shares of XAM closed the trading session at A$0.091 on ASX ( as on 17 April 2019) and was up by 1.11% as compared to its previous dayâs closing price. The company has a market capitalisation of A$58.32 with 52-week high of A$0.235.
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