Xanadu Mines


Primary ticker: ASX:XAM, TSX:XAM
Stage of development: Exploration, Development
Primary minerals: Copper Gold
Project to promote: Kharmagtai and Red Mountain
Project location: Mongolia
Website: www.xanadumines.com

Xanadu Mines Limited is an exploration and development company, operating in Mongolia. We give investors exposure to globally significant, large-scale copper-gold discoveries underpinned by low-cost inventory growth. Xanadu maintains a portfolio of development ready and exploration projects. It remains one of the few listed juniors who control a globally significant copper-gold deposit in our flagship Kharmagtai project. Xanadu currently have 2 projects in the South Gobi Desert – Kharmagtai and Red Mountain.

Cash: AUD$4.1M
Debt: NIL

Major shareholders:

Asia Capital & Advisors – 15%
Zijin Mining – 9.9%
Paradice Investment Management – 4%
Nero Resources Fund – 3%
Management Ownership – 6%

Management Profile

Colin Moorhead – Executive Chairman and Managing Director
Experienced industry executive, having spent over three decades working in mining companies from innovation, discovery and project development through to operations. He has extensive experience in development and financing significant mining projects internationally, global mining operations and successful mergers & acquisitions. A geologist by training, Mr Moorhead is known for strong leadership, strategy and execution. He was an executive level manager responsible for global exploration and resource development at Newcrest Mining in 2008–2015, a period of significant growth for Newcrest. He served as CEO of emerging Indonesian-listed producer PT Merdeka Copper Gold Tbk, building and leading the team that constructed and commissioned the highly successful Tujuh Bukit Gold Mine. He is currently a Non-Executive Director of Aeris Resources (ASX:AIS) and Coda Minerals (ASX:COD), and Executive Chairman of Shihayo Gold (ASX:SIH). He is a Fellow, Chartered Professional and Immediate Past President of AUSIMM, a graduate of AICD and Harvard Business School Advanced Management Program (AMP).

What is your rationale for taking part in 121 Mining Investment?

Seeking to meet with investors with the capacity buy XAM on market. Well funded post Zijin Mining’s acquisition of stakes at both company and project level for A$58M. Kharmagtai Pre Feasibility Study (PFS) and reinvigorated Discovery Exploration program due to kick off soon. Red Mountain discovery exploration program recently kicked off, targeting meaningful high grade shallow gold, copper, silver deposit.

What recent news would you like to highlight to investors attending?

30 August – Exploration ramps up at Red Mountain
22 August – FIRB approves Zijin Investment
1 August – Positive Metallurgical Test Results at Kharmagtai
9 April – Strategic Partnership with Zijin Mining & Placement
6 April – Scoping Study – Kharmagtai Copper-Gold Project

What are your key goals in 3 months, 6 months, 12 months?

3 Months:

* Shareholder approval & People’s Republic of China (PRC) Approval of Zijin Mining’s A$58M investment at listed company level and project level, noting the larger hurdle of FIRB approval was recently cleared.

* Kicking off PFS and Discovery Exploration program at Kharmagtai


6 Months:

* Updates on Kharmagtai PFS technical studies, optimising production and incorporating capital and operating cost improvements, through multiple real upside opportunities to minimise waste, reduce emissions and add serious value.

* New exploration discoveries at both Kharmagtai and Red Mountain.


12 Months:

* Good progress on Kharmagtai PFS, optimising production and incorporating capital and operating cost improvements, through multiple real upside opportunities to minimise waste, reduce emissions and add serious value.

* Delivery of Kharmagtai’s maiden Ore Reserve

* Delivery of Red Mountain’s maiden Mineral Resource

What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?

* Mongolia government is seeking to accelerate foreign investment, especially from mining, given its rich mineralised potential

* They are working towards a more simple, transparent and competitive mining code (more akin to successfully developed mining jurisdictions such as Australia and Canada.

* Upcoming revisions to attract further investment are coming for both the Mining Code (recently reshuffled pro business parliament targeting completion by end 2023), Investment Law and new Investor Protection council.

* Xanadu’s Country Manager & Executive Director Ganbayar Lkhagvasuren is very well connected politically in Mongolia, and a committee member of the New Mining Code Advisory Group.

* Given the timeline for revisions to the Mining Code, were expecting both of Xanadu’s mining licences to be favourably impacted.

What do you think makes your company such a compelling investment?

* Accelerating Mongolian exploration and studies following strategic investment by Zijin for A$58M, with transaction pricing XAM at ~8cps (XAM currently trading at 59% discount at 3.3cps). Gap expected to close as transaction finalised & approved, and cash banked.

* Flagship project Kharmagtai PFS fully funded and funded for future high impact discoveries at both Kharmagtai and 100% owned Red Mountain.

* PFS optimising and enhancing project commencing soon, targeting Decision to Mine in 2023, and production in next 5yrs

* Delivery of Kharmagtai Maiden Ore Reserve targeted for 2023, following recent Mineral Resource upgrade to 3Mt copper & 8Moz gold, with nearly 50% in Indicated confidence category.

* For a change of control deal for XAM, a post-investment offer is required from Zijin, subject to board endorsement and subsequent XAM shareholder approval.

What are the top 3 key investor takeaways?

1. Kharmagtai copper gold project has low ESG risk, well funded to decision to mine, with first concentrate production targeted in Q4’2027.

2. Plenty of opportunities for discovery exploration at both projects.

3. Kharmagtai PFS targeting production optimisation and opex and capex improvements, through multiple real upside opportunities to minimise waste, reduce emissions and add serious value.