Xanadu Mines (ASX: XAM) says oxide leach testwork on ore from its Kharmagtai copper-gold project in Mongolia has highlighted the potential to conduct commercialised processing and generate significant early cash.
The company says leaching tests on the shallower oxidised portion of the project’s mineral resource delivered positive metallurgical extraction results of up to 93 per cent copper and 46 per cent gold. Oxide leach recovery had previously been identified as one of multiple potential uplift scenarios in the company’s recently-released scoping study for the operation by reducing mining strip and generating earlier operating cashflows.
Late last year, Xanadu tabled a staggering resource estimate upgrade for Kharmagtai, jumping to 1.3 billion tonnes with 3.4 million tonnes of contained copper and 8.5 million gold ounces. The total resource includes 52 million tonnes of oxide material primarily in the top 20m from the surface.
Management says the leach oxide testing shows the surface material, which will need to be excavated before it can access the main sulphide deposits, can potentially be processed as ore rather than pre-stripping. It could also reduce waste rock production by about 10 per cent in the early years of the project, in addition to generating net revenue rather than net costs.
The latest results come just one day after Xanadu revealed early metallurgical recoveries of up to 98 per cent copper and 95 per cent gold from rougher flotation testwork. Samples were collected from core drilled at the Stockwork Hill, White Hill, Copper Hill and Golden Eagle deposits at Kharmagtai.
Tests are expected to extend for an additional four weeks out to a total 12-week period.
Management says results to date indicate that leaching is accelerated at a finer crush size and gold and copper extractions are tracking better than expected. It adds that extractions presented are based on the assay of leach solutions, as compared to the assay head grades.
The latest test figures will be used to complete the company’s prefeasibility study (PFS), which is tracking on schedule and to budget.
Instead of turning left to the waste dump, our goal is to turn right and place it on a leach pad, where it can turn a negative into a net positive during the early years of Kharmagtai operations; a double benefit for project economics. With continued successful leaching testwork, along with process and engineering design, we expect to deliver oxide heap leaching into the PFS base case and drive real value uplift for all stakeholders.
Xanadu Mines executive chairman and managing director Colin Moorhead
Last year, the company completed two phases of its strategic partnership with China’s giant Zinjin Mining Group, providing access to funding for its recent exploration blitz at the operation. The deal saw Zijin invest US$35 million (AU$52 million), which will also be used to complete the Kharmagtai PFS.
A 50:50 joint venture (JV) has been created between the two partners at a project level, with Xanadu to be the operator on the ground. The partnership has allocated 18 months to knock over the PFS, which is expected to be completed this year, while an earlier scoping study identified several upside opportunities that could materially upgrade the economics of the project.
Management expects to deliver the next phase of testwork results during June or July. Xanadu has also previously expressed its interest in adding projects to its Mongolian holdings as part of its plans to build a portfolio of future-facing metals projects.
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