TORONTO, Oct. 15, 2024 (GLOBE NEWSWIRE) -- Xanadu Mines Ltd (ASX: XAM, TSX: XAM) (Xanadu, XAM or the Company) is pleased to report an increase in the Mineral Resource Estimate (Resource, Mineral Resource Estimate or MRE) and a Maiden Ore Reserve for its flagship copper-gold project at Kharmagtai, in the South Gobi region of Mongolia (Figure 1 and Table 1). The MRE update incorporates a revised cut-off grade to align to the marginal cut-off grade in the Kharmagtai Pre-Feasibility Study (PFS). The updated Mineral Resource Estimate and Maiden Ore Reserve are reported in concert with the PFS announced on 14 October 2024.

Highlights

• Kharmagtai Maiden Ore Reserve reported with approximately 1.6Mt Cu and 4.0Moz Au, comprised of Indicated material within the pit shells in the Kharmagtai PFS, but excluding the final pit phase at White Hill which is primarily driven by Inferred material.
• Significant increase in Kharmagtai MRE as Kharmagtai adopts the PFS¹ marginal cut-off grade for economic extraction within the open pit.
  • Open Pit Resource cut-off reduced from 0.20% CuEq to 0.13% CuEq to match the PFS mine plan marginal cut-off grade.
  • Contained copper increase from 3.8Mt to 4.7Mt Cu, or an increase of 0.9Mt Cu.
  • Contained gold increase from 9.3Moz to 11Moz Au, or an increase of 1.7Moz Au.
  • No additional drilling has been completed since August 2024. The MRE growth is exclusively due to change in cut-off grade aligned to PFS¹ calculations by Mining Plus.

Xanadu's Executive Chairman and Managing Director, Mr Colin Moorhead, said "We are pleased to report Kharmagtai Maiden Ore Reserve in concert with the PFS results announced today. We have also aligned the Mineral Resource to the PFS marginal cut-off grades, which demonstrates the sensitivity of this project to that cut-off grade and the significant scale of Kharmagtai, which remains open along strike and at depth with significant growth potential.”

Table 1: Comparison October 2024 vs August 2024 Mineral Resource Estimate²

Resource	Cutoff (% CuEq)	Classification	Tonnes (Mt)	Grades			Contained Metal
				CuEq (%)	Cu (%)	Au (g/t)	CuEq (Mlbs)	CuEq (kt)	Cu (kt)	Au (koz)
October 2024	0.13 (OC) 0.30 (UG)	Indicated	1,300	0.30	0.22	0.17	8,800	4,000	2,900	7,100
		Inferred	900	0.28	0.21	0.13	5,600	2,500	1,900	4,000
August 2024	0.20 (OC) 0.30 (UG)	Indicated	890	0.37	0.26	0.21	7,300	3,300	2,300		6,000
		Inferred	590	0.34	0.25	0.17	4,500	2,000	1,500		3,300

Notes:

• CuEq (lbs and t) accounts for Au (g/t) value and CuEq (t) must not be totalled to Au ounces
• Figures may not sum due to rounding
• Significant figures do not imply an added level of precision
• Resource constrained by 0.1%CuEq reporting solid in line with geological analysis by XAM
• Resource constrained by RV1400fpit (coded field equal to 1)
• Cut-off for Open Cut uses 0.13% CuEq, the marginal mine cut-off per the October 2024 PFS. Cut-off for Underground remains unchanged at 0.30% CuEq.
• Resource CuEq equation (CuEq=Cu+Au*0.60049*0.86667) where Au at USD$1400/oz and Cu at USD$3.4/lb was employed according to the Clients' (XAM) direction.
• Au recovery is relative with Cu rec=90% and Au rec=78% (rel Au rec=78/90=86.667% with number according to the Clients' (XAM) direction
• Underground Resource "other 0p2 and 0p3" NOT inside RV1400fpit above and below nominated mRL level by deposit as follows SH>=720mRL, WH>=915mRL, CH>=1100mRL, ZA>=920mRL, ZE>=945mRL, PE>=1100mRL and GE>=845mRL
• Model: KH_ALL_GLOBAL_OKMOD_FINAL_V3_FORCLIENT_140624_inRV1400fpit

Table 2: Ore Reserve by Classification (Open Cut)

Classification	Tonnes (Mt)	Grades		Contained Metal
		Cu (%)	Au (g/t)	Cu (kt)	Au (koz)
Proved	0	0	0	0	0
Probable	730	0.21	0.17	1,600	4,000
Total	730	0.21	0.17	1,600	4,000

Notes:

• Figures may not sum due to rounding
• Significant figures do not imply an added level of precision
• Ore Reserve constrained by Kharmagtai PFS mine plan inventory³
• Cut-off for Open Cut Ore Reserve uses 0.13% CuEq, the marginal breakeven mine cut-off per the October 2024 PFS.
• Reserve CuEq equation (CuEq=Cu+Au*0.7039Au) where Au at USD$1900/oz and Cu at USD$4.0/lb was employed according to the Clients' (XAM) direction.
• Au recovery is relative with Cu rec=80% and Au rec=81% according to the Clients' (XAM) direction

MINERAL RESOURCE ESTIMATE UPDATE OVERVIEW

Xanadu engaged independent consultants, Spiers Geological Consultants (SGC), to prepare an updated Resource for Kharmagtai. The Resource has been reported in accordance with the JORC Code 2012, is effective as of 31st July 2024, and is shown in full in Tables 3 to 5.

This Resource is an update to the August 2024 Mineral Resource Estimate, which reduces the open pit cut-off grade from 0.20% CuEq to 0.13% CuEq in line with the PFS marginal breakeven cut-off grade. Open cut resources are reported within the same revenue factor 1.4 pit shell from the Kharmagtai PFS. The revenue factor 1.4 pit shell is being used to define RPEEE for the open pit-able MRE at Kharmagtai.

SGC considers that data collection techniques are consistent with industry best practice and are suitable for use in the preparation of a Resource to be reported in accordance with JORC Code 2012. Available quality assurance and quality control (QA/QC) data supports the use of the input data provided by Xanadu.

The Resource is considered to have reasonable prospects for eventual economic extraction (RPEEE) on the following basis:

• the deposit is located in a favourable mining jurisdiction, with no known impediments to land access or tenure status;
• the volume, orientation and grade of the Resource is amenable to mining extraction via traditional open-pit and underground methods; and
• a Scoping Study⁴ and PFS⁵ have been reported to ASX that demonstrate Kharmagtai economic viability as an open pit mine within the revenue factor 1.4 shell that constrains the open cut Resource using the selected marginal cut-off grade, at a range of metal prices and assumptions.
• The PFS has reported a maiden Ore Reserve based on Indicated Resource within the Open Cut Mineral Resource Estimate.

The Resource models are well understood and there is substantial upside potential to be realised by better understanding the economics of the deposit. As demonstrated in the images below, significant volumes of mineralisation have been modelled that fall outside of the constraining pit wireframe. These parts of the model will be targeted for further investigation through economic studies to assess if more of this material can be brought into the Mineral Resource.

The total Mineral Resource Estimate includes material classified as oxide totalling 121Mt @ 0.31% CuEq which can be found in Table 5.

Figure 1: Plan view of the Kharmagtai district. Deposit outlines define the edges of the PFS open pit designs. Confirmed porphyry centres define zones where mineralised porphyry has been intersected in drilling. Geochemical targets represent areas of anomalous copper and gold.

Figure 2: Cross section through the White Hill Deposit showing open nature of the White Hill deposit with grades generally increasing with depth.

Figure 3: Schematic Cross Sections showing the cut-off grade reporting boundaries at White Hill. Red zone represents MRE open pit potential with a cutoff of 0.13% CuEq, blue area "outside open pit” and green area represents the area defined as underground potential with a 0.3% CuEq cutoff applied. These are shown separately as previous MRE's used this 915mRL level as the change from Open Pit and Underground.

Figure 4: Illustration of resource classification within the 2024 PFS pit shells, plan view.

Figure 5: Illustration of resource classification within the 2024 PFS pit shells, long section.

Table 3: Kharmagtai Project - Potential Open Pit Mineral Resource Estimate October 2024 reported at 0.13% CuEq cut-off grade, within the revenue factor 1.4 pit, by resource classification.

Deposit	Classification	Tonnes (Mt)	Grades			Contained Metal
			CuEq (%)	Cu (%)	Au (g/t)	CuEq (Mlbs)	CuEq (kt)	Cu (kt)	Au (koz)
Stockwork Hill	Indicated	314	0.35	0.23	0.23	2,445	1,110	730	2,310
White Hill		704	0.30	0.23	0.13	4,578	2,080	1,590	2,980
Copper Hill		65	0.29	0.21	0.15	420	190	140	310
Zaraa		84	0.23	0.15	0.15	424	190	130	410
Golden Eagle		62	0.24	0.11	0.25	334	150	70	500
Zephyr		49	0.23	0.14	0.17	243	110	70	260
Exploration Potential
Total Indicated		1,279	0.30	0.21	0.16	8,447	3,830	2,730	6,770
Stockwork Hill	Inferred	74	0.22	0.14	0.14	352	160	100	340
White Hill		361	0.26	0.21	0.10	2,100	950	770	1,100
Copper Hill		30	0.18	0.15	0.06	120	50	40	60
Zaraa		195	0.26	0.18	0.15	1,123	510	350	970
Golden Eagle		50	0.21	0.11	0.20	230	100	50	320
Zephyr		39	0.19	0.12	0.14	165	70	50	180
Exploration Potential
Total Inferred		751	0.25	0.18	0.12	4,097	1,860	1,380	2,970

Notes:

• CuEq (lbs and t) accounts for Au (g/t) value and CuEq (t) must not be totalled to Au ounces
• Figures may not sum due to rounding
• Significant figures do not imply an added level of precision
• Resource constrained by 0.1%CuEq reporting solid inline with geological analysis by XAM
• Resource constrained by RV1400fpit (coded field equal to 1)
• CuEq equation (CuEq=Cu+Au*0.60049*0.86667) where Au at USD$1400/oz and Cu at USD$3.4/lb was employed according to the Clients' (XAM) direction.
• Au recovery is relative with Cu rec=90% and Au rec=78% (rel Au rec=78/90=86.667% with number according to the Clients' (XAM) direction
• Model: KH_ALL_GLOBAL_OKMOD_FINAL_V3_FORCLIENT_140624_inRV1400fpit

Table 4: Kharmagtai Project - Potential Underground Mineral Resource Estimate October 2024, reported at 0.3%CuEq cut-off grade, outside the revenue factor 1.4 pit, by resource classification.

Deposit	Classification	Tonnes (Mt)	Grades			Contained Metal
			CuEq (%)	Cu (%)	Au (g/t)	CuEq (Mlbs)	CuEq (kt)	Cu (kt)	Au (koz)
Stockwork Hill	Indicated	14	0.46	0.30	0.29	138	60	40	130
White Hill		11	0.41	0.35	0.12	104	50	40	40
Copper Hill		-	0.33	0.23	0.19	2	-	-	-
Zaraa		13	0.47	0.33	0.28	132	60	40	110
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