Mr. Colin Moorhead reports

HIGH-GRADE CORE SHAPING UP AT WHITE HILL

Xanadu Mines Ltd. has provided an update on infill drilling at the Kharmagtai project in Mongolia, being developed with the company's joint venture partner, Zijin Mining Group Co. Ltd. Infill drilling continues to expand upon the new zone (core) of high-grade copper and gold mineralization at the White Hill deposit, demonstrating progressive growth in high-grade material at the base of the previously optimized open pits.

Highlights:

• Extensive approximately 48,000 metres of infill diamond drilling have been completed at Kharmagtai to support the prefeasibility study (PFS);
• Latest results expand upon the recently identified high-grade zone (core) at White Hill, located below the previous scoping study pit designs;
• Best drilling results below and within the pit include:
  • KHDDH661 - 325 metres of 0.38 per cent eCu (equivalent copper) (0.33 per cent copper and 0.11 gram per tonne gold) from 570m
    • Including 146.2 metres of 0.50 per cent eCu (0.43 per cent copper and 0.13 gram per tonne gold) from 700.8m
    • Including 23.7 metres of 0.84 per cent eCu (0.74 per cent copper and 0.20 gram per tonne gold) from 792.3m
    • Including 12 metres of 1.00 per cent eCu (0.87 per cent copper and 0.26 gram per tonne gold) from 794m
    • And 10 metres of 0.92 per cent copper (0.85 per cent copper and 0.12 gram per tonne gold) from 830m
    • And 4 metres of 1.28 per cent copper (1.2 per cent copper and 0.16 gram per tonne gold) from 834
  • KHDDH665 - 733 metres of 0.39 per cent eCu (0.31 per cent copper and 0.15 gram per tonne gold) from 80m
    • Including 210.7 metres of 0.55 per cent eCu (0.43 per cent copper and 0.23 gram per tonne gold) from 411.3m
    • Including 56 metres of 0.85 per cent eCu (0.66 per cent copper and 0.37 gram per tonne gold) from 490m
    • Including 23 metres of 1.16 per cent eCu (0.92 per cent copper and 0.46 gram per tonne gold) from 521m
• Newly identified high-grade (>1 per cent eCu) core at White Hill demonstrates potential to:
  • Enhance 2021 Mineral Resource Estimate3 (MRE) in preparation for updated PFS MRE in 4Q CY2023.
  • Expand and deepen 2022 Scoping Study4 pit shells to capture additional higher grade for longer period.
• Additional follow-up drilling is being planned around the newly identified high-grade (core) zone at White Hill and higher-grade extensions identified at Stockwork Hill5.
• Growth-focused discovery exploration drilling at Kharmagtai is continuing with 4 diamond rigs investigating shallow targets and one drill rig targeting deep mineralization.
• Kharmagtai JV is funding US$35M6 for both PFS completion and discovery exploration, aiming towards decision to mine in Q4 CY2024.

Xanadu's Executive Chairman and Managing Director, Mr Colin Moorhead, said "We continue to advance our understanding of the Kharmagtai copper and gold deposit through our extensive infill drilling program. The final assay results from the initial infill drill program are currently being received, and we have started the resource modelling. We look forward to delivering the results of this work in a Mineral Resource Estimate upgrade in Q4 CY2024.

It is particularly exciting to see the continued high-grade results from White Hill deposit where we have effectively intercepted the top of a previously undefined high-grade core. Discovery of a high-grade core at White Hill is important and highlights strong potential for additional vertical extensions of high-grade mineralized zones, similar to both, the Stockwork Hill and Copper Hill deposits. This has potential to add additional high-grade mining inventory, which could translate to real value in the Kharmagtai open pit. Drilling will continue to define this high-grade core at White Hill.

Significantly, Kharmagtai still has significant new discovery potential, and we continue to explore with four diamond drill rigs testing shallow higher-grade targets and another drill rig testing potential high-grade resource extensions at depth as part of our on-going exploration discovery strategy.

Infill Drilling Expands High-Grade Core at White Hill

Assay results have been returned for 21 additional drill holes at White Hill, with grades on the most part materially better than or in line with the 2021 White Hill MRE7 (Figures 1 to 4; Appendix 1).

Drill hole KHDDH661, located on the southern margin of the White Hill deposit, intersected a significantly higher-grade zone of copper and gold mineralization, on the margin of the current optimised pit design (Figures 1 and 2).

Drill hole KHDDH665 targeted definition and expansion of White Hill mineralization. Intersecting a new high-grade zone, it returned the following interval, including broad zones where the 2021 MRE had predicted significantly lower grades (Figure 2):

Drill holes KHDDH669 and KHDDH670 targeted areas of low drill density within the eastern portion of the scoping study open pit. Both holes returned significantly higher results than the previous MRE had predicted (Figure 3):

About the Infill Drilling Program

Four diamond drill rigs are currently focussed on Kharmagtai infill drilling, with the objective to target areas with potential for future Mineral Resource to Ore Reserve conversion. Totalling ~48,000 metres, the infill drilling program is planned to specifically increase the Resource confidence category from Inferred to Indicated. As such, the planned drill holes aim to remove any mineralization knowledge gaps around the edges of existing deposits.

Kharmagtai currently has an Inferred and Indicated Resource of 1.1Bt at 0.3 per cent copper and 0.2g/t gold, containing 3Mt Cu and 8Moz Au8. As part of the Kharmagtai PFS, the Resource will be upgraded to at least Indicated classification, enabling a maiden, JORC compliant Ore Reserve to be reported. To achieve this, the infill drilling program is designed to upgrade and extend strike length of the shallow open pit Resource areas and selected deeper high-grade zones (Figure 4), including investigation of near-mine, higher-grade extensions.

About Xanadu Mines

Xanadu is an ASX and TSX listed Exploration company operating in Mongolia. We give investors exposure to globally significant, large-scale copper-gold discoveries and low-cost inventory growth. Xanadu maintains a portfolio of exploration projects and remains one of the few junior explorers on the ASX or TSX who jointly control a globally significant copper-gold deposit in our flagship Kharmagtai project. Xanadu is the Operator of a 50-50 JV with Zijin Mining Group in Khuiten Metals Pte Ltd, which controls 76.5% of the Kharmagtai project.

Competent Person Statement

The information in this announcement that relates to Mineral Resources is based on information compiled by Mr Robert Spiers, who is responsible for the Mineral Resource estimate. Mr Spiers is a full time Principal Geologist employed by Spiers Geological Consultants (SGC) and is a Member of the Australian Institute of Geoscientists. He has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity he is undertaking to qualify as the Qualified Person as defined in the CIM Guidelines and National Instrument 43-101 and as a Competent Person under JORC Code 2012. Mr Spiers consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

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 mineralization 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.

Mineral Resources and Ore Reserves Reporting Requirements

The 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code 2012) sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves. The Information contained in this Announcement has been presented in accordance with the JORC Code 2012.

We seek Safe Harbor.