Mr. Colin Moorhead reports

METALLURGICAL TESTS AT KHARMAGTAI SHOW STRONG SULPHIDE ROUGHER FLOTATION RECOVERY

Xanadu Mines Ltd. has provided an update on metallurgical test work for the Kharmagtai project in Mongolia, being developed with the company's joint venture partner Zijin Mining Group Co. Ltd. The sulphide rougher recovery results represent a very positive technical and economic outcome for the Kharmagtai prefeasibility study (PFS). Next stage cleaner recovery and oxide leach test work continues to progress to plan.

Highlights

• PFS stage metallurgical test work completed for sulphide rougher process recoveries.
• Rougher flotation tests delivered metallurgical recoveries up to 98 per cent copper and 95 per cent gold, at head grades up to 1.6 per cent Cu and 2.0g/t Au at P80 grind size of 150 micron (microm).
• These are in line with or better than Scoping Study1 assumptions and indicate potential value uplift in final PFS recoveries.
• Grind size selected at 150 microm for Stage 1 (15Mtpa in Scoping Study) and 212 microm for Stage 2 (30Mtpa in Scoping Study), following trade-off studies by DRA Global. Coarse particle flotation remains under investigation to further optimise Stage 2 grind size.
• Process flowsheet includes conventional comminution, followed by rougher flotation, then regrinding and three stages of cleaning to produce a clean concentrate.
• Next stage regrind & cleaner flotation underway, targeting a balance between concentrate grade and recovery. Results expected in May or June 2024.

Xanadu's Executive Chairman & Managing Director, Colin Moorhead said: "Strong sulphide rougher flotation results were expected given the clean mineralogy of the deposits at Kharmagtai, and it is very pleasing to have this confirmed here. These results are only part of our metallurgical test plan, and we look forward to future announcements including cleaner flotation and an even larger potential value uplift from our oxide leach program being investigated by MPS labs in Perth."

Metallurgical Recoveries

The rougher flotation test program was conducted at ALS laboratory in Perth. It included head grade analysis and rougher flotation recovery test work on 26 samples taken from varying deposits, depths, sulphide and alteration types, using a 150 microm grind size.

Results are shown in Table 1 and demonstrate achievement of generally high rougher flotation recoveries in both copper and gold. Copper head grade versus copper recovery is shown in Figure 1.

Grind Size Selection

The flowsheet considers conventional comminution followed by rougher flotation, rougher concentrate is then reground and followed by three stages of cleaning to produce a final concentrate (Figure 2).

The rougher flotation step represents the key to overall recovery, so comminution circuit grind size selection was based on rougher recoveries at primary grinds of 80 per cent passing 212 (coarser), 180, 150, and 106 (finer) microm.

DRA analysis concluded that 150 microm result is optimum for Stage 1 (defined as 15Mtpa in the Scoping Study3) and recommends 212 microm for Stage 2 (30Mtpa in the Scoping Study).

Rougher flotation results for the four grind sizes tested are shown in Table 2. These tests were conducted on a composite sample made up from the 26 variability samples with average assays of 0.41 per cent Cu and 0.35g/t Au.

Copper recovery to the rougher concentrate decreased with increasing grind size (coarser) as would be expected.

Flotation Sample Selection and Preparation

Samples were collected from core drilled at Stockwork Hill, White Hill and Copper Hill deposits at the Kharmagtai project, as being representative of each of these zones. Sample preparation consisted of homogenizing and splitting samples "as received" into their respective composites and labelling by deposit (CH = Copper Hill; SH = Stockwork Hill; WH = White Hill) and by sample number (between 1 and 15 by deposit), followed by crushing and grinding to 150 microm. Each split was rotary split and homogenized for head analysis and sub-samples taken for test work. Head assays for Cu and Au were conducted by fire assay for each sample.

Future Test Work

The next stage of the flowsheet after the roughers is a regrind followed by three stages of cleaning to produce a final concentrate. Cleaner test work is in progress, focused on determining the optimal balance of concentrate grade and recovery.

Sulphide flotation is a subset of the broader Kharmagtai metallurgical test work program. The comprehensive metallurgy program during the Pre-Feasibility Study includes comminution properties of the mineralization and alteration styles at Kharmagtai to determine optimum flowsheet and generate inputs for engineering design. This will also generate data to inform the copper and gold recovery models, and allow operating costs estimates to be calculated. Concentrate samples will be generated for marketing studies as part of the broader metallurgy program. This will be important for reinforcing concentrate saleability, which we expect to be a clean and in-demand concentrate, in a very tight concentrate market.

The broader metallurgical program also includes oxide leach test work to determine the value and viability of using a heap leach to capture value from partially oxidised, near-surface pre-strip material which was treated as waste in the Scoping Study4 and identified as a significant uplift opportunity to turn pre-strip costs into positive revenue for the Kharmagtai project.

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 per cent of the Kharmagtai project.

We seek Safe Harbor.