Xanadu Mines Ltd. 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. (Zijin). The sulphide rougher recovery results represent a very positive technical and economic outcome for the Kharmagtai Pre-Feasibility Study (PFS).

Next stage cleaner recovery and oxide leach test work continues to progress to plan. 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 µm grind size.

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 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% passing 212 (coarser), 180, 150, and 106 (finer) µm. DRA analysis concluded that 150 µm result is optimum for Stage 1 (defined as 15Mtpa in the Scoping Study) and recommends 212 µm for Stage 2 (30Mtpa in the Scoping Study). Rougher flotation results for the four grind sizes tested. These tests were conducted on a composite sample made up from the 26 variability samples with average assays of 0.41% Cu and 0.35g/t Au.

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 homogenising 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 µm. Each split was rotary split and homogenised for head analysis and sub-samples taken for test work.

Head assays for Cu and Au were conducted by fire assay for each sample. 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 mineralisation 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.