Xanadu Identifies High-Grade Copper-Nickel Targets in Mongolia

Xanadu Mines Ltd reported strong field operations at the highly promising Sant Tolgoi Copper-Nickel Project in Zavkhan Province, Western Mongolia. Sant Tolgoi is considered highly promising for the discovery of new magmatic intrusion-related Copper-Nickel systems.

The goal of this exploration effort is to gather essential data to identify high-grade sulfide mineralization within the expansive Sant Tolgoi Intrusive Complex.

Highlights:

• The Sant Tolgoi Copper-Nickel Project's field exploration campaign is well underway, and it marks Xanadu's first extensive actions at these extremely attractive district-scale magmatic prospects
• Comprehensive geological mapping and geochemical sampling are underway
• The acquisition of high-resolution magnetic, gravity, and CSAMT is complete, with modeling in progress
• Several shallow copper-nickel sulfide prospects have been identified along extensive kilometers of strike
• Early geochemical and geophysical data are expected in Q4 2024

We are very pleased to have commenced and making excellent exploration progress at the Sant Tolgoi Copper-Nickel Project. This project represents an exciting green-fields opportunity. We believe this is potentially a new Magmatic Cu-Ni District in an under-explored mineral province of Western Mongolia and is an extension of fertile magmatic activity hosting a significant number of Ni-Cu-PGE deposits in the Central Asian Orogenic Belt.

Dr. Andrew Stewart, Vice President, Xanadu Mines Ltd.

Stewart added, “Sant Tolgoi lies on the western extension of the deep-seated Khangai Fault systems. Encouragingly surface mapping has identified widespread mineralization, primarily consisting of copper oxides, either as fracture fillings or disseminated mineralization in coarse- to medium-grained gabbro, validating our generative strategy.”

About Sant Tolgoi

The Sant Tolgoi Project, also known as the Sant Tolgoi Cu-Ni Project, consists of two Exploration Licences, XV-17774 (Oyut) and XV-21887 (Sant Tolgoi), spanning over 40 km² in the Zavkhan Province of Western Mongolia. The tenement portfolio includes several advanced exploration sites with high potential for major magmatic copper and nickel deposits.

Located in Mongolia's Zavkhan Region, the project sits on the western extension of the Khangai Fault systems, a metalliferous fault network known for significant mafic and ultramafic intrusions, making it highly prospective for intrusion-hosted copper and nickel discoveries. Early evidence of various copper-nickel systems has been observed in historical drilling.

Agreement Terms

Xanadu Mines Ltd has entered into a binding agreement with STSM LLC, granting XAM the right to earn up to 80 % interest in two exploration licenses, XV-17774 (Oyut) and XV-21887 (Sant Tolgoi), located in the Zavkhan Province of western Mongolia. Key terms are:

Stage 1 Farm-in

• After meeting the minimum commitment, XAM can proceed with Stage 1, where it can acquire a 51 % stake in the project by investing $1,000,000 USD in exploration over 24 months.
• Upon completion of Stage 1 Farm-In, XAM will hold a 51 % ownership in the projects.

Formation of Joint Venture (JV):

• STSM LLC has the option to terminate the farm-in and form a JV when XAM has earned a 51% stake in the projects. XAM would hold 51 %, and STSM 49 %, with both parties contributing pro rata to their shares. XAM would act as the JV manager, based on standard commercial agreements.

Stage 2 Farm-In (Post-Joint Venture Formation):

• If STSM opts not to contribute to its pro rata share, XAM can invest an additional $10,000,000 in exploration and transition the exploration license to a mining lease.
• This would increase XAM’s stake to 80 %, with STSM LLC retaining the remaining 20%.

Stage 3 Farm-In (Post-Mining Lease Transfer):

• After completing Stage 2, XAM will own 80 % of the projects, with STSM LLC holding 20 %. STSM will contribute to future exploration costs based on its 20 % stake.
• XAM can offer a loan with a minimum 10 % interest rate for up to 20 % pro rata, to be repaid by STSM from its gross revenue and royalties from product sales resulting from the projects.