Compelling Coarse Ore Flotation Results Indicate Throughput Upside For Kharmagtai

The Eriez HydroFloat test work for evaluating coarse ore flotation has demonstrated excellent results for one of the key uplift scenarios defined in the Kharmagtai Scoping Study1. It has effectively improved upfront processing efficiencies, producing a coarse reject of up to ~44% by mass for the main mineralised sulphide orebody.

Highlights

• Testwork for assessing coarser grind options (P80 grind sizes ranging between 150 to 450 microns ( μm ) for Kharmagtai sulphide mineralisation, using HydroFloat achieved compelling results:
  • Up to 94% copper and 92% gold recovered in the HydroFloat stage;
  • Enabling a peak coarse reject of 43.8% by mass , at 450μm; and
  • Rougher recoveries of 91% for copper and 83% for gold , at 250 μm.
• Coarse ore flotation may offer numerous benefits for Kharmagtai, including:
  • Reduced power and water intensity per tonne of ore processed;
  • Increased mill capacity and overall plant capacity for an increased production rate;
  • Reduction in consumables, such as grinding media and reagents; and
  • Significant improvement in tailings stability with the production of coarser tails, as well as water recycling at the back end of the plant.
• HydroFloat provides the opportunity for Kharmagtai to recover valuable minerals in the 150 to 200μm range that processing through conventional flotation alone is unable to perform.
• More than 70 HydroFloat units are commercially used in global operations, including Australia. The pilot program to date has demonstrated significant potential for HydroFloat, with further mineralogy and pilot tests to be conducted as new samples become available.
  

Xanadu's Executive Chairman and Managing Director, Colin Moorhead said:

“These results provide strong support for our Scoping Study uplift scenario using coarse ore flotation to improve overall project economics. This uplift is achieved through increasing throughput and accelerating mining and processing rates which ultimately accelerate revenue generation at Kharmagtai.

It also promises to enhance the environmental sustainability aspects of Kharmagtai through the early separation of barren material and a coarser grind size, allowing for significant reduction in power and water requirements, and better tailings management. Given this separation method has been used successfully by bulk miners for over 20 years, we intend to leverage those learnings at Kharmagtai. We are now working with DRA, our process design engineers, to determine the optimal timing to include HydroFloat in the processing flowsheet, and maximise its beneficial impact for Kharmagtai.”

Coarse Ore Flotation Metallurgical Testwork Program

Summary

The existing conventional flowsheet involves crushing and grinding ore to a P80 size of 150μm for Stage 1 (15Mtpa in Scoping Study) and 212μm for Stage 2 (30Mtpa in Scoping Study) 2 .

Testwork to investigate coarser grind options was completed at ALS' laboratory in Perth and was supervised by Eriez Australia using Eriez HydroFloat pilot equipment, returning HydroFloat rougher recoveries of:

• 91% Cu recovery and 83.2% Au recovery at 250μm; and
• 88.4% Cu recovery and 77.7% Au recovery at 350μm.

Description

Composite samples were prepared from core drilled at each of the Stockwork Hill, White Hill and Copper Hill deposits Kharmagtai. Sample preparation consisted of combining samples“as received” into a single 200kg composite, crushing to 3.35mm, followed by rotary blending and splitting and then grinding individual samples to 150 (finer), 250, 350 and 450 (coarser) μm.

Eriez supplied the CrossFlow classifier (XF), rotary drum and HydroFloat (HF) units used for laboratory testing at the ALS facility. The Eriez Laboratory CrossFlow is a hydraulic classifier that separates particles according to size, shape, and specific gravity. Samples were classified in the CrossFlow to remove the fines and slimes with a target split size of 90μm and the CrossFlow underflow was used as the feed for the coarse particle flotation into the HydroFloat unit. Prior to that, the HydroFloat feed was polished and conditioned with collector reagent in a rotating drum before being pumped into the HydroFloat. The entire HydroFloat overflow and HydroFloat underflow streams were collected, split, and sub-sampled before assay analysis for primarily copper and gold. Combined CrossFlow overflow and HydroFloat overflow from the 250 and 350μm tests were tested by flotation to produce a rougher concentrate, after grinding to 75μm.

HydroFloat Results

The coarse ore flotation evaluation included head grade analysis and rougher flotation recovery testwork on a composite sample taken from varying deposits, depths, sulphide and alteration types to test coarser grind options. Results for the Cross Flow (XF) stage at the tested P80 grind sizes are shown in Table 1.

Table 1: Mass Split in Cross Flow

As the grind size gets coarser, less fines are produced and hence the XF overflow mass reduces from 52.9% by weight at 150 μm, to 36.6% at 450 μm. In a full-scale flowsheet, the XF overflow would join the HF overflow for downstream conventional rougher and cleaner flotation.

The results from the HydroFloat (HF) stage are shown in Table 2. Both Cu and Au recoveries increase as the grind size becomes finer, and at the same time the HydroFloat overflow Cu and Au grades increase from 0.88% Cu to 1.24% Cu and from 0.97g/t Au to 1.70g/t Au , demonstrating improved liberation at the finer sizes. The HydroFloat underflow grade (final tailings) reduce from 0.08% Cu to 0.03% Cu and 0.08g/t Au to 0.06g/t Au as the sizing gets finer.

Table 2: HydroFloat Recovery and Mass Pull Results

The combined XF overflow (minus 90 μm) and the HydroFloat overflow represent the downstream feed in the process flowsheet. For each of the 250 μm and 350 μm laboratory tests, the XF and HF overflows were combined and ground to 75 μm for rougher flotation. The results of this step, plus the HydroFloat (HF) results are combined in Table 3 and compared with results from the conventional flowsheet.

Table 3: Combined Results of HydroFloat Test Products for Rougher Flotation Compared to Standard Rougher Test

These results demonstrate that the 250 μm HydroFloat test, followed by a 75 μm grind for rougher flotation, produced similar results to a conventional flotation test at 150 μm. Furthermore, improved rougher concentrate grade and recovery were achieved:

• 5.95% Cu grade and 91.0% recovery for HydroFloat, versus
• 4.64% Cu grade and 90.1% recovery for conventional flotation.

However, Au grade and recovery are both less favourable for HydroFloat versus conventional flotation.

Results indicate that use of Eriez HydroFloat for Kharmagtai ore achieved a high recovery while rejecting coarse, barren ore.

Significance to Kharmagtai

The results achieved in these preliminary tests provide sufficient encouragement to conduct further studies. Since the comminution circuit is the major source of energy consumption, investigating ways to reduce this through a coarser grind warrants further work. This will take the form of mineralogical studies to determine the liberation of sulphides at coarse grinds, followed by further pilot testing on new samples, as they become available.

Figure 1: Eriez 6” Laboratory HydroFloat Setup

Sample Selection and Preparation

Metallurgical sample locations, zones and assayed head grades are detailed in Table 3 . Drill hole collar locations for drill holes sampled are outlined in Figure 2 and detailed in Appendix 1, Table 1 .

Table 3: Drill hole sample details incorporated in composite for HydroFloat testwork

Figure 2: Collar locations for drill holes sampled in metallurgical testwork

Next Steps

The next step for coarse ore flotation is PFS process flow sheet modelling and engineering design by DRA, the engineering firm leading process design and engineering for the study.

Coarse ore flotation is a subset of the broader Kharmagtai metallurgical testwork program. The comprehensive metallurgy program during the Pre-Feasibility Study includes comminution properties of the mineralisation and alteration styles at Kharmagtai to determine the 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 also be generated for marketing studies as part of the broader metallurgy program.

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.

For further information on Xanadu, please visit: or contact:

Colin Moorhead
Executive Chairman and Managing Director
E: ...
P: +61 2 8280 7497

This Announcement was authorised for release by Xanadu's Executive Chair and Managing Director.

Appendix 1: Metallurgical Sample Composition and Location

Table 1: Drill hole sample details for rougher flotation testwork

Appendix 2: Statements and Disclaimers

Competent Person Statements

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 mineralisation 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.

The information in this Announcement that relates to metallurgy and metallurgical testwork has been reviewed by Graham Brock, BSc (Eng), ARSM. Mr Brock is not an employee of the Company but is employed as a contract consultant. Mr Brock is a Fellow of the Australasian Institute of Mining and Metallurgy; he has sufficient experience with the style of processing response and type of deposit under consideration, and to the activities undertaken, to qualify as a competent 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. Mr Brock consents to the inclusion in this report of the contained technical information in the form and context as it appears.

Forward-Looking Statements

Certain statements contained in this Announcement, including information as to the future financial or operating performance of Xanadu and its projects may also include statements which are 'forward‐looking statements' that may include, amongst other things, statements regarding targets, estimates and assumptions in respect of mineral reserves and mineral resources and anticipated grades and recovery rates, production and prices, recovery costs and results, capital expenditures and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions. These 'forward-looking statements' are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Xanadu, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies and involve known and unknown risks and uncertainties that could cause actual events or results to differ materially from estimated or anticipated events or results reflected in such forward‐looking statements.

Xanadu disclaims any intent or obligation to update publicly or release any revisions to any forward‐looking statements, whether as a result of new information, future events, circumstances or results or otherwise after the date of this Announcement or to reflect the occurrence of unanticipated events, other than required by the Corporations Act 2001 (Cth) and the Listing Rules of the Australian Securities Exchange ( ASX ) and Toronto Stock Exchange ( TSX ). The words 'believe', 'expect', 'anticipate', 'indicate', 'contemplate', 'target', 'plan', 'intends', 'continue', 'budget', 'estimate', 'may', 'will', 'schedule' and similar expressions identify forward‐looking statements.

All 'forward‐looking statements' made in this Announcement are qualified by the foregoing cautionary statements. Investors are cautioned that 'forward‐looking statements' are not guarantee of future performance and accordingly investors are cautioned not to put undue reliance on 'forward‐looking statements' due to the inherent uncertainty therein.

For further information please visit the Xanadu Mines' Website at .

Appendix 3: Kharmagtai Table 1 (JORC 2012)

Set out below is Section 1 and Section 2 of Table 1 under the JORC Code, 2012 Edition for the Kharmagtai project. Data provided by Xanadu. This Table 1 updates the JORC Table 1 disclosure dated 8 December 2023.

JORC TABLE 1 - SECTION 1 - SAMPLING TECHNIQUES AND DATA

(Criteria in this section apply to all succeeding sections).

JORC TABLE 1 - SECTION 2 - REPORTING OF EXPLORATION RESULTS

(Criteria in this section apply to all succeeding sections).

JORC TABLE 1 - SECTION 3 - ESTIMATION AND REPORTING OF MINERAL RESOURCES

Mineral Resources are not reported so this is not applicable to this Announcement. Please refer to the Company's ASX Announcement dated 8 December 2023 for Xanadu's most recent reported Mineral Resource Estimate and applicable Table 1, Section 3.

JORC TABLE 1 - SECTION 4 - ESTIMATION AND REPORTING OF ORE RESERVES

Ore Reserves are not reported so this is not applicable to this Announcement.

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1 ASX/TSX Announcement 8 April 2022 – Scoping Study Kharmagtai Copper-Gold Project
2 ASX/TSX Announcement 4 March 2024 – Metallurgical Tests at Kharmagtai Show Strong Sulphide Rougher Flotation Recovery

Photos accompanying this announcement are available at:

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