Figure 1. Location of reported drilling in plan view on Kharmagtai Mining Lease. Figure 2. Cross section showing drill hole KHDDH564. Figure 3. 3D plan view of Stockwork Hill showing the main high-grade zones and currently reported drill holes. Figure 4. 3D oblique view of Stockwork Hill showing the main high-grade zones and currently reported drill holes and 2021 drilling. Figure 5. Slab images from KHDDH565, each slab is halved HQ core and 4.36cm tall. Figure 6. Slab images from KHDDH565, each slab is halved HQ core and 4.36cm tall. TORONTO, April 20, 2021 (GLOBE NEWSWIRE) -- Xanadu Mines Ltd (ASX: XAM, TSX: XAM) (“Xanadu” or “the Company”) is pleased to provide an update of on-going drilling at the Stockwork Hill deposit on the Company’s Kharmagtai porphyry copper and gold project in the South Gobi region of Mongolia. Highlights Partial results and visual logs reported from two diamond drill holes (KHDDH564 & KHDDH565) due to delays in Ulaanbaatar assay lab related to COVID-19 restrictions.Visual logs of copper in two drill holes highlight the potential for significant strike and depth extension to high-grade bornite zone at Stockwork Hill.KHDDH565 expands the strike length of recently reported high-grade bornite zones, intersecting a >680 metre interval of mineralised diorite and intrusive breccia, demonstrating significant potential growth in the mineralised volume under Stockwork Hill.KHDDH564 intersects a new zone of mineralisation representing a repeat (offset block) of the high-grade bornite zoneDrilling continues uninterrupted at Xanadu’s Kharmagtai project with two diamond drill rigs. Xanadu’s Chief Executive Officer, Dr Andrew Stewart, said “While our drilling continues uninterrupted, following a temporary assay lab slowdown, we’ve decided to share some encouraging partial assays and visual copper sulphide results from Stockwork Hill. These two holes expand the recently discovered high-grade bornite zone, intersecting significant zones of visual copper sulphide mineralisation. KHDDH565, still in progress, is very significant, having intersected over 680 metres of visual copper mineralisation so far and still within mineralisation. KHDDH564 looks to have intersected the upper zone in new down thrown block of mineralisation. These show that Xanadu continues to move toward our high grade target of a >100Mt, 0.8%CuEq block, which would underpin future development at Kharmagtai. We support the Government of Mongolia in its actions to manage COVID-19 as it completes its well progressed vaccination program.” KHDDH565 In Progress Drill hole KHDDH565 was designed as a long-strike or long section drill hole to provide the following: Target offsets - information about the faults at the eastern and western ends of the high-grade bornite zone.Grade continuity - detailed information along the strike of the high-grade bornite zone.Maximise data - reduce the amount of drilling required to incorporate the high-grade bornite zone into the next mineral resource estimate update.Extend west - assist in understanding the western extensions of the high-grade bornite zone where little drilling has occurred.Evaluate shallow, eastern targets - test tourmaline breccia targets suggested by broad spaced drilling to the east of Stockwork Hill. Assays have been returned to 604m, just above where the hole entered the high-grade bornite zone. Interim assay results show that a new tourmaline breccia zone has been discovered along strike from the existing tourmaline breccia at Stockwork Hill (Figures 3, 4, 5 and 6). This new tourmaline breccia zone has returned: 159m @ 0.31% Cu and 0.21 g/t Au (0.41% eCu) from 323m Including 66m @ 0.52% Cu and 0.37g/t Au (0.7% eCu) from 361m Including 26m @ 0.77% Cu and 0.56g/t Au (1.06% eCu) from 369m Including 8m @ 1.18% Cu and 0.64g/t Au (1.51% eCu) from 369m Including 6m @ 0.83% Cu and 0.83g/t Au (1.26% eCu) from 389m Including 16m @ 0.48% Cu and 0.40g/t Au (0.68% eCu) from 409m Including 8m @ 0.83% Cu and 0.37g/t Au (1.02% eCu) from 445m KHDDH565 remains in progress at a depth of 1,300m. Final assays for the remainder of the drill hole are expected in mid-May. KHDDH564 Partial Results Drill hole KHDDH564 was designed as a large-scale step out (400m to the south), targeting a repeat of the high-grade bornite zone at Stockwork Hill (Figure 1). The hole has been completed and assays have been returned to 1,305m (Figure 1 and 2). The visual mineralisation reported in March (please see ASX/TSX Announcement dated 23 March 2021) has returned assays showing that KHDDH564 has tagged the top of the next major discovery at Kharmagtai. KHDDH564 intersects 31m @ 0.53% Cu and 0.12 g/t Au (0.59% eCu) from 1176m Including 18m @ 0.79% Cu and 0.15g/t Au (0.86% eCu) from 1183m Including 4m @ 1.22% Cu and 0.24g/t Au (1.35% eCu) from 1183m And 3m @ 1.14g/t Au from 1052m Final assays from KHDDH564 are expected in mid-May 2021. Additional drill holes are being planned to target this new zone of mineralisation. KHDDH566 New Drilling Xanadu has recently commended drill hole KHDDH566, which has been designed as a scissor hole, like KHDDH563 (see ASX/TSX Announcement dated 23 March 2021). KHDDH566 will intersect the high-grade bornite zone 70-100m along strike from KHDDH563 and is currently at 450m (Figure 1). The high-grade bornite zone is expected around 600m. Assays for KHDDH566 are expected late-May. Zaraa Drilling Three diamond drill holes were completed at Zaraa in March, but assays were delayed as Stockwork Hill drill holes took priority at the laboratory. These holes (KHDDH560, 561, 562) were designed to fill gaps in the drill pattern at Zaraa to allow it to be added to the next Mineral Resource Upgrade. All holes returned low to medium grade porphyry mineralisation indicative of the edges of the Zaraa system. Hole details can be found in Table 1. Figure 1. is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/2bb9f47d-1d7d-4662-ace3-31b7c379661d Figure 2. is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/e4c270c6-3098-4554-838d-b59a02cb313b Figure 3. is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/1265d46b-3144-457b-922a-2adc902e7ff6 Figure 4. is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/cbf49715-779c-4f2d-8bc2-95575e224ce3 Figure 5. is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/c56c6953-6e60-4953-8f13-66d7cc34276e Figure 6. is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/59c0c747-6c67-42e1-99f3-0fcd9c75e510 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 control an emerging Tier 1 copper-gold deposit in our flagship Kharmagtai project. For information on Xanadu visit: www.xanadumines.com. Andrew StewartCEO Xanadu Mines Ltd Andrew.firstname.lastname@example.org+61 409 819 922 This Announcement was authorised for release by Xanadu’s Board of Directors. Appendix 1: Drilling Results Table 1: Drill hole collar Hole IDProspectEastNorthRLAzimuth (°)Inc (°)Depth (m)KHDDH559BStockwork Hill59286748780601163211-351120.1KHDDH560Zaraa59460048760671289315-651296.5KHDDH561Zaraa59454748774571270135-701330.7KHDDH562Zaraa59453048772991271135-701045.5KHDDH563Stockwork Hill592690487719012960-60951.0KHDDH564Stockwork Hill592668487664912990-601405.0KHDDH565Stockwork Hill59313348778881280233-551200.0 Table 2: Significant drill results Hole IDProspectFrom (m)To (m)Interval (m)Au (g/t)Cu (%)CuEq(%)AuEq(g/t)KHDDH559BStockwork Hill21822622.214.171.124.35and 236248120.090.060.100.20and 2845642800.360.460.641.26including 29029440.190.280.380.74including 3085542460.400.510.711.39including 318336180.280.670.811.58including 3464721260.500.700.961.87including 346360141.232.362.995.84including 37037440.531.111.372.69including 392414220.740.731.112.17including 51051880.970.270.761.49including 534546120.340.410.581.14and 611.8838226.21.430.681.412.75including 6157901751.830.841.783.47including 617637202.091.092.164.22including 617635182.281.152.324.53including 6497831342.040.891.933.77including 651712613.761.433.366.57including 75676371.671.071.923.76and 848908600.050.090.110.22and 928938100.050.080.110.21and 970.3994126.96.36.199.160.32and 11151188.8.131.52.050.621.22KHDDH560Zaraa23924340.060.180.210.40and 25525940.060.290.320.63and 1003.2101713.80.090.050.100.19and 1105110940.030.170.190.37and 1282.61296.513.90.030.120.130.26KHDDH561Zaraa2135140.180.030.120.24and 4555100.200.040.140.28and 67137700.070.070.100.20and 147177300.200.120.220.43including 15916340.470.360.601.18and 189259700.150.120.190.38and 26951224184.108.40.2060.59including 29729920.120.280.340.67including 3153584220.127.116.110.72including 371401300.360.230.410.81including 411421100.270.200.330.65including 453.5504.250.70.320.290.450.88including 463475120.390.330.531.04and 53212567240.070.150.190.37including 53254818.104.22.168.46including 562572100.350.170.350.69including 58259422.214.171.1240.58including 680686126.96.36.1990.59including 778795188.8.131.520.56including 934952180.090.240.290.57including 10281045170.110.310.370.72including 10571079184.108.40.2060.55including 11851195100.100.310.360.71and 128113254220.127.116.11.32including 1289129780.300.160.310.61KHDDH562Zaraa3254220.180.040.130.26and 7286140.120.040.100.20and 120138181.210.050.671.31including 12012441.420.050.781.52including 13413843.550.121.933.78and 148204560.170.050.130.26and 219772.4518.104.22.168.320.62including 44144760.260.240.370.73including 467491240.160.200.280.55including 507550422.214.171.1240.70including 566772.4206.40.310.360.521.02including 572.762350.30.500.450.701.37including 65966340.340.570.741.45including 720755350.370.420.611.18and 7821045.52126.96.36.199.310.60including 784842580.240.340.460.90including 784810.626.60.330.410.581.13including 86586940.320.490.661.28including 888922340.320.380.541.06including 888902140.470.530.771.51including 969982.4188.8.131.52.250.48including 1002100640.750.180.571.11KHDDH563Stockwork Hill322332100.060.120.150.29and 648.6830181.41.780.681.593.11including 6518201691.910.721.703.32including 66466840.400.520.721.41including 680785.6105.62.890.992.464.82including 686778923.231.062.715.30and 8609184.108.40.206.190.240.47including 88889240.070.300.340.66including 906936300.160.270.350.69including 92893460.380.420.621.20and 947.59513.50.050.350.380.74KHDDH564Stockwork Hill4595500.050.130.160.31and 129286.2157.20.050.170.200.39including 12913670.060.260.290.57including 24224640.090.310.350.69including 25726580.080.260.300.59and 96597160.040.140.160.32and 1052105531.140.030.611.19and 11761207310.120.530.591.15including 11831201180.150.790.861.68including 11831187220.127.116.112.63Assays pendingKHDDH565Stockwork Hill6979100.120.050.120.23and 183215318.104.22.168.43including 197211140.320.170.330.65and 247263160.050.070.100.19and 3234821590.210.310.410.81including 361427660.370.520.701.38including 369395260.560.771.062.07including 36937780.641.181.512.94including 38939560.830.831.262.46including 409425160.400.480.681.33including 44545380.370.831.022.00including 44545160.400.971.172.30and 522538160.330.230.400.78including 526538120.410.290.500.99and 558604460.030.100.110.22Assays pending Appendix 2: Statements and Disclaimers 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. Competent Person Statement 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. Copper Equivalent Calculations The copper equivalent (eCu) calculation represents the total metal value for each metal, multiplied by the conversion factor, summed and expressed in equivalent copper percentage with a metallurgical recovery factor applied. The copper equivalent calculation used is based off the eCu calculation defined by CSA in the 2018 Mineral Resource Upgrade. Copper equivalent (eCu) grade values were calculated using the following formula: eCu = Cu + Au * 0.62097 * 0.8235, Where Cu = copper grade (%); Au = gold grade (gold per tonne (g/t)); 0.62097 = conversion factor (gold to copper); and 0.8235 = relative recovery of gold to copper (82.35%). The copper equivalent formula was based on the following parameters (prices are in USD): Copper price = 3.1 $/lb (or 6,834 $ per tonne ($/t)); Gold price = 1,320 $ per ounce ($/oz); Copper recovery = 85%; Gold recovery = 70%; and Relative recovery of gold to copper = 70% / 85% = 82.35%. 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 www.xanadumines.com. 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 11 April 2019. JORC TABLE 1 - SECTION 1 - SAMPLING TECHNIQUES AND DATA (Criteria in this section apply to all succeeding sections). CriteriaJORC Code explanationCommentarySampling techniques Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc.). These examples should not be taken as limiting the broad meaning of sampling.Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.Aspects of the determination of mineralisation that are Material to the Public Report.In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases, more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information. Representative ½ core samples were split from PQ, HQ & NQ diameter diamond drill core on site using rock saws, on a routine 2m sample interval that also honours lithological/intrusive contacts.The orientation of the cut line is controlled using the core orientation line ensuring uniformity of core splitting wherever the core has been successfully oriented.Sample intervals are defined and subsequently checked by geologists, and sample tags are attached (stapled) to the plastic core trays for every sample interval.RC chip samples are ¼ splits from one meter intervals using a 75%:25% riffle splitter to obtain a 3kg sampleRC samples are uniform 2m samples formed from the combination of two ¼ split 1m samples. Drilling techniques Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc.). The Mineral Resource estimation has been based upon diamond drilling of PQ, HQ and NQ diameters with both standard and triple tube core recovery configurations, RC drilling and surface trenching with channel sampling.All drill core drilled by Xanadu has been oriented using the “Reflex Ace” tool. Drill sample recovery Method of recording and assessing core and chip sample recoveries and results assessed.Measures taken to maximise sample recovery and ensure representative nature of the samples.Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material. Diamond drill core recoveries were assessed using the standard industry (best) practice which involves: removing the core from core trays; reassembling multiple core runs in a v-rail; measuring core lengths with a tape measure, assessing recovery against core block depth measurements and recording any measured core loss for each core run.Diamond core recoveries average 97% through mineralization.Overall, core quality is good, with minimal core loss. Where there is localized faulting and or fracturing core recoveries decrease, however, this is a very small percentage of the mineralized intersections.RC recoveries are measured using whole weight of each 1m intercept measured before splittingAnalysis of recovery results vs grade shows no significant trends that might indicate sampling bias introduced by variable recovery in fault/fracture zones. Logging Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc.) photography.The total length and percentage of the relevant intersections logged. All drill core is geologically logged by well-trained geologists using a modified “Anaconda-style” logging system methodology. The Anaconda method of logging and mapping is specifically designed for porphyry Cu-Au mineral systems and is entirely appropriate to support Mineral Resource Estimation, mining and metallurgical studies.Logging of lithology, alteration and mineralogy is intrinsically qualitative in nature. However, the logging is subsequently supported by 4 Acid ICP-MS (48 element) geochemistry and SWIR spectral mineralogy (facilitating semi-quantitative/calculated mineralogical, lithological and alteration classification) which is integrated with the logging to improve cross section interpretation and 3D geological model development.Drill core is also systematically logged for both geotechnical features and geological structures. Where drill core has been successfully oriented, the orientation of structures and geotechnical features are also routinely measured.Both wet and dry core photos are taken after core has been logged and marked-up but before drill core has been cut. Sub-sampling techniques and sample preparation If core, whether cut or sawn and whether quarter, half or all core taken.If non-core, whether riffled, tube sampled, rotary split, etc. and whether sampled wet or dry.For all sample types, the nature, quality and appropriateness of the sample preparation technique.Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.Whether sample sizes are appropriate to the grain size of the material being sampled. All drill core samples are ½ core splits from either PQ, HQ or NQ diameter cores. A routine 2m sample interval is used, but this is varied locally to honour lithological/intrusive contacts. The minimum allowed sample length is 30cm.Core is appropriately split (onsite) using diamond core saws with the cut line routinely located relative to the core orientation line (where present) to provide consistency of sample split selection.The diamond saws are regularly flushed with water to minimize potential contamination.A field duplicate ¼ core sample is collected every 30th sample to ensure the “representivity of the in situ material collected”. The performance of these field duplicates are routinely analysed as part of Xanadu’s sample QC process.Routine sample preparation and analyses of DDH samples were carried out by ALS Mongolia LLC (ALS Mongolia), who operates an independent sample preparation and analytical laboratory in Ulaanbaatar.All samples were prepared to meet standard quality control procedures as follows: Crushed to 75% passing 2mm, split to 1kg, pulverised to 85% passing 200 mesh (75 microns) and split to 150g sample pulp.ALS Mongolia Geochemistry labs quality management system is certified to ISO 9001:2008.The sample support (sub-sample mass and comminution) is appropriate for the grainsize and Cu-Au distribution of the porphyry Cu-Au mineralization and associated host rocks. Quality of assay data and laboratory tests The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established. All samples were routinely assayed by ALS Mongolia for goldAu is determined using a 25g fire assay fusion, cupelled to obtain a bead, and digested with Aqua Regia, followed by an atomic absorption spectroscopy (AAS) finish, with a lower detection (LDL) of 0.01 ppm.All samples were also submitted to ALS Mongolia for the 48 element package ME-ICP61 using a four acid digest (considered to be an effective total digest for the elements relevant to the MRE). Where copper is over-range (>1% Cu), it is analysed by a second analytical technique (Cu-OG62), which has a higher upper detection limit (UDL) of 5% copper.Quality assurance has been managed by insertion of appropriate Standards (1:30 samples – suitable Ore Research Pty Ltd certified standards), Blanks (1:30 samples), Duplicates (1:30 samples – ¼ core duplicate) by XAM.Assay results outside the optimal range for methods were re-analysed by appropriate methods.Ore Research Pty Ltd certified copper and gold standards have been implemented as a part of QC procedures, as well as coarse and pulp blanks, and certified matrix matched copper-gold standards.QC monitoring is an active and ongoing processes on batch by batch basis by which unacceptable results are re-assayed as soon as practicable.Prior to 2014: Cu, Ag, Pb, Zn, As and Mo were routinely determined using a three-acid-digestion of a 0.3g sub-sample followed by an AAS finish (AAS21R) at SGS Mongolia. Samples were digested with nitric, hydrochloric and perchloric acids to dryness before leaching with hydrochloric acid to dissolve soluble salts and made to 15ml volume with distilled water. The LDL for copper using this technique was 2ppm. Where copper was over-range (>1% Cu), it was analysed by a second analytical technique (AAS22S), which has a higher upper detection limit (UDL) of 5% copper. Gold analysis method was essentially unchanged. Verification of sampling and assaying The verification of significant intersections by either independent or alternative company personnel.The use of twinned holes.Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.Discuss any adjustment to assay data. All assay data QAQC is checked prior to loading into XAM’s Geobank data base.The data is managed by XAM geologists.The data base and geological interpretation is managed by XAM.Check assays are submitted to an umpire lab (SGS Mongolia) for duplicate analysis.No twinned drill holes exist.There have been no adjustments to any of the assay data. Location of data points Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.Specification of the grid system used.Quality and adequacy of topographic control. Diamond drill holes have been surveyed with a differential global positioning system (DGPS) to within 10cm accuracy.The grid system used for the project is UTM WGS-84 Zone 48NHistorically, Eastman Kodak and Flexit electronic multi-shot downhole survey tools have been used at Kharmagtai to collect down hole azimuth and inclination information for the majority of the diamond drill holes. Single shots were typically taken every 30m to 50m during the drilling process, and a multi-shot survey with readings every 3-5m are conducted at the completion of the drill hole. As these tools rely on the earth’s magnetic field to measure azimuth, there is some localised interference/inaccuracy introduced by the presence of magnetite in some parts of the Kharmagtai mineral system. The extent of this interference cannot be quantified on a reading-by-reading basis.More recently (since September 2017), a north-seeking gyro has been employed by the drilling crews on site (rented and operated by the drilling contractor), providing accurate downhole orientation measurements unaffected by magnetic effects. Xanadu have a permanent calibration station setup for the gyro tool, which is routinely calibrated every 2 weeks (calibration records are maintained and were sighted)The project DTM is based on 1 m contours from satellite imagery with an accuracy of ±0.1 m. Data spacing and distribution Data spacing for reporting of Exploration Results.Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.Whether sample compositing has been applied. Holes spacings range from <50m spacings within the core of mineralization to +500m spacings for exploration drilling. Hole spacings can be determined using the sections and drill plans provided.Holes range from vertical to an inclination of -60 degrees depending on the attitude of the target and the drilling method.The data spacing and distribution is sufficient to establish anomalism and targeting for porphyry Cu-Au, tourmaline breccia and epithermal target types.Holes have been drilled to a maximum of 1,300m vertical depth.The data spacing and distribution is sufficient to establish geological and grade continuity, and to support the Mineral Resource classification. Orientation of data in relation to geological structure Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material. Drilling is conducted in a predominantly regular grid to allow unbiased interpretation and targeting.Scissor drilling, as well as some vertical and oblique drilling, has been used in key mineralised zones to achieve unbiased sampling of interpreted structures and mineralised zones, and in particular to assist in constraining the geometry of the mineralised hydrothermal tourmaline-sulphide breccia domains. Sample security The measures taken to ensure sample security. Samples are delivered from the drill rig to the core shed twice daily and are never left unattended at the rig.Samples are dispatched from site in locked boxes transported on XAM company vehicles to ALS lab in Ulaanbaatar.Sample shipment receipt is signed off at the Laboratory with additional email confirmation of receipt.Samples are then stored at the lab and returned to a locked storage site. Audits or reviews The results of any audits or reviews of sampling techniques and data. Internal audits of sampling techniques and data management are undertaken on a regular basis, to ensure industry best practice is employed at all times.External reviews and audits have been conducted by the following groups:2012: AMC Consultants Pty Ltd. was engaged to conduct an Independent Technical Report which reviewed drilling and sampling procedures. It was concluded that sampling and data record was to an appropriate standard.2013: Mining Associates Ltd. was engaged to conduct an Independent Technical Report to review drilling, sampling techniques and QAQC. Methods were found to conform to international best practice.2018: CSA Global reviewed the entire drilling, logging, sampling, sample shipping and laboratory processes during the competent persons site visit for the 2018 MRe, and found the systems and adherence to protocols to be to an appropriate standard. JORC TABLE 1 - SECTION 2 - REPORTING OF EXPLORATION RESULTS (Criteria in this section apply to all succeeding sections). CriteriaCommentaryMineraltenementand landtenurestatus The Project comprises 2 Mining Licences (MV-17129A Oyut Ulaan and (MV-17387A Kharmagtai): Xanadu now owns 90% of Vantage LLC, the 100% owner of the Oyut Ulaan mining licence.The Kharmagtai mining license MV-17387A is 100% owned by Oyut Ulaan LLC. Xanadu has an 85% interest in Mongol Metals LLC, which has 90% interest in Oyut Ulaan LLC. The remaining 10% in Oyut Ulaan LLC is owned by Quincunx (BVI) Ltd (“Quincunx”). The Mongolian Minerals Law (2006) and Mongolian Land Law (2002) govern exploration, mining and land use rights for the project. Explorationdone byotherparties Previous exploration at Kharmagtai was conducted by Quincunx Ltd, Ivanhoe Mines Ltd and Turquoise Hill Resources Ltd including extensive drilling, surface geochemistry, geophysics, mapping.Previous exploration at Red Mountain (Oyut Ulaan) was conducted by Ivanhoe Mines. Geology The mineralisation is characterised as porphyry copper-gold type.Porphyry copper-gold deposits are formed from magmatic hydrothermal fluids typically associated with felsic intrusive stocks that have deposited metals as sulphides both within the intrusive and the intruded host rocks. Quartz stockwork veining is typically associated with sulphides occurring both within the quartz veinlets and disseminated thought out the wall rock. Porphyry deposits are typically large tonnage deposits ranging from low to high grade and are generally mined by large scale open pit or underground bulk mining methods. The deposits at Kharmagtai are atypical in that they are associated with intermediate intrusions of diorite to quartz diorite composition; however the deposits are in terms of contained gold significant, and similar gold-rich porphyry deposits. Drill holeInformation Diamond drill holes are the principal source of geological and grade data for the Project.See figures in this ASX/TSX Announcement. DataAggregationmethods The CSAMT data was converted into 2D line data using the Zonge CSAMT processing software and then converted into 3D space using a UBC inversion process. Inversion fit was acceptable, and error was generally low.A nominal cut-off of 0.1% eCu is used in copper dominant systems for identification of potentially significant intercepts for reporting purposes. Higher grade cut-offs are 0.3%, 0.6% and 1% eCu.A nominal cut-off of 0.1g/t eAu is used in gold dominant systems like Golden Eagle for identification of potentially significant intercepts for reporting purposes. Higher grade cut-offs are 0.3g/t, 0.6g/t and 1g/t eAu.Maximum contiguous dilution within each intercept is 9m for 0.1%, 0.3%, 0.6% and 1% eCu.Most of the reported intercepts are shown in sufficient detail, including maxima and subintervals, to allow the reader to make an assessment of the balance of high and low grades in the intercept.Informing samples have been composited to two metre lengths honouring the geological domains and adjusted where necessary to ensure that no residual sample lengths have been excluded (best fit). The copper equivalent (eCu) calculation represents the total metal value for each metal, multiplied by the conversion factor, summed and expressed in equivalent copper percentage with a metallurgical recovery factor applied. The copper equivalent calculation used is based off the eCu calculation defined by CSA in the 2018 Mineral Resource Upgrade.Copper equivalent (CuEq or eCu) grade values were calculated using the following formula:eCu or CuEq = Cu + Au * 0.62097 * 0.8235,Gold Equivalent (eAu) grade values were calculated using the following formula:eAu = Au + Cu / 0.62097 * 0.8235.Where:Cu - copper grade (%)Au - gold grade (g/t)0.62097 - conversion factor (gold to copper)0.8235 - relative recovery of gold to copper (82.35%)The copper equivalent formula was based on the following parameters (prices are in USD): Copper price - 3.1 $/lb (or 6834 $/t)Gold price - 1320 $/ozCopper recovery - 85%Gold recovery - 70%Relative recovery of gold to copper = 70% / 85% = 82.35%. Relationshipbetween mineralisationon widthsand interceptlengths Mineralised structures are variable in orientation, and therefore drill orientations have been adjusted from place to place in order to allow intersection angles as close as possible to true widths.Exploration results have been reported as an interval with 'from' and 'to' stated in tables of significant economic intercepts. Tables clearly indicate that true widths will generally be narrower than those reported. Diagrams See figures in the body of the report. Balancedreporting Resources have been reported at a range of cut-off grades, above a minimum suitable for open pit mining, and above a minimum suitable for underground mining. Othersubstantiveexplorationdata Extensive work in this area has been done and is reported separately. FurtherWork The mineralisation is open at depth and along strike.Current estimates are restricted to those expected to be reasonable for open pit mining. Limited drilling below this depth (-300m RLl) shows widths and grades potentially suitable for underground extraction.Exploration on going. JORC TABLE 1 - SECTION 3 - ESTIMATION AND REPORTING OF MINERAL RESOURCES (Criteria listed in section 1, and where relevant in section 2, also apply to this section.) CriteriaCommentaryDatabaseintegrity The database is a Geobank data base system.Data is logged directly into an Excel spread sheet logging system with drop down field lists.Validation checks are written into the importing program ensures all data is of high quality.Digital assay data is obtained from the Laboratory, QAQC checked and importedGeobank exported to Access and connected directly to the GemcomSurpac Software.Data was validated prior to resource estimation by the reporting of basic statistics for each of the grade fields, including examination of maximum values, and visual checks of drill traces and grades on sections and plans. Site visits Andrew Vigar of Mining Associates Pty Ltd visited the site from 24 and 25 October 2014.The site visit included a field review of the exploration area, an inspection of core, sample cutting and logging procedures and discussions of geology and mineralisation with exploration geologists. Geologicalinterpretation Mineralisation resulted in the formation of comprises quartz-chalcopyrite-pyrite-magnetite stockwork veins and minor breccias.The principle ore minerals of economic interest are chalcopyrite, bornite and gold, which occur primarily as infill within these veins. Gold is intergrown with chalcopyrite and bornite.The ore mineralised zones at Stockwork Hill, White Hill and Copper Hill are associated with a core of quartz veins that were intensely developed in and the quartz diorite intrusive stocks and/or dykes rocks. These vein arrays can be described as stockwork, but the veins have strong developed preferred orientations.Sulphide mineralisation is zoned from a bornite-rich core that zone outwards to chalcopyrite-rich and then outer pyritic haloes, with gold closely associated with bornite.Drilling indicates that the supergene profile has been oxidised to depths up to 60 metres below the surface. The oxide zone comprises fracture controlled copper and iron oxides; however there is no obvious depletion or enrichment of gold in the oxide zone. Dimensions Stockwork Hill comprises two main mineralised zones, northern and southern stockwork zones (SH-N and SH-S) which are approximately 100 metres apart and hosted in diorite and quartz diorite porphyries.The SH-S is at least 550 metres long, 600 metres deep and contains strong quartz-chalcopyrite-pyrite stockwork veining and associated high grade copper-gold mineralisation. The stockwork zone widens eastward from a 20 to 70 metres wide high-grade zone in the western and central sections to a 200 metres wide medium-grade zone in the eastern most sections. Mineralisation remains open at depth and along strike to the east.The SH-N consists of a broad halo of quartz that is 250 metres long, 150 metres wide long and at least 350 metres deep.WH consists of a broad halo of quartz veins that is 850 metres long, 550 metres wide long and at least 500 metres deep, and forms a pipe like geometry.CH forms a sub vertical body of stockwork approximately 350 × 100 metres by at least 200 metres and plunges to the southeast. Estimation andmodellingtechniques The estimate Estimation Performed using Ordinary Kriging.Variograms are reasonable along strike.Minimum & Maximum Informing samples is 5 and 20 (1st pass), Second pass is 3 and 20.Copper and Gold Interpreted separately on NS sections and estimated as separate domains.Halo mineralisation defined as 0.12% Cu and 0.12g/t Au Grade.The mineralised domains were manually digitised on cross sections defining mineralisation. Three-dimensional grade shells (wireframes) for each of the metals to be estimated were created from the sectional interpretation. Construction of the grade shells took into account prominent lithological and structural features. For copper, grade shells were constructed for each deposit at a cut-off of 0.12% and 0.3% Cu. For gold, wireframes were constructed at a threshold of 0.12g/t and 0.3 g/t. These grade shells took into account known gross geological controls in addition to broadly adhering to the above mentioned thresholds.Cut off grades applied are copper-equivalent (CuEq) cut off values of 0.3% for appropriate for a large bulk mining open pit and 0.5% for bulk block caving underground.A set of plans and cross-sections that displayed colour coded drill holes were plotted and inspected to ensure the proper assignment of domains to drill holes.The faulting interpreted to have had considerable movement, for this reason, the fault surface was used to define two separate structural domains for grade estimation.Six metre down-hole composites were chosen for statistical analysis and grade estimation of Cu and Au. Compositing was carried out downhole within the defined mineralisation halos. Composite files for individual domains were created by selecting those samples within domain wireframes, using a fix length and 50% minimum composite length.A total of 4,428 measurements for specific gravity are recorded in the database, all of which were determined by the water immersion method. The average density of all samples is 2.74 t/m3. In detail there are some differences in density between different rock types, but since the model does not include geological domains a single pass Inverse Distance (ID2) interpolation was applied.Primary grade interpolation for the two metals was by ordinary kriging of capped 6m composites. A two-pass search approach was used, whereby a cell failing to receive a grade estimate in a previous pass would be resubmitted in a subsequent and larger search pass.The Mineral Resource Estimate meets the requirements of JORC 2012 and has been reported considering geological characteristics, grade and quantity, prospects for eventual economic extraction and location and extents. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories using relevant copper-equivalent cut-off values.The copper equivalent (eCu) calculation represents the total metal value for each metal, multiplied by the conversion factor, summed and expressed in equivalent copper percentage with a metallurgical recovery factor applied. The copper equivalent calculation used is based off the eCu calculation defined by CSA in the 2018 Mineral Resource Upgrade.Copper equivalent (CuEq or eCu) grade values were calculated using the following formula: eCu or CuEq = Cu + Au * 0.62097 * 0.8235, Gold Equivalent (eAu) grade values were calculated using the following formula: eAu = Au + Cu / 0.62097 * 0.8235. Where: Cu - copper grade (%) Au - gold grade (g/t) 0.62097 - conversion factor (gold to copper) 0.8235 - relative recovery of gold to copper (82.35%) The copper equivalent formula was based on the following parameters (prices are in USD): Copper price - 3.1 $/lb (or 6834 $/t) Gold price - 1320 $/oz Copper recovery - 85% Gold recovery - 70% Relative recovery of gold to copper = 70% / 85% = 82.35%.Moisture All tonnages are reported on a dry basis. Cut-offparameters Cut off grades applied are copper-equivalent (CuEq) cut off values of 0.3% for possible open pit and 0.5% for underground. Miningfactors orassumptions No mining factors have been applied to the in-situ grade estimates for mining dilution or loss due to the grade control or mining process.The deposit is amenable to large scale bulk mining.The Mineral Resource is reported above an optimised pit shell. (Lerch Grossman algorithm), mineralisation below the pit shell is reported at a higher cut-off to reflect the increased costs associated with block cave underground mining Metallurgicalfactors orassumptions No metallurgical factors have been applied to the in-situ grade estimates. Environmentalfactors or assumptions An environmental baseline study was completed in 2003 by Eco Trade Co. Ltd. of Mongolia in cooperation with Sustainability Pty Ltd of Australia. The baseline study report was produced to meet the requirements for screening under the Mongolian Environmental Impact Assessment (EIA) Procedures administered by the Mongolian Ministry for Nature and Environment (MNE). Bulk density A total of 4,428 measurements for specific gravity are recorded in the database, all of which were determined by the water immersion method.The average density of all samples is approximately 2.74 t/m3. In detail there are some differences in density between different rock types, but since the model does not include geological domain, an ID2 was applied to a density attribute.There is no material impact on global tonnages, but it should be noted that density is a function of both lithology and alteration (where intense magnetite/sulphide is present). Classification The Mineral Resource classification protocols, for drilling and sampling, sample preparation and analysis, geological logging, database construction, interpolation, and estimation parameters are described in the ASX/TSX Announcement above have been used to classify the 2015 resource.The Mineral Resource statement relates to global estimates of in situ tonnes and gradeThe Mineral Resource Estimate has been classified in accordance with the JORC Code, 2012 Edition using a qualitative approach. The classifications reflect the competent person’s view of the Kharmagtai Copper Gold Project. Audits orreviews Xanadu’s internal review and audit of the Mineral Resource Estimate consisted of data analysis and geological interpretation of individual cross-sections, comparing drill-hole data with the resource estimate block model.Good correlation of geological and grade boundaries was observed2013 - Mining Associates Ltd. was engaged to conduct an Independent Technical Report to review drilling, sampling techniques, QA/QC and previous Resource estimates. Methods were found to conform to international best practice. Discussion ofrelativeaccuracy/confidence An approach to the resource classification was used which combined both confidence in geological continuity (domain wireframes) and statistical analysis. The level of accuracy and risk is therefore reflected in the allocation of the measured, indicated, and inferred resource categories.Resource categories were constrained by geological understanding, data density and quality, and estimation parameters. It is expected that further work will extend this considerably.Resources estimates have been made on a global basis and relates to in situ grades.Confidence in the Indicated Mineral Resources is sufficient to allow application of Modifying Factors within a technical and economic study. The confidence in Inferred Mineral Resources is not sufficient to allow the results of the application of technical and economic parameters.The deposits are not currently being mined.There is surface evidence of historic artisanal workings.No production data is available. JORC TABLE 1 - SECTION 4 - ESTIMATION AND REPORTING OF ORE RESERVES Ore Reserves are not reported so this is not applicable to this announcement.