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Investor Presentation July 2012 1 For personal use only
Investor
Presentation
July 2012
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Information Not A Recommendation
The views expressed in this Information Memorandum are based on information derived from Xanadu's own internal sources and from publicly available sources that have not been independently verified by Xanadu. No representation, warranty or undertaking, express or implied, is made or given by Xanadu or any of its officers or employees as to the fairness, accuracy, completeness or reliability of that information. This Information Memorandum should not be relied upon as a recommendation or forecast by Xanadu. Any recipient of this Information Memorandum is responsible for conducting their own due diligence and other enquiries as to the information provided herein. Recipients of this Information Memorandum should seek and rely upon their own legal, tax, financial and accounting advice. Any decision to rely on the information contained in this Information Memorandum is the sole responsibility of the recipient of this document and Xanadu will not be responsible for any loss incurred by the recipient as a result of any actions taken by them relying on the information in this Information Memorandum.
Explorations targets are conceptual in nature there not having been sufficient exploration to define a Mineral Resource, and that it is uncertain if further exploration will result in the determination of a Mineral Resource.
Forward Looking Statements & Disclaimer
Mongolian Exploration & Resource Development Company 2
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Mongolian Exploration & Resource Development Company
Corporate Overview
52 week low 52 week high 30 Day VWAP
Date 27-Jun-12 27-Jul-11 6-Jul-12
Share Price 0.165 0.59 $0.21
Share Price / volume History (A$; millions) Key Statistics (A$)
Substantial Share holders
Name No. Shares Held % of Shares on Issue
Straits Resources 24.6m 12.4%
Noble Energy 17.9m 9.0%
Eagle Securities 14.3m 7.2%
Directors Interest
Directors collectively have 20% of securities on issue
Ordinary Shares on issue 6-Jul-12 199m
Options 6-Jul-12 26m
Share Price 6-Jul-12 $0.23
Market Capitalisation 6-Jul-12 46m
Cash 6-Jul-12 15m
Enterprise Value 6-Jul-12 31m
XMM = S&P/ASX 300 Metals and Mining Index
XMM = S&P/ASX 300 Metals and Mining Index
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Mongolian Exploration & Resource Development Company
Business Strategy
Xanadu Mines Ltd (ASX:XAM)
• Exploration strategy to target copper/gold systems with large scale potential
Attract attention and maintain dialogue with global majors
• Existing thermal assets (500mt in two JORC resources) in divestment process
Suitable for domestic power station feedstock or coal to liquids (CTL)
• Joint venture interest in hard coking coal vehicle (Ekhgoviin Chuluu LLC) with Noble Group
2012 Exploration programs
• 5,000m diamond program at Sharchuluut copper porphyry project
• Mapping at the Argalant and Amgalant copper project
• 10,000m program at Elgen Zost low sulphidation epithermal project
New copper acquisition
• Currently in earn in phase of advanced copper project, Oyut Ulaan in SE Gobi
Management team strengthened
• Recently recruited senior resources professional based in Mongolia to drive commercial strategy and business
development
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Mongolian Exploration & Resource Development Company
Sharchuluut Uul Porphyry Cu-Au Project
Strategic location
• Bulgan Province of Northern Mongolia, approximately 230km NW of Ulaanbaatar
• Approximately 40 km NW of the world-class Erdenet Cu-Mo deposit
• Well developed infrastructure including rail access to China and Russia
Exploration area comprises 1 exploration licence
• Totalling 488km² and remains relatively unexplored
• Five porphyry-related prospects within a 15-kilometre-long, northwest oriented corridor of porphyry-related alteration and mineralisation at the north-western extremity of the Erdenet Trend
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Mongolian Exploration & Resource Development Company
Sharchuluut Uul Porphyry Cu-Au Project
Erdenet Trend
• Located at the NW
extremity Erdenet trend
• Intersection of the arc
parallel faults and the
northwest-southeast
transverse faults
• Optimal for porphyry
copper exposure and
preservation
• Erdenet trend displays a
progressively deeper
erosion level from NW to SE
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Mongolian Exploration & Resource Development Company
Sharchuluut Uul Porphyry Cu-Au Project
2012 Exploration Program
• Exploration drilling commenced in April 2012
• Alteration and field relationships suggest a high level of formation above a deeper porphyry
• A strong possibility of discovering additional mineralised porphyry gold-copper targets within the Sharchuluut
Uul district, and along the defined structural corridor
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Mongolian Exploration & Resource Development Company
Oyut Ulaan Cu-Au Project
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The acquisition
• Xanadu Mines has executed a terms sheet with Temujin Mining Corp (a private Canadian company) to acquire Oyut Ulaan Cu- Au project via a purchase of Temujin’s wholly owned subsidiary Vantage LLC.
• Once documentation is finalized and a mining license issued, Xanadu will be entitled to a 25% Project interest
• Xanadu’s purchase of the remaining 75% will be subject to approval by a General Meeting of its Shareholders
Strategic location
• 275 km NE and along strike of the world-class Oyu Tolgoi Cu-Au Project
• 60 km West of Sainshand city and the Trans Mongolian Railway
Exploration license
• License comprises 120 km² of moderately eroded Cu/Au rich porphyry and skarn stratigraphy
• License area explored by Mongolian & Russian geologists in the 1960’s and by Ivanhoe mines from 2001- 2009.
• Extensive geophysical, trenching and drill data from 16 holes being evaluated
Mineral potential
• Potential to host a large buried porphyry copper deposit or multiple skarn targets
• Numerous walk up drill targets comprise 18 mineralized prospects
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Mongolian Exploration & Resource Development Company
Oyut Ulaan Cu-Au Project
Malachite in surface rocks at Oyut Ulaan June 2012 Trench featuring Malachite at Oyut Ulaan June 2012 For
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Mongolian Exploration & Resource Development Company
Amgalant & Argalant Uul Cu-Au Projects
Strategic location
• Omnogovi Province of Southern Mongolia, approximately 230km SE of Ulaanbaatar
• Approximately 110 kilometres northeast of the world-class Oyu Tolgoi Cu-Au Project
• Proximal to the large Tsagaan Suvarga Cu-Mo deposit under development
• Exploration licences are large (Amgalant –109 km² and Argalant Uul –895 km²)
• Relatively under explored and occur in a shallowly eroded porphyry-type environment
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Mongolian Exploration & Resource Development Company
Amgalant & Argalant Uul Cu-Au Projects
Regional Landsat image
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Amgalant & Argalant Uul Cu-Au Projects
Regional airborne magnetic (RTP) Image
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Mongolian Exploration & Resource Development Company
Amgalant & Argalant Uul Cu-Au Projects
Regional airborne magnetic (RTP) Image
Detailed ground magnetic data showing interpreted intrusive centres under shallow cretaceous gravels
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Mongolian Exploration & Resource Development Company
Solenker Epithermal Gold District
Strategic location
• Dornogovi Province of SE Mongolia, approximately 680km SSE of Ulaanbaatar & 30km from Chinese border
• Xanadu holds 80% of the joint venture (Altan Xanadu) covering Elgen-Zost and Suug
• All significant regional Landsat data & geochemical anomalies held by Xanadu
• Altan Xanadu JV consists of 4 exploration licenses covering approximately 401km²
Regional Geology
• Mesozoic Continental extension
• Upper Jurassic to Lower Cretaceous bimodal volcanism associated with extension
Numerous High Priority Low Sulphidation Epithermal Prospects
• Shallow level of erosion (100-200 vertical meters ) above the gold rich (boiling) zone
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Mongolian Exploration & Resource Development Company
Solenker Epithermal Gold District
Suuj Uul LSE Prospect • Interpreted to represent the shallow level of a epithermal breccia pipe
enriched in Au & Ag. • Target at depth within a dilatational structure.
Elgen Uul LSE Prospect • Interpreted to represent the upper level of a low sulphidation
epithermal system enriched in Au. • Outcropping, sub-cropping and buried mineralised LSE style
veins over >3km strike. • Broad silica alteration continues under cover. • Discreet epithermal quartz-adularia vein zones have been
intersected beneath the silica sinter. • Shallow level of erosion (100-200 vertical metres above where
the gold rich zone is present). • The presence of stibnite & arsenic minerals. • Predominance of chalcedony and amorphous silica.
Zost Uul LSE Prospect • Interpreted to represent the
shallow level of a low sulphidation epithermal system enriched in Au.
• Extensive stibnite & arsenic anomaly associated with exposed silica sinters.
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Mongolian Exploration & Resource Development Company
Foreign Investment Law
“Law on regulation of foreign investment in business entities operating in sector of strategic importance”
Highlights
• Became law on May 17 2012
• Applies to three business sectors
• Minerals • Banking and finance • Media and communications
Thresholds
• Foreign entity must notify Government if it acquires between 5% to 33.33% of a domestic entity
• Approval from Cabinet must be sought for acquisition of 33.33% or above
• Parliamentary approval required for >49% and acquisition value > 100B MNT ($75M)
• International treaty provisions would prevail for those signature counties
Implementation
• Will require full suite of regulations to administer
• Decision timing up to 95 days
• Expect further clarification after June 28 election outcome
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Mongolian Exploration & Resource Development Company
Investment Highlights
A next generation minerals play in a next generation minerals region
• Pursuing coal and copper/ gold production in Mongolia with significant early mover advantage • Identified significant JORC coal resources currently being divested • Operating in Mongolia for more than seven years; 30 national support staff in Ulaanbaatar
Mongolia an emerging resources powerhouse due to prospectivity and location
• Major international mining companies, currently investing significantly in Mongolia including Rio Tinto, Vale, Centerra, Ivanhoe, Peabody, Xstrata and Teck Cominco
• A suite of highly prospective for coal, copper, gold and uranium which are all in strong demand
Direct rail access to China & north Asia
• All projects are located near rail infrastructure with excellent access to China and broader Asian markets • China will be targeted as preferred export destination
2012 Exploration Program
• Focused on porphyry copper at Sharchuluut and Oyut Ulaan and gold at Elgen-Zost-Suug • Strong balance sheet to fund aggressive exploration • Aggressive exploration of recently acquired JV coking coal licences supported by Noble Energy • Preparing spin out of coking assets into new IPO in 2013
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Mongolian Office
2nd Khoroo, AOS Street
Military Town,
Bayanzurkh District
Ulaanbaatar, Mongolia
T + 976 5011 0211
Sydney Office
Suite 4, Level 2,
66 Oxford Street
Darlinghurst NSW 2010
Australia
T + 61 2 9332 4322
W:www.xanadumines.com
ABN:92 114 249 026
ASX Code: XAM
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mailto:[email protected]
