Xanadu Mines (XAM) Investor Update summary

Project overview and development status

• Kharmagtai is a large-scale, low-cost, open-pit copper-gold project in Mongolia, 120km from Oyu Tolgoi, with a 30-year mine life and potential for a 40-year extension, and remains open at depth.

• The project is well-located near major infrastructure, water, skilled workforce, and end markets, benefiting from Mongolia's stable, pro-mining stance and strong mining culture.

• Operatorship has transitioned to Zijin Mining Group, with a 50/50 JV structure at the holding company level, and Zijin now leads the next phase toward a bankable feasibility study (BFS).

• Xanadu Mines holds a 38.25% stake in Kharmagtai, with Zijin as a major JV partner and operator, targeting significant copper production growth.

• Key next steps include completing a BFS, a Mongolian feasibility study, a detailed environmental impact assessment, and securing an investment agreement to set fiscal terms.

Resource, reserve, and production profile

• 2024 resource estimate: 2,200Mt at 0.29% CuEq (0.21% Cu, 0.15g/t Au), containing 6.5Mt copper and 11Moz gold.

• Probable ore reserve: 730Mt at 0.21% Cu and 0.17g/t Au, with 1.6Mt copper and 4Moz gold.

• PFS outlines average annual production of 75,000 tonnes of copper and 165,000 ounces of gold over a 29-year mine life, with an NPV of nearly $1 billion and IRR of 21%.

• Open pit design targets higher-grade ore, low strip ratio, and conventional processing for gold-rich concentrate and dore.

• First quartile C1 cash cost of $0.70/lb copper for Stage 1.

Financials and funding

• Pre-production capital is estimated at $890 million, with a 4-year payback period; stage two expansion contingent on water supply and market conditions.

• Xanadu requires $25–30 million for BFS and $425–450 million for construction; Bacchus Capital and Jefferies are advising on funding and corporate options.

• Multiple funding and transaction options are under negotiation, including debt, royalty, off-take, equity, and asset-level deals, with term sheets in hand but no final agreements yet.

• Put options established in the JV protect against dilution and provide long-term exposure; EGM called to maintain these options.

• The board unanimously agreed to maintain the put option for leverage in ongoing negotiations, not as a commitment to exercise it.