Xanadu Mines (XAM) Investor Update summary

Recent developments and transaction status

• Exclusivity with Zijin has ended without a firm deal, and no extension to the 25% put option has been agreed.

• An EGM has been called to preserve optionality for 30 days, with a shareholder vote scheduled for June 4 on exercising the 25% put option.

• Discussions continue with Zijin and other interested third parties, with strong interest particularly from Eastern companies and some Mongolian parties.

• Zijin's non-binding offer remains open, but progress has been slow due to Zijin's internal bandwidth and recent corporate activity.

Strategic considerations and shareholder value

• Exercising the put option would provide $25 million and a loan carry, but a portion would be needed to operate the company until production, with dividends not ruled out.

• Exploration is still considered valuable, and ceasing it could hinder future capital raising and news flow.

• The board seeks a premium transaction, sufficient corporate funding, and an extension of the put option period in negotiations.

• The independent expert report sets a benchmark for evaluating offers, but the AUD 25 million put option is not the main driver for Zijin.

Project and market context

• Kharmagtai is on care and maintenance pending funding resolution, with environmental monitoring ongoing.

• The project is well-positioned with nearby infrastructure, including rail and grid power, supporting future development.

• Mongolian government interest in strategic deposits is evolving, with no current official classification for Kharmagtai.

• Strengthening China-Mongolia relations and new infrastructure projects are noted, but not seen as directly impacting the current deal.