Xanadu Mines (XAM) Investor Update summary

Strategic update on project ownership and transaction options

• Exclusivity with Zijin has ended without a finalized deal, reopening the field for third-party negotiations.

• An EGM and shareholder vote are scheduled to decide on exercising the 25% put option, preserving optionality for 30 days.

• Discussions continue with Zijin and other interested parties, with strong interest from Eastern and Mongolian entities.

• If the put option is exercised, $25 million would be received, with a loan carry through to production, but operational costs would persist.

• The board is considering whether to return part of the proceeds as dividends, but no decision has been made.

Status of Zijin negotiations and project dynamics

• Zijin's offer remains open, but progress is slow due to their internal bandwidth and recent gold asset spin-out.

• Zijin is not seeking to exit the project and maintains a strong strategic fit with Kharmagtai.

• The exclusivity period allowed for broader engagement, now enabling open talks with other parties.

• Option price hurdles are not significant for Zijin but serve as benchmarks for evaluating superior offers.

• The company is actively managing relationships and negotiations with Zijin's head of business development.

Project operations and future plans

• Kharmagtai is currently on care and maintenance, awaiting funding resolution to resume activity.

• Exploration potential remains high, with management emphasizing the value of further drilling.

• Operational costs in the last quarter included extraordinary items, and future G&A will be right-sized based on outcomes.

• The company is preparing for both scenarios: exercising the put option or maintaining a larger project stake.

• Infrastructure advantages position the project well for future development.