Xanadu Mines Reveals $890M Capex Estimate for Kharmagtai Copper-Gold Project

Significant Investment Required
Xanadu Mines has disclosed that its Kharmagtai copper-gold project in Mongolia will necessitate a pre-production capital expenditure (capex) of $890 million, as highlighted in a recent pre-feasibility study (PFS). This estimate includes a contingency of $110 million, reflecting the project’s robust planning.

Long-Term Production Potential
The PFS indicates that Kharmagtai has the potential to emerge as a long-term, low-cost mining operation. As global demand for copper surges—driven largely by electrification efforts—the project is positioned to make a meaningful contribution to the global copper supply. The estimated mine life is projected to be 29 years, with annual production expected to range from 60 to 80 kilotonnes of copper and 165,000 to 170,000 ounces of gold, achieved through a two-stage expansion plan.

Mining Techniques and Financial Projections
Utilizing conventional open-pit mining and sulphide flotation methods, the project aims to maintain operational efficiency. The PFS forecasts a post-tax net present value (NPV) of $930 million and an after-tax internal rate of return (IRR) of 21%, with a steady-state payback period of four years.

Ownership Structure and Development Timeline
Located in the Omnogovi province, the Kharmagtai project is owned 38.25% by Xanadu Mines, 38.25% by Zijin Mining, 13.5% by executive director Ganbayar Lkhagvasuren, and 10% by QGX. The mine design incorporates open pits at the Stockwork Hill, White Hill, Copper Hill, and Zephyr Golden Eagle deposits.

Leadership Insights and ESG Considerations
Colin Moorhead, executive chairman and managing director of Xanadu Mines, praised the PFS as the culmination of 18 months of intensive work alongside their joint venture partner, Zijin Mining Group. He emphasized Kharmagtai’s status as a world-class copper asset located in a resource-rich region, bolstering its potential for significant value creation for shareholders and sustainable economic opportunities for local stakeholders.

The project has been assessed as having low environmental, social, and governance (ESG) risks, enhancing its appeal to investors. A bankable feasibility study (BFS) is set to commence in Q1 2025, with construction targeted for mid-2026, pending necessary funding and regulatory approvals.