08:51 AM EDT, 10/15/2024 (MT Newswires) -- Xanadu Mines ( XANAF ) reported Tuesday the results of a prefeasibility study for its flagship Kharmagtai copper-gold project in Mongolia, as well as an increase in resources and a maiden ore reserve there.

According to the company, the study confirms the potential of Kharmagtai as a "globally significant, long life, low cost, low risk future copper-gold mine". Xanadu said it is based on conventional open pit mining and sulphide flotation, with low environmental, social and governance (ESG) risk, and supported by nearby rail, road and power links providing the potential for rapid development. "Kharmagtai is well positioned to help fill the looming copper global supply gap driven by growing demand for an increasingly electrified economy, it added.

Among highlights in the study, presented in 100% terms (Xanadu holds 50% control and 38.25% economic share), it generated a net present value of US$930 million based on an 8% discount rate, with a 21% internal rate of return, a 4-year payback period and a 29-year mine life.

In a separate announcement, Xanadu cited an increase in contained copper to 4.7 million tonnes from 3.8 million tonnes. Contained gold also rose to 11 million ounces from 9.3 million ounces.

Xanadu said the MRE update incorporates a revised cut-off grade to align to the marginal cut-off grade in the Kharmagtai Pre-Feasibility Study (PFS). The updated MRE and Maiden Ore Reserve are reported in concert with the PFS announced on 14 October 2024.

The ore reserve comprised 1.6 million tonnes of copper and 4.0 million ounces of gold.

"It remains true today that as the global economy decarbonizes, the supply of copper cannot meet forecast demand," said Colin Moorhead, Xanadu's executive chairman and managing director, in the release about the study. "Development of large scale porphyry copper deposits is becoming more urgent, and with a competitive time to production and relatively low ESG risk, Kharmagtai is well positioned to move forward quickly."

Xanadu's share price rose 7.7% last Friday before the long holiday weekend to $0.07 on the TSX, leaving it shy of 52 week highs.