- Xanadu Mines Ltd (TSX:XAM) has announced C$10.46 million in funding from Japan Oil, Gas and Metals National Corporation (JOGMEC)
- JOGMEC will fund all the exploration at the site for the next four years
- The earn in agreement will give JOGMEC a 51 per cent stake in the Red Mountain copper and gold project in Mongolia
- Previous drilling at the site has returned high-grade copper and gold deposits
- Xanadu Mines Ltd (TSX:XAM) is holding steady with a share price of $0.25 and a market cap of $19 million
Xanadu Mines Ltd (TSX:XAM) has entered into an earn in agreement with the Japan Oil, Gas and Metals National Corporation (JOGMEC) for exploration funding.
JOGMEC has agreed to fund all exploration activities at the Red Mountain copper-gold deposit in southern Mongolia, in exchange for 51 per cent of the company in four years time.
JOGMEC is an independent administrative corporate entity of the Japanese Government whose remit is to secure a stable supply of oil, gas, critical minerals and metals for Japanese businesses.
The C$10.46 million deal will allow the company to develop its secondary site in southern Mongolia, alongside its flagship Kharmagtai gold project located some 265 km from Red Mountain.
Xanadu’s CEO, Dr Andrew Stewart, said the company was honoured that JOGMEC had formed a partnership with the junior miner.
“This partnership and increased exploration funding allow a focussed and accelerated exploration program at Red Mountain, thereby maximising the chances of success while minimising shareholder dilution.
“Previous drilling at then project has returned numerous high-grade intercepts from a broad range of mineralisation styles,” he said.
As per the agreement, Xanadu will manage the project until the four years is up, at which time the companies will form a joint venture.
The exploration program for Red Mountain is expected to begin in April or May when conditions in Mongolia improve, and will run through until November.
Red Mountain’s geology indicated there is a strong likelihood of high grade mineralization at depth.
Xanadu Mines Ltd (TSX:XAM) is holding steady with a share price of $0.25 at 10:00am EST.