Xanadu to raise $1M for exploration in Mongolia

• Xanadu Mines (TSX:XAM) has received the go-ahead from investors for a C$1.03 million capital raise to kick-start exploration at the Kharmagtai project
• The cash will fund exploration activities at the company’s flagship Kharmagtai gold and copper project in Mongolia
• The company will issue approximately 34 million shares at three cents per share, diluting its current public float by 4.3 per cent
• Previously, Xanadu suspended exploration activities at Kharmagtai, due to coronavirus concerns in the region
• Xanadu Mines (AXM) remains unmoved since Tuesday and is trading at three cents per share

Xanadu Mines (TSX:XAM) has received the go-ahead from investors to raise approximately C$1.03 million to kick-start exploration at its Kharmagtai project.

Kharmagtai is the junior copper and gold miner’s flagship project in southern Mongolia.

Xanadu describes Kharmagtai as a potential tier one gold asset and the company is pushing in all of its chips to advance the project.

Xanadu’s investors have accepted a price per share of three cents, matching the company’s current share price. 

The company is offering investors roughly 34 million new shares, which would dilute Xanadu’s current publish float by 4.3 per cent.

Xanadu will use the cash to complete its diamond drilling program at Kharmagtai, along with a geophysical program targeting large scale gold deposits.

Upon completing the raise, Xanadu will have a cash balance of approximately $2.84 million.

Xanadu had to suspend drilling at Kharmagtai during the coronavirus crisis and is eager to explore the asset once operations recommence. 

The company has already outlined over a kilometre of mineral strike at the site.

The company has also brought in some big partners, signing an agreement in the first quarter of 2020 with the Japan National Gas, Minerals and Energy Corporation to develop the Red Mountain project, also located in Mongolia. 

Xanadu’s CEO, Dr Andrew Stewart said the company was sitting on a world class project at Kharmagtai and was gearing up to accelerate exploration.

“Discussions with existing shareholders revealed significant investor demand that was reflected in this capital raising.

“We look forward to advancing our exciting projects and to releasing more exploration results from Kharmagtai and Red Mountain in the coming weeks,” he said. 

Xanadu Mines (AXM) remains unmoved since Tuesday and is trading at three cents per share