Kharmagtai Copper-Gold Project in South Gobi, Mongolia, boasts prospects for a potentially world-class mine that could become a major supplier of copper required by the global energy transition.

That’s the view of ASX-listed Xanadu Mines, which said on October 14 in a stock market announcement that a pre-feasibility study (PFS) has established that Kharmagtai could be big-league.

The PFS “confirms the potential of Kharmagtai as a globally significant, long life, low cost, low risk future copper-gold mine” located in an established mining jurisdiction, Xanadu said. 

Xanadu’s executive chairman and managing director Colin Moorhead said: “This Pre-Feasibility Study is the result of 18 months of hard work led by Spencer Cole, working closely with our JV partners at Zijin Mining Group Co Ltd. This confirms to an international PFS standard that Kharmagtai is a world class copper asset, located in a region of the South Gobi which hosts several significant deposits, including those at Rio Tinto’s Oyu Tolgoi mine.

“The future development of Kharmagtai into a long life, low cost, mine will provide significant value to our shareholders and multigeneration employment and economic opportunity for our stakeholders in Mongolia.

“It remains true today that as the global economy decarbonises, the supply of copper cannot meet forecast demand. Development of large scale porphyry copper deposits is becoming more urgent, and with a competitive time to production and relatively low ESG [environmental, social & governance] risk, Kharmagtai is well positioned to move forward quickly.  We are excited to demonstrate such a strong Project at Kharmagtai and to move forward with its final pre-construction stage of development.”

Rio Tinto’s Oyu Tolgoi copper-gold underground mine, focused on one of the world’s biggest copper deposits, began mining operations last year. It is expected to produce approximately 3mn tonnes of copper concentrate per year. This will place Oyu Tolgoi among the top five copper mines in the world in terms of volume and profitability.

The Kharmagtai project is based on conventional open pit mining and sulphide flotation and is supported by nearby rail, road and power links providing the potential for rapid development, Xanadu added.

“Kharmagtai is well positioned to help fill the looming copper global supply gap driven by growing demand for an increasingly electrified economy,” the company also said in its announcement.

Xanadu holds 50%-control and a 38.25%-economic share in the project.

The potential mine, the company said, has a projected 29-year life-span.

Projected production ranges from 60-80ktpa copper and 165-170kozpa gold production across the first and second stages of expansion.