Xanadu Mines is pleased to present the recent supplementary program drill results . The drill hole details are set out and the assays are summarised. A plan and cross - sections are included with photographs of representative core samples from KHDDH359.

HIGHLIGHTS

  • Supplementary 5 hole drilling program at Kharmagtai ex tend s the centres of known high – grade mineralization and confirms a new porphyry centre .
  • Drilling continues to increase scale and potential of this large copper – gold system with multiple near – surface, gold rich centres, including AltanTolgoi and Zesen Uul .
  • KHDDH35 9 in the northern part of Altan Tolgoi intersected 315.7m @ 0. 47 % Cu & 0. 37g /t Au (0. 70 % CuEq) from 0.3m , including 160m @ 0.65% Cu & 0.56g/t Au (1.00% CuEq) from 14m .
  • KHDDH358 in the eastern part of Altan Tolgoi intersected 102m @ 0.56% Cu & 0. 62g/t Au (0.91 % CuEq) from 540m in the Tourmaline breccia .
  • New porphyry centre identified with two holes intersecting low density stockwork mineralisation at Pigeon, approximately 2 kilometres east of Tsagaan Sudal .
  • $A13.6 m illion p lacement completed and Rights Issue underway to support Xanadu ‘s plann ed Kharmagtai drilling program and multi – disciplinary studies to deliver a maiden resource early next year , and to further investigate the exciting Oyut Ulan property .

The supplementary drill program at Kharmagtai has delivered results consistent with a large copper – gold system with a multiple near – surface, gold – rich centres incl uding Altan Tolgoi, Zesen Uul and Tsagaan Sudal.

The Kharmagtai project is one of the most advanced copper – gold projects in northern Asia and recent work continues to increase the size and grade of the project . All four prospects remain open, including the tourmaline breccia mineralisation to the east of Altan Tolgoi which appear s to be part of a much larger system extending for several kilometres in an east – west direction.

The porphyry mineralisation intersected in the recent drilling at the Pigeon pro spect has demonstrated the excellent potential for the discovery of additional shallow porphyry centre s under shallow sand cover.

RECENT DRILLING RESULTS:

Diamond drill hole KHDDH359 tested the northern extension of the Altan Tolgoi stockwork zone and intersected mineralisation from surface to a depth of 626.5 m etres . The hole inter sec ted a 160 m etre higher – grade section grading 0.65% Cu & 0.56g/t Au (1 .00 % CuEq) from 14 m etres within a 315.7 m etre – wide zone of shallow stockwork higher grade mineralisat ion grading 0.47% Cu and 0.37g/t Au (0.7 0 % CuEq) from 0.3 m etres. The hole intersected mineralised tourmaline breccia a t approximately 310 m etres which continued to the end of hole, demonstrat ing the continuity of the tourmaline breccia system below the shallow stockwork mineralisation .

Diamond drill hole KHDDH358 targeted minerali s ation at East Altan Tolgoi and intersected 102 m etres of higher grade tourmaline breccia grading 0.56% Cu & 0.62g/t Au (0.91 % CuEq) from 540 m etres . Th is result for KHDDH358 confirm s the continuity of broad zones of very significant copper – gold mineralisation hosted in tourmaline breccias at East Altan Tolgoi.

Our understanding of t he mineralisation within the tourmaline breccia unit is improving with fur ther drilling and analysis. Its grade profile appears to be zoned vertically, from barren or weakly mineralized tourmaline breccia near ! the top of the unit and with chalcopyrite and chalcopyrite " gold cemented breccia at increasing depths. We are targeting areas where the lower part of this unit is close to surface. The tourmaline breccia complex at Altan Tolgoi East has similarities to the very strongly mineralised tourmaline breccia d y ke complex in the world class Rio Blanco – Los Bronces district of Ch ile in that it appears to be a large (several k ilometres long), variably mineralized breccia dyke unit . Drill " testing and trenching along strike is required to determine whether it is a single, continuous breccia dyke complex , or a series of isolated brecc ia pipes and dikes localised along a favourable structural corridor and also to further define where the areas of best mineralisation are located within this unit(s) .

Diamond drill hole KHDDH36 0 test ed the western extension of the high – grade Southern Stockwork at Altan Tolgoi (which contains a high – grade bornite core). The south – western flank of this shear zone has only been tested at shallow levels on the southern half of the prospect. The off " faulted high – grade porphyry mineralisation is interpreted to lie at depth. The drill hole was designed to test for the off " faulted high – grade mineralisation and test the western extension of the prospect where high " grade mineralisation remains narrow but open . KHD DH360 has intersected 44 m etres @ 0.12% Cu &0.41g /t Au (0.37% CuEq) from 40 m etres associated with disseminated bornite mineralisation. Although weak the style of mineralisation and presence of bornite indicates potential proximity of another stockwork zone.