Xanadu Mines has reported a significant increase to the mineral resource estimate at its Kharmagtai copper-gold project in the South Gobi region of Mongolia.

The new estimate represents a 400% increase in contained copper and a 249% increase in contained gold within the open cut mine. It includes results from diamond core drilling and reverse circulation percussion drilling.

Following the upgrade, which is an update on figures announced in March 2015, the open-cut resource of the project increased to 598Mt, containing 1.9Mt of copper and 4.3Moz of gold.

Xanadu Mines managing director and CEO Dr Andrew Stewart said: “Xanadu’s exploration has been very efficient, driven by a high-quality geological model and understanding of the deposits.

“With a 400% increase in contained copper, we are confident that the upcoming Scoping Study will show a financially robust open-pit starter project that will pave the way for Kharmagtai to develop into another high-quality Mongolian mining operation.

“With the discovery of Zaraa and mineralisation intersected down to 1,200 vertical metres and still open, we believe there is an opportunity for a very large-scale system. The addition of Zaraa to the global resource base should have a positive impact on the overall scale and grade.”

The company is undertaking a scoping study with an initial focus on a higher grade ‘starter project’ to showcase project economics.

“We believe there is an opportunity for a very large-scale system.”

The study is scheduled for completion in the fourth quarter of this year and will consider the addition of the new discoveries, Zaraa and White Hill West, to the global resource base.

At Zaraa, the company will focus on developing an initial mineral resource estimate to boost the global resource base.

Xanadu is evaluating the exploration potential of the Zaraa discovery along with the development plan for White Hill, Stockwork Hill and Copper Hill.