Xanadu Mines Ltd — Capital/Financing Update 2021

Jun 3, 2021

ASX | TSX ANNOUNCEMENT

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XANADU ACCELERATES 2021 EXPLORATION PROGRAM

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3 June 2021

Xanadu Mines Ltd ( ASX: XAM, TSX: XAM ) (“Xanadu” or “the Company”) is pleased to update the market on its on-going exploration program for porphyry copper and gold deposits at the Kharmagtai District in the South Gobi region of Mongolia.

Highlights

• 23,000 metres of diamond drilling planned for completion by Q4 of CY2021, utilising three drill rigs

• Funded Exploration Program with three key components:

• High-Grade Definition Program - define scale and tenor of gold-rich, bornite zones underneath current Stockwork Hill, White Hill and Copper Hill resources

• Discovery Drilling Program - drilling of priority targets to identify new discoveries within the Kharmagtai District; and

• Resource Upgrade Program - targeting a resource upgrade beneath the current resource and including large-scale mineralisation at Zaraa

• Targeting approach will utilise data from recent drilling, geophysics, and multispectral core scanning technology on site

• Resource modelling to commence in Q4 of CY2021, on completion of the drill program

• Currently testing deeper extensions at White Hill and Stockwork Hill using 3 drill rigs

AUSTRALIA c/o Company Matters Pty Limited Level 12, 680 George Street Sydney NSW 2000 T: +612 8280 7497

MONGOLIA Suite 23, Building 9B Olympic St, Sukhbaatar District Ulaanbaatar, Mongolia T: +967 7012 0211

Xanadu Mines Ltd ACN 114 249 026

www.xanadumines.com

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Xanadu’s Chief Executive Officer, Dr Andrew Stewart, said “Xanadu is well capitalised to pursue its exploration program for 2021, aiming to create material value and growth within the Kharmagtai District. Recent exploration successes have confirmed an exciting potential to expand the higher-grade resource and unlock the next stage of development in this district. Our 23,000 metres drilling program will test this potential, and we look forward to updating the market as our program develops.”

Exploration Program

Xanadu has set a goal targeting an increase of the combined Kharmagtai resource to >1 billion tonnes @ ≥0.5% copper equivalent (CuEq) including >100 million tonnes @ ≥0.8% CuEq, with the aim of enabling future development of the Kharmagtai District.

The 23,000-metre drilling program at Kharmagtai is designed around delivery of this goal, with detailed objectives including:

1. High-Grade Definition Program – define scale and tenor of gold-rich, bornite zones identified underneath current Stockwork Hill, White Hill and Copper Hill resources;

2. Discovery Drilling Program – drilling of priority targets to identify new discoveries on the Kharmagtai District; and

3. Resource Upgrade Program – targeting a resource upgrade resource to >1 billion tonnes @ ≥0.5% CuEq including >100 million tonnes @ ≥0.8% CuEq. Define to Indicated status beneath the current resource and large-scale mineralisation at Zaraa.

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Figure 1. Kharmagtai District Long Section - Known Mineralisation

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Current Drilling

The Exploration Program is currently underway with three active diamond drills - KHDDH569, KHDDH570 and KHDDH571 ( Figure 2 ).

Current drill hole KHDDH571 aims to test the western extension of the gold-rich, bornite zone under Stockwork hill.

Deeper extension of mineralisation under White Hill will be tested by current drill hole KHDDH569.

Current drill hole KHDDH570 will test the eastern extent of Zaraa mineralisation.

Drill holes KHDDH567 and KHDDH568 are both completed and pending assay results.

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Figure 2. Current and Recent Drilling Long Section

High Grade Definition Program

The drilling program beneath the existing resource focuses directly on delivering the goal of >100Mt at 0.8% CuEq. Drilling will focus on deeper, gold-rich, high grade zones under Stockwork Hill, White Hill and Copper Hill (see purple mineralisation in Figure 3 ), which are key to achieving this goal.

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Results to date beneath the existing Stockwork Hill resource indicate a zone of mineralisation at >1% CuEq, which is relatively long and narrow, shaped similar to a flattened cigar laying at an angle. Assay results from recent drill hole KHDDH565 have more than doubled the potential length of this mineralisation.

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Figure 3. Stockwork Hill Long Section - Current and Recent Drilling (see ASX Announcement Dated 28 May 2021 for KHDDH565 and 566 assay results)

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Further drilling will define the full extent and tenure of the known zones and explore for similar high-grade shapes nearby ( Figure 4 ).

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Figure 4. Existing Resource Plan View – Current Drilling Locations

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Xanadu will methodically test these gold-rich, bornite zones in 2021. To target its drilling, Xanadu will utilise data from the drilling it completed in 2020 and early 2021 and improved data from the core scanning technology now in place at Kharmagtai.

Discovery Drilling Program

Discoveries to date show that Kharmagtai is a district that hosts a complex system of copper-gold porphyries intrusions. As a result, Kharmagtai cannot be treated as a single deposit, and it remains prospective for new discovery across its 70 square kilometre license area.

Xanadu has identified several priority targets for new discovery to be drilled during the CY2021 program ( Figure 5 ). Following completion of current drill holes at Stockwork Hill and Zaraa, Xanadu’s intention is for one drill rig to be focused on discovery drilling.

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Figure 5. Kharmagtai District Plan View - Target Areas and Current Drilling

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Timeline

The 2021 Exploration Program for the Kharmagtai District will be largely completed by early Q4, CY2021. Drill results will be published regularly during the program, with 5 monthly announcements anticipated between June and October 2021. The drill program will initially focus on high grade zones under Stockwork Hill, White Hill and Zaraa deposits.

Xanadu will design dual purpose drilling where possible to deliver specific intercepts and to provide the necessary data to define resources to Indicated status. Modelling to update the 2018 Mineral Resource Estimate (please refer to ASX Announcement dated 31 October 2018) will commence in Q4, CY2021.

About Xanadu Mines

Xanadu is an ASX and TSX listed Exploration company operating in Mongolia. We give investors exposure to globally significant, large scale copper-gold discoveries and low-cost inventory growth. Xanadu maintains a portfolio of exploration projects and remains one of the few junior explorers on the ASX or TSX who control an emerging Tier 1 copper-gold deposit in our flagship Kharmagtai project. For information on Xanadu visit: www.xanadumines.com.

Andrew Stewart CEO

Xanadu Mines Ltd

Andrew.stewart@xanadumines.com +61 409 819 922

This Announcement was authorised for release by Xanadu’s Board of Directors.

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Appendix 2: Statements and Disclaimers

Mineral Resources and Ore Reserves Reporting Requirements

The 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code 2012 ) sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves. The Information contained in this Announcement has been presented in accordance with the JORC Code 2012.

Competent Person Statement

The information in this announcement that relates to exploration results is based on information compiled by Dr Andrew Stewart, who is responsible for the exploration data, comments on exploration target sizes, QA/QC and geological interpretation and information. Dr Stewart, who is an employee of Xanadu and is a Member of the Australasian Institute of Geoscientists, has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as the “Competent Person” as defined in the 2012 Edition of the Australasian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves and the National Instrument 43-101 . Dr Stewart consents to the inclusion in the report of the matters based on this information in the form and context in which it appears.

Copper Equivalent Calculations

The copper equivalent (CuEq or eCu ) calculation represents the total metal value for each metal, multiplied by the conversion factor, summed, and expressed in equivalent copper percentage with a metallurgical recovery factor applied. The copper equivalent calculation used is based off the eCu calculation defined by CSA in the 2018 Mineral Resource Upgrade.

Copper equivalent (CuEq or eCu ) grade values were calculated using the following formula:

eCu = Cu + Au * 0.62097 * 0.8235,

Where Cu = copper grade ( % ); Au = gold grade (gold per tonne ( g/t )); 0.62097 = conversion factor (gold to copper); and 0.8235 = relative recovery of gold to copper (82.35%).

The copper equivalent formula was based on the following parameters (prices are in USD): Copper price = 3.1 $/lb (or 6,834 $ per tonne ( $/t )); Gold price = 1,320 $ per ounce ( $/oz ); Copper recovery = 85%; Gold recovery = 70%; and Relative recovery of gold to copper = 70% / 85% = 82.35%.

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Forward-Looking Statements

Certain statements contained in this Announcement, including information as to the future financial or ‐ operating performance of Xanadu and its projects may also include statements which are ‘forward looking statements’ that may include, amongst other things, statements regarding targets, estimates and assumptions in respect of mineral reserves and mineral resources and anticipated grades and recovery rates, production and prices, recovery costs and results, capital expenditures and are or may be based on assumptions and estimates related to future technical, economic, market, political, social and other conditions. These ‘forward-looking statements’ are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Xanadu, are inherently subject to significant technical, business, economic, competitive, political and social uncertainties and contingencies and involve known and unknown risks and uncertainties that could cause actual events ‐ or results to differ materially from estimated or anticipated events or results reflected in such forward looking statements.

‐ Xanadu disclaims any intent or obligation to update publicly or release any revisions to any forward looking statements, whether as a result of new information, future events, circumstances or results or otherwise after the date of this Announcement or to reflect the occurrence of unanticipated events, other than required by the Corporations Act 2001 (Cth) and the Listing Rules of the Australian Securities Exchange ( ASX ) and Toronto Stock Exchange ( TSX ). The words ‘believe’, ‘expect’, ‘anticipate’, ‘indicate’, ‘contemplate’, ‘target’, ‘plan’, ‘intends’, ‘continue’, ‘budget’, ‘estimate’, ‘may’, ‘will’, ‐ ‘schedule’ and similar expressions identify forward looking statements.

All ‘forward ‐ looking statements’ made in this Announcement are qualified by the foregoing cautionary statements. Investors are cautioned that ‘forward ‐ looking statements’ are not guarantee of future ‐ performance and accordingly investors are cautioned not to put undue reliance on ‘forward looking statements’ due to the inherent uncertainty therein.

For further information please visit the Xanadu Mines’ Website at www.xanadumines.com.

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Appendix 3: Kharmagtai Table 1 (JORC 2012)

Set out below is Section 1 and Section 2 of Table 1 under the JORC Code, 2012 Edition for the Kharmagtai project. Data provided by Xanadu. This Table 1 updates the JORC Table 1 disclosure dated 11 April 2019.

JORC TABLE 1 - SECTION 1 - SAMPLING TECHNIQUES AND DATA

(Criteria in this section apply to all succeeding sections).

Criteria	JORC Code explanation	Commentary
Sampling techniques	• Nature and quality of sampling	•Representative ½ core samples were	split
	(e.g. cut channels, random chips,	from PQ, HQ & NQ diameter diamond	drill
	or specific specialised industry	core on site using rock saws, on a routine
	standard measurement tools	2m sample interval that also honours
	appropriate to the minerals under	lithological/intrusive contacts.
	investigation, such as down hole	•The orientation of the cut line is controlled
	gamma sondes, or handheld XRF	using the core orientation line ensuring
	instruments, etc.). These	uniformity of core splitting wherever the core
	examples should not be taken as	has been successfully oriented.
	limiting the broad meaning of	•Sample intervals are defined	and
	sampling.	subsequently checked by geologists,	and
	• Include reference to measures	sample tags are attached (stapled) to	the
	taken to ensure sample	plastic core trays for every sample interval.
	representivity and the appropriate	•RC chip samples are ¼ splits from	one
	calibration of any measurement	meter intervals using a 75%:25% riffle
	tools or systems used.	splitter to obtain a 3kg sample
	• Aspects of the determination of	•RC samples are uniform 2m samples
	mineralisation that are Material to	formed from the combination of two ¼	split
	the Public Report.	1m samples.
	• In cases where ‘industry standard’
	work has been done this would be
	relatively simple (e.g. ‘reverse
	circulation drilling was used to
	obtain 1 m samples from which 3
	kg was pulverised to produce a
	30 g charge for fire assay’). In
	other cases, more explanation
	may be required, such as where
	there is coarse gold that has
	inherent sampling problems.
	Unusual commodities or
	mineralisation types (e.g.
	submarine nodules) may warrant
	disclosure of detailed information.
Drilling techniques	• Drill type (e.g. core, reverse	•The Mineral Resource estimation has been
	circulation, open-hole hammer,	based upon diamond drilling of PQ, HQ	and
	rotary air blast, auger, Bangka,	NQ diameters with both standard and triple
	sonic, etc.) and details (e.g. core	tube core recovery configurations,	RC
	diameter, triple or standard tube,	drilling and surface trenching with channel
	depth of diamond tails, face-	sampling.
	sampling bit or other type,	•All drill core drilled byXanadu has been

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Criteria	JORC Code explanation	Commentary
	whether core is oriented and if so,	oriented using the “Reflex Ace” tool.
	_by what method, etc.). _
Drill sample recovery	• Method of recording and	•Diamond drill core recoveries were
	assessing core and chip sample	assessed using the standard industry (best)
	recoveries and results assessed.	practice which involves: removing the core
	• Measures taken to maximise	from core trays; reassembling multiple core
	sample recovery and ensure	runs in a v-rail; measuring core lengths with
	representative nature of the	a tape measure, assessing recovery against
	samples.	core block depth measurements and
	• Whether a relationship exists	recording any measured core loss for each
	between sample recovery and	core run.
	grade and whether sample bias	•Diamond core recoveries average 97%
	may have occurred due to	through mineralization.
	preferential loss/gain of	•Overall, core quality is good, with minimal
	fine/coarse material.	core loss. Where there is localized faulting
		and or fracturing core recoveries decrease,
		however, this is a very small percentage of
		the mineralized intersections.
		•RC recoveries are measured using whole
		weight of each 1m intercept measured
		before splitting
		•Analysis of recovery results vs grade shows
		no significant trends that might indicate
		sampling bias introduced by variable
		recovery in fault/fracture zones.
Logging	• Whether core and chip samples	•All drill core is geologically logged by well-
	have been geologically and	trained geologists using a modified
	geotechnically logged to a level of	“Anaconda-style” logging system
	detail to support appropriate	methodology. The Anaconda method of
	Mineral Resource estimation,	logging and mapping is specifically designed
	mining studies and metallurgical	for porphyry Cu-Au mineral systems and is
	studies.	entirely appropriate to support Mineral
	• Whether logging is qualitative or	Resource Estimation, mining, and
	quantitative in nature. Core (or	metallurgical studies.
	costean, channel, etc.)	•Logging of lithology, alteration and
	photography.	mineralogy is intrinsically qualitative in
	• The total length and percentage	nature. However, the logging is
	of the relevant intersections	subsequently supported by 4 Acid ICP-MS
	logged.	(48 element) geochemistry and SWIR
		spectral mineralogy (facilitating semi-
		quantitative/calculated mineralogical,
		lithological and alteration classification)
		which is integrated with the logging to
		improve cross section interpretation and 3D
		geological model development.
		•Drill core is also systematically logged for
		both geotechnical features and geological
		structures. Where drill core has been
		successfullyoriented, the orientation of

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Criteria	JORC Code explanation	Commentary
		structures and geotechnical features are
		also routinely measured.
		•Both wet and dry core photos are taken after
		core has been logged and marked-up but
		before drill core has been cut.
Sub-sampling	• If core, whether cut or sawn and	•All drill core samples are ½ core splits from
techniques and	whether quarter, half or all core	either PQ, HQ or NQ diameter cores. A
sample preparation	taken.	routine 2m sample interval is used, but this
	• If non-core, whether riffled, tube	is varied locally to honour
	sampled, rotary split, etc. and	lithological/intrusive contacts. The minimum
	whether sampled wet or dry.	allowed sample length is 30cm.
	• For all sample types, the nature,	•Core is appropriately split (onsite) using
	quality, and appropriateness of	diamond core saws with the cut line routinely
	the sample preparation technique.	located relative to the core orientation line
	• Quality control procedures	(where present) to provide consistency of
	adopted for all sub-sampling	sample split selection.
	stages to maximise representivity	•The diamond saws are regularly flushed with
	of samples.	water to minimize potential contamination.
	• Measures taken to ensure that	•A field duplicate ¼ core sample is collected
	the sampling is representative of	every 30th sample to ensure the
	the in-situ material collected,	“representivity of the in-situ material
	including for instance results for	collected”. The performance of these field
	field duplicate/second-half	duplicates is routinely analysed as part of
	sampling.	Xanadu’s sample QC process.
	• Whether sample sizes are	•Routine sample preparation and analyses of
	appropriate to the grain size of	DDH samples were carried out by ALS
	the material being sampled.	Mongolia LLC (ALS Mongolia), who
		operates an independent sample
		preparation and analytical laboratory in
		Ulaanbaatar.
		•All samples were prepared to meet standard
		quality control procedures as follows:
		Crushed to 75% passing 2mm, split to 1kg,
		pulverised to 85% passing 200 mesh (75
		microns) and split to 150g sample pulp.
		•ALS Mongolia Geochemistry labs quality
		management system is certified to ISO
		9001:2008.
		•The sample support (sub-sample mass and
		comminution) is appropriate for the grainsize
		and Cu-Au distribution of the porphyry Cu-
		Au mineralization and associated host
		rocks.
Quality of assay data	• The nature, quality and	•All samples were routinely assayed by ALS
and laboratory tests	appropriateness of the assaying	Mongolia for gold
	and laboratory procedures used	•Au is determined using a 25g fire assay
	and whether the technique is	fusion, cupelled to obtain a bead, and
	considered partial or total.	digested with Aqua Regia, followed byan

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Criteria	JORC Code explanation	Commentary
	• For geophysical tools,	atomic absorption spectroscopy (AAS)
	spectrometers, handheld XRF	finish, with a lower detection (LDL) of 0.01
	instruments, etc., the parameters	ppm.
	used in determining the analysis	•All samples were also submitted to ALS
	including instrument make and	Mongolia for the 48-element package ME-
	model, reading times, calibrations	ICP61 using a four-acid digest (considered
	factors applied and their	to be an effective total digest for the
	derivation, etc.	elements relevant to the MRE). Where
	• Nature of quality control	copper is over-range (>1% Cu), it is
	procedures adopted (e.g.	analysed by a second analytical technique
	standards, blanks, duplicates,	(Cu-OG62), which has a higher upper
	external laboratory checks) and	detection limit (UDL) of 5% copper.
	whether acceptable levels of	•Quality assurance has been managed by
	accuracy (i.e. lack of bias) and	insertion of appropriate Standards (1:30
	precision have been established.	samples – suitable Ore Research Pty Ltd
		certified standards), Blanks (1:30 samples),
		Duplicates (1:30 samples – ¼ core
		duplicate) by XAM.
		•Assay results outside the optimal range for
		methods were re-analysed by appropriate
		methods.
		•Ore Research Pty Ltd certified copper and
		gold standards have been implemented as a
		part of QC procedures, as well as coarse
		and pulp blanks, and certified matrix
		matched copper-gold standards.
		•QC monitoring is an active and ongoing
		processes on batch by batch basis by which
		unacceptable results are re-assayed as
		soon as practicable.
		•Prior to 2014: Cu, Ag, Pb, Zn, As and Mo
		were routinely determined using a three-
		acid-digestion of a 0.3g sub-sample followed
		by an AAS finish (AAS21R) at SGS
		Mongolia. Samples were digested with nitric,
		hydrochloric and perchloric acids to dryness
		before leaching with hydrochloric acid to
		dissolve soluble salts and made to 15ml
		volume with distilled water. The LDL for
		copper using this technique was 2ppm.
		Where copper was over-range (>1% Cu), it
		was analysed by a second analytical
		technique (AAS22S), which has a higher
		upper detection limit (UDL) of 5% copper.
		Gold analysis method was essentially
		unchanged.

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Criteria	JORC Code explanation	Commentary
Verification of	• The verification of significant	•All assay data QAQC is checked prior to
sampling and	intersections by either	loading into XAM’s Geobank data base.
assaying	independent or alternative	•The data is managed by XAM geologists.
	company personnel.	•The data base and geological interpretation
	• The use of twinned holes.	is managed by XAM.
	• Documentation of primary data,	•Check assays are submitted to an umpire
	data entry procedures, data	lab (SGS Mongolia) for duplicate analysis.
	verification, data storage (physical	•No twinned drill holes exist.
	and electronic) protocols.	•There have been no adjustments to any of
	• Discuss any adjustment to assay	the assay data.
	data.
Location of data	• Accuracy and quality of surveys	•Diamond drill holes have been surveyed
points	used to locate drill holes (collar	with a differential global positioning system
	and down-hole surveys),	(DGPS) to within 10cm accuracy.
	trenches, mine workings and	•The grid system used for the project is UTM
	other locations used in Mineral	WGS-84 Zone 48N
	Resource estimation.	•Historically, Eastman Kodak and Flexit
	• Specification of the grid system	electronic multi-shot downhole survey tools
	used.	have been used at Kharmagtai to collect
	• Quality and adequacy of	down hole azimuth and inclination
	topographic control.	information for the majority of the diamond
		drill holes. Single shots were typically taken
		every 30m to 50m during the drilling
		process, and a multi-shot survey with
		readings every 3-5m are conducted at the
		completion of the drill hole. As these tools
		rely on the earth’s magnetic field to measure
		azimuth, there is some localised
		interference/inaccuracy introduced by the
		presence of magnetite in some parts of the
		Kharmagtai mineral system. The extent of
		this interference cannot be quantified on a
		reading-by-reading basis.
		•More recently (since September 2017), a
		north-seeking gyro has been employed by
		the drilling crews on site (rented and
		operated by the drilling contractor),
		providing accurate downhole orientation
		measurements unaffected by magnetic
		effects. Xanadu have a permanent
		calibration station setup for the gyro tool,
		which is routinely calibrated every 2 weeks
		(calibration records are maintained and
		were sighted)
		•The project DTM is based on 1 m contours
		from satellite imagery with an accuracy of
		±0.1 m.

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Criteria	JORC Code explanation	Commentary
Data spacing and	• Data spacing for reporting of	•Holes spacings range from <50m spacings
distribution	Exploration Results.	within the core of mineralization to +500m
	• Whether the data spacing, and	spacings for exploration drilling. Hole
	distribution is sufficient to	spacings can be determined using the
	establish the degree of geological	sections and drill plans provided.
	and grade continuity appropriate	•Holes range from vertical to an inclination of
	for the Mineral Resource and Ore	-60 degrees depending on the attitude of the
	Reserve estimation procedure(s)	target and the drilling method.
	and classifications applied.	•The data spacing and distribution is
	• Whether sample compositing has	sufficient to establish anomalism and
	been applied.	targeting for porphyry Cu-Au, tourmaline
		breccia and epithermal target types.
		•Holes have been drilled to a maximum of
		1,300m vertical depth.
		•The data spacing and distribution is
		sufficient to establish geological and grade
		continuity, and to support the Mineral
		Resource classification.
Orientation of data in	• Whether the orientation of	•Drilling is conducted in a predominantly
relation to geological	sampling achieves unbiased	regular grid to allow unbiased interpretation
structure	sampling of possible structures	and targeting.
	and the extent to which this is	•Scissor drilling, as well as some vertical and
	known, considering the deposit	oblique drilling, has been used in key
	type.	mineralised zones to achieve unbiased
	• If the relationship between the	sampling of interpreted structures and
	drilling orientation and the	mineralised zones, and in particular to assist
	orientation of key mineralised	in constraining the geometry of the
	structures is considered to have	mineralised hydrothermal tourmaline-
	introduced a sampling bias, this	sulphide breccia domains.
	should be assessed and reported
	if material.
Sample security	• The measures taken to ensure	•Samples are delivered from the drill rig to the
	sample security.	core shed twice daily and are never left
		unattended at the rig.
		•Samples are dispatched from site in locked
		boxes transported on XAM company
		vehicles to ALS lab in Ulaanbaatar.
		•Sample shipment receipt is signed off at the
		Laboratory with additional email
		confirmation of receipt.
		•Samples are then stored at the lab and
		returned to a locked storage site.
Audits or reviews	• The results of any audits or	•Internal audits of sampling techniques and
	reviews of sampling techniques	data management are undertaken on a
	and data.	regular basis, to ensure industry best
		practice is employed at all times.
		•External reviews and audits have been
		conducted bythe following groups:

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Criteria	JORC Code explanation	Commentary
		•2012: AMC Consultants Pty Ltd. was
		engaged to conduct an Independent
		Technical Report which reviewed drilling
		and sampling procedures. It was concluded
		that sampling and data record was to an
		appropriate standard.
		•2013: Mining Associates Ltd. was engaged
		to conduct an Independent Technical Report
		to review drilling, sampling techniques and
		QAQC. Methods were found to conform to
		international best practice.
		•2018: CSA Global reviewed the entire
		drilling, logging, sampling, sample shipping
		and laboratory processes during the
		competent persons site visit for the 2018
		MRe and found the systems and adherence
		to protocols to be to an appropriate
		standard.

JORC TABLE 1 - SECTION 2 - REPORTING OF EXPLORATION RESULTS

(Criteria in this section apply to all succeeding sections).

Criteria	Commentary
Mineral tenement and land tenure status	•The Project comprises 2 Mining Licences (MV-17129A Oyut Ulaan and (MV- 17387A Kharmagtai): o Xanadu now owns 90% of Vantage LLC, the 100% owner of the Oyut Ulaan mining licence. o The Kharmagtai mining license MV-17387A is 100% owned by Oyut Ulaan LLC. Xanadu has an 85% interest in Mongol Metals LLC, which has 90% interest in Oyut Ulaan LLC. The remaining 10% in Oyut Ulaan LLC is owned by Quincunx (BVI) Ltd (“Quincunx”). •The Mongolian Minerals Law (2006) and Mongolian Land Law (2002) govern exploration, mining, and land use rights for theproject.
Exploration done by other parties	•Previous exploration at Kharmagtai was conducted by Quincunx Ltd, Ivanhoe Mines Ltd and Turquoise Hill Resources Ltd including extensive drilling, surface geochemistry, geophysics, mapping. •Previous exploration at Red Mountain (Oyut Ulaan) was conducted by Ivanhoe Mines.
Geology	•The mineralisation is characterised as porphyry copper-gold type. •Porphyry copper-gold deposits are formed from magmatic hydrothermal fluids typically associated with felsic intrusive stocks that have deposited metals as sulphides both within the intrusive and the intruded host rocks. Quartz stockwork veining is typically associated with sulphides occurring both within the quartz veinlets and disseminated thought out the wall rock. Porphyry deposits are typically large tonnage deposits ranging from low to high grade and are generally mined by large scale open pit or underground bulk mining methods. The deposits at Kharmagtai are atypical in that theyare associated with intermediate intrusions

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Criteria	Commentary
	of diorite to quartz diorite composition; however, the deposits are in terms of contained gold significant, and similar gold-rich porphyry deposits.
Drill hole Information	•Diamond drill holes are the principal source of geological and grade data for the Project. •See figures in this ASX/TSX Announcement.
Data Aggregation methods	•The CSAMT data was converted into 2D line data using the Zonge CSAMT processing software and then converted into 3D space using a UBC inversion process. Inversion fit was acceptable, and error was generally low. •A nominal cut-off of 0.1% eCu is used in copper dominant systems for identification of potentially significant intercepts for reporting purposes. Higher grade cut-offs are 0.3%, 0.6% and 1% eCu. •A nominal cut-off of 0.1g/t eAu is used in gold dominant systems like Golden Eagle for identification of potentially significant intercepts for reporting purposes. Higher grade cut-offs are 0.3g/t, 0.6g/t and 1g/t eAu. •Maximum contiguous dilution within each intercept is 9m for 0.1%, 0.3%, 0.6% and 1% eCu. •Most of the reported intercepts are shown in sufficient detail, including maxima and subintervals, to allow the reader to make an assessment of the balance of high and low grades in the intercept. •Informing samples have been composited to two metre lengths honouring the geological domains and adjusted where necessary to ensure that no residual sample lengths have been excluded (best fit). The copper equivalent (eCu) calculation represents the total metal value for each metal, multiplied by the conversion factor, summed, and expressed in equivalent copper percentage with a metallurgical recovery factor applied. The copper equivalent calculation used is based off the eCu calculation defined by CSA in the 2018 Mineral Resource Upgrade. Copper equivalent (CuEqoreCu) grade values were calculated using the following formula: eCu or CuEq = Cu + Au * 0.62097 * 0.8235, Gold Equivalent (eAu) grade values were calculated using the following formula: eAu = Au + Cu / 0.62097 * 0.8235. Where: Cu - copper grade (%) Au - gold grade (g/t) 0.62097 - conversion factor (gold to copper) 0.8235 - relative recovery of gold to copper (82.35%)

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Criteria	Commentary
	The copper equivalent formula was based on the following parameters (prices are in USD): o Copper price - 3.1 $/lb (or 6834 $/t) o Gold price - 1320 $/oz o Copper recovery - 85% o Gold recovery - 70% o Relative recoveryofgold to copper = 70% / 85% = 82.35%.
Relationship between mineralisation on widths and intercept lengths	•Mineralised structures are variable in orientation, and therefore drill orientations have been adjusted from place to place in order to allow intersection angles as close as possible to true widths. •Exploration results have been reported as an interval with 'from' and 'to' stated in tables of significant economic intercepts. Tables clearly indicate that true widths willgenerallybe narrower than those reported.
Diagrams	•See figures in the bodyof the report.
Balanced reporting	•Resources have been reported at a range of cut-off grades, above a minimum suitable for open pit mining, and above a minimum suitable for underground mining.
Other substantive exploration data	•Extensive work in this area has been done and is reported separately.
Further Work	•The mineralisation is open at depth and along strike. •Current estimates are restricted to those expected to be reasonable for open pit mining. Limited drilling below this depth (-300m RLl) shows widths and grades potentially suitable for underground extraction. •Exploration ongoing.

JORC TABLE 1 - SECTION 3 - ESTIMATION AND REPORTING OF MINERAL RESOURCES

Mineral Resources are not reported so this is not applicable to this announcement. Please refer to ASX Announcement dated 31 October 2018 for Xanadu’s most recent reported Mineral Resource Estimate and applicable Table 1, Section 3.

JORC TABLE 1 - SECTION 4 - ESTIMATION AND REPORTING OF ORE RESERVES

Ore Reserves are not reported so this is not applicable to this announcement.