ASX- and TSX-listed Xanadu Mines has increased the mineral resource of its Kharmagtai project, in the South Gobi region of Mongolia, to more than one-billion tonnes, including a higher-grade component of about 100-million tonnes.

The updated mineral resource estimates positions Kharmagtai as one of the biggest undeveloped copper assets held by a listed junior, the company said on Wednesday.

The Kharmagtai resource of 1.1-billion tonnes contains three-million tonnes of copper and eight-million ounces of gold, which is a 50% increase in contained copper and an 80% increase in contained gold metal from the previous resource estimate.

The higher-grade zones of more than 0.8% copper-equivalent have grown from about 58-million tonnes in the previous estimate to just on 100-million tonnes with the latest update.

“This could be a real game-changer for project economics, with better defined and larger high-grade zones, setting the project apart from similarly sized orebodies, with the higher-grade component potentially unlocking project scenarios that could pave the way to put Kharmagtai into production. A significant increase in gold to copper ratios, has resulted in a greater than 80% increase in contained gold, which means higher by-product credits that will be reflected in lower all-in sustaining costs. The high-grade core and high gold to copper ratios of the Kharmagtai system are likely to be very important to future project economics, as they provide a degree of optionality for mine development that is not often seen in mining projects of this nature,” said CEO Andrew Stewart.

He added that many of the biggest copper projects worldwide had logistical and social challenges, leading to significant delays and increased capital costs.

“Some projects have been stuck in red tape for so long that their impact on future copper supply is now in doubt. By comparison, Kharmagtai has advantages in both areas. Logistically the South Gobi is flat terrain with ready access to industrial water, nearby power, rail and road infrastructure, and proximity to the largest consumers of copper in Asia. Socially Xanadu has a strong social licence to operate and Kharmagtai is in a very low population area. Further, the Mongolian regulators support mining development; it’s important to remember that the Oyu Tolgoi pit was able to move from discovery to production in approximately five years, an incredible outcome given the time it takes large mining projects to get off the ground elsewhere,” said Stewart.

The updated resource covers only about 30% of the 8 km strike length of the Kharmagtai mineralised complex. The known deposit is open to the north and at depth, and recent drilling has already intercepted high-grade bornite outside the resource.