Mr. Colin Moorhead reports

KHARMAGTAI PROJECT UPDATE

Xanadu Mines Ltd. has provided an update on its flagship Kharmagtai copper-gold project in the South Gobi region of Mongolia. The prefeasibility study (PFS) is nearing completion, and operatorship transition to Zijin Mining Group Co. is in progress, with planning and financing discussions under way for the next stage of development.

Highlights:

• The Kharmagtai PFS is in final stages of technical review and evaluation:
  • Xanadu has taken extra weeks to complete final mine design and independent reviews to the highest standard; public announcement of results expected in mid-October, 2024;
  • Xanadu remains accountable for PFS delivery to Australian and Canadian standards;
  • PFS delivery will be achieved within the financing provided by Zijin's initial $35-million (U.S.) investment;
• Operator transition under way as previously communicated, having commenced on Sept. 10, 2024, per the joint venture shareholder agreement:
  • General manager and chair of Khuiten Metals joint venture board now Zijin's nominees;
• Planning under way for a bankable feasibility study (FS);
• Xanadu is in discussions with potential financing sources and other interested parties through its advisers Bacchus Capital and Jefferies.

Xanadu's executive chairman and managing director, Colin Moorhead, said: "The Kharmagtai PFS is coming together and will demonstrate its potential as a large-scale, high-value copper-gold mine. We have taken additional time to ensure final work and technical reviews are at our expected standard, which is not unusual for major projects of this scale and complexity. We look forward to publishing the study outcomes in mid-October. Importantly, this outcome has been achieved within the funding provided by Zijin's initial $35-million (U.S.) investment.

"Meanwhile, the transition of operatorship from Xanadu to Zijin commenced on Sept. 10, as per our JV shareholders agreement, and the teams are working together now to make sure we have a smooth transition structured in the best interests of the project. Xanadu continues to work with its advisers Bacchus Capital and Jefferies to assess funding options for its share of the next stage of development and other potential third party interest.

"In parallel with PFS finalization, the new, Zijin-nominated GM is focused on developing the feasibility study plan and budget, which will require Xanadu approval. Subject to approval and funding, in 2025, Kharmagtai will launch into the final stages of preconstruction approvals, permitting and, ultimately, development."

About Xanadu Mines Ltd.

Xanadu is an Australian Securities Exchange and Toronto Stock Exchange listed exploration company operating in Mongolia. The company gives 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 that jointly control a globally significant copper-gold deposit in the company's flagship Kharmagtai project.

We seek Safe Harbor.