Strategic Partnership with Zijin Mining Group

Since entering into the April 2022 strategic partnership with Zijin Mining Group Co., Ltd (Zijin), Xanadu worked closely with Zijin to progress the Company’s flagship Kharmagtai Copper-Gold Project, including the following commercial stages.

1. April 2022: Placement to raise ~A$5.6 million and providing Zijin with a 9.9% shareholding in Xanadu
2. March 2023: Placement to raise ~A$7.2 million and providing Zijin with a 19.4% shareholding in Xanadu
3. March 2023: Creation of a 50/50 JV, Khuiten Metals, that holds a 76.5% effective interest in Kharmagtai. Zijin has invested US$35.0 million in the JV to fund the Kharmagtai PFS and exploration until September 2024
4. December 2024: On delivery of the PFS, transition of JV Operatorship to Zijin, and the vesting of two 6-month options, granted for Xanadu’s benefit by the original Zijin investment agreement.

Following delivery of the 18-month PFS in October 2024, Xanadu has the option to:

1. Exercise a six-month put option to sell its 50% share of the Phase 3 JV (interest in Khuiten Metals) to Zijin for US$50 million;
2. Exercise a six-month put option to sell half of its share of the Phase 3 JV (25%) to Zijin for US$25 million plus a loan carry for Xanadu’s remaining ~19.1% share of costs until commercial production at Kharmagtai; or
3. Elect to fund its share of the project Feasibility Study and Construction

Alternative outcomes for Xanadu include corporate level transactions.

About Zijin Mining Group

Zijin is a multinational mining group dedicated to exploration and development of gold, copper, zinc and other mineral resources globally, as well as associated refining, processing, trading and other businesses. Its operations include projects and operations in 14 provinces in the People’s Republic of China (PRC) as well as 13 overseas countries across Europe, Central Asia, Africa, Oceania and South America. It is one of the largest Chinese mining companies distinguished by its significant domestic and international copper and gold resource, reserves and production.

References

1. ASX/TSX Announcement 19 April 2022 – Strategic Partnership with Zijin Mining and Placement
2. ASX/TSX Announcement 22 August 2022 – Foreign Investment Review Board Approves Zijin Investment in Xanadu
3. ASX/TSX Announcement 21 December 2022 – Investment Deal Signed with Zijin; Pathway to Kharmagtai Production
4. ASX/TSX Announcement 10 March 2023 – Zijin and Xanadu Transaction Completed and Kharmagtai PFS Underway
5. ASX/TSX Announcement 13 April 2023 – Kharmagtai Pre-Feasibility drilling off to a flying start
6. ASX/TSX Announcement 18 April 2024 – Bacchus engaged as Strategic & Project Funding Adviser
7. ASX/TSX Announcement 2 October 2024 – Kharmagtai Project Update
8. ASX/TSX Announcement 21 January 2025 – Xanadu’s Near-Term Outlook
9. ASX/TSX Announcement 14 October 2024 – Kharmagtai PFS
10. ASX/TSX Announcement 14 October 2024 – Kharmagtai Resources and Reserves