Xanadu Mines Advances with Strategic Moves for Kharmagtai
Xanadu Mines Advances with Strategic Moves for Kharmagtai
for the quarter ended 30 June 2025
(figures are unaudited and in A$ except where stated)
TORONTO, July 29, 2025 --
June 2025 Quarter
During the quarter ending 30 June 2025, Xanadu Mines Ltd. (Xanadu or the Company) focused its efforts on exploring strategic funding avenues to enhance the Kharmagtai Copper and Gold Project (Kharmagtai). A significant outcome of this initiative was an off-market takeover bid initiated by Bastion Mining Pty Ltd (Bastion), which the Board has recommended to shareholders. At the time of this report, Bastion acquired a relevant interest exceeding 90% of Xanadu shares and has issued a Notice of Compulsory Acquisition for all outstanding shares.
Key Highlights:
- Xanadu entered into an exclusivity agreement with Zijin Mining Group Co. Ltd. (Zijin) on April 7, 2025, to explore various corporate transactions. The exclusivity period expired on May 5, 2025, without finalizing a control transaction.
- A Bid Implementation Agreement (BIA) with Bastion was established on May 19, 2025, recommending the off-market takeover bid to acquire all fully paid ordinary shares in Xanadu at A$0.08 cash per share (the Offer).
- The Offer provided a 57% premium to Xanadu’s closing price of A$0.051 on May 16, 2025, and a 52% premium to the 90-day Volume Weighted Average Price (VWAP) up to that date.
- Bastion entered into a subscription agreement, purchasing 286,829,633 Xanadu shares at an issue price of A$0.06 per share, securing interim funding of A$17.2 million.
- On May 26, 2025, Xanadu withdrew shareholder resolutions related to a put option under the Kharmagtai Joint Venture Shareholders Agreement with Zijin.
- Bastion declared the takeover offer unconditional as of June 24, 2025, after acquiring more than 50% shareholding in Xanadu.
- Xanadu held A$18.532 million in cash as of June 30, 2025.
- On July 25, 2025, Bastion published a Notice of Compulsory Acquisition after acquiring more than 90% of Xanadu shares.
- Subsequently, Bastion extended the Offer to close at 7:00 PM (Sydney time) on August 5, 2025.
- Following the sale of Zijin shares into the Offer, Zijin’s nominee Shaoyang Shen resigned from the Board of Xanadu, retaining a 50% shareholding in Khuiten Metals Pte Ltd, which controls Kharmagtai.
Colin Moorhead, Executive Chairman & Managing Director, commented:"This transaction with Bastion signifies a pivotal milestone in the advancement of both the Kharmagtai Project and Xanadu. It represents the culmination of our strategy to provide liquidity to Xanadu shareholders while unlocking value from our significant discoveries. Given the project's scale and complexities, I am immensely proud of this achievement and appreciate everyone’s efforts, especially our supportive shareholders."
"Looking ahead, I anticipate Kharmagtai will emerge as the next major copper mine in Mongolia, playing a critical role in the global copper supply chain. We extend our best wishes to Bastion and Zijin to expedite the project's transition to production."
Corporate Transaction
On April 7, 2025, Xanadu initiated discussions with its major shareholder, Zijin Mining Group Co. Ltd, concerning a variety of potential corporate transactions. This arrangement allowed for an extension of a potential option for the Company to divest a 25% interest in Khuiten Metals Pte Ltd. Following thorough discussions, Xanadu announced on May 5, 2025, that no control transaction had been finalized within the allotted exclusivity period, prompting them to pursue discussions with other interested parties. The 25% Put Option was subsequently withdrawn from the proposals at the scheduled Extraordinary General Meeting (EGM) on June 4, 2025, which was also canceled.
On May 19, 2025, the Company revealed it had finalized a Bid Implementation Agreement with Bastion Mining Pte Ltd, under which Bastion made a cash offer at A$0.08 per share for all fully paid ordinary shares issued in Xanadu not owned by Bastion at that time. This offer represents a consortium bid, including Boroo Pte Ltd and Xanadu Director Ganbayar Lkhagvasuren as Bid Sponsors. Boroo is engaged in significant gold investments globally, with notable assets including Lagunas Norte in Peru.
Bastion's Bidders Statement highlighted the substantial premium above historic market prices for Xanadu shares and conveyed an overall valuation of around A$160 million for Xanadu Mines, aligning with high-end valuation figures produced by external modeling. The Statement also noted the advantages of reducing exposure to risks tied to a company with a non-operating minority joint partner.
Xanadu's Takeover Board Committee, supported by legal and financial advisers, endorsed the Offer unanimously, advising shareholders to accept it unless a better proposal arises, contingent upon an Independent Expert's impartial judgment that the Offer remains fair and reasonable.
The Board recognized that this Offer followed the Xanadu team's concerted efforts over the previous five years to advance the Kharmagtai Copper-Gold Project, with the recent release of a Pre-Feasibility Study (PFS) in October 2024 signifying a new operational milestone for the Company.
As a strategic next step, Bastion articulated intentions to delist Xanadu from both the ASX and TSX markets if interest exceeds 75%, while also planning a compulsory acquisition for the remaining shares should interest exceed 90%.
In terms of project progress, securing project permits and navigating the Mongolian investment agreement path remains a priority. The substantial in-country experience of Boroo is perceived as crucial for engaging stakeholders effectively. The timing aligns with the assessment made by the Takeover Board Committee regarding the need for a liquidity event for Xanadu shareholders.
Subsequent to the quarter's close, Bastion announced an extension of its Offer until 7 PM Sydney time on August 5, 2025. The Takeover Board Committee once more emphasized their recommendation for shareholders to accept the Offer promptly in the absence of a superior proposal and contingent upon the Independent Expert’s continued determination that the Offer is equitable.
On July 25, Bastion confirmed that it had achieved more than 90% shareholder acceptance, thereby issuing a Notice of Compulsory Acquisition for the remaining shares.
Operations
Throughout the quarter, Xanadu maintained its three projects—Kharmagtai (operated by Zijin), the Red Mountain Copper-Gold Project, and the Sant Tolgoi Copper-Nickel Project—under care and maintenance. Technical discussions persisted for the Bankable Feasibility Study (BFS) at Kharmagtai, alongside ongoing community and regulatory engagement programs. No exploration activities were undertaken during this quarter.
Financial and Corporate Overview
Capital Structure
As of June 30, 2025, the Company reported 2,291,211,189 fully paid ordinary shares outstanding and approximately A$18.532 million in cash reserves.
During the quarter, 92,184,000 fully paid ordinary shares were issued to option holders following a Change of Control event, effectively waiving their Vesting and Restriction conditions in line with the terms of the options grant.
Equity Funding Schemes
To fulfill corporate and joint venture funding obligations amid the Offer period, Bastion and Xanadu reached a share subscription arrangement, with Bastion agreeing to subscribe for 286,829,633 Xanadu Shares at an issue price of A$0.06 per share.
The share issuance transacted on May 26, 2025, was executed within Xanadu’s available placement capacity in accordance with ASX Listing Rule 7.1. Following settlement, Bastion owned 13.04% of Xanadu Shares.
Director Changes
After the quarter, following Zijin's share sale into the Offer, Shaoyang Shen resigned as a director of Xanadu, although Zijin retains a 50% interest in Khuiten Metals Pte Ltd, the entity controlling Kharmagtai.
Company Overview
Xanadu is a resource exploration entity listed on both ASX and TSX, with operations concentrated in Mongolia. The Company focuses on delivering significant copper-gold discoveries and developing a robust project portfolio. Xanadu's flagship Kharmagtai project is one of the few significant copper-gold deposits under junior exploration, demonstrating a commitment to maximizing shareholder value.
For more information, reach out to:
| Colin Moorhead Executive Chairman & Managing Director E: colin.moorhead@xanadumines.com P: +61 2 8280 7497 | Spencer Cole Chief Financial & Development Officer E: spencer.cole@xanadumines.com P: +61 2 8280 7497 |
This announcement has been authorized for release by Xanadu’s Board of Directors.
Frequently Asked Questions
What is the main focus of Xanadu Mines?
Xanadu Mines primarily focuses on copper and gold exploration projects, especially the Kharmagtai Project, aiming for significant development and shareholder returns.
Who is involved in the recent takeover bid for Xanadu Mines?
Bastion Mining Pty Ltd has made the takeover bid for Xanadu Mines, with recommendations for shareholders to accept the offer.
What financial position does Xanadu Mines hold as of June 30, 2025?
As of that date, Xanadu Mines reported approximately A$18.532 million in cash, with ongoing strategic financial assessments.
Are there any significant changes in the management team?
Yes, after the quarter, Shaoyang Shen, a representative from Zijin, resigned from Xanadu's board.
What is the future outlook for the Kharmagtai Project?
The Kharmagtai Project is anticipated to be a major mine in Mongolia, contributing significantly to the global copper supply, with plans for effective production commencement.
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