Xanadu Mines (XAM.TO, XAM.AX) has announced it entered into a joint venture agreement with JOGMEC whereby the latter has agreed to spend US$7.2M over a 4 year period to earn a 51% stake in the Red Mountain copper-gold project in Mongolia.
Red Mountain is located approximately 400 kilometers southeast of Ulaan-Baatar and covers 57 square kilometers of what appears to be an underexplored copper porphyry district. Initial exploration activities on the project have confirmed the potential for a large copper porphyry system and that obviously triggered JOGMEC’s interest to jointly explore the tenements.
Xanadu Mines will remain the manager of the Red Mountain exploration project (and will very likely receive a 5-10% management fee for doing so) while the cash infusion from JOGMEC dedicated to the Red Mountain project will allow Xanado to fully focus on its Kharmagtai copper-gold project, almost 300 kilometers west of Red Mountain.
Meanwhile, Xanadu has raised A$1.12 at A$0.033 per share to fund its exploration activities.
Disclosure: The author has no position in Xanadu Mines.