Xanadu Mines will add the prospective Oyut Ulaan copper-gold
project in the South Gobi region of Mongolia to its exploration portfolio with
the proposed acquisition of Temujin Mining Corporation’s wholly owned
subsidiary Vantage LLC.

Under the deal, the company will earn an initial 25% interest in the project
upon completion of definitive documentation and the issue if a mining licence.

The further 75% will be acquired following approval of the transaction by
Xanadu shareholders.

Highlighting the prospectivity of the South Gobi region, Oyut Ulaan is
surrounded by a number of porphyry copper and copper skarn deposits including
Ivanhoe Mines (TSX: IVN, NYSE: IVN) massive Oyu Tolgoi mine.

Oyu Tolgoi, which is scheduled to be in production in 2013, is the word’s
largest undeveloped copper-gold project with 81 billion pounds of copper and 46
million ounces of gold.

Further upside of the acquisition, is Oyut Ulaan is strategically located in a
region with planned near term rail infrastructure.

The acquisition of Oyut Ulaan will further consolidate Xanadu’s copper and gold
asset portfolio in the South East Gobi region.

Deal terms

To settle the acquisition of Vantage LLC, Xanadu will issue 3.9 million new
shares and A$4.2 million in shares at a price equal to the 15-day volume
weighted average price of Xanadu shares on the day of the general meeting to
approve the deal.

A further 15 million Xanadu shares will be issued upon the definition of a JORC
Resource of at least 90 million tonnes at 1% copper equivalent.

To acquire the initial 25% interest Xanadu must cover expenditures to complete
hydrology, environmental and assay reports on the project area.

The company must spend a minimum of $5 million on the project in the 30 months
after the mining licence is granted.

Source: www.proactiveinvestors.com