Brian Thornton, Chairman, Xanadu Mines

1. MONGOLIAMONGOLIA
The big tomorrow of miningThe big tomorrow of mining®®
Mr Brian Thornton, Chairman
June 2010
Xanadu’s mascot “Marmot Khan” who made the original coal
discovery hole at Khar Tarvaga in August 2006

2. Disclaimer
This Corporate Update is not a disclosure document nor does it
constitute the provision of financial product advice.
None of Xanadu Mines Ltd (“Xanadu”), its related bodies corporate,
officers, employees and advisors makes or gives any representation,
warranty or guarantee in relation to this Corporate Update (whether
orally, in document form or in any form whatsoever)
(“Information”) to the recipient of this Corporate Update
(“Recipient”) or any of its related bodies corporate, officers,
employees and advisors.
The Information is provided expressly on the basis that the Recipient
will carry out its own independent inquiries into the Information and
make its own independent decisions about the affairs, financial
position or prospects of Xanadu Mines Ltd. Xanadu reserves the right
to update, amend or supplement the Information at any time in its
absolute discretion (without incurring any obligation to do so).
Mongolia
The Opportunity
The Challenges
Mongolia and its Potential
About Xanadu
The Coal Opportunity
Khar Tarvaga Coal
Galshar Coal
Why Mongolia?

3. Mongolia – the opportunity
3,800kms border with China – the engine room of the
world
Mongolia – the opportunity
Multitude of walk up drill targets i.e. near surface
compared to Australia, and Canada
HutagHutag South (South (XanaduXanadu 100%)100%)

4. 7
Mongolia – the opportunity
Has the mineral products China needs; coal, copper and
uranium
Mongolia – the opportunity
Exploration relatively easy and inexpensive compared to
developed countries
Khar Tarvaga: drilling for coal in Winter

5. Mongolia – the opportunity
China becoming more dependent on foreign coal i.e. imports
of thermal coal this year expected to reach 100mt
Source: Bloomberg, 2010
Mongolia – the challenges
Limited infrastructure i.e. rail, roads, electricity networks
Rail capacity of Trans Mongolian an issue including Russian
ownership
Fuel supply – totally dependent on Russia for diesel, petrol and
avgas

6. Mongolia – the challenges
Water supply in the bottom half of the country is limited due to low
precipitation
Hence dependence on aquafers for major projects including wash
plants for coal
Mongolian on a steep learning curve to become part of the modern
world
MongoliaMongolia
Land area 1.56m km2 (c.f. Queensland 1.73, W.A.
2.5)
Minerals are the major sector:
• Cu, Au, U, Mo, rare earths & coal
• 10% of GNP of US $1billion
• 56% of industrial production
• 66% of exports
Total coal resources estimated at 150+ billion
tonnes
Favourable legal, investment and fiscal regime
Minerals Law 2006 based on Australian and
Canadian Mining Laws
Elected Parliamentary Democracy

7. Development PotentialDevelopment Potential
Until Oyu Tolgoi discovered, Mongolia not on the
exploration radar
US$80m spent in 2009 on exploration activities
Mongolia has 2 of the world’s largest mining
projects:
• Oyu Tolgoi 36m tonnes Cu + 45m Oz Au and
• Tavan Tolgoi - 6 billion tonnes of coal
Akin to Peru, Chile opportunity in 1970s and
1980s
Estimated that 60-70% of Mongolia remains
unexplored
““OyuOyu TolgoiTolgoi remains RIOremains RIO TINTOTINTO’’ss favouritefavourite projectproject””
CEO, Tom AlbaneseCEO, Tom Albanese
AboutAbout XanaduXanadu MinesMines
Operating in Mongolia since 2005
Established a 327mt JORC coal resource at Khar Tarvaga
near the Trans Mongolian railway
About to drill at Galshar coal project to confirm potential
coal resources of up to 200mt
Elgen-Zos gold project in SE Gobi has potential for a low
grade gold system
Projects strategically located to markets of China, Korea,
Japan and Russia
Close to infrastructure including rail, roads and power
Hence focus is China’s energy and metal needs

8. Current Mongolian ProjectsCurrent Mongolian Projects
“We will burn our coal and if we have to, weWe will burn our coal and if we have to, we
will burn your coal toowill burn your coal too””
HuHu JintaoJintao National Peoples CongressNational Peoples Congress
The coal opportunity

9. Voracious coal appetite next door
In 2009 China’s coal consumption was 3.3 billion tonnes; estimated to be 4
billion tonnes by 2016
2009 imports of 126mt – 1/5 of 600mt world seaborne coal consumption
China’s coal imports up 226% to 44.4mt in Q1 2010 i.e. annualised 178mt
April 2010 – benchmark thermal coal hit US$108 per tonne suggesting
tightening supplies
Existing China coal resources remotely located i.e. Xinjiang and Inner Mongolia
Deeper and more expensive with increasing environmental and safety standards
New taxes in China (Shanxi) have added RMB20–30/ tonne to coal production
costs
China has less than 45 years of coal supplies based on its current consumption
rates; hence looking to third party supplies
China’s coal resources
Energy Reserves to Consumption RatioEnergy Reserves to Consumption Ratio

10. KharKhar TarvagaTarvaga CoalCoal
Flagship project - Xanadu 100%
JORC resource of 327mt
About 200kms SE of Ulaanbaatar
320km2 licences
Within 37kms of railway
Number of near surface, shallow dipping coal
seams
Plus additional 20mt at our nearby Tugrug
project
KharKhar TarvagaTarvaga CoalCoal
Marmot discovery hole August 2006
Aircore drilling Dec 2006, infill drilling Jan - May
2007
JORC coal resource 327m tonnes certified by SRK
Low sulphur 1%, ash 12% and a calorific value of
4,800 kcal/kg energy (washed)
Similar to General Blend No. 1 ex Bohai gulf ports
Suitable for:
• power generation
• coal to liquids or
• gasification to urea/ fertilisers

11. KharKhar TarvagaTarvaga CoalCoal
Near surface coal at nearby Bayanjargalan
KharKhar TarvagaTarvaga CoalCoal -- MarketsMarkets
Coal to Liquids (CTL)
• Mongolia completely dependent on imported
fuel – diesel, petrol, avgas
• Xanadu’s KT coal deposit of 330mt potentially
converts to 480m bbls of liquids (diesel, jet
fuel, etc)
• Nexant Inc. of China completed a technology
scoping study of KT coal project November
2009

12. KharKhar TarvagaTarvaga CoalCoal -- MarketsMarkets
Discussions ongoing with potential Korean and
Chinese JV partners
Shenhua’s Erdos CTL Plant April 2009
KharKhar TarvagaTarvaga CoalCoal -- MarketsMarkets
Mine mouth power station
• Mongolian Government strategy is to become a
supplier of electricity by wire to China
• In lieu of supplying raw coal to burgeoning
China market
• Major financiers/ developers in discussions with
the Government to develop these options
• A value adding proposition for Mongolia

13. 25
Galshar Coal Project
100% ownership of 230mt Galshar thermal coal resource in SE
Gobi
Located 200kms from China border / 65kms from railway
One main thick coal seam and several thinner seams with average
thickness of 21m
Coal quality in excess of 6,000kcal/kg
Potential for large scale open pit operation with low stripping ratio
Resource open to north, east and potentially south
Power and unpaved road infrastructure in place
26
Galshar Geology
Galshar Coal deposit located within Eastern Mongolia Choyr-Nyalga coal basin
Hosted within a sequence of lower Khashaat Khudag Cretaceous fine, grained sediments
Three distinct coal zones at Galshar:
Anticline – thick coal sequence east/west trending. Well defined (50-200m spaced
drilling). Strike length 1.4kms with an average 21m thickness and max 46.6m. Open to the
east.
Northern Limb – 3.4km coal sequence. Extends north of the Anticline zone. Deposit
remains open to northeast. Less defined (1km spaced drilling).
Southern Limb zone – 1.8kms thin shallow coal seam. Extends south of the Anticline
zone. Remains open.

14. 27
Major coal basins
28
Galshar Coal Resources
Estimated in-situ resource of 230mt of coal*
**Qdaf Value
(kcal/kg) Total (mt)
5000-5999 42.5
6000-6499 100.3
6500-8807 87.8
TOTAL 230.6**
*Not to JORC or NI43-101 code standards
**Daf – dried ash free
***resource remains open to the north, east and potentially south

15. SummarySummary
Mongolia a frontier opportunity for energy and minerals
Xanadu has early mover advantage
Focused on energy related minerals i.e. coal to China
Exposure to copper and gold in SE Gobi
A JORC compliant energy coal resource of 327mt at KT
Acquired coal resource at Galshar of 200mt (June 2010)
Close to main rail corridor and end user markets
World’s largest new copper project being developed at Oyu Tolgoi
Independent democratically elected government, run by well
educated and highly intelligent people
Xanadu committed to an equitable sharing of benefits with
Mongolians as part of its licence to operate
“The China moment
has arrived
particularly for coal”

16. MONGOLIAMONGOLIA
The big tomorrow of miningThe big tomorrow of mining®®
Xanadu’s mascot “Marmot Khan” who made the original
coal discovery hole at Khar Tarvaga in August 2006