XAM has developed a copper gold deposit that was known by...

XAM has developed a copper gold deposit that was known by ancient miners/smelters in the area, documented by a Mongolian Government / Russian team in the 1960s, drilled by Robert Friedland early this century, and in a bold move by management, brought into the XAM stable of tenements by agreement with Rio Tinto a number of years ago. The copper and gold there is real, it is quantified in a JORC statement, and drilling is making it look more and more likely this could become a avery big open pit mine with bulk underground mining potential.

After the recent cash raising, the market capitalisation of the company will be about $100 million Australian. The company basically owns about 67% of Kharmagtai, and if they could sell it for a 3% smelter royalty as developed so far I reckon the current share price is pretty spot on.

However, if
1) Further drilling rapidly expands the JORC at Karmagtai
and / or
2) The very prospective Oyuut Oolan gold copper play continues to develop,

then the underlying value of this company will rise rapidly.

The chances of either or both of the above happenning are much higher than an explorer finding comercial mineralisation in a green fields geophysical anomaly elsewhere. It looks like a reasonable punt. Yet ASX speculators continue to ignore XAM, probably because it is in much fabled but unfamiliar Mongolia, far from their favourite holiday spots.

I find this a bit sad, this company was established through the vision of a group of Australian risk takers, it would have been good to see the next generaton of risk takers in Australia take the batton and run with it.

But reading between the lines of the North American road show and the subsequent cash raising, it looks like the company has been forced to start planning a listing in a more globally aware bourse and eventually, if and when it succeeds, to cease being an Australian owned engine for mineral exploration. And in years to come local Australian minerals investors may well have to talk of what could have been.