Xanadu: Quarterly Activities Report

January 24, Xanadu Mines Limited (ASX:XAM) --

HIGHLIGHTS

· Exploration drilling completed at the Elgen-Zost epithermal gold project

· At the Oyut Ulaan Porphyry copper project, drill target definition continues

· Completion of the Oyut Ulaan transaction requires approval under the new Foreign Investment Law

· New board appointments confirmed including Denis Gately, Non-Executive Chairman and independent Non-Executive Directors Mark Wheatley and Dr Darryl Clark

· International CEO search underway

· Cash on hand at 31st December 2012 was AUD$7.4m to fund exploration and working capital

EKHGOVIIN CHULUU LLC (Joint Venture Company Xanadu/Noble Group)

· Exploration programs completed ahead of winter recess.

· At Nuurstei (EC 80%) a bulk sample confirmed moderate ash, low moisture, high CSN (8), indicating a premium hard coking coal

· At Khus (EC 51%) drilling (17 holes) and sampling have indicated the potential for bituminous coal.

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