Existing shareholders include Straits Asia and the Talbot Group, and the float is expected to give Xanadu a market capitalisation of $90-100 million.
The private company started exploring Mongolia six years ago with a focus on projects located close to rail infrastructure and the Chinese border.
The Khar Tarvaga thermal coal project in central Mongolia hosts 327 million tonnes of indicated and inferred resources, and is about 30 kilometres from the Trans Mongolian railway and 160km south of the nation’s capital, Ulaanbaatar.
Xanadu fully acquired the Galshar thermal coal project in June and has set an exploration target of 175-225Mt.
Located in the Southeast Gobi, low ash and sulfur seams up to 21 metres thick were identified back in 1975.
A drilling program is on the cards for 2011. The project is about 65km east of the nearest Trans Mongolian railway spur at a fluorspar mine in Bor-Ondur.
Xanadu’s Hutag Uul copper project and Elgen-Zos gold project are in the same province.
Drilling is underway at Elgen-Zos as part of Xanadu’s commitments to earn an 80% stake of the project.
The best intersection so far is 19m at 0.6 grams per tonne gold starting from a depth of 165m and a rock sample has also returned 0.51gpt gold.
“Mongolia has now become a destination of choice for the world’s major mining houses due to its prospectivity, resource endowment and its 3800-kilometre border with China,” Xanadu founder and executive chairman Brian Thornton said.
“The country represents a next-generation minerals play with two world-class copper gold and coal projects, namely Oyu Tolgoi and Tavan Tolgoi respectively.”
Xanadu’s chief geologist Dr Andrew Stewart has spent eight years in Mongolia, working for Ivanhoe Mines and more recently as Vale’s exploration manager in the country.
Southern Cross Equities is the lead manager for the initial public offering, which is expected to close on December 8.
A recent capital raising spree raised $6.6 million for Xanadu.
The company has previously contemplated a float on the Hong Kong stock exchange but abandoned such a move after the global financial crisis kicked in.
Mongolian coal explorer Hunnu Coal won IPO of the Year at the recent RESOURCESTOCKS Best of the Best awards.
Vancouver-based SouthGobi Energy Resources acquired a 19.9% stake in Australia-listed Mongolian coal explorer Aspire Mining for $20.1 million in October.