Xanadu: Quarterly Activities Report - Period ended 30 June 2012

July 25, Xanadu Mines Ltd (ASX:XAM) --

XANADU KEY HIGHLIGHTS

• Exploration drilling continues at the Sharchuluut Uul porphyry project, with 3,197.8m completed to date and assay results expected next month;

• Reconnaissance exploration commenced at the Amgalant porphyry copper project;

• Completion of resource studies and maiden metallurgical test work to enable an application for a Mining Licence (30 year tenure) to be submitted for the Oyut Ulaan copper project;

• Drill tender awarded for 10,000m program at Elgen Zost gold system in South East Gobi;

• Mining Licence application for Galshar thermal project well advanced;

• A$15.5 million cash on hand at 30 June 2012 to fund exploration and pursue new opportunities.

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

• Agreement signed to earn 80% interest in the Khus Coal Project located in the South Gobi region, where exploration drilling commenced in July 2012;• Option agreement signed on Khar Servegen Coal Project, located in the South Gobi, where due diligence drilling commenced in July 2012.

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