Shallow results included 9m grading 6.6 grams per tonne and 0.18% copper from 24m, with Xanadu also hitting mineralisation below 1000m at Zaraa.
"Initial widely spaced drilling and geophysics indicates that the new Zaraa discovery represents a very large copper-gold system," Xanadu said.
"Based upon the current data, Zaraa appears to be a northeast trending, steeply dipping porphyry system approximately 400 metres wide and up to 1.5km long."
Zaraa is part of the Kharmagtai district where Xanadu has had previous success at Stockwork Hill, White Hill and Copper Hill.
Further assays from the prospect are expected this month.
Xanadu had cash at the start of the current quarter of A$5.1 million.
Shares in Xanadu were unchanged in late trade at 19c, capitalising the company at $112 million.
The stock's 12-month high was 34c.
