Xali Gold Closes Acquisition of Pico Machay Gold Project
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Xali Gold Closes Acquisition of Pico Machay Gold Project
Vancouver, British Columbia, December 24th, 2025. Xali Gold Corp. (TSXV:XGC) ( “Xali Gold” or the
“Company”) is very pleased to announce the closing on December 24th, 2025, of the acquisition of
the Pico Machay Gold Pro ject (“Pico Machay” or the “Pro ject”), an advanced exploration stage
project in Peru with a near-term production goal, as announced in the Company’s October 24th, 2025
news release. Xali Gold acquired the company Minera Calipuy S.A.C. (“Calipuy”), which wholly
owns Pico Machay, from Pan American Silver Corp. (“Pan American”) and its subsidiary, Aquiline
Resources Inc. (“Aquiline”).
“With the acquisition of Pico Machay now closed, our full attention turns to advancing the asset and
unlocking its value,” said Joanne Freeze, President and CEO of Xali Gold. “Pico Machay offers both
immediate value and substantial upside, particularly giv en that the historic al resource was
calculated using a long -term gold price of just US$700 per ounce. In the current gold price
environment, we see a compelling opportunity to aggressively move the Project forward. Over the
coming months, our priority will be to update the historical resource estimate as well as review and
optimize previous engineering studies, including the low -cost, low-strip ratio open -pit heap-leach
concept outlined by prior owners, with the objective of rapidly advancing the Project into near-term
production.”
As per the terms of the agreement with Pan American and Aquiline, Xali Gold has paid the initial cash
payment of US$500,000 to close the acquisition and acquire the shares of Calipuy . Details on the
remaining cash payments (all dollar values are United States dollars) are:
Time Period Cash Payments
December 24th, 2026 (1st Year Anniversary) $1.5M
December 24th, 2027 (2nd Year Anniversary) $1.5M
December 24th, 2028 (3rd Year Anniversary) $4.0M
December 24th, 2029 (4th Year Anniversary) $3.0M
Earlier of December 24th, 2030 or commencement of commercial production $4.5M
Upon completion of a technical report prepared in accordance with NI 43 -
101 disclosing aggregate mineral reserves or mineral resources classified as
any of proven mineral reserves, prob able mineral reserves, measured
mineral resources, or indicated mineral reserves, greater than 1.25M oz Au in
the aggregate for the Project (the “Contingent Payment”)
$2.5M
Total $17.0M
The transaction with Pan American and Aquiline to acquire 100% of their collective interest in
Calipuy is arm’s length and no finders’ fees were paid.
The payments of up to $17M are secured by Promissory Notes for each of the five deferred payments
NEWS RELEASE
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and the Contingent Payment, a first-priority Share Pledge Agreement over 100% of Calipuy’s shares
and a first-priority Mortgage Agreement over both Pico Machay as well as the Company’s Las Brujas
II property in Peru. The Promissory Notes are unconditionally and irrevocably guaranteed by Calipuy
and Candente Gold Peru S.A.C., they do not bear interest prior to their respective maturity dates and
are non -convertible into any securities . In the event of a failure to pay on the maturity date, the
Promissory Notes immediately accrue default interest at a rate of the Federal Funds Rate plus 800
basis points.
A total of $15M (including the initial cash payment paid at closing) is to be paid over 5 years for the
known historical gold resource. If more than 1.25M oz Au aggregate mineral reserves or mineral
resources classified as any of proven mineral reserves, probable mineral reserves, measured
mineral resources, or indicated mineral resources (as per CIM Definitions) are disclosed in a
National Instrument 43-101 technical report then Xali Gold is to pay an additional $2.5M. Xali Gold
has provided Pan American with a Purchaser's Special Indemnity. This indemnity is unlimited in
amount and indefinite in duration and covers all existing and future liabilities (environmental, tax,
labour, etc.) of the Project.
Calipuy is the recorded, legal and beneficial holder of 100% interest in a total of 17 mining rights (the
“Mining Rights”) that make up the Project. All Mining Rights are in good standing and in force. The
Mining Rights would expire in 2039, if production has not commenced by that time.
There is an existing 1% Net Smelter Return (“NSR”) royalty covering the El Alcatraz 4 concession
which covers the centre of the historical resource. The NSR, which covers all metals, was granted to
Maverix Metals Inc. in July 2016. The royalty is perpetual, with no cap on payments and no buyback
provision. In January 2023, Triple Flag Precious Metals Corp. completed the acquisition of Maverix
Metals Inc. and now holds the NSR.
In addition to the Mining Rights, there exists a Comprehensive Registry of Mining Formalization
(REINFO) which is administered by the Ministry of Energy and Mines of Peru (“MINEM”). REINFO was
introduced in 2017 and formalizes companies and businesses tha t are active in small mining or
artisanal mining and exempts them from criminal liability for illegal mining. REINFO permits are
designed to bring informal mining operations into the formal economy.
As a result of the REINFO permits, there has been some artisanal mining activity on the Property,
most of which is reported to have occurred from 2020 to 2022. There are currently six valid REINFO
permits on the Property. Xali Gold is aware of some limited underground workings. There also
appears be a rudimentary and abandoned leach pad present on the Project. Only a few local people
appear to be active recently and with minimal support. Xali Gold plans to work with the REINFO
owners to be able to exte nsively sample previously drilled zones from existing underground
workings. This is expected to enable the Company to do some very valuable work while waiting for
surface drilling permits.
Xali Gold’s local Peruvian counsel have advised that the Company will not hold any environmental
liability associated with any informal mining activity by reporting it to the government of Peru as soon
they take ownership of Calipuy.
The Pico Machay Project is located in the community of Santa Ana (see Figure 1 below), with whom
Silver Mountain Resources Inc. recently signed a 20-year agreement allowing them to reactivate and
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operate the Reliquias Mine. Xali Gold looks forward to engaging with the Santa Ana community and
advancing Pico Machay under a mutually beneficial framework.
Figure 1: Huancavelica Mining Projects
About Xali Gold
Xali Gold is a gold and silver exploration company focused on advancing opportunities in the
Americas. The Company is focused on completing the exploration and development of Pico Machay,
an advanced exploration stage gold project in South America with a near-term production goal. Xali
Gold maintains exploration potential as well as two royalty agreements with third parties who have
the rights to produce gold and silver from specific areas of the El Oro gold-silver Project in Mexico, a
historic district-scale system with a long history of significant gold and silver production.
Xali Gold is dedicated to being a responsible Community partner.
Joanne C. Freeze, P.Geo. is a Qualified Person as defined by National Instrument 43 -101 and has
reviewed and approved the contents of this release.
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Neither the TSX Venture Exchange nor its Regulation Services Provider accepts responsibility for the
adequacy or accuracy of this release.
On behalf of the Board of Xali Gold Corp.
“Joanne Freeze” P.Geo.
President, CEO and Director
For further information please contact:
Joanne Freeze, President & CEO
Tel: + 1 (604) 512-3359
Forward-looking Disclaimer
This press release contains forward-looking information within the meaning of Canadian securities laws (“forward-looking
statements”). Forward -looking statements are typically identified by words such as: believe, expect, anticipate, intend,
estimate, plan s, postulate and similar expressions, or are those, which, by their nature, refer to future events. All
statements that are not statements of historical fact are forward-looking statements.
Forward-looking statements in this press release include, without limitation: the timing of payment of the five deferred
payments and the Contingent Payment; the timing to conduct updated exploration work on the Project, including optimizing
prior engineering studies and timing to prepare a current mineral resource estimate for the Company (that is not a historical
resource under NI 43-101); the Company’s plans to work with REINFO owners to sample previously drilled zones; expected
engagement with the Santa Ana community; timing to bring the Project into production, if at all; impacts of artisanal miners
on the Project and environmental liabilities, if any; impacts and results of community engagement with indigenous
populations located near the Project . These forward-looking statements are made as of the date of this press release.
Although the Company believes the forward -looking statements in this press release are reasonable, it can give no
assurance that the expectations and assumptions in such statements w ill prove to b e correct. The Company cautions
investors that any forward -looking statements by the Company are not guarantees of future results or performance, and
are subject to risks, uncertainties, assumptions and other factors which could cause events or outcomes to differ
materially from those expressed or implied by such forward-looking statements.
Known risk factors and assumptions include risks associated with exploration and project development; accessing further
funding and related dilution: continuing its projected growth, or being fully able to implement its business strategies; the
calculation of mineral resources and additional work required to convert historical resources to current mineral resources;
the nature, quality and quantity of any mineral deposits that may be located on the project; operational risks associated
with mining and mineral processing; fluctuations in metal prices and assumptions including costs; title matters;
government regulation; obtaining and renewing necessary consents, authorizations, licenses and permi ts; environmental
liability and insurance; reliance on key personnel; local community opposition; currency fluctuations; labour disputes;
competition; variations in market conditions, and the volatility of our common share price and volume; future sales of
shares by existing shareholders; and other risk factors described in Xali Gold’s MD&A and other filings with Canadian
securities regulators, which may be viewed at www.sedarplus.ca. Although we have attempted to identify important factors
that could cause actual actions, events or results to differ materially from those described in forward -looking statements,
there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended.
There can be no assurance that forward -looking statements will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance
on forward-looking statements. Xali Gold expressly disclaims any intention or obligation to update or revise any forward -
looking information, whether as a result of new information, future events or otherwise, except in accordance with
applicable securities laws.