Xali Gold Delineates Drilling Targets at El Dorado
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Xali Gold Delineates Drilling Targets at El Dorado
Vancouver, British Columbia, February 25 th, 2021. Xali Gold Corp. (TSX V:XGC) ("Xali
Gold” and/or the “Company” ) is pleased to advise that new drill targets have been
delineated on the El Dorado Gold-Silver Project, located in Nayarit State, Mexico through
the development of a new 3D geological model . The new model indicates high grade
mineralization occurring in multiple parallel veins such that future mining could focus on
several veins at once to potentially allow reduced mining costs. Drilling is planned to test
potential lateral extensions to the high grade zone.
Permitting applications are in progress for the drilling which are expected to take 3 to 4
months to receive. Permit applications are also being prepared for the reopen ing of the
historical Hundida Mine and should take 6 to 10 months to receive. Mineralization is
planned to be shipped from this area to the ne arby SDA plant under acquisition from
Magellan Acquisitions.
The El Dorado vein system has a history of small -scale mining from two veins in the
Hundido and El Dorado mines (see News Release April 28, 2020 ) but four veins with
parallel high-grade zones have been deline ated in the new model. Additionally, several
vein targets have been identified along trend for follow-up exploration.
Prospero Silver Corp. (“Prospero”) explored the El Dorado property between 2010 and
2011. The ir drilling intersec ted multiple steeply -dipping silicified mineralized zones
extending from near-surface to the 180 metre (“m”) drilled depth and over a strike length
of 440m. Prospero intersected grades ranging from 3 to 40 grams per tonne (“gpt”) gold
and 57 to 500 g pt silver over true widths rang ing from 0.52 to 11.2 m.
(http://www.candentegold.com/i/maps/sedardoc4391012.pdf)
Significant results reported by Prospero on Dec 10, 2010 included:
- 16.17m grading 4.03 g/t gold, 204 g/t silver, 4.0% lead, and 1.75% zinc; and
2.32m grading 6.04 g/t gold and 140 g/t silver in hole DOR -10-11.
(http://www.candentegold.com/i/maps/Prospero-NR--December-10,-2010.pdf)
Mineralization in the Hundido historical mine area was reported to range from 1.45 to
11.22m (true widths) and given economics at the time (19 00 to 1983) grades mined are
assumed to have exceeded 10 gpt gold. Drill intersections near the edges of the mined
areas show grades of 49.8 gpt gold over 3m; 13.9 gpt gold over 1.45m and 8.6 over 2.3m.
The following longitudinal section by Prospero shows the drilling pattern along the El
Dorado vein in the area of the Hundido and El Dorado mines, along with summary drill
hole intersection grades and widths. (Prospero News Release dated June 22, 2011)
NEWS RELEASE
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The Hundido and El Dorado mines occur within The El Dorado vein trend which extends
over a strike length of 3.5 km with widths exceeding tens of meters containing numerous
parallel veins and vein breccias. In addition, high level silicification and argillic alteration
on surface indicate depth potential to the mineralizing system. For these reasons,
exploration potential outside of the area of historical mining and Prospero’s drilling is
believed to be excellent. (“Magellan Gold Corporation, Form 10-K Annual Report US SEC
dated Dec 31, 2018, File No. 333 -174287”)
http://www.candentegold.com/s/eldorado.asp?ReportID=878118).
Both the north-easterly striking as well as east -west striking splits of the main structure
exhibit structural complexity and potential for multi -meter wide precious metal
mineralization. Anomalous base metal assays (100's to 1000's of parts per million lead,
zinc and copper) are ubiquitous as evidenced by the common occurrence of visible galena,
sphalerite and chalcopyrite in outcrop and dumps.
The El Dorado Gold-Silver Project is located in the Pacific Coastal Plain, State of Nayarit,
50 km south of the SDA Plant, which Xali Gold has an option to purchase from Magellan
Acquisition Corp., 70 km north -northwest of Tepic, the state capital, and 180 km
southeast of Mazatlan, Sinaloa. The project has excellent road and rail infrastructure.
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The Company’s Qualified Persons have not verified Prospero’s drill results as due to
COVID travel restrictions, they have not yet been able to examine the drill core nor assay
data and are therefore relying on data provided in News Releases filed on Sedar by
Prospero in 2010 and 2011 and verified by their Qualified Persons and on examinations
of the data by Company Geologists already based in Mexico.
Terms of the Agreement
Xali Gold has the right to assume the rights and obligations of a Lease Agreement between
Magellan Acquisitions and Ingenieros Mineros, S.A. de C.V. (“IMSA”). The Lease
Agreement allows Xali Gold to explore and mine from the El Dorado property while IMSA
retains a negotiable NSR of 3.5% and make payments of $25,000 in 2021.
About Xali Gold
Xali Gold has launched a comprehensive growth strategy to build a cash flowing business
platform and gain access to properties with near surface exploration potential while
maintaining El Oro as its flagship asset and an integral part of the overall growth strategy.
The acquisition of the SDA Plant, the El Dorado historic mines and the Cocula Project
signify important initial steps.
The financial benefits from Western Mexico operations and the addition of specialized
personnel will translate across platforms to strengthen the Company’s efforts to explore
and potentially mine areas demonstrated to contain mineralization of value. The
Company is currently evaluating other properties that are complementary to the SDA
plant, El Dorado and the Cocula Project.
El Oro is a district scale gold project encompassing a well-known prolific high-grade gold
dominant gold-silver epithermal vein system in Mexico. The project covers 20 veins with
past production and more than 57 veins in total, from which approximately 6.4 million
ounces of gold and 74 million ounces of silver were reported to have been produced from
just two of these veins (Ref. Mexico Geological Service Bulletin No. 37, Mining of the El
Oro and Tlapujahua Districts. 1920, T. Flores*)
Modern understanding of epithermal vein systems indicates that several of the El Oro
district’s veins hold excellent discovery potential, par ticularly below and adjacent to the
historic workings of the San Rafael Vein, which was mined to an average depth of only
200 metres.
Joanne C. Freeze, P.Geo., President, CEO and Director and Matthew Melnyk, CPG.,
Director Operations and Director are Qu alified Persons as defined by National
Instrument 43-101 for the projects discussed above, however, they have not been able to
visit the El Dorado or Cocula Projects nor the SDA Plant recently due to COVID virus
travel restrictions. The work discussed in the News Release is either historical and
documented by public records or conducted by Mexican professionals with qualifications
similar to those of QP’s registered in Canada. Ms. Freeze and Mr. Melnyk have reviewed
and approved the contents of this release.
Neither TSX Venture Exchange nor its Regulation Services Provider accepts
responsibility for the adequacy or accuracy of this release.
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Xali Gold is dedicated to being a responsible Community partner.
Forward-looking Information
This news release may contain forward -looking information (as such term is defined
under Canadian securities laws) including but not limited to information regarding
references to historical resource estimates, the potential for discovery on the El Dorado
Property and in the El Oro district and other statements that are not historical facts.
While such forward -looking information is expressed by Xali Gold in good fai th and
believed by Xali Gold to have a reasonable basis, they address future events and
conditions and are therefore subject to inherent risks and uncertainties including those
set out in Xali Gold’s MD&A. Factors that c ause the actual results to differ materially
from those in forward -looking information include, without limitation, gold prices,
results of exploration and development activities, regulatory changes, defects in title,
availability of materials and equipment, timeliness of government approvals, potential
environmental issues, availability of capital and financing and general economic,
market or business conditions. 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.
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) 689-1957
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