Xali Gold Enters Agreement for Mining in Historic Underground Workings, Exploration and Reducing Debt at El Oro Mexico
1
Xali Gold Enters Agreement for Mining in Historic Underground
Workings, Exploration and Reducing Debt at El Oro Mexico
Vancouver, British Columbia, July 22, 2024 - Xali Gold Corp. (TSXV:XGC) (" Xali Gold” or
“the Company”) is very pleased to announce it has signed a legally binding Letter of Intent
(“LOI”) with Rio Verde Resources (“ Rio Verde”) on portions of five mining concessions
within the El Oro Mining District (“El Oro 5 Concessions ”) in the State of Mexico and
Michoacán de Ocampo, Mexico.
Rio Verde has been granted the exclusive right to explore and extract gold, silver and any
other economic minerals that may be found above the 2400 metre (“m”) level in the historic
workings covered by the El Oro 5 Concessions in exchange for payment of a 3% Net Smelter
Return (“NSR”) to Xali Gold. The initial agreement has a term of 5 years which may be
extended for an additional 5 years providing Xali Gold is receiving benefits totalling $1 Million
(“M”) per year. Xali Gold retains the exclusive ownership of all mineral bodies discovered
or delineated below the 2400 m level.
“There couldn’t be a better time , since we acquired the property in 2006 and gold prices
were much lower than the current $2400 per ounce, to be monetizing the mineralization left
behind in the historic workings and to be exploring for new mineral bodies ,” states Joanne
Freeze, President and CEO of Xali Gold. “Rio Verde is well known for their ability to get into
production in record time, to make good profits and to discover mineral deposits. This new
partnership will allow us to keep all the exploration upside we have demonstrated by our
previous drilling underneath the historic workings, while we work together with Rio Verde to
test exploration concepts and get underground access for future drilling as well as pay back
our debts on the mineral rights.”
Keith Piggott of Rio Verde has advised us that their production will initially focus on the
exploration target identified by Luismin -Hillsborough in 1993 . Luismin-Hillsborough
estimated there to be a potential for 762,000 ounces (“ozs”) gold (“Au”) and 9.8M ozs silver
(“Ag”) (6.89M tonnes grading 3.44 g/t Au and 44 g/t Ag) in the historic workings after
studying 2,600, 2 m interval mine level plans with grades, sections and production
documentation as well as 8 new drill holes. The mineralization is understood to have been
left behind in in-situ vein, pillars and back-fill as it had grades below historical cut-off of 8 g/t
Au.
The LOI shall initially pertain to only the 5 mining concessions of El Carmen, El Oro VII, Dos
Estrellas 77 Fracc.1, Dos Estrellas 77 and Dos Estrellas 77 Fracc. II. Rio Verde shall
maintain the concessions in good standing during this period, by paying the semi-annual
concession fees, by incurring the minimum investments and the corresponding filings with
the Mexican Mines Bureau, by making the filings of statistical reports and by paying the
Governmental Royalties.
NEWS RELEASE
2
In addition to the 3% NSR payments, Rio Verde has agreed to provide funding to pay
concession fees owing, initially on the 5 Concessions they plan to mine. Rio Verde and Xali
Gold will collaborate to negotiate a payment plan with the Mexican Tax Authority for mineral
rights fees owed over the last 5 years (all fees owing prior to that are no longer due).
Funds provided for concession fees will be provided as participation in a Private Placement
in Xali Gold under the following terms: A Unit comprising one share and one -half warrant
will be priced at CAD$0.05. A full warrant will be exercisable at CAD$0.10 per share for two
years. Xali Gold will grant Rio Verde the right to participate in future Private Placements,
terms of which will be in the context of the market at the time when the funds are provided.
Such funds are expected to come from income generated from operations on the five
concessions and will be used to assist Xali Gold in paying off the remaining fees due on the
rest of the El Oro Property.
Rio Verde has also been granted the right to appoint an additional member to the Board of
Xali Gold and to the position of Chair of the Board, when Rio Verde holds greater than 20%
of the outstanding shares in the Company, provided that person is deemed qualified by the
current Board of Xali Gold.
About Rio Verde Resources
Rio Verde is a private company controlled and managed by Keith Piggott, the former
President and CEO of Goldgroup Mining Inc. and Core Gold Inc . Mr. Piggott is a mining
engineer with over 50 years of experience in Zambia, Australia and PNG, Mexico and South
America. In the recent past, as well as significant exploration success, he has started 3
mines: Cerro Colorado, El Boludo and Cerro Prieto in Sonora, Mexico plus a green -fields
start in a record time of 3 months in Ecuador . These mines have collectively produced
approximately 500,000 ozs of gold to date.
About Xali Gold
Xali Gold has gold and silver projects in Peru and Mexico. The Company’s flagship 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 6.4M ozs of gold
and 74M ozs of silver were reported to have been produced from just two of these veins
(Ref. Mexico Geological Service Bulletin Nr. 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, particularly below and adjacent to the
historic workings of the San Rafael Vein, which was mined to an average depth o f only
200m.
Xali Gold is dedicated to being a responsible Community partner.
Joanne C. Freeze, P.Geo., President and CEO is the Qualified Person as defined by
National Instrument 43-101 for the projects discussed above. Ms. Freeze has reviewed and
approved the contents of this release. Neither the TSX Venture Exchange nor its Regulation
Services Provider accepts responsibility for the adequacy or accuracy of this release.
3
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 historical production records . While such forward -looking information is
expressed by Xali Gold in good faith and believed by Xali Gold to have a reasonable basis, they may 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 cause 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 a nd 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
NR 133