Xali says 7 El Oro concessions cancelled unlawfully

Ms. Joanne Freeze reports XALI GOLD UPDATES AFTER FILING ANNUAL FINANCIAL STATEMENTS Xali Gold Corp. has filed its audited annual financial statements, accompanying management discussion and analysis, and CEO (chief executive officer) and CFO (chief financial officer) certifications for the financial year ended March 31, 2025 (the annual filings), in accordance with applicable Canadian securities laws on Aug. 16, 2025. The annual filings are available both under the company's profile at SEDAR+ as well as on the company website under investors -- financial reports. The TSX Venture Exchange is currently conducting a listing review of Xali Gold, which is a normal part of the review process after trading has been halted in a company. The company is working to resume trading as soon as possible. In connection with the listing review, the transfer agent and registrar for Xali Gold have confirmed that the company is in good standing with Computershare Investor Services Inc. "Given the current price of gold, and our very experienced and capable partners in Mexico, we are focused on securing an advanced exploration stage project in South America in one of the proven high-sulphidation epithermal belts in Peru," said Joanne Freeze, president and chief executive officer of Xali Gold. El Oro update Xali Gold also provides an update on the cancellation of some of the El Oro concessions by the Mexican Mining Bureau (MMB). Two mining concessions which were peripheral to known mineralization and drill targets were cancelled prior to March 31, 2025. One of these was cancelled with notice but the other was cancelled without notice, which we have been told is unlawful. Due to the extensive size of these two claims, and given that they comprise 76.28 per cent of the fees owing for the total El Oro property, the company decided not to legally challenge these two cancellations and instead to write-off $2,260,108 in outstanding mining fees related to these concessions. In late July, 2025, it was discovered that an additional seven El Oro concessions had also been cancelled by the MMB without notice. All of these cancellations are understood to be unlawful for failure to provide the legally required 60-day notice directly to the company. The company is currently seeking legal advice to understand potential recourse to suspend or overturn the cancellation of these seven concessions. It is also understood that this is not an unusual practice by the MMB at the moment and several companies are managing to get cancellations overturned. Remedioambiente (see below under About Xali Gold) is legally obligated to pay the fees due on the five claims under option to them (including two of the unlawfully cancelled ones) and has advised the company they are in a position to contest those cancellations. About Xali Gold Corp. El Oro is a district-scale historic producer of gold and silver. The El Oro property hosts 20 veins with past production and more than 57 veins in total, with two veins alone producing approximately 6.4 million ounces of gold and 74 million oz of silver from mining that averaged only 200-metre depth. While the company's main goal at El Oro is to make a new discovery, similar to the multimillion-ounce (oz) gold and silver orebodies mined historically, the company has entered into two agreements with third parties for the rights to produce gold and silver from specific shallow areas of the El Oro project which are expected to bring in cash flow and open up underground access for drilling. Remedioambiente S.A. de C.V. (RM) has the right to recover gold and silver from mineralized veins and backfill left behind in the historic mine workings on five concessions. Kappes, Cassiday & Associates (KCA) has the right to reprocess the Mexico mine tailings (see news release dated Oct. 24, 2024). The agreements provide for Xali Gold to receive funds from net smelter returns (NSRs) of up to 3 per cent from each of these two agreements. In addition, the underground work by RM is expected to give the company underground access for drilling the high-grade targets identified by previous drilling below the historic workings at El Oro and also assist in paying mineral rights fees (see news release dated Aug. 28, 2024). With renewed interest in gold and silver exploration in South America, Xali Gold has recently been reviewing high-sulphidation gold targets with features similar to Yanacocha and Pierina, within proven high-sulphidation epithermal belts in Peru. The company maintains other properties in Peru. Joanne C. Freeze, PGeo, president and chief executive officer, 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. We seek Safe Harbor.