Xali Gold Agrees to Transfer the El Oro Tailings Project in Mexico to Kappes, Cassiday

On November 13, 2025, Xali Gold announced it has finalized a definitive agreement to transfer all rights to its El Oro Tailings Project in Mexico to Kappes, Cassiday and Associates (KCA). In exchange, KCA will make staged payments totaling $150,000 within six months and then pay Xali Gold a minimum royalty of US$50,000 every six months until production begins. Once in production, Xali Gold will receive a gross royalty of 4% of sales income, which can be reduced to a minimum of 3% after accounting for other royalties. KCA has the right to purchase 1% of this royalty for US$1,000,000. KCA assumes all project-related payments and taxes and will acquire the Mexican subsidiary that holds the project.

KCA has already completed a drill program confirming the historical resource, with potential for a 10-15% increase in size. They have also developed an engineering design package with estimated recoveries of 78% for gold and 86% for silver.

This news is a material positive event, primarily because it confirms and solidifies the company's recent strategic pivot away from operational responsibilities in Mexico to focus on its new flagship project in Peru.

Looking at the historical context, Xali Gold was in a precarious position through mid-2025. The company faced a cease trade order for failing to file financials on time (August 7, 2025), was dealing with the "unlawful" cancellation of numerous mining concessions in Mexico by the government (July-August 2025), and had a staggering working capital deficiency of over $3.15 million as of June 30, 2025. It was clear the company could not fund its Mexican projects.

The pivot began in late October 2025 with the announcement of the acquisition of the Pico Machay Gold Project in Peru, a transaction deemed a "fundamental acquisition" by the TSXV. This was a massive undertaking, with a US$17.5 million payment schedule.

The agreement to transfer the El Oro Tailings Project to a reputable operator like KCA is the other side of this strategic shift. It effectively removes a significant capital and operational burden from Xali Gold's balance sheet while retaining upside through a royalty stream. The payments from KCA (US$150,000 + US$50,000 bi-annually) are minor compared to Xali's debt and the Pico Machay acquisition cost, but they provide some non-dilutive cash flow.

This move cleans up the corporate story, de-risks the Mexican asset base, and allows management to focus entirely on financing and advancing the Pico Machay project. While this news does not solve the company's critical and immediate need for a large financing, it is a logical and necessary step in its restructuring and new corporate direction. The market's positive reaction since the Peru acquisition announcement reflects approval of this strategic shift, and this news further validates it.

Xali Gold Corp. is a precious metals exploration company. Historically, its focus was the El Oro district in Mexico, a past-producing gold-silver region. The company held the El Oro project, which included the historic mine workings, exploration ground, and a tailings deposit.

Following significant challenges in Mexico, including the cancellation of mining concessions and a severe lack of capital, the company has pivoted its strategy. In October 2025, Xali Gold announced the acquisition of the Pico Machay Gold Project in Peru, which is now its flagship asset. Pico Machay is an advanced-stage exploration project with a historical (non-NI 43-101 compliant) resource of 264,600 oz Au (M&I) and 446,000 oz Au (Inferred). The company plans to update this resource and advance the project towards production. Xali Gold is effectively transitioning into a Peruvian-focused developer, retaining royalty interests on its legacy Mexican assets.