Xali Gold gains community approval at Pico Machay

Executive Summary

• Xali Gold Corp. received authorization from the Santa Ana community to advance mining exploration activities at its Pico Machay gold project in Peru, establishing a pathway for fieldwork and long-term partnership discussions.
• The company will immediately initiate a Phase I comprehensive field program, including relogging historical drill cuttings, 3-D geological modeling, mapping, and sampling, to update previous exploration and engineering studies.
• The release clarifies that a non-brokered private placement announced in December 2025 was fully completed, raising $1.5 million to fund the acquisition closing payment to Pan American Silver, Phase I exploration, and working capital.

Key Details

• Community Authorization: The community of Santa Ana authorized Xali Gold to further advance mining exploration activities at the Pico Machay project on Feb. 22, 2026.
• Phase I Field Program Activities:
  • Historical Data Analysis: Systematic relogging of historical reverse circulation (RC) drill cuttings, documenting lithologies, alteration, and mineralization; detailed review of assays and interpretations (commenced Jan. 2026).
  • Advanced Modelling: Reconstruction of geological and resource models using 3-D software to optimize deposit understanding.
  • Mapping and Reconnaissance: Geological mapping of the entire property to define stratigraphy, mineralization controls, and undrilled exploration targets.
  • Sampling: Collection of rock chip and bulk samples on surface and within current underground workings.
• Social Strategy & Community Engagement:
  • Social Diagnosis: Gathering baseline information for project development in partnership with the community.
  • Long-term Negotiation: Discussions for a long-term agreement covering exploration and operations, based on the successful 2008 agreement between Santa Ana and Minera Calipuy (under Aquiline Resources).
  • Artisanal Mining: Commitment to coexistence and respect for community members with current REINFO (Registry of Community Mining Owners) within concession areas.
  • Local Contracting: Priority for qualified community members for jobs and services.
• Environmental Studies:
  • Flora and Fauna: Establishing environmental baseline and protecting native species.
  • Comprehensive Monitoring: Preventative monitoring of water, soil, air quality, and noise levels.
  • Liability Management: Inventory and declaration of pre-existing environmental liabilities to the Ministry of Energy and Mines (MINEM).
• Project Background: Pico Machay is located in the northern extent of the Southern Peru epithermal gold-silver belt. It was discovered in 1997 and explored by Aquiline Resources through 2009. Previous engineering studies targeted an open pit heap-leach operation based on a $700/oz gold price.
• Private Placement Clarification:
  • Completion Date: Dec. 24, 2025.
  • Gross Proceeds: $1.5 million.
  • Units Issued: 15 million units.
  • Price: 10 cents per unit.
  • Warrant Terms: Each unit included one-half of one common share purchase warrant. Each warrant is exercisable for one additional share for 18 months at $0.20 per share, subject to accelerated expiry.
  • Use of Proceeds: $500,000 (U.S.) payment to Pan American Silver for the closing of the Pico Machay acquisition; Phase I exploration at Pico Machay; working capital; and general corporate purposes.

Notable Quotes

• "This agreement underscores the strong, constructive relationship we are building together with the community of Santa Ana," said Joanne Freeze, president and chief executive officer of Xali Gold. "It provides a clear pathway for Xali Gold to progress its fieldwork and continue to build a long-term partnership focused on shared benefits, transparency and responsible development throughout the life of the Pico Machay project."