Xali Gold moves Pico Machay toward development

Executive Summary

• Xali Gold Corp. is reactivating development plans for its Pico Machay gold project in Peru following its acquisition in December 2025, aiming to advance the project toward production.
• The company is undertaking significant technical work to update historical resource estimates (originally based on a $700/oz gold price) and optimize engineering studies for a low-cost, open-pit heap-leach operation.
• Key activities include relogging 20,000 meters of historical drilling, reconstructing the geological model, and initiating community engagement and environmental baseline studies.

Key Details

• Project Location & Context: Pico Machay is located in the southern Peru epithermal gold-silver belt (Western Cordillera Andes). It benefits from existing infrastructure and a mining-friendly community.
• Historical Resource Data:
  • Measured & Indicated: 264,600 ounces of gold from 10.6 million tonnes grading 0.78 g/t gold.
  • Inferred: 446,000 ounces of gold from 23.9 million tonnes grading 0.58 g/t gold.
  • Basis: Historical data from 154 reverse circulation holes drilled prior to 2009, based on a long-term gold price of $700/oz.
  • Exploration Potential: Nine additional high-potential exploration targets remain untested.
• Current Activities (Underway):
  • Relogging: Approximately 20,000 meters of historical reverse circulation drilling to recreate the geological model (commenced Jan. 15, 2026; ~30% complete).
  • Geological Modeling: Reconstruction of the geological model using Leapfrog 3-D software (commenced Feb. 5, 2026).
  • Community Engagement: Commenced Dec. 27, 2025, in Santa Ana; discussions ongoing for a long-term land access agreement.
  • Sampling: Preparing for detailed geological mapping, rock chip, and bulk sampling on surface and in underground workings.
• Planned Activities for 2026:
  • Sampling all new underground workings.
  • Underground and/or surface drilling to verify grades and upgrade resources.
  • Acquiring a Ficha Tecnica Ambiental (FTA) permit for exploration and resource expansion drilling.
  • Advancement of a Preliminary Economic Assessment (PEA) alongside environmental baseline studies.
• Strategic Focus: The immediate critical path involves updating the historical resource estimate and optimizing previous engineering studies (specifically the low-cost, low-strip ratio open-pit heap-leach concept outlined by prior owner Aquiline Resources) to initiate the detailed environmental impact assessment (EIA). Aquiline had completed ~50% of their detailed EIA in 2009.
• Technical Disclaimer: The company notes that a qualified person has not done sufficient work to classify historical estimates as current resources under current CIM standards. Significant data compilation, redrilling, and verification are required.

Notable Quotes

• "We are now focused on advancing Pico Machay into development as soon as possible," said Joanne Freeze, president and chief executive officer. "The immediate critical path includes updating the historical resource estimate and optimizing previous engineering studies, especially the low-cost, low-strip ratio open-pit heap-leach concept outlined by prior owner Aquiline Resources. Advancing the engineering studies will enable us to initiate the detailed environmental impact assessment (EIA) required for operations."