Xali Gold closes Pico Machay project acquisition

Ms. Joanne Freeze reports XALI GOLD CLOSES ACQUISITION OF PICO MACHAY GOLD PROJECT Xali Gold Corp. closed on Dec. 24, 2025, the acquisition of the Pico Machay gold project, an advanced-exploration-stage project in Peru with a near-term production goal, as announced in the company's Oct. 24, 2025, news release. Xali Gold acquired the company Minera Calipuy SAC, which wholly owns Pico Machay, from Pan American Silver Corp. and its subsidiary, Aquiline Resources Inc. "With the acquisition of Pico Machay now closed, our full attention turns to advancing the asset and unlocking its value," said Joanne Freeze, president and chief executive officer of Xali Gold. "Pico Machay offers both immediate value and substantial upside, particularly given that the historical resource was calculated using a long-term gold price of just $700 (U.S.) per ounce. In the current gold price environment, we see a compelling opportunity to aggressively move the project forward. Over the coming months, our priority will be to update the historical resource estimate, as well as review and optimize previous engineering studies, including the low-cost, low-strip-ratio open-pit heap-leach concept outlined by prior owners, with the objective of rapidly advancing the project into near-term production." As per the terms of the agreement with Pan American and Aquiline, Xali Gold has paid the initial cash payment of $500,000 (U.S.) to close the acquisition and acquire the shares of Calipuy. Details on the remaining cash payments (all dollar values are U.S. dollars) are as follows. The transaction with Pan American and Aquiline to acquire 100 per cent of their collective interest in Calipuy is arm's length, and no finders' fees were paid. The payments of up to $17,000 are secured by promissory notes for each of the five deferred payments, and the contingent payment by a first-priority share pledge agreement over 100 per cent of Calipuy's shares and a first-priority mortgage agreement over both Pico Machay and the company's Las Brujas II property in Peru. The promissory notes are unconditionally and irrevocably guaranteed by Calipuy and Candente Gold Peru SAC, and they do not bear interest prior to their respective maturity dates and are non-convertible into any securities. In the event of a failure to pay on the maturity date, the promissory notes immediately accrue default interest at a rate of the federal funds rate plus 800 basis points. A total of $15-million (including the initial cash payment paid at closing) is to be paid over five years for the known historical gold resource. If more than 1.25 million ounces gold aggregate mineral reserves or mineral resources classified as any of proven mineral reserves, probable mineral reserves, measured mineral resources or indicated mineral resources (as per Canadian Institute of Mining, Metallurgy and Petroleum definitions) are disclosed in a National Instrument 43-101 technical report, then Xali Gold is to pay an additional $2.5-million. Xali Gold has provided Pan American with a purchaser's special indemnity. This indemnity is unlimited in amount and indefinite in duration, and covers all existing and future liabilities (environmental, tax and labour) of the project. Calipuy is the recorded, legal and beneficial holder of a 100-per-cent interest in a total of 17 mining rights that make up the project. All mining rights are in good standing and in force. The mining rights would expire in 2039 if production has not commenced by that time. There is an existing 1-per-cent net smelter return royalty covering El Alcatraz 4 concession, which covers the centre of the historical resource. The NSR, which covers all metals, was granted to Maverix Metals Inc. in July, 2016. The royalty is perpetual, with no cap on payments and no buyback provision. In January, 2023, Triple Flag Precious Metals Corp. completed the acquisition of Maverix Metals and now holds the NSR. In addition to the mining rights, there exists a comprehensive registry of mining formalization (Reinfo), which is administered by the Ministry of Energy and Mines of Peru (MINEM). Reinfo was introduced in 2017, formalizes companies and businesses that are active in small mining or artisanal mining, and exempts them from criminal liability for illegal mining. Reinfo permits are designed to bring informal mining operations into the formal economy. As a result of the Reinfo permits, there has been some artisanal mining activity on the property, most of which is reported to have occurred from 2020 to 2022. There are currently six valid Reinfo permits on the property. Xali Gold is aware of some limited underground workings. There also appears be a rudimentary and abandoned leach pad present on the project. Only a few local people appear to be active recently and with minimal support. Xali Gold plans to work with the Reinfo owners to be able to extensively sample previously drilled zones from existing underground workings. This is expected to enable the company to do some very valuable work while waiting for surface drilling permits. Xali Gold's local Peruvian counsel has advised that the company will not hold any environmental liability associated with any informal mining activity by reporting it to the government of Peru as soon it takes ownership of Calipuy. The Pico Machay project is located in the community of Santa Ana, with which Silver Mountain Resources Inc. recently signed a 20-year agreement allowing it to reactivate and operate the Reliquias mine. Xali Gold looks forward to engaging with the Santa Ana community and advancing Pico Machay under a mutually beneficial framework. About Xali Gold Corp. Xali Gold is a gold and silver exploration company focused on advancing opportunities in the Americas. The company is focused on completing the exploration and development of Pico Machay, an advanced-exploration-stage gold project in South America with a near-term production goal. Xali Gold maintains exploration potential, as well as two royalty agreements with third parties which have the rights to produce gold and silver from specific areas of El Oro gold-silver project in Mexico, a historic district-scale system with a long history of significant gold and silver production. Xali Gold is dedicated to being a responsible community partner. Joanne C. Freeze, PGeo, is a qualified person as defined by National Instrument 43-101, and has reviewed and approved the contents of this release. We seek Safe Harbor.