Xali Gold Files Technical Report on the Pico Machay Gold Project in Peru

The most recent news, dated December 8, 2025, states that Xali Gold Corp. has filed a National Instrument 43-101 (NI 43-101) compliant technical report for its Pico Machay Gold Project in Peru. This report is described as a fundamental step towards the completion of the acquisition of the project from Minera Calipuy, a subsidiary of Pan American Silver Corp. The technical report is an update of a 2009 report and was prepared by an independent Qualified Person. Joanne Freeze, President and CEO, expressed confidence in Pico Machay's potential to add immediate and long-term value for shareholders through experienced exploration and responsible development.

This news is a routine, yet necessary, procedural step in the context of the larger Pico Machay acquisition announced in late October 2025. The filing of a NI 43-101 technical report is a regulatory requirement for public disclosure of mineral projects and validates the geological and resource information.

• Positive Aspects:

  • Regulatory Compliance: Confirms the company is moving forward with the acquisition of Pico Machay in a structured, compliant manner. This adds credibility to the acquisition process.
  • Project Advancement: It is a tangible step in formalizing the project, following the positive due diligence results announced on November 19, 2025, which indicated a significantly larger alteration footprint than previously understood and confirmed data integrity.
  • Management Commitment: Reinforces management's commitment to the Pico Machay project as a core asset for future growth, aligning with the strategic shift towards South America.

• Negative Aspects/Risks:

  • Expected Event: The filing of the technical report was an anticipated outcome following the due diligence completion and the announcement of the acquisition. It does not introduce new material information beyond what was already indicated in previous releases regarding the project's potential or the terms of the acquisition.
  • Funding Challenge: While positive for the project, the filing itself does not alleviate the company's precarious financial position. Xali Gold still faces a significant working capital deficit and a substantial payment schedule for the Pico Machay acquisition ($17.5 million USD over several years, with $0.5 million USD due at closing). The recently announced C$1.5 million financing (December 2, 2025) provides some liquidity but is barely enough to cover the initial Pico Machay payment and only partially addresses the broader working capital needs.
  • Dilution Risk: Future financings will be required to fund the multi-year acquisition payments and ongoing exploration, posing a continued dilution risk for shareholders.

Overall, the news is a positive administrative milestone, confirming the progression of a material acquisition. However, its immediate impact on the stock price is likely to be neutral to slightly positive, as it merely confirms previously established expectations rather than unveiling new, game-changing information. The market has already reacted positively to the initial acquisition news and the subsequent positive due diligence findings. The critical aspect remains the company's ability to fund this acquisition and its ongoing operations, which is an area of significant risk.

Xali Gold Corp. (TSXV: XGC) is a Canadian gold exploration company. The company has historically focused on projects in Mexico and Peru.

Flagship Project: The newly acquired Pico Machay Gold Project in Peru is poised to become the company's flagship asset. It is a high-sulphidation gold deposit covering approximately 4,700 hectares, located in a historically significant mining district. * Historic Resources: The project has a historic Measured and Indicated resource of 264,600 ounces of gold (10.6 million tonnes grading 0.78 gpt) and an Inferred resource of 446,000 ounces of gold (23.9 million tonnes grading 0.58 gpt). These estimates were based on a long-term gold price of US$700/ounce. * Exploration Upside: Recent due diligence (November 19, 2025) revealed a significantly larger alteration footprint of 533 hectares, compared to the 28-hectare area of the current resource, suggesting substantial potential for resource expansion and new discoveries. * Acquisition Terms: Xali Gold is acquiring Pico Machay for a total consideration of US$17.5 million, payable in stages over five years, with an additional payment upon delineating 1.25 million ounces of gold. The first payment of US$500,000 is due at closing.

Other Projects: * El Oro Project (Mexico): A district-scale historic gold-silver producer. Xali Gold has two royalty agreements in place: * El Oro Tailings Project: Transferred to Kappes, Cassiday & Associates (KCA). Xali retains a 4% NSR (minimum 3%) and will receive minimum royalty payments until production. KCA confirmed 2014 inferred resource (1.27M tonnes at 2.94 gpt Au and 75.12 gpt Ag) and identified potential for 10-15% expansion with improved metallurgical recoveries (78% Au, 86% Ag). * El Oro 5 Concessions (historic workings): Remedioambiente SA de CV has rights to recover gold and silver from historic workings above 2,400m ASL, in exchange for a 3% NSR to Xali Gold. Xali retains 100% of exploration potential below 2,400m ASL. This project is currently embroiled in a dispute with the Mexican Mines Bureau over allegedly unlawful concession cancellations. * Sarape Project (Mexico): An LOI to option this project was signed in February 2025 but was terminated in September 2025, with Xali Gold citing concerns over increasing costs and lack of clarity with permitting in Mexico. * Tres Marias Property (Peru): Barrick terminated an option agreement, but Xali Gold retains a 1.5% NSR royalty. * Casua Property: Xali Gold holds a 1.5% NSR royalty on this property.