Xali Gold Announces Non-Brokered Financing

On December 2, 2025, Xali Gold announced a non-brokered private placement to raise gross proceeds of up to C$1,500,000. The financing will consist of up to 15,000,000 units at a price of C$0.10 per unit. Each unit comprises one common share and one common share purchase warrant. Each warrant entitles the holder to purchase one additional common share at an exercise price of C$0.20 for a period of 18 months. The warrants include an acceleration clause if the company's shares trade at or above C$0.30 for 10 consecutive days.

The proceeds will be used for the acquisition and exploration of the Pico Machay Gold Project in Peru, as well as for working capital and general corporate purposes.

This financing is critically important and therefore has a material positive impact, despite being dilutive. The historical context reveals a company on the verge of insolvency that has recently pivoted its entire strategy.

A review of the past year shows a company in deep distress. Operations in Mexico were plagued by legal challenges, including the disputed cancellation of key mining concessions (July-August 2025). Financially, the company was in a catastrophic state, culminating in a cease trade order in August 2025 for failure to file annual financials. The September 30, 2025, financial statements confirm this, showing a mere C$38,980 in cash against over C$3.3 million in current liabilities, resulting in a working capital deficit of over C$3.2 million and a shareholders' deficit of C$3.3 million.

In late October 2025, the company announced a transformational, "bet-the-company" acquisition of the Pico Machay Gold Project in Peru from a subsidiary of Pan American Silver for a total consideration of US$17.5 million in staged payments. This acquisition requires an initial cash payment of US$500,000 upon closing.

Without this C$1.5 million financing, Xali Gold would be unable to make the initial acquisition payment and would likely face bankruptcy, rendering the entire strategic pivot moot. The financing is the essential lifeline that enables the company to: 1. Survive in the short term. 2. Close the potentially company-making Pico Machay acquisition. 3. Fund initial exploration work on the new flagship asset.

While positive and necessary, it is critical to note that this financing is not a panacea. After the initial US$500k (~C$680k) payment for Pico Machay, only about C$820k remains. This amount is wholly insufficient to address the C$3.3 million in current liabilities. The company remains deeply indebted and will require substantial additional capital and/or successful debt restructuring (e.g., shares-for-debt) to clean up its balance sheet. The financing, priced at the 52-week high with a full warrant, is also dilutive, adding 15 million shares and 15 million warrants to the capital structure.

In conclusion, the financing is material and positive because it allows the company to execute a credible new strategy and avoid imminent failure. However, it only kicks the can down the road regarding the company's severe underlying financial problems.

Xali Gold Corp. is a junior mineral exploration company that was historically focused on its El Oro gold-silver district in Mexico. After facing significant jurisdictional challenges in Mexico, including the unlawful cancellation of mineral concessions, the company has pivoted its strategy.

The company's new flagship project is the Pico Machay Gold Project in Peru, which it is in the process of acquiring from a subsidiary of Pan American Silver. Pico Machay is a high-sulphidation epithermal gold deposit with a historical (non-43-101 compliant) resource of 264,600 oz gold (Measured & Indicated) and 446,000 oz gold (Inferred). Recent due diligence confirmed the historical data and identified a much larger alteration footprint than previously understood, suggesting significant exploration upside for resource expansion.

Xali Gold also retains royalty interests on its former Mexican properties, most notably the El Oro Tailings project being advanced by Kappes, Cassiday & Associates (KCA).