Xali Gold Closes Acquisition of Pico Machay Gold Project

Core Viewpoint - Xali Gold Corp. has successfully closed the acquisition of the Pico Machay Gold Project in Peru, which is at an advanced exploration stage and aims for near-term production [1][2]. Acquisition Details - The acquisition involved purchasing Minera Calipuy S.A.C., the owner of Pico Machay, from Pan American Silver Corp. and Aquiline Resources Inc. [1] - An initial cash payment of US$500,000 was made to finalize the acquisition, with total cash payments amounting to US$17 million over the next five years [2][4]. - The payment schedule includes deferred payments of US$1.5 million in the first and second years, US$4 million in the third year, US$3 million in the fourth year, and US$4.5 million upon the commencement of commercial production [2][4]. Financial Arrangements - Payments are secured by Promissory Notes and a first-priority Share Pledge Agreement over Calipuy's shares, along with a Mortgage Agreement over both Pico Machay and the Las Brujas II property [3]. - The Promissory Notes do not bear interest before maturity and are guaranteed by Calipuy and Candente Gold Peru S.A.C. [3]. Project Potential - The historical resource estimate for Pico Machay was based on a long-term gold price of US$700 per ounce, indicating significant upside potential in the current gold price environment [2]. - The company plans to update the historical resource estimate and optimize previous engineering studies to advance the project towards production [2]. Mining Rights and Regulations - Calipuy holds 100% interest in 17 mining rights associated with the Pico Machay Project, which are in good standing and valid until 2039 if production has not commenced by then [5]. - There is a 1% Net Smelter Return royalty on the El Alcatraz 4 concession, which is perpetual and covers all metals [6]. Community Engagement - Xali Gold aims to engage with the local Santa Ana community to advance the Pico Machay Project under a mutually beneficial framework [10].