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 its subsidiary Aquiline Resources Inc. [1] - An initial cash payment of US$500,000 was made to finalize the acquisition, with total cash payments potentially reaching US$17 million over the next five years [2][4]. Payment Structure - The payment schedule includes: - US$1.5 million due on December 24, 2026 - US$1.5 million due on December 24, 2027 - US$4 million due on December 24, 2028 - US$3 million due on December 24, 2029 - US$4.5 million due upon the earlier of December 24, 2030, or the commencement of commercial production - An additional US$2.5 million contingent payment if mineral reserves exceed 1.25 million ounces [2][3][4]. Security and Guarantees - Payments are secured by Promissory Notes, a Share Pledge Agreement over Calipuy's shares, and a Mortgage Agreement over both Pico Machay and the Las Brujas II property [3]. - The Promissory Notes are guaranteed by Calipuy and Candente Gold Peru S.A.C., and do not accrue interest before maturity [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, all of which are in good standing and valid until 2039 if production has not commenced [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].