Xali Gold Enters Agreement for Mining in Historic Underground Workings, Exploration and Reducing Debt at El Oro Mexico
22 July 2024 - 9:00PM
Xali Gold Corp. (TSXV:XGC) ("
Xali Gold” or
“the
Company”) is very pleased to announce it has
signed a legally binding Letter of Intent (“
LOI”)
with Rio Verde Resources (“
Rio Verde”) on portions
of five mining concessions within the El Oro Mining District
(“
El Oro 5 Concessions”) in the State of Mexico
and Michoacán de Ocampo, Mexico.
Rio Verde has been granted the exclusive right
to explore and extract gold, silver and any other economic minerals
that may be found above the 2400 metre (“m”) level
in the historic workings covered by the El Oro 5 Concessions in
exchange for payment of a 3% Net Smelter Return
(“NSR”) to Xali Gold. The initial agreement has a
term of 5 years which may be extended for an additional 5 years
providing Xali Gold is receiving benefits totalling $1 Million
(“M”) per year. Xali Gold retains the
exclusive ownership of all mineral bodies discovered or delineated
below the 2400 m level.
“There couldn’t be a better time, since we
acquired the property in 2006 and gold prices were much lower than
the current $2400 per ounce, to be monetizing the mineralization
left behind in the historic workings and to be exploring for new
mineral bodies,” states Joanne Freeze, President and CEO of Xali
Gold. “Rio Verde is well known for their ability to get into
production in record time, to make good profits and to discover
mineral deposits. This new partnership will allow us to keep all
the exploration upside we have demonstrated by our previous
drilling underneath the historic workings, while we work together
with Rio Verde to test exploration concepts and get underground
access for future drilling as well as pay back our debts on the
mineral rights.”
Keith Piggott of Rio Verde has advised us that
their production will initially focus on the exploration target
identified by Luismin-Hillsborough in 1993.
Luismin-Hillsborough estimated there to be a potential for 762,000
ounces (“ozs”) gold (“Au”) and
9.8M ozs silver (“Ag”) (6.89M tonnes grading 3.44
g/t Au and 44 g/t Ag) in the historic workings after studying
2,600, 2 m interval mine level plans with grades, sections and
production documentation as well as 8 new drill holes. The
mineralization is understood to have been left behind in in-situ
vein, pillars and back-fill as it had grades below historical
cut-off of 8 g/t Au.
The LOI shall initially pertain to only the 5
mining concessions of El Carmen, El Oro VII, Dos Estrellas 77
Fracc.1, Dos Estrellas 77 and Dos Estrellas 77 Fracc. II. Rio Verde
shall maintain the concessions in good standing during this period,
by paying the semi-annual concession fees, by incurring the minimum
investments and the corresponding filings with the Mexican Mines
Bureau, by making the filings of statistical reports and by paying
the Governmental Royalties.
In addition to the 3% NSR payments, Rio Verde
has agreed to provide funding to pay concession fees owing,
initially on the 5 Concessions they plan to mine. Rio Verde and
Xali Gold will collaborate to negotiate a payment plan with the
Mexican Tax Authority for mineral rights fees owed over the last 5
years (all fees owing prior to that are no longer due).
Funds provided for concession fees will be
provided as participation in a Private Placement in Xali Gold under
the following terms: A Unit comprising one share and one-half
warrant will be priced at CAD$0.05. A full warrant will be
exercisable at CAD$0.10 per share for two years. Xali Gold will
grant Rio Verde the right to participate in future Private
Placements, terms of which will be in the context of the market at
the time when the funds are provided. Such funds are expected to
come from income generated from operations on the five concessions
and will be used to assist Xali Gold in paying off the remaining
fees due on the rest of the El Oro Property.
Rio Verde has also been granted the right to
appoint an additional member to the Board of Xali Gold and to the
position of Chair of the Board, when Rio Verde holds greater than
20% of the outstanding shares in the Company, provided that person
is deemed qualified by the current Board of Xali Gold.
About Rio Verde Resources
Rio Verde is a private company controlled and
managed by Keith Piggott, the former President and CEO of Goldgroup
Mining Inc. and Core Gold Inc. Mr. Piggott is a mining engineer
with over 50 years of experience in Zambia, Australia and PNG,
Mexico and South America. In the recent past, as well as
significant exploration success, he has started 3 mines: Cerro
Colorado, El Boludo and Cerro Prieto in Sonora, Mexico plus a
green-fields start in a record time of 3 months in Ecuador. These
mines have collectively produced approximately 500,000 ozs of gold
to date.
About Xali Gold
Xali Gold has gold and silver projects in Peru
and Mexico. The Company’s flagship project El Oro is a district
scale gold project encompassing a well-known prolific high-grade
gold dominant gold-silver epithermal vein system in Mexico. The
project covers 20 veins with past production and more than 57 veins
in total, from which approximately 6.4M ozs of gold and 74M ozs of
silver were reported to have been produced from just two of these
veins (Ref. Mexico Geological Service Bulletin Nr. 37, Mining of
the El Oro and Tlapujahua Districts. 1920, T. Flores).
Modern understanding of epithermal vein systems
indicates that several of the El Oro district’s veins hold
excellent discovery potential, particularly below and adjacent to
the historic workings of the San Rafael Vein, which was mined to an
average depth of only 200m.
Xali Gold is dedicated to being a responsible
Community partner.
Joanne C. Freeze, P.Geo., President and CEO is
the Qualified Person as defined by National Instrument 43-101 for
the projects discussed above. Ms. Freeze has reviewed and approved
the contents of this release. Neither the TSX Venture
Exchange nor its Regulation Services Provider accepts
responsibility for the adequacy or accuracy of this release.
Forward-looking InformationThis
news release may contain forward-looking information (as such term
is defined under Canadian securities laws) including but not
limited to historical production records. While such
forward-looking information is expressed by Xali Gold in good faith
and believed by Xali Gold to have a reasonable basis, they may
address future events and conditions and are therefore subject to
inherent risks and uncertainties including those set out in Xali
Gold’s MD&A. Factors that cause the actual results to differ
materially from those in forward-looking information include,
without limitation, gold prices, results of exploration and
development activities, regulatory changes, defects in title,
availability of materials and equipment, timeliness of government
approvals, potential environmental issues, availability of capital
and financing and general economic, market or business conditions.
Xali Gold expressly disclaims any intention or obligation to update
or revise any forward-looking information, whether as a result of
new information, future events or otherwise, except in accordance
with applicable securities laws.
On behalf of the Board of Xali Gold
Corp.
“Joanne Freeze” P.Geo.President, CEO and
Director
For further information please contact:Joanne
Freeze, President &
CEO
Tel:
+ 1 (604) 689-1957
info@xaligold.com NR
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