Xali Gold Signs New Agreement for Sale of the El Oro Tailings Project
15 Abril 2024 - 8:00AM
Xali Gold Corp. (TSXV:XGC) ("Xali Gold” or the “Company”) is
pleased to announce that the Company has signed a Letter of Intent
to enter a Purchase Agreement (the “LOI Agreement”) with Kappes,
Cassiday & Associates (“KCA”) on the Mexican Mine Tailings
Reprocessing Project at El Oro (the “El Oro Tailings Project”) in
Mexico. The Letter of Intent is a legally binding agreement.
“We are excited to be able to move ahead with
our El Oro Tailings Project,” says Joanne Freeze, President and CEO
of Xali Gold. “With KCA’s experience in Mexico, and their
proprietary recovery process, we anticipate a fairly rapid
development timeline. KCA’s recovery process is expected to achieve
higher gold and silver recoveries and require less permitting than
the previous process proposed by Sun River Gold. As such, we
estimate that this new agreement on the Tailings should allow us
both to pay outstanding mineral rights fees on the El Oro Project
as well as fund exploration at El Oro. 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 6.4 million ounces of gold and 74
million ounces of silver were reported to have been produced from
just two of these veins. The previous agreement with Sun River Gold
has been terminated as they were in default of their obligations
under that agreement and were given sufficient notice of their
default.”
In order to earn 100% interest in the El Oro
Tailings Project, subject to royalty payments outlined below, KCA
has agreed to:
- Pay Xali Gold US$25,000 upon
signing;
- Pay Xali Gold an additional
US$25,000 three months after signing the LOI Agreement;
- Pay Xali Gold US$100,000 six months
after signing the LOI Agreement.
Terms of the Royalty Payments are as
follows:
- Once production begins, KCA will
pay Xali Gold a gross royalty equal to 4% of the sales income
("NSR") received from the gold and silver produced from the El Oro
Tailings Project, less any royalties due and payable to others (the
Municipality of El Oro), but in no case less than a 3% gross
royalty.
- KCA has the right at any time to
buy a 1% royalty from Xali Gold for US$1,000,000, which would lower
the NSR from 4% to 3% of the sales income received from the gold
and silver produced from the Project, less any royalties due and
payable to others including the Municipality of El Oro, but in no
case less than a 2% royalty.
- KCA will make minimum royalty
payments of US$50,000 every six months commencing six months from
signing the LOI agreement, until a total royalty payment of
US$1,000,000 has been paid to Xali Gold, but royalty payments on
production will continue past that point.
- KCA will also be obligated to pay
the Municipality of El Oro an 8% Net Profits Interest (“NPI”) on
production from the Tailings or renegotiate this with the
Municipality.
- Xali Gold has the right to receive
the first US$1.5M from the Municipality’s 8% NPI.
The Mexico Mine Tailings at El Oro contain an
Inferred Resource* of 1,267,400 Tonnes grading 2.94 gold grams per
tonne (“g/t”), 75.12 silver g/t containing 119,900 ounces of gold
and 3,061,200 ounces of silver.
*Note: Mineral Resources are not Mineral
Reserves and do not have demonstrated economic viability. All
figures have been rounded to reflect the accuracy of the estimate.
For more information, please see below.
About KCA
Since 1972, KCA has provided process
metallurgical services to the international mining industry.
KCA specializes in all aspects of heap leaching, cyanide
processing, laboratory testing, project feasibility studies,
engineering design, construction and operations management.
KCA has worked in Mexico for many years and maintains an office in
Chihuahua to serve its Mexican consulting clients. KCA was
responsible for the construction management of several major
projects in Mexico including Ocampo, Pinos Altos, and most recently
the recovery plant of Orla’s Camino Rojo project. While the
El Oro Tailings Project will be KCA’s first entrepreneurial mining
venture in Mexico, KCA owns a gold mining project in the
neighboring country of Guatemala and looks forward to making a
success of the El Oro Tailings Project.
About Xali Gold
Xali Gold has gold and silver exploration
projects in Peru and Mexico. El Oro is our main focus in Mexico.
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.
Mexican Mines Tailings Inferred Resource
Estimate*
Classification |
Tonnes |
Gold (g/t) |
Silver (g/t) |
Ounces Gold |
Ounces Silver |
Inferred |
1,267,400 |
2.94 |
75.12 |
119,900 |
3,061,200 |
*Note: Mineral Resources are not Mineral
Reserves and do not have demonstrated economic viability.
The estimate reflects the results of the auger
and channel sampling program completed in May 2014 (see News
Release 036 June 26, 2014) as compared with extensive historic
assessments including drill testing and metallurgical test work.
The 2014 verification sampling program of the 1990 historic results
was completed through systematic sampling of the upper 3.0 metres
of the tailings with a hand auger and vertically channel sampling
the lower 5 to 10 metres of the tailings dump. In 1990, Luismin
drilled 297.7 metres in 22 holes and in 1951, the Cooperativa de
Las Dos Estrellas drilled 2162.7 metres in 184 holes. The mineral
resources reported have been estimated using criteria consistent
with the Canadian Institute of Mining and Metallurgy (“CIM”)
Definition Standards (2014) and in conformity with the CIM
“Estimation of Mineral Resources and Mineral Reserves Best
Practice” (2003) guidelines. The contained metal figures shown are
in-situ. No assurance can be given that the estimated quantities
will be produced. All figures have been rounded to reflect accuracy
and to comply with securities regulatory requirements. Some
summations may not agree due to rounding. This reported Mineral
Resource has an effective date of July 8th, 2014.
The Mexico Mine Tailings mineral resource was
constrained on the west and north by an offset of 30m from an
existing highway and is reported at a cut-off grade of 2.5 g/t gold
equivalent (“AuEq”). Gold and silver recoveries used were 50% and
50% respectively. Metal prices used were 12-month rolling averages
for: gold US$1,304.92/oz and silver US$20.67/oz. Mining and
processing costs and G&A used were $7.00, $27.00 and $11.00 US
per tonne respectively.
For more information see “National Instrument
43-101 Technical Report on the Inferred Mineral Resource Estimate
of the Mexico Mine Tailings” prepared by Nadia Caira, P.Geo. and
Allan Reeves, P.Geo., dated August 25, 2014 with an effective date
of July 8, 2014 available at www.sedar.com
Joanne C. Freeze, P.Geo., President and CEO is a
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 the mineral resource estimate
for the Mexico Mine Tailings and information regarding references
to historical resource estimates, the potential for discovery on
the El Oro Properties and other statements that are not historical
facts, and the ability to pay mineral rights fees and fund
exploration. While such forward-looking information is expressed by
Xali Gold in good faith and believed by Xali Gold to have a
reasonable basis, they 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 & CEOTel: + 1 (604)
689-1957info@xaligold.com
NR 128
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