Developing A Cash Flowing Business Platform Around Mexican Mining Assets

Low Risk, Near Surface Production and Exploration

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Xali Gold Corp. Profile

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  Why Xali Gold Corp?

XGC: TSX.V 

Xali Gold Highlights:

  • Low risk, near surface production and exploration
  • Acquired SDA plant: Cornerstone of growth strategy
  • El Dorado mine primary target to provide feed for SDA plant
  • Cocula: Xali has the right to receive 70% of profits derived from mining and processing of the deposit.
  • El Oro Gold District: Candente Gold's flagship asset is a district scale gold project having previously produced 8 million-ounce AuEq

All projects geared toward funding the advancement of El Oro exploration

Recently Acquired Victoria Property in Central Newfoundland

  • An emerging significant exploration jurisdiction in Canada
  • 3 kilometres southwest of Marathon’s Valentine Gold Project that contains 3M ounces
  • 79 claims covering 1975 hectares

Projects:

El Dorado Project:  

  • New Exploration and Production Agreement on El Dorado gives Xali Gold the right to explore and produce gold, silver and other metals for life of mine.
  • Xali has the right to earn up to a 100% interest in both the San Dieguito de Arriba beneficiation mill ("SDA plant") and the El Dorado property in Nayarit State, Mexico through a MOU with Magellan Acquisition Corp.

Cocula:

  • Xali has the right to receive 70% of profits derived from mining and processing of the deposit.
  • One of the cornerstones in Western Mexico production platform, hosting shallow mineralizatio.
  • 54m @ 4.97 g/t Au -trench
  • 37.5m @ 1.3 g/t Au including 7.5m @ 5.8 g/t Au in a vertical drill hole beneath the trench
  • Targeting near term, low cost production potential by leaching and/or flotation

SDA Plant: 

  • The SDA Mill is a fully operational flotation plant which also includes a precious metals leach circuit - Merrill Crowe system and associated assets, licenses and agreements. 
  • Plan to use mill to develop cash flow through toll milling or processing ore from property deals.

El Oro Gold District – Primary focus is the past San Rafael Vein

  • 110 km WNW of Mexico City 
  • 27 claims covering 17,960 hectares 
  • Excellent access -paved highway to project  
  • Mining friendly population 
  • Excellent infrastructure & services 
  • Power to Site

The San Rafael Vein: 2.4km of strike of high-grade Epithermal veins 

  • 31 exploration targets identified by Candente 
  • Identified by gold and silver surface rock sampling 
  • El Oro Historic Production of 8 million ounces of gold equivalent at the San Rafael Vein 
  • Average grades: 10-12 g/t gold & 120-160 g/t silver 
  • Average Widths: 3 to 10 metres 
  • Bonanza grades: up to 50 g/t gold & 500 g/t silver 
  • Widths: up to 70 metres in places  
  • Mined from 1896 to 1929 by 3 companies concurrently in 3 contiguous sections: 
  • Mexico Mine (North)
  • Esperanza Mine (Central) 
  • South Mine (South) 
  • Flooding in one section of the San Rafael vein in 1929 resulted in the other two sections flooding and work ceasing abruptly and unexpectedly 

The Full Potential of the San Rafael Vein has Never Been Properly Investigated. 

 

Option with Sun River Gold 

Investigating the potential to recover gold and silver from the Mexico Mine Tailings of El Oro   

  • contain an Inferred Resource* of 1,267,400 T grading 2.94 Au g/t, 75.12 Ag g/t containing 119,900 ounces of gold and 3,061,200 ounces of silver. 

Projects: 

El Dorado Project: SDA Plant and El Dorado Property 

Memorandum of Understanding with Magellan Acquisition Corp. which gives Xali Gold the right to earn up to a 100% interest in both the San Dieguito de Arriba beneficiation mill ("SDA plant") and the El Dorado property in Nayarit State, Mexico. 

San Dieguito de Arriba Processing Plant ("SDA Plant") 

The SDA plant is a central element in Candente's growth strategy to provide production revenue and a stable operational base for the company.    

  • The mill was operational from 2007 (by Minerales Vane S.A. de C.V.) until April 2017, processing ore from various operators in the region on a toll and partnership basis.  
  • The SDA Mill is a fully operational flotation plant which also includes precious metals leach circuit   
  • Merrill Crowe circuit for the treatment of concentrates. 
  • associated assets, licenses and agreements. 

The plant has the capacity to treat up to 200 tpd of material via a flotation circuit. 

History:  

The SDA plant was operational from 2007 (by Minerales Vane S.A. de C.V.) until April 2017, processing ore from various operators in the region on a toll and partnership basis.   

Magellan acquired the SDA plant from Rose Petroleum in November 2017 through the purchase of its subsidiary, Minerales Vane, for a value of $1.5M ($1M cash plus shares).   

Magellan only operated the plant in February 2019 when processing a bulk sample of approximately 600 tons for a tolling opportunity.   

  • the supplier subsequently experienced challenges in providing feed to the plant and has not operated since. 

Magellan entered an option agreement on the El Dorado property in August of 2018, with Ingenieros Mineros, S.A. de C.V. ("IMSA") and modified the agreement January 15, 2020. IMSA retains a negotiable NSR of 3.5% and Magellan is obligated to either perform US$20,000 of work on the property in 2020 and $25,000 in 2021 or make payments of US$5,000 per quarter. Under the Definitive Option Agreement with Magellan, Candente Gold would assume these obligations. 

El Dorado Gold-Silver Property: 

The El Dorado Property is viewed as a high priority source for mill feed given historical production, high grade gold and silver mineralization, proximity to the SDA plant and the Company's path to full ownership of both. 

Located in the Pacific Coastal Plain, State of Nayarit. within a district of epithermal vein systems.  The principal vein system is the El Dorado epithermal vein trend which has been traced over a strike length of 3.5 kilometers   

El Dorado epithermal vein trend comprising outcropping vein over 1.5 kilometers in length and additional discontinuous outcrops indicate a strike length of 3.5 kilometers.   

This structure hosts multiple mineralized zones: 

  • high-grade veins potentially minable underground,   
  • Lower-grade bulk tonnage stockwork zones  
  • Prospective exploration targets have been defined along the El Dorado Vein structure related to historic mines (reported to have produced high grades),  anomalous geochemical sample resultsand zones of structural complexity.

History:

The El Dorado vein system has a history of small-scale mining from two veins.   Mining in the area has been documented during the periods of: 1900 to 1927; 1965 to 1975; 1975 to 1983; and 1985 to 1990.  From 1985 to 1990 ore was shipped to the El Venado processing plant located near Ruiz, Nayarit, for toll treatment to produce a flotation concentrate.   

  • Historic metallurgical balance sheets from this plant indicate the grade of the material was on the order of 5 g/t Au and 70 g/t Ag. 

The principal vein system is the El Dorado epithermal vein trend which has been traced over a strike length of 3.5 kilometers. This structure hosts multiple mineralized zones including high-grade, and lower-grade bulk tonnage stockwork zones extending over tens of meters in width in both the hanging wall and footwall of the vein system.   

  • In addition, high level silicification and argillic alteration on surface indicate depth potential to the mineralizing system.   
  • In a report dated May 1986 by Compañia Fresnillo, S.A. de C.V., a list of 46 underground samples reported an average grade of 7.88 g/t Au and 55 g/t Ag for the three levels of the El Dorado Mine with vein widths ranging from 1.2 meters to 4.0 meters.  Neither Magellan nor Candente Gold have been able to verify the historic data. 

The El Dorado vein system was explored and drilled by Prospero Silver in 2010-2011 with a total of 4,950 meters drilled in 28 diamond core holes.  The drilling was reported to have intersected multiple steeply-dipping silicified mineralized zones extending from near-surface to a drilled depth of 150 meters. 

El Oro Gold District: 

The San Rafael Vein is Currently the Primary Focus of Candente Gold's Exploration in the El Oro District 

  • One of Mexico’s highest-grade historic gold and silver past producers  
  • 8M ozAu Eq Historic Production –from only 2of more than 50 known veins  
  • Historic production -only 200 metres vertically 
  • San Rafael Vein laterally to 3.5kmlaterally and vertically to 500m 

Xali's flagship asset (since 2007) is El Oro, a district scale gold project encompassing a well-known prolific high-grade gold dominant 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 (Ref. Mexico Geological Service Bulletin No. 37, Mining of the El Oro and Tlapujahua Districts. 1920, T. Flores*) 

One of the most productive veins, the San Rafael Vein, historically produced over 4 million ounces of gold and 44 million ounces of silver from the upper 150 to 250 metre mine levels.  Mine grades averaged 10 to 12 grams per tonne ("g/t") gold and 120 to 160 g/t silver over average widths of 3 to 10 metres.  High grade bonanza shoots in San Rafael graded up to 50 g/t gold and 500 g/t silver, and in some places the vein is over 70m wide.  Many of the El Oro district's veins hold significant discovery potential, particularly below the historic workings of San Rafael, which was mined to an average depth of only 200 metres before being shut down in the 1920s due to flooding and the low price of gold. 

Much of the waste material from historic mining activities was re-introduced to the mines as backfill with a grade that would not be considered waste by modern standards.  The Company will be undertaking an evaluation of the potential to economically recover and process the backfill material.  In addition to potential economic benefits of processing the backfill, the exercise could serve to open up historic workings to more efficiently access and explore the El Oro District veins below the level of historic workings. 

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 200 metres 

Option with Sun River Gold – Investigating the potential to recover gold and silver from the Mexico Mine Tailings of El Oro   

Candente Gold's subsidiary, CCM El Oro Jales, has an agreement with the municipality of El Oro which provides the Company the right to recover all available gold and silver from the tailings deposit and pay to the Municipality of El Oro an 8% Net Profits Interest ("NPI").   

  • Candente Gold also retains the first US$1.5M from the 8%NPI payable to the Municipality. 
  • contains an Inferred Resource* of 1,267,400 T grading 2.94 Au g/t, 75.12 Ag g/t containing 119,900 ounces of gold and 3,061,200 ounces of silver. 
  • Sun River has the option to acquire 100% of the Tailings Project by making staged payments  

Located adjacent to existing road access, power and water services

Newfoundland

Victoria Property Overview

The Victoria Property is located in Central Newfoundland and Labrador, named as one of the top 10 mining jurisdictions in the world (Fraser Institute 2021).  It is located just 3 kilometres (“km”) southwest of Marathon’s Valentine Gold Project (“Marathon”), within a structurally controlled gold belt of Central Newfoundland, an emerging significant exploration jurisdiction in Canada. 

The new gold district occurs within a northeast-trending structural corridor defined by crustal-scale faults extending from southwestern to north-central Newfoundland.  Marathon has defined (Measured and Indicated) reserves of 3.14 million ounces (“Moz”) gold and Inferred resources of 1.00 Moz (https://marathon-gold.com/valentine-gold-project/). Marathon’s mine construction is expected to commence in early 2022, on schedule to build the largest gold mine in Atlantic Canada.  *There are no assurances that similar results would be obtained on Xali Gold’s Victoria Property. 

The Victoria Property, comprising 79 claims covering 1975 hectares, is also situated 65km southwest of the historic mining town of Buchans where mining was continuous for 57 years starting in 1905.  From 1928 to 1984, ASARCO mined approximately 16 million tonnes from five high grade orebodies, with an average mill head grade of 14.51% zinc, 7.56% lead, 1.33% copper, 126 g/t silver and 1.37 g/t gold.

The Victoria Property demonstrates excellent exploration potential for gold mineralization, due to its location within the structurally controlled gold belt as well as distinctive magnetic-geophysical anomalies identified and high-grade gold discovered in glacial till samples and bedrock samples of quartz veins on the property.  The high-grade gold intervals from glacial till reaching 178 grams per tonne (“gpt”), 66.7 gpt and 10.1 gpt were discovered by Rubicon Minerals Corporation in 2003.   The gold-bearing quartz veins occur within 50 meters of two of these till samples and contain 10.45 gpt and 66.7 gpt gold.  Further exploration was likely hampered by the lack of ground access which required helicopter support, however, several quad trails have now opened up access on the property. 

Xali Gold has received an exploration permit from the Newfoundland government, which allows the Company to conduct prospecting, geochemical surveys and ground geophysics.  Field work is planned to commence at the end of Q3 2021.

Terms of the Agreement

Xali Gold has entered into an Option Agreement (“Agreement”) which provides for the following:

Acquire 100% interest, subject to a 2% Net Smelter Royalty* (“NSR”) by:

  1. Issuing a total of 3.5 million (“M”) shares over 3 years
  2. Making payments of a total of CDN $100,000 over 3 years
  3. Funding exploration activities of CDN $650,000 over 3 years

*Xali Gold has the right to buyback 1% of the NSR for CDN $1M at any time.

Of the above, the following is a firm commitment:

  • Payment of CDN $25,000
  • Issue 500,000 common shares
  • Funding exploration activities of CDN $50,000 within one year

 

Last changed at 22-Sep-2021 01:52PM by AGORACOM