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 has acquired gold and silver projects with near surface exploration potential & near-term production potential to develop cash flow that supports overall development of their flagship El Oro Gold Silver Project. A high grade project with tremendous exploration potential.

Xali Gold Highlights:

El Oro Gold District: Candente Gold's flagship asset is a district scale gold project having previously produced 8 million-ounce Gold Equivalent

  • New drill targets have been identified
  • 3D Leapfrog model and drillholes have been designed to test potential extensions to high-grade gold and silver zones intersected by previous drilling
    • ProsperoSilver in 2010-2011; true width intercepts of:-3m @ 49.8 g/t AuEq-11.2m @ 7.8 g/t AuE
  • Started a new drilling permit application process for the 100-per-cent-held El Oro gold-silver project in Mexico
  • Low risk, near surface production and exploration
    • Small Drill Program Could Yield Major Discovery

Acquired SDA plant: Cornerstone of growth strategy -Develop Revenue

  • Increased Ownership to 50%
  • Received interest from third parties desiring to enter into joint ventures in Western Mexico assets, the SDA plant and near-surface high grade mineralization near the plant.

El Dorado Gold Silver Project:

  • Acquired to provide feed for SDA plant
    • El Dorado Gold-Silver Project: acquisition of rights to the El Dorado gold and silver historic mines was the initial step in this strategy
    • grades increase at depth – does not include extensions of the veins that extend below 150m & mapped for 3.5 km along strike

El Oro Tailings Reprocessing Project:

  • Sun River Gold (Optioned/ PRIVATE ) initiating reprocessing
    • 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
    • Advanced NPI payments of US$15,000 per month until commercial production is reached
      • have made 2 payments to Xali totalling $30K as of Nov/22
  • 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
    • Xali retains the first US$1.5M from the 8% NPI

The Mexico Mine Tailings contain an *Inferred Resource Estimate* of 119,900 oz gold and 3,061,200 oz silver in 1,267,400 tons grading 2.94 g/t gold and 75.12 g/t silver

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.
  • El Oro Tailings Reprocessing Project
    • Sun River Gold advising the Company that it has arranged financing of approximately US$6.5M
    • Xali Gold also retains the first US$1.5M
    • 5% Net profit Interest
    • Xali Gold has an agreement which provides the Company the right to recover all available gold and silver from the tailings deposit

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

New drill targets have been identified by using a three-dimensional Leapfrog model and are designed to test potential extensions to high-grade gold and silver zones intersected by previous drilling. Some of the higher grades were found in several veins with overlying lower-grade disseminated gold near the Mexico-Esperanza mines border area of the San Rafael vein.

The Mexico-Esperanza high-grade intersections at the El Oro project include:

  • 16.7 grams per tonne gold and 32.5 g/t silver over 1.4 metres;
  • 30.7 g/t Au and three g/t Ag over 1.9 m;
  • 12.8 g/t Au and 44.0 g/t Ag over 0.5 m;
  • 13.7 g/t Au and 6.5 g/t Ag over three m;
  • 2.4 g/t Au and 372 g/t Ag over 0.5 m;
  • 18.1 g/t Au and 137 g/t Ag over 0.4 m;
  • One g/t Au and five g/t Ag over 75 m.

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.

 

Last changed at 01-Dec-2022 11:36AM by AGORACOM