Ms. Joanne Freeze reports

XALI GOLD CLOSES FIRST TRANCHE OF PRIVATE PLACEMENT FOR $1.5 MILLION

On Dec. 23, 2025, Xali Gold Corp. closed the first tranche of the previously announced non-brokered private placement for gross proceeds of $1.5-million. A second tranche of up to $500,000 is planned to close in early January, 2026.

The net proceeds from the private placement will be used to cover the $500,000 (U.S.) payment due to Pan American Silver Corp. for the closing of the acquisition of the Pico Machay gold property, an advanced-exploration-stage project in Peru with a near-term production goal, as announced in the company's Oct. 24, 2025, news release. In addition to the payment, the proceeds will also be allocated to the exploration of Pico Machay and working capital and general corporate purposes.

"The successful progress of this private placement allows us to move ahead with the Pico Machay acquisition and execute on the next phase of our growth strategy," said Joanne Freeze, president and chief executive officer of Xali Gold. "We are excited about the opportunities this transaction presents for the company."

The private placement resulted in the issuance of 15 million units, with each unit consisting of one common share and one-half of one common share purchase warrant at a price of 10 cents per unit. Each warrant will be exercisable for one additional share of the company for 18 months at a price of 20 cents per warrant share, subject to an accelerated expiry (as defined below). If, at any time after April 24, 2026, the company's common shares have a closing price on the TSX Venture Exchange at or above a price of 30 cents per share for a period of 10 consecutive trading days, the company may give notice by news release that the expiration of the warrants will be accelerated to 40 days from the date of providing such notice. Both the shares and any warrant shares issued on exercise of the warrants will be subject to a mandatory four-month-and-one-day hold period commencing the day of closing of the private placement.

Finders' fees of 6 per cent in cash and 6 per cent in non-transferrable finder warrants were paid on a portion of the private placement in accordance with the policies of the TSX-V. Each finder's warrant is non-transferable and exercisable into a common share for a period of 18 months at a price of 20 cents per common share, subject to the same accelerated expiry provisions. A total of $30,300 was paid in cash finders' fees (of which $9,900 was to Canadian-registered dealer firms and $20,400 was to BLB Advisory, a Peruvian-based finder) and 99,000 finder warrants were issued to the Canadian-registered firms.

Two directors of the company participated in the private placement, which constitutes a related party transaction, as defined in Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions. The issuance of units to the directors is exempt from the valuation requirements of Section 5.4 of MI 61-101 pursuant to Subsection 5.5(a) of MI 61-101, and exempt from the minority shareholder approval requirements of Section 5.6 of MI 61-101, pursuant to Subsection 5.7(1)(a) of MI 61-101.

Pico Machay acquisition update

With the closing of the private placement, Xali Gold is able to move ahead with closing the acquisition of Pico Machay. Xali Gold will acquire the company Minera Calipuy SAC, which wholly owns Pico Machay, from Pan American and its subsidiary, Aquiline Resources Inc.

The Pico Machay acquisition is expected to close later today, and the transaction is subject to final TSX-V approval.

About Xali Gold Corp.

Xali Gold is a gold and silver exploration company focused on advancing opportunities in the Americas. The company is focused on completing the acquisition, exploration and development of Pico Machay, an advanced-exploration-stage gold project in South America with a near-term production goal. Xali Gold maintains exploration potential as well as two royalty agreements with third parties that have the rights to produce gold and silver from specific areas of the El Oro gold-silver project in Mexico, a historic district-scale system with a long history of significant gold and silver production.

Xali Gold is dedicated to being a responsible community partner.

Joanne C. Freeze, PGeo, is a qualified person as defined by NI 43-101 and has reviewed and approved the contents of this release.

We seek Safe Harbor.