Ms. Joanne Freeze reports

XALI GOLD POSITIONS PICO MACHAY GOLD PROJECT TO REACTIVATE DEVELOPMENT PLANS AMID STRONG GOLD MARKET

Xali Gold Corp. has provided an update on the continuing activities on the recently acquired Pico Machay gold project in Peru.

Following the completion of the acquisition in December, 2025, Pico Machay gives Xali Gold both immediate value and substantial long-term upside, particularly given that the historical resource, completed in 2008, was based on a long-term gold price of $700 (U.S.) per ounce. A positive production decision was also made using the same gold price in 2009.

"We are now focused on advancing Pico Machay into development as soon as possible," said Joanne Freeze, president and chief executive officer. "The immediate critical path includes updating the historical resource estimate and optimizing previous engineering studies, especially the low-cost, low-strip ratio open-pit heap-leach concept outlined by prior owner Aquiline Resources. Advancing the engineering studies will enable us to initiate the detailed environmental impact assessment (EIA) required for operations. Aquiline had completed approximately 50 per cent of their detailed EIA in 2009."

Community engagement commenced on Dec. 27, 2025, in the community of Santa Ana. Meetings have been highly constructive, reflecting the community's organized structure, familiarity with exploration and mining activities, and commitment to transparency and sustainable development.

The following activities are currently under way:

• Relogging of approximately 20,000 metres of historical reverse circulation drilling to recreate the geological model and uncover controls to higher grade mineralization (commenced Jan. 15, 2026; approximately 30 per cent complete);
• Reconstruction of the geological model using Leapfrog 3-D software (commenced Feb. 5, 2026);
• Continuing discussions regarding a long-term land access agreement with the Santa Ana community, building on successful models in the region, to support all phases from exploration to production;
• Preparing for detailed geological mapping, rock chip and bulk sampling, both on surface and in underground workings to better understand mineralization controls and enhance resource definition beyond historical data.

The following activities are also planned for 2026:

• Sampling all new underground workings;
• Underground and/or surface drilling within the resource to verify grades and upgrade the resourc;
• Acquiring a Ficha Tecnica Ambiental (FTA) permit for exploration and resource expansion drilling, advancement of a preliminary economic assessment (PEA) alongside environmental baseline studies to guide future surface drilling and project development.

Located within the southern Peru epithermal gold-silver belt, Pico Machay sits in a historically productive mining district in the Western Cordillera Andes. The project benefits from existing infrastructure and a mining-friendly community eager to partner on sustainable development. Xali Gold remains confident in the significant upside potential at Pico Machay, which hosts a historical measured and indicated resource of 264,600 ounces (oz) of gold (10.6 million (M) tonnes grading 0.78 gram per tonne (gpt) gold) and an additional historical inferred resource of 446,000 oz of gold (23.9 M tonnes grading 0.58 gpt gold). A total of 154 reverse circulation holes drilled prior to 2009, were relied upon to delineate the historical resource. All of these holes were drilled in a central zone while nine additional high-potential exploration targets remain untested.

Various historical engineering studies at Pico Machay targeted an open pit heap-leach operation, which was expected to be low-cost and with a low strip ratio. Given that those studies were based on a long-term gold price of $700/oz and several exploration targets remain untested, Xali Gold considers the upside potential to be very strong.

Details of the acquisition can be found in the company's Oct. 24, 2025, and Dec. 24, 2025, news releases.

Technical information

Information regarding the historical resource at Pico Machay is outlined in the technical report titled: "Amended Technical Report on the Pico Machay Gold Deposit in Huancavelica Province, Peru" prepared by David G. Thomas, PGeo, for Xali Gold dated Dec. 16, 2025, and filed on SEDAR+. All resource estimates have used the same categories in accordance with Canadian Institute of Mining Standards on Mineral Resources and Reserves.

All resource estimates for Pico Machay are considered historical in nature and are based on prior data and reports prepared by previous property owners. A qualified person has not done sufficient work yet to classify the historical estimates as current resources in accordance with current CIM categories and the company is not treating the historical estimates as current resources. Significant data compilation, redrilling, resampling and data verification may be required by a qualified person before the historical estimates on the project can be classified as a current resource. There can be no assurance that any of the historical mineral resources, in whole or in part, will ever become economically viable. In addition, mineral resources are not mineral reserves and do not have demonstrated economic viability. Even if classified as a current resource, there is no certainty as to whether further exploration will result in any inferred mineral resources being upgraded to an indicated or measured resource category.

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 the exploration and development of Pico Machay, an advanced exploration stage gold project in Peru with a near-term production goal. Xali Gold maintains exploration potential as well as two royalty agreements with third parties who have the rights to produce gold and silver from specific areas of the El Oro gold-silver project in Mexico, a historic district-scale precious metal 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 National Instrument 43-101 and has reviewed and approved the contents of this release.

We seek Safe Harbor.