Ms. Joanne Freeze reports

XALI GOLD COMMENCES WORK ON PICO MACHAY GOLD PROJECT IN PERU

Xali Gold Corp. has commenced work on the recently acquired Pico Machay gold project. Xali Gold has commenced fieldwork with the initiation of community engagement in anticipation of starting technical fieldwork and environmental studies for drilling permits this month.

"With the acquisition of Pico Machay successfully closed on Dec. 24, 2025, our team hit the ground running during the holiday period," said Joanne Freeze, president and chief executive officer of Xali Gold. "Community engagement commenced with introductory meetings and the sharing of holiday cheer in the community between Dec. 27 and 30. In addition, we are engaging with permitting consultants in order to get surface drilling permit applications in as soon as possible."

Xali Gold has a fourfold strategy to take Pico Machay into production as soon as possible while also exploring for additional resources, which includes:

1. Conduct detailed rock-chip sampling, bulk sampling and geological mapping, both on surface and within existing underground workings; this work will assist in achieving a better understanding of geological controls to higher grades as well as compare assay results with those from historical drilling, which was all by reverse circulation (RC); RC produces small chips of rock, which are well known to allow fine gold (present at Pico Machay) to wash away;
2. Concurrently complete an environmental technical report to support a surface drilling permit under a ficha tecnica ambiental (FTA) permit estimated to take two to three months to acquire;
3. Launch a new preliminary economic assessment (PEA) and detailed environmental studies for additional surface drilling and development for operations;
4. Simultaneously negotiate a 20-year community agreement encompassing all activities from surface exploration drilling under the FTA through to full production; Silver Mountain recently signed a 20-year agreement with the same community to reactivate and operate its Reliquias mine, approximately 12 kilometres from Pico Machay.

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

About Pico Machay

Pico Machay lies within the northern extent of the southern Peru epithermal gold-silver belt and in the eastern part of Western Cordillera Andes within a well-established mining area/district. Xali Gold looks forward to advancing discussions with the Santa Ana community and advancing Pico Machay under a mutually beneficial framework.

Pico Machay was discovered in 1997 and explored by several juniors, including Aquiline Resources, through 2009. Aquiline completed various engineering studies, including resource estimations and metallurgical test work. These studies targeted an open-pit heap-leach operation, which was expected to be low cost and with a low strip ratio. Given that Aquiline's engineering work, prior to that company's acquisition by Pan American Silver Corp., was based on a long-term gold price of $700 per ounce and several exploration targets remain untested, Xali Gold considers the upside potential to be very strong.

Pico Machay has a historical measured and indicated resource of 264,600 ounces of gold (10.6 million tonnes grading 0.78 gram per tonne gold) and an additional historical inferred resource of 446,000 ounces of gold (23.9 million tonnes grading 0.58 gram per tonne 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.

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 CIM (Canadian Institute of Mining, Metallurgy and Petroleum) 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 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 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.