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:
- Issuing a total of 3.5 million (“M”) shares over 3 years
- Making payments of a total of CDN $100,000 over 3 years
- 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