Pico Machay is an advanced-stage, high-sulphidation epithermal gold project located within the Southern Peru Epithermal Gold-Silver Belt, a well-established mining region in central Peru. The 4,700-hectare Project hosts a Historical Measured and Indicated Resource of 264,600 ounces of gold contained in 10.6 million tonnes grading 0.78 grams per tonne (“g/t”) gold, plus an additional Historical Inferred Resource of 446,000 ounces of gold contained in 23.9 million tonnes grading 0.58 g/t gold. The historical resource was defined by 154 reverse circulation drill holes concentrated within a relatively small central portion of the Project. (Refer to Historical Resource section for more details.)

Previous operators completed extensive drilling, metallurgical testing and engineering studies evaluating Pico Machay as a potentially low-strip-ratio, open-pit heap-leach operation. Much of this work was based on a long-term gold price of US$700 per ounce. The combination of a substantially stronger gold-price environment, mineralization extending beyond the historical resource area and numerous exploration targets across the property provides significant potential to expand and enhance the Project.

Xali Gold’s 2026 surface and underground sampling program has confirmed broad zones of gold mineralization within the historical resource area while also identifying mineralization across a much larger footprint. Results include 2.92 g/t gold over 31.5 metres from Surface Channel 1, including 13.76 g/t gold over 4.5 metres. Gold mineralization and alteration characteristic of a high-sulphidation epithermal system have also been identified in underground workings extending across an area approximately 1.35 kilometres by 0.83 kilometres. In addition, 67 of 119 surface samples returned more than 0.50 g/t gold, helping Xali Gold define and refine multiple exploration targets outside the historical resource area.

Xali Gold is integrating the 2026 sampling results with approximately 20,000 metres of historical drilling to refine the geological model and plan the next phase of work. The Company intends to complete approximately 2,000 metres of confirmatory drilling (twinning approximately 10% of the historical resource), before completing an updated mineral resource estimate and subsequent Preliminary Economic Assessment. Environmental baseline studies and permitting work are also underway to support future drilling and project development.

• Gold mineralization confirmed within and beyond the historical resource area
• 2.92 g/t gold over 31.5 metres from Surface Channel 1, including 13.76 g/t gold over 4.5 metres
• High-sulphidation alteration and mineralization identified in underground workings across an area measuring approximately 1.35 kilometres by 0.83 kilometres
• 67 of 119 surface samples returned more than 0.50 g/t gold
• Ten exploration targets currently defined outside the area covered by the historical resource

Xali Gold is advancing a staged program designed to confirm the historical data, update the mineral resource and evaluate Pico Machay’s current development potential.

• Complete geological modelling and drill targeting
• Advance environmental studies and permitting
• Complete approximately 2,000 metres of confirmatory drilling, representing approximately 10% of the historical resource drilling
• Prepare an updated mineral resource estimate
• Advance a Preliminary Economic Assessment
• Evaluate additional exploration targets for future resource growth

Established Peruvian Mining Region

Pico Machay is located in the District of Santa Ana, Province of Castrovirreyna, Department of Huancavelica, within the northern extent of the Southern Peru Epithermal Gold-Silver Belt. The Project lies in an established mining region with a long history of exploration and production. The Corihuarmi Gold Mine is located approximately 63 kilometres north of Pico Machay, while several additional mining operations and projects occur within approximately 45 kilometres of the property.

Existing Infrastructure Nearby

Pico Machay benefits from excellent access by paved and gravel roads and is located in a sparsely populated area. Water suitable for mining purposes is available approximately 1.5 kilometres from the Project, while a medium-voltage electrical line is located approximately 7.4 kilometres away.

In June 2026, the local community of Comunidad Campesina de Salcca Santa Ana confirmed their support for the continued advancement of Pico Machay and has authorized Xali Gold to undertake the drilling, exploration and environmental studies necessary for the Project’s development. Xali Gold is committed to maintaining a transparent, respectful and mutually beneficial relationship with the Community, including supporting community-led initiatives focused on health, education, basic infrastructure and economic development.

The terms of the Agreement with Pan American Silver Corp and Aquiline Resource Inc to acquire 100% of their collective interest in Minera Calipuy S.A.C., who owns all right, title and interest in the mining concessions that make up the Pico Machay Gold Project include the following cash payments (all dollar values are US dollars):

1. $0.5M on Closing the Transaction;
2. $1.5M on each of the 1st and 2nd Year Anniversaries;
3. $4.0M on the 3rd Year Anniversary;
4. $3.0M on the 4th Year Anniversary;
5. $4.5M on the earlier of 5th Year Anniversary or commencement of commercial production;
6. $2.5M on delineating more than 1.2M ounces of gold in an NI43-101 compliant Measured and Indicated Resource or a Proven and Probable Reserve.

Total cash payments are US$17.5M.

Closing of the transactions under the SPA are subject to customary closing conditions for transactions of this nature, as set out in the SPA, including TSX-V approval for Xali Gold. Pan American will retain certain security interests over Calipuy, subject to Xali Gold’s completion of the deferred payments under the SPA.