XALI GOLD RATIFIES AGREEMENT & HIRING LOCAL Xali is moving forward and it is great to hear they will be employing people living in the ElOro district!
Xali Gold Ratifies Agreement with El Oro Municipality for Reprocessing Historic Tailings
2022-03-31 07:00 ET - News Release
VANCOUVER, British Columbia, March 31, 2022 (GLOBE NEWSWIRE) -- Xali Gold Corp. (TSXV:XGC) ("Xali Gold" and/or the "Company") is pleased to announce that its Mexican subsidiary, Minera CCM El Oro Jales ("CCM El Oro") and the Municipality of El Oro have agreed to renew both the Tailings Agreement (on the Mexico Mine Tailings Project in El Oro, Mexico) and the Tourism Agreement (collectively called the "Agreements"). The terms of the Agreements have no substantial changes but do include the obligation to employ persons from El Oro on a preferential basis.
Renewing the Tailings Agreement is the final item required for Sun River Gold Corp ("Sun River"), who have the option to acquire 100% of the Tailings Project from CCM El Oro, to receive permits to operate the Tailings Reprocessing Facility at El Oro, Mexico. Further to Sun River advising the Company that it has arranged financing of approximately US$6.5M (see News Release dated October 14, 2021), they also expect to have the Facility operational in Q2 2022. Sun River has also advised that most of the equipment required for the reprocessing operation has been procured.
The Tailings Agreement, called the 'Ratificacion del Convenio de Usufructo del Terreno Denominado Los Jales Tiro Mexico' provides Xali Gold with the right to recover all available gold and silver from the tailings deposit and pay to the Municipality of El Oro an 8% Net Profits Interest ("NPI"). Xali Gold also retains the first US$1.5M from the 8% NPI payable to the Municipality. Sun River must make all NPI payments to the Municipality.
The original Tailings Agreement was signed in 2013 and renewed and revised in 2017 and again in 2019. The Tailings Agreement signed in 2019, is to be ratified every three years, when the Municipality elects a new President and Council Members. There was no change to any previous terms in the Tailings Agreement.
The Tailings Agreement is directly related to a Tourism Agreement, which allows the Municipality of El Oro to operate tourism activities in part of the San Juan tunnel and the Providencia Shaft which are historic workings controlled by CCM El Oro as part of the El Oro mineral property. The State of Mexico has contributed significant financing of this tourism project which is part of their larger initiative to promote tourism and mining together throughout Mexico.
The tailings are located several kilometres apart from both the San Juan tunnel and Providencia shaft and the tourism activities in these facilities would not impact the development of the tailings.
Sun River has the option to acquire 100% of the Tailings Project from CCM El Oro by making staged payments totalling US$500,000 (paid), bring the tailings into commercial production by October 31, 2021 (extended to April 31, 2022 as stated in Company News Release 109 dated January 6, 2022), and grant to the Company a 5% NPI, Life of Mine royalty (the "Candente Royalty") as well as the Municipality's 8% NPI on production from the properties.
Sun River is a private Arizona based corporation managed by an experienced team of mining professionals with a combined 80 years of mining experience in Mexico, including specific experience in the reprocessing of old gold and silver tailings.
The Tailings Project in El Oro contain an Inferred Resource* of 1,267,400 Tonnes grading 2.94 Au g/t, 75.12 Ag g/t containing 119,900 ounces of gold and 3,061,200 ounces of silver.