Interview with Joanne Freeze, President & CEO of Xali Gold Corp.
Recording date: 11th September 2024
Xali Gold Corp presents an intriguing investment opportunity in the precious metals sector, combining potential near-term revenue generation with significant exploration upside across its portfolio in Mexico and Peru. The company's strategy focuses on leveraging historic mining areas to fund new discoveries while minimizing dilution for shareholders.
At the heart of Xali Gold's Mexican assets is the El Oro project, a historic mining district that has produced approximately 8 million ounces of gold equivalent. The company believes there is potential for another substantial ore body at depth, possibly containing an additional 8 million ounces of gold equivalent. This exploration thesis is based on the understanding that low sulfidation systems in Mexico often have multiple mineralization events, contrary to previous assumptions about the deposit's limits.
Xali Gold has secured two key agreements at El Oro that could provide near-term revenue. The first is a joint venture for processing tailings containing an estimated 120,000 ounces of gold and 3 million ounces of silver, potentially generating a 3% Net Smelter Return (NSR) royalty within 6-12 months. The second is an underground mining agreement targeting remnant resources, with a potential exploration target of 750,000 ounces of gold and 8 million ounces of silver, also providing a 3% NSR. These agreements not only offer potential cash flow but also provide valuable underground access for more targeted and cost-effective exploration drilling.
These agreements not only offer potential cash flow but also provide valuable underground access for more targeted and cost-effective exploration drilling. This strategic advantage could significantly enhance Xali Gold's ability to explore and potentially expand the known resource at El Oro, particularly at depth.
Expanding its portfolio, Xali Gold has acquired a new high sulfidation property in Peru called Majo. This project exhibits similarities to other significant high sulfidation deposits in the country, such as Yanacocha and Pierina. The company plans to commence immediate exploration activities, including trenching and pitting, to better understand the near-surface mineralization and define drilling targets.
Xali Gold's management team, led by CEO Joanne Freeze, brings significant experience in both Mexico and Peru. Freeze's background includes work on major discoveries in Peru, adding credibility to the company's exploration strategy in both countries.
The company's financing strategy focuses on minimizing dilution while maintaining exploration momentum. By structuring its Mexican assets to potentially generate near-term revenue through NSR agreements, Xali Gold aims to fund ongoing exploration activities. For its Peruvian operations, the company is considering a small equity raise and exploring the possibility of selling portions of its Mexican NSRs to royalty companies.
While Xali Gold offers several promising opportunities, investors should be aware of the risks associated with junior mining companies, including exploration risk, permitting and regulatory risks, financing risk, and commodity price risk.
In conclusion, Xali Gold Corp offers investors exposure to a mix of potentially near-term revenue-generating assets and exploration upside in two prolific mining jurisdictions. The company's strategy of leveraging historic mining areas to fund new discoveries, combined with management's expertise in both Mexico and Peru, positions Xali Gold as an interesting prospect in the junior mining sector. Investors should closely monitor developments in both Mexico and Peru, as success in either jurisdiction could significantly impact the company's valuation.
View Xali Gold's company profile: https://www.cruxinvestor.com/companies/xali-gold
Sign up for Crux Investor: https://cruxinvestor.com
What is Company Interviews?
An insight into junior mining and opportunities to invest.
Company Interviews, a Crux Investor show, exists to cut through the jargon, bias and bluster.
Matthew Gordon, and guest host Merlin Marr-Johnson hone in on the important factors that indicate a company's strong footing for growth and success.