Xali Gold to Option Advanced Lithium’s Sarape Project in Sonora

Xali Gold entered into a binding Letter of Intent (LOI) to option Advanced Lithium’s Sarape silver-gold project in Sonora, Mexico. The company considers the Sarape project attractive due to its location in a proven high-grade silver and gold district, its extensive vein systems, and its potential for high-grade mineralization at depth, similar to nearby successful mines.

The Sarape project is located in the Rio Sonora Valley, a region known for its mining activity and proximity to prominent mines such as First Majestic Silver’s Santa Elena mine, Premier Gold’s Mercedes mine, and Coeur Mining’s Las Chispas mine. 

The project spans 57km² and is believed to contain high-grade silver and gold mineralization, with significant vein systems observed near the surface. Xali Gold aims to explore deeper areas of the system where higher-grade gold and silver deposits may be located. “We are excited about the acquisition of the Sarape Project, which has potential to be very similar to the Las Chispas deposit and other robust deposits in Mexico and offers asymmetric upside potential for the discovery of silver and gold mineralization at depth,” says Joanne Freeze, CEO, Xali Gold. She also explains that the company plans to begin an accelerated exploration program at Sarape, complementing ongoing underground work at the El Oro Project.

Allan Laboucan, CEO, Advanced Lithium, says that the El Oro and Sarape projects complement each other, as both are low-sulfidation epithermal vein systems. He highlights the substantial mineralization at Sarape, with veins extending up to 5,000m. Laboucan says he is confident that Xali Gold will be able to unlock the project’s value once drilling permits are obtained. “Next door on the Sarape property, there are two key veins with widespread gold and silver mineralization that have only been tested with 6 drill holes into the veins.  If Xali Gold completes the 90% earn-in at Sarape, our shareholders will own approximately 50% of El Oro through shares in Xali Gold, as well as a direct 10% interest at Sarape,” he says.

The LOI includes terms that grant Xali Gold the right to earn a 90% interest in the Sarape project. To achieve this, Xali Gold will issue 1 million shares to Advanced Lithium upon signing a Definitive Agreement and make a total of US$312,360 in cash payments in stages to fund drilling at the project. The earn-in process will begin with a 51% interest once Xali Gold has completed 10,000m of drilling, at which point it will issue 26.6 million shares. 

After that, Xali Gold will earn a 70% interest by completing an additional 5,000m of drilling and issuing an additional 21 million shares. The final 90% interest will be earned after completing a cumulative total of 20,000m of drilling, issuing 91.4 million more shares, and fully paying the US$312,360. This process is expected to take 12 to 18 months, pending regulatory approval.

Recent Xali Gold Developments 

Xali Gold has other parallel activities like the underground work restart at El Oro. On Jan. 29, 2025, the company announced it agreed with Remedioambiente to begin underground test work at El Oro. The work will focus on determining effective recovery methods for gold and silver and establishing the best underground access. Xali Gold will receive a 3% Net Smelter Return (NSR) on gold and silver recovered from the historic workings above the 2,400m level. The agreement establishes an initial term of 5 years, extendable for another 5 years if Remedioambiente invests a minimum of US$1 million annually. Xali Gold retains exclusive ownership of any mineral bodies discovered below the 2,400m level.