07:51 AM EST, 02/28/2025 (MT Newswires) -- Xali Gold ( CGDXF ) said Friday that it signed a binding letter of intent to buy 90% of the Sarape silver-gold project in Mexico from Advanced Lithium.

Xali Gold ( CGDXF ) will issue 1 million shares on signing of a definitive agreement and pay $450,000 in stages upon closing financings to fund drilling programs. As part of the deal, Xali will gain an initial 51% stake after completing 10,000 meters of drilling and issuing 26.6 million shares. The stake will increase to 70% once an additional 5,000 meters has been drilled and 21 million shares paid. The stake will then be boosted to 90% after the company completes an additional 5,000 meters of drilling and pays another 91.4 million shares.

"We are excited about the acquisition of the Sarape project, which has potential to be very similar to SilverCrest's Las Chispas deposit and other robust deposits in Mexico and offers asymmetric upside potential for the discovery of silver and gold mineralization at depth," Xali CEO Joanne Freeze said.

Xali's share price closed 12.5% higher on Thursday at $0.045 on the TSXV.