Xali Gold Corp. provided an update on the Company?s activities in Mexico and Peru. In Mexico, the focus is partnerships with third parties to deliver near-term cash flows and in Peru the focus is returning to exploration.

Currently, the Company has excellent progress on four fronts. El Oro Tailings Project Mexico Recent test work on the Mexican Mine Tailings Reprocessing Project at El Oro in Mexico, indicates excellent potential for 75% recovery of the gold and silver using a new process being introduced by Kappes, Cassiday and Associates. KCA?s test work was recently conducted on two near-surface bulk samples collected by backhoe and sent to the KCA laboratory in Reno, Nevada.

KCA reported an average of 72% recovery on gold and 80% recovery of silver from the tailings using a proprietary process. This process would allow the gold and silver to be produced in the form of Dore, which enhances the value of the royalty stream agreed with Xali Gold. Overall recoveries will need further testing to establish a better estimate for overall recoveries of gold and silver, but KCA is very optimistic about the process.

KCA?s plans are to remove the tailings from their present location and process them at a distant site which would not require any further permitting and hence, the Company is optimistic about a shorter timeline to production than previously thought possible. SDA Plant Mexico: Grupo Minero WIYA (?WIYA?), who have signed a Modification to the Rent to Purchase Agreement on the San Dieguito de Arriba (?SDA?) Plant in Nayarit, Western Mexico, are conducting modifications on the SDA Plant in order to produce a single bulk concentrate and have commenced shipping mineralized material from their mine to the SDA Plant. Approximately 550 tons of mineralized rock has been received at the SDA Plant in preparation for the restart of the mill, once 1500 tons has been delivered.   El Oro Gold Hard Rock Project: Xali Gold is in discussions with a local experienced mining group who has proposed an agreement whereby they would open up some of the historic workings to extract and process previously untreated mineralized backfill from the underground workings of the historic San Rafael mine at El Oro, Mexico.

Profits from the recovery of gold and silver bearing materials would be shared and in addition, the underground work would give Xali Gold underground access for drilling the previously developed targets for new mineralized zones. Previous drilling from surface has proven that the gold and silver mineralization continues at depth underneath historic workings from which 5 million (?M?) ounces (?oz?) gold equivalent (4M oz gold and 44 M oz silver) was produced. Drilling from underground would be much less expensive than drilling from surface due to the occurrence of up to 300 metes of volcanic rocks above the gold and silver bearing veins.

Peru: Xali Gold is in discussions with several other companies to acquire additional gold and silver exploration projects in Peru. The exploration projects are either high or low sulphidation systems, where Xali Gold?s technical team has extensive experience.