The letter of intent (LOI) pertains to five specific mining concessions. Credit: Dmitry Kalinovsky/Shutterstock.

Xali Gold has signed a legally binding LOI with Rio Verde Resources, granting exclusive rights to explore and extract minerals from the El Oro mining concessions in Mexico.

The initial five-year agreement, with a possible five-year extension, involves a 3% net smelter return (NSR) to Xali Gold and retains Xali Gold’s ownership of mineral bodies below the 2,400m level.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Rio Verde’s initial focus will be on an exploration target identified in 1993 by Luismin-Hillsborough.

The LOI pertains to five specific mining concessions, with Rio Verde responsible for maintaining them in good standing, including payment of fees and government royalties.

In addition to the NSR, Rio Verde will fund the payment of concession fees and collaborate with Xali Gold to negotiate a payment plan for mineral rights fees owed to the Mexican Tax Authority.

See Also:

Rio Verde also gains the right to appoint a board member and chair when holding more than 20% of Xali Gold’s shares, subject to current board approval.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Xali Gold president and CEO Joanne Freeze said: “There couldn’t be a better time, since we acquired the property in 2006 and gold prices were much lower than the current $2,400 per ounce, to be monetising the mineralisation left behind in the historic workings and to be exploring for new mineral bodies.

“This new partnership will allow us to keep all the exploration upside we have demonstrated by our previous drilling underneath the historic workings, while we work together with Rio Verde to test exploration concepts and get underground access for future drilling as well as pay back our debts on the mineral rights.”