Ms. Joanne Freeze reports

XALI GOLD COMPLETES FTA APPLICATION FOR DRILLING AND OUTLINES DEVELOPMENT TEAM FOR PICO MACHAY

Xali Gold Corp. has completed its Ficha Tecnica Ambiental (FTA) application for its resource confirmation and exploration drilling program at the Pico Machay gold project in Huancavelica, Peru.

The FTA application is expected to be submitted to Peru's Ministry of Energy and Mines (MINEM) on Oct. 21 or Oct. 22, as soon as the company receives documentation from MINEM regarding the attendance of the successful informative workshop held on Oct. 7, 2026, with members of the Comunidad Campesina de Salcca Santa Ana and representatives of MINEM.

"Submitting the FTA will bring us another step closer to the drilling planned to support an updated mineral resource estimate and subsequent preliminary economic assessment (PEA) at Pico Machay," said Joanne Freeze, president and chief executive officer of Xali Gold. "The program is planned to verify historical drilling results and improve our understanding of the controls to gold mineralization, providing a stronger foundation for the resource update. The PEA will evaluate potential development options and project economics, helping us define the next steps for advancing Pico Machay."

Xali Gold is planning an initial program of approximately 3,000 metres of diamond drilling, including approximately 2,000 metres to twin previous reverse circulation holes within the historical resource area. The FTA permit will allow up to 20,000 metres from 20 platforms, which will include further resource definition drilling as well as extensive exploration drilling.

Experienced team supporting Pico Machay's development

Xali Gold has assembled an experienced multidisciplinary team to advance Pico Machay through resource estimation and economic assessment, while preparing for potential future development. Combining expertise in geology, mine engineering, metallurgy, environmental management, permitting and project finance, with extensive experience in Peru, the team provides a strong foundation for evaluating the project's development potential and planning the technical, permitting ,and financial steps required to advance it.

The company's previously announced technical and project finance team includes:

• Ing. Wilder Frank Garcia Haro -- exploration manager: Xali Gold's full-time exploration manager, Ing, Mr. Garcia brings more than 30 years of international exploration and mine development experience, including senior roles with Rio Alto, Tahoe Resources, Newmont, Barrick Gold, Gold Fields and Antamina. His experience at Peru's La Arena and Shahuindo gold operations includes leading exploration programs that expanded resources and supported mine planning, bringing directly relevant expertise to the advancement of Pico Machay.
• David Thomas, PGeo -- mineral resource estimation: Principal geologist with DKT Geosolutions, Mr. Thomas brings more than 30 years of geological experience, including resource estimation and evaluation of high-sulphidation epithermal gold deposits. His extensive South American experience includes mineral resource estimation at Canariaco in Peru and resource estimate review at Gramalote in Colombia. He prepared the company's December, 2025, technical report on Pico Machay and is part of the team advancing the updated mineral resource estimate.
• Gordon Zurowski, PEng -- mine engineering and economic evaluation: Principal mine engineer with AGP Mining Consultants, Mr. Zurowski has more than 30 years of experience in mine operations and consulting, specializing in open-pit planning and economic evaluation. His Peruvian project experience includes Cuajone, Canariaco Norte, Cerro Lindo, Magistral and Marcona.
• Adam Johnston, FAusIMM, CP (Met) -- metallurgy and processing: Chief metallurgist with Transmin Metallurgical Consultants, Mr. Johnston has more than 30 years of international experience spanning metallurgical testing, process design, commissioning and operations. His experience includes Peruvian heap-leach and high-sulphidation gold projects, including Corihuarmi, Tres Cruces and Pucamarca.
• Aran Gough, RP Bio -- environmental management and permitting: The company's senior adviser -- environmental, social and governance, Mr. Gough brings 29 years of international experience. His work in Peru includes guiding Zafranal through environmental assessment and regulatory approval, and overseeing permitting and environmental programs for Toromocho through construction and into operations.
• Brent Cochrane, MA, ICDD -- project finance: Mr. Cochrane brings more than 40 years of international mining finance experience, including serving as vice-president, finance and administration, of Compania Minera Antamina S.A. His financing experience in Peru includes both Antamina and Mina Justa.
• Susan Mitchell -- senior financial adviser: Ms. Mitchell brings more than 40 years of experience in mining finance and capital markets, with senior roles at CIBC, Cyprus AMAX Minerals and WestLB. She has extensive expertise in capital sourcing, transaction structuring, mergers and acquisitions, and financial risk management. Susan will support the company's financing strategy and evaluation of potential capital sources as Pico Machay advances through resource estimation, subsequent economic assessment and consideration of future development.

About Pico Machay

Located within the Southern Peru epithermal gold-silver belt, Pico Machay sits in a historically productive mining district in the Western Cordillera of the Andes. The project benefits from existing infrastructure and a mining-friendly community eager to partner on sustainable development.

Xali Gold remains confident in the significant upside potential at Pico Machay, which hosts a historical resource and several untested exploration targets on the project. Various historical engineering studies at Pico Machay were completed through 2009 and evaluated the potential for a low-cost, low strip-ratio, open-pit heap-leach operation. Given that those studies were based on a long-term gold price of $700/ounce and several exploration targets remain untested, Xali Gold considers the upside potential to be very strong.

Grant of incentive stock options

The company also announces that on Oct. 17, 2026, it has granted 1.6 million incentive stock options to eligible employees, consultants and directors of the company, in accordance with the company's stock option plan. The options are exercisable at 20 cents per share for a period of five years from the date of grant, with 20 per cent vesting immediately and an additional 20 per cent vesting each quarter thereafter until fully vested. The options are subject to the policies of the TSX Venture Exchange.

About Xali Gold Corp.

Xali Gold is a gold and silver exploration company focused on advancing opportunities in the Americas. The company is focused on the exploration and development of Pico Machay, an advanced exploration-stage gold project in Peru with a near-term production goal.

The company's approach to community engagement and responsible development is guided by strong governance principles and Board oversight that support long-term stakeholder relationships.

Joanne C. Freeze, PGeo, is a qualified person as defined by National Instrument 43-101 and has reviewed and approved the contents of this release.

We seek Safe Harbor.