Alio Gold Inc (TSX:ALO) (NYSE MKT:ALO) (“Alio
Gold” or the “Company”), is pleased to provide an exploration
update from its 100% owned Ana Paula project in Guerrero, Mexico,
including the completion of the 2,000 metre drill program to twin
previous drill holes within the pre-feasibility pit for
metallurgical test work samples. The Company has also initiated a
surface drill program to target the high-grade breccia below the
pre-feasibility pit that will commence in the first quarter of
2018.
Highlights
- Completed 2,000m, drill program for metallurgical sampling,
confirming high-grade mineralization and lithology in the Mineral
Resource Estimate (‘MRE’) dated May 16, 2017 as per the NI 43-101
Preliminary Feasibility Study
- Drill hole 17-09 intersected 24.9m (from 38.5m to 63.4m) of 6.1
g/t gold which include an interval of 4.4m (from 53.5 to 57.9) of
27.24 g/t gold.
- Commenced construction of the portal site for the underground
decline
- Underground mining equipment mobilized and enroute to site
- Initiated 4,000m surface drilling program to enhance existing
information on deeper high-grade breccia extension before
Definitive Feasibility Study (“DFS”) completion in Q2 2018 and to
test a priority target north of the current pre-feasibility
pit
“The second set of results of the drill program
have continued to confirm previous drilling providing confidence in
the robustness of the block model,” said Greg McCunn, Chief
Executive Officer. “The drill program was primarily designed to
supply a variety of rock types and grade to allow the creation of
composite samples intended for the metallurgical test program. The
samples from the drill core are representative of the material
within the proposed pre-feasibility pit and will undergo
metallurgical testing with results to be incorporated into the DFS.
The DFS is currently underway and on track to be completed in the
second quarter of 2018.”
The Company initiated an extensive exploration
program in the third quarter of 2017 at Ana Paula which
includes:
Twin hole drilling program for
metallurgical samples
This program which is now completed, was
intended to provide sufficient material within the proposed open
pit for metallurgical testing. Drill results for hole APM-17-04 and
APM-17-05 were previously announced on October 24th, 2017.
The final results for holes APM-17-06 through APM-17-10 are shown
in the table below. Final assays are pending for holes APM-17-11
through APM-17-17.
Hole NB |
Material |
Azimuth |
Dip |
Depth From |
Depth To |
Au (gpt) |
Interval length (m) |
Estimated True Width |
APM-17-06 |
SED |
0 |
-90 |
6.5 |
19.1 |
2.15 |
12.6 |
6.3 |
APM-17-07 |
No significant assays |
APM-17-08 |
MBX |
90 |
-45 |
8.6 |
14.5 |
1.10 |
5.9 |
N/A |
APM-17-08 |
SED |
|
|
33.9 |
38.0 |
0.87 |
4.1 |
3.9 |
APM-17-08 |
INTRS |
|
|
197.6 |
200.7 |
2.11 |
3.1 |
2.9 |
APM-17-09 |
HALO |
0 |
-90 |
38.5 |
63.4 |
6.12 |
24.9 |
N/A |
including |
|
53.5 |
57.9 |
27.24 |
4.4 |
N/A |
APM-17-09 |
HALO |
|
|
75.2 |
88.3 |
4.55 |
13.1 |
N/A |
APM-17-10 |
HALO |
90 |
-65 |
28.6 |
41.8 |
1.50 |
13.2 |
N/A |
Note on true width calculation:For the complex breccia and
surrounding halo mineralization and in the monolithic breccia
(MBX), the calculation of a true width is inappropriate since these
units are not tabular. For the mineralization outside of these
units (i.e. sediments (SED) and intrusive (INTRS)) the true width
can be estimated since the mineralization is likely following the
stratigraphy.
Deeper Exploration Drilling
In September, the Company initiated the
construction of an underground decline to be driven 1,200 metres
from a portal site located in the adjacent valley from the proposed
pit and approximately 400 meters from the proposed mill site. The
decline will provide access for a drill program that is targeted to
confirm the continuity and shape of the high-grade gold
mineralization below the pre-feasibility pit that is hosted in the
complex breccia. It will also provide access to explore the gold
mineralization indications at depth hosted in hornfels skarn,
typical of the Guerrero Gold Belt and allow a bulk sample to be
collected.
A contract has been awarded to construct the
decline and contractors have mobilized to site and begun surface
preparations, including clearing and preparation of the portal
site, the explosives magazine site, establishment of a site camp
and upgrades to the existing site access road. Mobile
equipment required for underground mining is enroute to the site
and expected to arrive in January. The construction of the
underground decline is expected to be completed in mid-2018.
While the decline is in progress, the Company
has initiated an exploration program to drill six further holes
from surface, targeting the high-grade breccia below the
pre-feasibility pit. The program will commence early in the
first quarter of 2018 and is expected to be completed by the second
quarter of 2018.
“Adding further data to our knowledge of the
extension of the high-grade breccia in the first half of 2018 will
allow us to evaluate whether a portion of the extension can be
included in the DFS,” commented Greg McCunn, Chief Executive
Officer. “After some further design work, a further six holes
were identified that could be drilled cost effectively from surface
while we are constructing the decline.”
North Target Surface
Exploration
Following the completion of the metallurgical
sample drilling the Company is on track to commence the surface
drilling on the high priority target that is 100 metres north of
the proposed open pit. Structural mapping of the target area is
underway and expected to be completed in December after which an
airborne magnetic survey will be flown over the target area in
January, with drilling expected to commence in the second quarter
of 2018.
Regional Exploration Work
Regional exploration work is also advancing on
the 56,000 hectare land package. Structural work being conducted on
the North Target will be extended to other areas of the concession
and airborne magnetic geophysics will also be conducted over a
broader target area in early 2018. The regional program is
targeting further breccia or skarn targets that can be subsequently
drilled.
About Alio Gold
Alio Gold is a growth oriented gold mining
company, focused on exploration, development and production in
Mexico. Its principal assets include its 100%-owned and
operating San Francisco Mine in Sonora, Mexico and its 100%-owned
development stage Ana Paula Project in Guerrero, Mexico. Located
within the highly prospective Guerrero Gold Belt on 56,000 hectares
of underexplored land the Ana Paula Project is a high-grade, high
margin project currently in the definitive feasibility stage. An
underground decline to provide access for an exploration drill
program has been initiated targeting the continuation of the
high-grade gold mineralization below the proposed pit which has the
potential to significantly enhance the robust economics of the
project. The Company also has a portfolio of other exploration
properties, all of which are located in Mexico.
Investor Contact
Lynette GouldVice President, Investor
Relations604-638-8976lynette.gould@aliogold.com
Qualified Person
The scientific and technical content of this
news release has been reviewed and approved by Pierre Desautels, P.
Geo, a ‘Qualified Person’ as defined by National Instrument 43-101
– Standards of Disclosure for Mineral Projects who is an
independent consultant to the company.
Quality Assurance/Quality
Control
Drill holes reported in this press release were
drilled using PQ sized diamond drill bits. Company personal are
located at the at the drill site. Contractors and employees of Alio
Gold conducted all logging and sampling. The core was logged,
marked up for sampling using standard lengths of approximately 1.5
meters. Samples are then collected by sawing a ¼ of the PQ core
using a diamond saw with the remaining ¾ portion of the PQ core
retained for metallurgical test work. The samples were catalogued
and placed into sealed bags and securely stored at the site until
it was shipped to sample preparation laboratory owned by ALS Chemex
in Guadalajra, Mexico. The core was dried and crushed and
pulverized to 85% passing 75 microns. The pulps were then shipped
for assay to the ALS Chemex located in Vancouver, Canada. At that
location, the samples were analysed for gold using fire assay with
an atomic absorption finish (FA-AA) on a 50 gram charge. Samples
returning over 10 grams per tonnes are re-assayed using a fire
assay with a gravimetric finish. Samples were also analyzed for a
suite of 35 elements using Aqua Regia Inductively coupled plasma
atomic emission spectroscopy (ICP-AES). Over limits for silver,
arsenic, zinc were re-assayed using a ore grade ICP-AES method.
Quality control procedures included the systematic insertion of
blanks, duplicates and sample standards into the sample stream. In
addition, The Labs inserted their own quality control samples.
Cautionary Note to United States
InvestorsThe Company is subject to the reporting
requirements of the applicable Canadian securities laws, and as a
result it reports its mineral reserves and resources according to
Canadian standards. Canadian reporting requirements for disclosure
of mineral properties are governed by NI 43-101. The definitions of
NI 43-101 are adopted from those given by the Canadian Institute of
Mining, Metallurgy and Petroleum. U.S. reporting requirements are
governed by Industry Guide 7 (“Guide 7”) of the Securities and
Exchange Commission (the “Commission”). These reporting standards
have similar goals in terms of conveying an appropriate level of
confidence in the disclosures being reported, but embody different
approaches and definitions.
The Company reports “resources” in accordance with NI 43-101.
While the terms “Mineral Resource,” “Measured Mineral Resource,”
“Indicated Mineral Resource” and “Inferred Mineral Resource” are
recognized and required by Canadian regulations, they are not
defined terms under standards of the Commission and generally, U.S.
companies are not permitted to report resources in documents filed
with the Commission. As such, certain information contained in this
news release describing mineralization and resources under Canadian
standards is not comparable to similar information published by
United States companies subject to the reporting and disclosure
requirements of the Commission. It cannot be assumed that all or
any part of Measured or Indicated Resources will ever be converted
into Mineral Reserves, an Inferred Mineral Resources has a lower
level of confidence than an Indicated Mineral Resources and it is
reasonably expected that the majority of Inferred Mineral Resources
could be upgraded to Indicated Mineral Resources with continued
exploration. Under Industry Guide 7, mineralization may not be
classified as a “reserve” unless the determination has been made
that the mineralization could be economically and legally produced
or extracted at the time the reserve determination is made. In
addition the quantity and grade of reported Inferred resources in
this estimation are conceptual in nature, and are estimated based
on limited geological evidence and sampling. Geological evidence is
sufficient to imply but not verify geological and grade or quality
continuity. For these reasons, an Inferred Mineral Resources has a
lower level of confidence than an Indicated Mineral Resources and
it is reasonably expected that the majority of Inferred Mineral
Resources could be upgraded to Indicated Mineral Resources with
continued exploration. Under Canadian rules, estimates of Inferred
Mineral Resources may not form the basis of a feasibility study. In
addition, the definitions of “Proven Mineral Reserves” and
“Probable Mineral Reserves” under CIM standards differ in certain
respects from the standards of the Commission.
For detailed technical information related to
the Company’s exploration, development, and operating assets,
please refer to the Company’s website at www.aliogold.com or the
most recent Annual Information Form available on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov.
Cautionary Note Regarding
Forward-Looking StatementsCertain statements and
information contained in this news release constitute
“forward-looking statements” within the meaning of applicable U.S.
securities laws and “forward-looking information” within the
meaning of applicable Canadian securities laws, which we refer to
collectively as “forward-looking statements”. Forward-looking
statements are statements and information regarding possible
events, conditions or results of operations that are based upon
assumptions about future economic conditions and courses of action.
All statements and information other than statements of historical
fact may be forward-looking statements. In some cases,
forward-looking statements can be identified by the use of words
such as “seek”, “expect”, “anticipate”, “budget”, “plan”,
“estimate”, “continue”, “forecast”, “intend”, “believe”, “predict”,
“potential”, “target”, “may”, “could”, “would”, “might”, “will” and
similar words or phrases (including negative variations) suggesting
future outcomes or statements regarding an outlook.
Forward-looking statements in news release
herein by reference include, but are not limited to statements and
information regarding: the Company's future mining activities,
including mining capacity, recovery, cash costs, production and
mine life; the Company's reserves and resources estimates; the
Company’s exploration and development plans, including anticipated
costs and timing thereof; the Company’s plans for growth through
exploration activities, acquisitions or otherwise; and expectations
regarding future maintenance and capital expenditures, working
capital requirements, the availability of financing and future
effective tax rates. Such forward-looking statements are based on a
number of material factors and assumptions, including, but not
limited to: that contracted parties provide goods or services in a
timely manner, that no unusual geological or technical problems
occur, that plant and equipment function as anticipated and that
there is no material adverse change in the price of gold, costs
associated with production or recovery. Forward-looking statements
involve known and unknown risks, uncertainties and other factors
which may cause actual results, performance or achievements, or
industry results, to differ materially from those anticipated in
such forward-looking statements. The Company believes the
expectations reflected in such forward-looking statements are
reasonable, but no assurance can be given that these expectations
will prove to be correct and you are cautioned not to place undue
reliance on forward-looking statements contained herein.
Some of the risks and other factors which could
cause actual results to differ materially from those expressed in
the forward- looking statements contained in this news release
herein by reference include, but are not limited to: risks and
uncertainties relating to the interpretation of drill results, the
geology, grade and continuity of mineral deposits and conclusions
of economic evaluations; results of initial feasibility,
pre-feasibility and feasibility studies, and the possibility that
future exploration, development or mining results will not be
consistent with the Company’s expectations; risks relating to
possible variations in reserves, resources, grade, planned mining
dilution and ore loss, or recovery rates and changes in project
parameters as plans continue to be refined; mining and development
risks, including risks related to accidents, equipment breakdowns,
labour disputes (including work stoppages and strikes) or other
unanticipated difficulties with or interruptions in exploration and
development; the potential for delays in exploration or development
activities or the completion of feasibility studies; risks related
to the inherent uncertainty of production and cost estimates and
the potential for unexpected costs and expenses; risks related to
commodity price and foreign exchange rate fluctuations; the
uncertainty of profitability based upon the cyclical nature of the
industry in which the Company operates; risks related to failure to
obtain adequate financing on a timely basis and on acceptable terms
or delays in obtaining governmental or local community approvals or
in the completion of development or construction activities; risks
related to environmental regulation and liability; political and
regulatory risks associated with mining and exploration; risks
related to the uncertain global economic environment; and other
factors contained in the section entitled “Risks and Uncertainties”
per above.
Although the Company has attempted to identify
important factors that could cause actual results or events to
differ materially from those described in the forward-looking
statements, you are cautioned that this list is not exhaustive and
there may be other factors that the Company has not identified.
Furthermore, the Company undertakes no obligation to update or
revise any forward-looking statements included in, or incorporated
by reference in, this news release if these beliefs, estimates and
opinions or other circumstances should change, except as otherwise
required by applicable law.
Neither the TSX nor its Regulation Services
Provider (as that term is defined in the policies of the TSX) nor
the New York Stock Exchange MKT accepts responsibility for the
adequacy or accuracy of this news release.
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