Alio Gold Inc. (TSX:ALO) (NYSE AMERICAN:ALO)
(“Alio Gold” or the “Company”), is pleased to announce the board of
directors has formally approved an underground exploration decline
(“decline”) and exploration program at its high grade, high margin
Ana Paula Project located in Guerrero, Mexico. The Company also
received the authorization to start construction of the decline
from SEMARNAT (Mexico’s Secretary of Environment and Natural
Resources).
Highlights
- Initiating a $16 million underground decline and exploration
program
- Exploring the extension of the high-grade breccia
mineralization and skarn target
- Permitting of the decline approved by SEMARNAT
- Receiving detailed bid proposals from contract miners during
September 2017
- Mobilizing of the contractor expected to commence in October
2017
- Initiating an additional $1.8 million surface exploration
program targeting a zone north of the proposed pit
- Drilling underway to twin 11 holes (2,000 metres) for
metallurgical testing
Key Historical Drill
Highlights*
Drill Hole Number |
Mineral Drill Intersections |
From (m) |
To (m) |
Width (m) |
Au (g/t) |
Rock Type (Domain) |
AP-10-20 |
287.0 |
342.7 |
55.7 |
3.66 |
Breccia |
Includes |
289.0 |
308.7 |
19.7 |
6.46 |
Breccia |
AP-11-70 |
677.5 |
691.0 |
13.5 |
29.12 |
Breccia |
AP-13-162 |
249.4 |
281.5 |
32.1 |
3.21 |
Breccia |
AP-12-123 |
340.7 |
354.9 |
14.2 |
8.55 |
Skarn |
AP-12-86 |
520.4 |
542.5 |
22.0 |
5.67 |
Skarn |
AP-13-215 |
704.7 |
719.1 |
14.5 |
5.87 |
Skarn |
*Full drill results available in Tables 1, 2 and 3 at the end of
the news release
“Delineating further underground Mineral
Resources and providing access to mine the Resources will add
significant value to an already attractive project,” said Greg
McCunn, Chief Executive Officer. “While we are advancing the
project through the Definitive Feasibility Study towards a
construction decision in Q2 2018, we will undertake a systematic
drill program on the known continuation of the high grade breccia
system and evaluate the deeper skarn target that has been
identified by past drilling. We are also very excited about the
surface drill target North of the proposed pit. With a large land
package of approximately 56,000 hectares on the highly prospective
Guerrero Gold Belt this is the start of what we expect to be a
successful exploration program to enhance the already robust
economics of Ana Paula.”
Underground Decline and Exploration
Program
A 1,200 meter long decline will be driven from a
portal site located in the adjacent valley from the proposed pit
and approximately 400 meters from the proposed mill site. The
underground decline is expected to take nine months to reach the
mineralized area after which an underground diamond drill program
will commence.
Drill targets from the underground are
compelling as previous depth drilling has reported high grade gold
mineralization in a series of intrusive sills in the contact with
the sedimentary sequence. The drill program is expected to confirm
the continuity and shape of the high grade gold mineralization
below the proposed pit that is hosted in the complex breccia and it
will also explore the gold mineralization indications at depth
hosted in hornfels skarn, typical of the Guerrero Gold Belt. The
underground drilling program proposed includes 80 diamond drill
holes (20,000 metres) and will include geochemical sampling and
assaying.
Figure 1: Proposed decline and drill
holes below the proposed
pithttp://www.globenewswire.com/NewsRoom/AttachmentNg/5b33d08d-1518-4028-828a-21b574442b57
Figure 2: Cross section showing mineral
reserves and resources and proposed exploration
targetshttp://www.globenewswire.com/NewsRoom/AttachmentNg/6e039c4e-d4e7-44d3-bb27-ce3d16f13606
The pit proposed in the May 2017 Pre-Feasibility
Study (“PFS”) estimated Proven and Probable Mineral Reserves of
13.44 Mt grading 2.36 g/t (~1.02M oz gold) using a $1,200/oz gold
price. The mineralization in the Reserves consists of a
high-grade breccia core as well as a surrounding halo of lower
grade mineralization. Included in the Reserves is an estimated 2.3
Mt at 5.9 g/t (~436k oz gold) within the high-grade breccia core
with an approximate depth of 190 metres.
The high-grade breccia is known to continue for
approximately 300 metres below the bottom of the proposed pit based
on prior drilling programs. Due to the topography in the area,
mining a deeper pit is not economical under reasonable gold price
assumptions. The purpose of driving the decline into the breccia
system will be to provide access to the extension of the high-grade
mineralization for both exploration drilling and, if warranted,
future mining.
The potential to add value to the existing
project is significant as the project as currently proposed in the
May 2017 PFS is limited to mining rates of 5,000 tonnes per day
(“tpd”) from the open pit due to the geometry of the pit. However,
the PFS envisions installing a used processing plant that the
Company has purchased and is currently refurbishing which while in
operation at the El Sauzal mine had a processing capacity of 6,000
tpd. Further work is being undertaken on grindability testwork to
confirm mill capacity and if positive there could potentially be
latent capacity that could be capable of treating material from
underground mining commencing in the first year of operations.
Previous drilling from surface below the
proposed pit into the high-grade breccia system has yielded
positive results, including the previously announced drill results
that can be found in Table 1.
To confirm historical drilling results, a drill
program is underway that is twinning 11 holes (2,000 meters) for
metallurgical testing with initial results expected by the end of
October 2017.
In addition to targeting expansion of the
Mineral Resource in the high-grade breccia extension, the
underground drill program will explore a deeper Skarn target. Gold
mineralization in the Guerrero Gold Belt, including the
neighbouring Torex Mining deposits, have traditionally been
associated with skarn mineralization. Prior drilling at Ana Paula
from surface has identified a skarn target approximately 300 metres
below the proposed pit. Previously announced drill results can be
found in Table 2.
Surface and Regional Exploration
Program
Historical drilling at Ana Paula has identified
a target located approximately 100 metres north of the proposed
pit. A $1.8 million exploration program has been approved which is
primarily focused at this target, including surface mapping and a
high resolution helicopter airborne magnetic survey to delineate a
drill program expected to consist initially of 12 diamond drill
holes for a total of 4,000 meters drilled. It is expected that the
airborne magnetic survey will commence in the fourth quarter of
2017 with drilling expected in the first half of 2018. Prior drill
results in the North Area target can be found in Table 3.
Figure 3: Location of proposed drilling
on the North Area of the Ana Paula proposed
pithttp://www.globenewswire.com/NewsRoom/AttachmentNg/1c4cfd64-d02e-4a7f-af61-3f11e1e4a235
With a land position of approximately 56,000
hectares within the highly prospective Guerrero Gold Belt there is
significant potential to delineate mineral deposits outside of the
immediate Ana Paula project area. The Company holds a premier land
package in the area, adjacent to Torex Mine's flagship operations
and on trend with Leagold's Los Filos mine. Between the concession
for all three companies, over 3 million ounces1 of gold have been
produced with current Measured and Indicated Mineral Resources of
over 15 million ounces1.
1 As per company reports and presentations
Figure 4: Large Land Package in Close
Proximity to other Gold Mining
Operationshttp://www.globenewswire.com/NewsRoom/AttachmentNg/42907498-5cc2-4f99-b41a-d9d3d6c93fc3
The Company plans to delineate further targets
on its concessions over the coming year by consolidating all of the
known work to-date on the concessions and further advancing
structural and geological surface mapping combined with
interpretation of prior airborne survey results.
Drill Results
Table 1: Ana Paula Underground – High
Grade Breccia |
|
Drill Hole Number |
Mineral Drill Intersections |
From (m) |
To (m) |
Width (m) |
Au (g/t) |
AP-10-20 |
287.0 |
342.7 |
55.7 |
3.66 |
Includes |
289.0 |
308.7 |
19.7 |
6.46 |
AP-11-35 |
660.3 |
665.7 |
5.4 |
2.67 |
AP-11-64 |
481.8 |
521.4 |
39.6 |
1.62 |
AP-11-70 |
439.7 |
446.9 |
7.2 |
2.84 |
|
677.5 |
691.0 |
13.5 |
29.12 |
Includes |
683.2 |
689.5 |
6.3 |
60.61 |
AP-12-81 |
264.5 |
275.0 |
10.5 |
4.92 |
AP-12-86 |
372.4 |
382.0 |
9.6 |
2.06 |
|
395.0 |
403.7 |
8.7 |
2.04 |
AP-13-162 |
249.4 |
281.5 |
32.1 |
3.21 |
Includes |
270.9 |
276.1 |
5.2 |
5.24 |
|
423.5 |
432.9 |
9.3 |
3.16 |
|
456.6 |
462.1 |
5.5 |
3.40 |
|
479.4 |
485.2 |
5.8 |
11.14 |
|
493.5 |
496.2 |
2.7 |
7.69 |
AP-13-206 |
706.9 |
709.4 |
2.6 |
5.19 |
Table 2: Ana Paula Underground – Hornfel Skarn
("HFL-SK") |
Drill Hole Number |
Mineral Drill Intersections |
From (m) |
To (m) |
Width (m) |
Au (g/t) |
AP-10-20 |
448.0 |
451.9 |
3.9 |
1.97 |
|
487.0 |
493.5 |
6.5 |
2.21 |
Includes |
488.7 |
489.7 |
1.0 |
6.27 |
|
510.0 |
515.0 |
5.0 |
4.14 |
AP-11-29 |
349.8 |
359.6 |
9.9 |
3.08 |
Includes |
355.4 |
357.7 |
2.3 |
8.82 |
AP-11-34 |
431.9 |
439.0 |
7.1 |
3.70 |
Includes |
435.2 |
439.0 |
3.8 |
5.97 |
AP-11-35 |
549.7 |
553.6 |
3.9 |
7.83 |
AP-11-48 |
206.9 |
213.0 |
6.1 |
4.54 |
|
216.3 |
221.2 |
4.9 |
4.28 |
|
247.0 |
259.0 |
12.0 |
3.52 |
|
525.2 |
527.8 |
2.7 |
3.12 |
AP-11-49 |
363.9 |
378.5 |
14.6 |
5.80 |
Includes |
368.9 |
371.7 |
2.8 |
14.47 |
and |
|
|
|
|
Includes |
375.4 |
377.5 |
2.1 |
14.16 |
AP-11-52 |
259.0 |
263.6 |
4.6 |
2.77 |
Includes |
263.1 |
263.6 |
0.5 |
8.54 |
|
269.0 |
282.0 |
13.0 |
2.21 |
Includes |
275.0 |
278.5 |
3.5 |
3.97 |
|
295.0 |
298.0 |
3.0 |
5.42 |
|
310.3 |
312.9 |
2.6 |
5.10 |
AP-11-64 |
563.5 |
568.0 |
4.5 |
4.61 |
AP-11-68 |
441.1 |
454.1 |
13.0 |
5.27 |
|
479.5 |
492.5 |
13.0 |
3.30 |
|
550.9 |
552.6 |
1.7 |
3.89 |
AP-11-70 |
366.3 |
368.6 |
2.3 |
3.67 |
AP-11-76 |
576.0 |
598.0 |
22.0 |
3.20 |
Includes |
579.3 |
579.9 |
0.5 |
43.38 |
Includes |
588.9 |
591.0 |
2.2 |
4.41 |
AP-12-101 |
219.9 |
226.3 |
6.4 |
14.48 |
Includes |
223.0 |
224.8 |
1.8 |
42.65 |
AP-12-102 |
168.1 |
174.0 |
5.9 |
4.27 |
AP-12-111 |
210.5 |
215.6 |
5.1 |
4.16 |
|
256.0 |
267.5 |
11.5 |
2.59 |
AP-12-123 |
340.7 |
354.9 |
14.2 |
8.55 |
AP-12-81 |
314.9 |
316.7 |
1.8 |
5.67 |
AP-12-86 |
325.6 |
330.0 |
4.4 |
9.18 |
|
520.4 |
542.5 |
22.0 |
5.67 |
Includes |
527.0 |
529.7 |
2.8 |
10.27 |
|
569.3 |
572.5 |
3.2 |
5.00 |
Includes |
569.3 |
570.8 |
1.5 |
8.20 |
AP-12-90 |
387.0 |
391.0 |
4.0 |
12.81 |
|
593.4 |
599.3 |
5.9 |
7.62 |
|
635.0 |
646.0 |
11.0 |
4.05 |
AP-12-92 |
501.9 |
502.9 |
1.0 |
27.30 |
|
514.5 |
517.5 |
3.0 |
7.00 |
|
561.0 |
567.1 |
6.1 |
5.33 |
|
604.0 |
608.3 |
4.3 |
13.31 |
Includes |
606.4 |
606.8 |
0.4 |
123.00 |
|
667.4 |
671.7 |
4.3 |
2.23 |
AP-12-97 |
476.0 |
481.2 |
5.2 |
3.50 |
|
505.7 |
509.5 |
3.8 |
5.89 |
Includes |
505.7 |
506.9 |
1.2 |
18.05 |
|
558.5 |
562.5 |
4.0 |
97.88 |
Includes |
558.5 |
559.0 |
0.5 |
760.00 |
|
598.8 |
603.7 |
4.9 |
3.15 |
|
653.9 |
656.4 |
2.5 |
3.44 |
AP-13-178 |
88.1 |
95.8 |
7.7 |
3.96 |
AP-13-185 |
406.3 |
408.3 |
2.1 |
6.50 |
AP-13-188 |
537.3 |
540.1 |
2.8 |
6.38 |
|
559.0 |
561.2 |
2.1 |
6.77 |
AP-13-215 |
581.2 |
592.6 |
11.4 |
3.91 |
|
704.7 |
719.1 |
14.5 |
5.87 |
AP-13-219 |
334.7 |
342.6 |
7.8 |
4.79 |
Table 3: Ana Paula - North
Target |
Drill Hole Number |
Mineral Drill Intersections |
From (m) |
To (m) |
Width (m) |
Au (g/t) |
AP-11-43 |
243.6 |
250.0 |
6.4 |
2.01 |
AP-13-226 |
287.9 |
292.9 |
5.0 |
4.43 |
AP-11-108 |
468.9 |
469.5 |
0.6 |
6.34 |
|
556.0 |
564.4 |
8.4 |
4.21 |
Includes |
563.0 |
564.4 |
1.4 |
20.90 |
AP-13-174 |
198.1 |
209.6 |
11.5 |
1.08 |
|
310.8 |
312.2 |
1.5 |
17.23 |
AP-12-121 |
47.1 |
50.0 |
2.9 |
2.54 |
AP-05-05 |
196.0 |
211.9 |
15.9 |
2.35 |
AP-10-13 |
105.6 |
109.6 |
3.9 |
2.86 |
|
180.9 |
193.0 |
12.0 |
3.94 |
About Alio Gold
Alio Gold is a Canadian gold mining company
engaged in exploration, development and production in Mexico.
Its principal assets include the producing San Francisco mine in
Sonora, Mexico and the development stage Ana Paula project in
Guerrero, Mexico. The Company also has a portfolio of other
exploration properties, all of which are located in Mexico.
Qualified Person
The scientific and technical content of this
news release has been reviewed and approved by Paul Hosford, BSc,
P.Eng, a ‘Qualified Person’ as defined by National Instrument
43-101 – Standards of Disclosure for Mineral Projects.
1) For more information on the Ana Paula mineral reserves and
mineral resources, see the Ana Paula technical report entitled “NI
43-101 Preliminary Feasibility Study, Guerrero, Mexico”, dated May
16, 2017 which is available on Alio Gold’s SEDAR profile at
www.sedar.com. Mineral resources that are not mineral reserves do
not have demonstrated economic viability.
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, and it cannot be assumed that all or any part of an
Inferred Mineral Resource exists, or is economically or legally
mineable. 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, an Inferred Mineral Resource has a great amount of
uncertainty as to its existence and as to its economic and legal
feasibility, and it cannot be assumed that all or any part of an
Inferred Mineral Resource will ever be upgraded to a higher
category. 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.
For further information, please
contact:
Lynette GouldVice President, Investor
Relations604-638-8976lynette.gould@aliogold.com
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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