Alio Gold Inc (TSX:ALO) (NYSE AMERICAN:ALO) (“Alio
Gold” or the “Company”), announces preliminary production results
from its 100% owned San Francisco Mine in Sonora, Mexico for the
Company’s first quarter (“Q1”) ended March 31, 2018. The Company
expects to release its full Q1 2018 financial and operational
results on May 9, 2018 and will host a conference call that same
day (details at the end of this release). The Company is also
providing an update on the management team and the proposed
business combination with Rye Patch Gold Corp. (“Rye Patch Gold”)
(see news release dated March 19, 2018).
Highlights
- Produced 17,624 ounces of gold in Q1 2018 at the San Francisco
Mine
- Maintained 2018 guidance of between 90,000 and 100,000 ounces
of gold
- Business combination with Rye Patch Gold supported by major
shareholders, on track to close May 25, 2018
- Appointed Markus Felderer as Vice President, Corporate
Development
“We anticipated the first quarter to be our
lowest production quarter of the year as we implemented our dual
cut-off strategy at San Francisco. With the run of mine ore
only placed under leach towards the end of January, we did not see
ounces draining from the pad until March,” said Greg McCunn, Chief
Executive Officer. “Further, we still have not yet seen the impact
of increased cut-off grade to the crusher feed and the average
grade fed to the crusher of 0.42 g/t gold was below
expectations. As our operating processes with this relatively
new strategy improve, we maintain our full-year guidance of between
90,000 and 100,000 ounces of gold at all-in sustaining costs of
between $1,000 and $1,100 per ounce.”
Mining and Processing
Category |
Three months ended March
31 |
2018 |
2017 |
Ore processed (t) (crusher feed) |
1,714,564 |
1,963,307 |
Average grade processed (g/t) |
0.42 |
0.48 |
ROM ore (t) |
1,100,860 |
- |
Average grade processed (g/t) |
0.17 |
- |
Waste mined (t) |
5,852,718 |
3,241,871 |
Total mined (t) |
8,679,322 |
5,183,988 |
Strip ratio (w:o) (crusher feed & ROM) |
2.07 |
1.67 |
Gold produced (oz) |
17,624 |
26,048 |
Silver produced (oz) |
8,997 |
11,899 |
Sales and Revenue
Gold produced and sold during the quarter was
17,624 ounces and 17,449 ounces, respectively. The average selling
price realized was $1,332/oz resulting in $23.3 million in metal
revenues. The Company had an unaudited cash balance of
approximately $39.3 million as at March 31, 2018.
Category |
Three months ended March
31 |
|
2018 |
|
2017 |
Gold Sold (oz) |
|
17,449 |
|
26,048 |
Realized Gold Price ($/oz) |
$1,332 |
$1,232 |
Business Combination with Rye Patch
Gold
On March 19, 2018, the Company announced a
proposed business combination with Rye Patch Gold. Since the
combination was announced, management has been pleased the strong
level of support on the transaction received from Rye Patch Gold’s
largest shareholders in its meetings. These shareholders,
totaling approximately 35% of issued and outstanding shares, have
committed to support the transaction. Joe Foster, Portfolio
Manager at Van Eck Gold Funds stated, “I believe the merged company
presents significant value and opportunity for the shareholders of
both companies. I anticipate Alio Gold to become a core position in
our junior portfolio of companies.”
Information circulars are expected to be mailed
to shareholders on April 25, 2018, with a special and annual
meeting of the Company and Rye Patch Gold to be held simultaneously
on May 18, 2018. A majority of the shareholder votes cast at
the Company’s shareholder meeting are required for approval and 66
2/3% of votes cast at Rye Patch Gold’s shareholder meeting are
required for approval. If successful, the transaction is
expected to close on May 25, 2018.
Appointed Markus Felderer as Vice
President, Corporate Development
The Company is pleased to announce that Markus
Felderer has been appointed Vice President, Corporate Development,
effective April 2, 2018. Markus was most recently Managing
Director, Investment Banking, at Canaccord Genuity, where he led an
M&A and equity business focused solely on the mining sector.
Previously, he led HSBC's Metals & Mining Advisory/M&A
business in the Americas. During his time in investment
banking, he provided a broad range of clients globally with
financial and strategic analyses and advice regarding growth and
financing strategies. Prior to investment banking, Mr.
Felderer worked at Teck Cominco Ltd. in business development where
he conducted evaluations of mining projects and companies. Markus
holds a Chartered Financial Analyst (CFA) designation and has an
MBA and a Bachelor of Applied Science, Mining and Mineral Process
Engineering.
Conference Call
The Company will release its 2018 first quarter
results prior to the market open on May 9, 2018, followed by a
conference call and webcast at 11:00am (EDT).
Date: |
Wednesday, May 9, 2018 |
Time: |
11:00am (EDT) |
Toll Free (US and Canada): |
(855) 427-9509 |
Toll Free (Outside North America): |
(210) 229-8822 |
Conference ID: |
1099349 |
Webcast: |
https://edge.media-server.com/m6/p/tq2s9yme |
Replay: |
To be available at http://www.aliogold.com |
|
|
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. The drill program will target 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 recently announced an
agreement to acquire Rye Patch Gold, including its 100% owned
Florida Canyon Mine and all of its resource and exploration
projects along the Oreana and Cortez Gold trends. The acquisition
is expected to be completed in late May 2018. The Company
also has a portfolio of other exploration properties, all of which
are located in Mexico.
Cautionary Note Regarding
Forward-Looking Statements
Certain 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
which relate to future events. Such statements include estimates,
forecasts and statements with respect to project development risks
and estimated future production and cash costs, future trends,
plans, strategies, objectives and expectations, including with
respect to costs, capital requirements, availability of financing,
production, exploration and reserves and resources, projected
production at the Company’s San Francisco Property and Ana Paula
Project, including estimated internal rate of return and projected
production, exploitation activities and potential, and future
operations, projected operational updates to the Ana Paula Project,
expectations regarding environmental studies at the Ana Paula
Project, expectations regarding permitting at the Ana Paula Project
and expectations regarding the payment of dividends on the
Company’s common shares.
Such forward-looking statements are based on a
number of material factors and assumptions, including, but not
limited to: the successful completion of development projects,
planned expansions or other projects within the timelines
anticipated and at anticipated production levels; the accuracy of
reserve and resource, grade, mine life, cash cost, net present
value and internal rate of return estimates and other assumptions,
projections and estimates made in the technical reports for the San
Francisco Property and the Ana Paula Project; that mineral
resources can be developed as planned; interest and exchange rates;
that required financing and permits will be obtained; general
economic conditions, that labour disputes, flooding, ground
instability, fire, failure of plant, equipment or processes to
operate are as anticipated and other risks of the mining industry
will not be encountered; that contracted parties provide goods or
services in a timely manner; that there is no material adverse
change in the price of gold, silver or other metals; competitive
conditions in the mining industry; title to mineral properties
costs; and changes in laws, rules and regulations applicable to the
Company. 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: decreases in
the price of gold; competition with other companies with greater
financial and human resources and technical facilities; risks
associated with doing business in Mexico; maintaining compliance
with governmental regulations and expenses associated with such
compliance; ability to hire, train, deploy and manage qualified
personnel in a timely manner; ability to obtain or renew required
government permits; failure to discover new reserves, maintain or
enhance existing reserves or develop new operations; risks and
hazards associated with exploration and mining operations;
accessibility and reliability of existing local infrastructure and
availability of adequate infrastructures in the future;
environmental regulation; land reclamation requirements; ownership
of, or control over, the properties on which the Company operates;
maintaining existing property rights or obtaining new rights;
inherent uncertainties in the process of estimating mineral
reserves and resources; reported reserves and resources may not
accurately reflect the economic viability of the Company’s
properties; uncertainties in estimating future mine production and
related costs; risks associated with expansion and development of
mining properties; currency exchange rate fluctuations; directors’
and officers’ conflicts of interest; inability to access additional
capital; problems integrating new acquisitions and other problems
with strategic transactions; legal proceedings; uncertainties
related to the repatriation of funds from foreign subsidiaries; no
dividend payments; volatile share price; negative research reports
or analyst’s downgrades and dilution; 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.
Source: ALO
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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