VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 16, 2017) - Alio Gold Inc (TSX:ALO) (NYSE MKT:ALO) ("Alio Gold" or the "Company"), formerly Timmins Gold Corp., will officially begin trading today under its new ticker "ALO" on both the TSX and the NYSE MKT. The Company is pleased to announce the results of a Pre-Feasibility Study ("PFS") on its Ana Paula Project ("Ana Paula" or the "Project"). Ana Paula is Alio Gold's 100% owned high-grade, open pit gold project located on the highly prospective Guerrero Gold Belt in Mexico. All figures are in US dollars unless otherwise stated. An NI 43-101 technical report will be filed on SEDAR and will be available on the Company's website within 45 days.
HIGHLIGHTS OF THE PFS
- Proven & Probable Mineral Reserves of 13.4 Mt at 2.36 g/t for 1,021,000 contained ounces of gold
- NPV5% = $223 million and IRR of 34% after tax at $1,250/oz gold
- Initial Capital Cost of $137.2 million
- First quartile operating costs with cash costs of $489/oz and site All-in Sustaining Costs of $524/oz
- Gold recovery 85%
- Mine life of 7.5 years from an open pit producing 868,000 ounces of gold
- Underground potential highlighted with Measured & Indicated Resources below the proposed pit of 3.0 Mt at 2.8 g/t for 266,700 contained ounces.
- Definitive Feasibility Study to start in July and take approximately 9 months to complete
Commenting on the PFS, Chief Executive Officer Greg McCunn said, "The Ana Paula Project has been significantly de-risked over the past six months with infill drilling now supporting a robust Mineral Resource Estimate, metallurgical test work defining an improved process design, capital and operating costs estimated to a high standard and our Environmental Impact Assessment approved by the regulators. The PFS has confirmed the project economics are very robust and we expect to continue moving the project forward to an investment decision in Q2 2018."
Mineral Resource Estimate
The updated Mineral Resource Estimate (MRE) was developed by AGP Mining Consultants of Toronto (AGP). In order to support the MRE, the Company completed over 10,000 metres of infill drilling in the latter part of 2016 and early 2017. In addition, previous drill core (approximately 49,500 meters) was re-logged in order to develop a more robust geological model.
Mineralization occurs in the complex breccia, granodiorite, monolithic breccia, hornfels and limestone-shale. The bulk of the high grade mineralization at Ana Paula is centered on the complex breccia domain which is surrounded by a high-grade mineralized halo, mainly granodiorite.
The MRE was based on a gold price of $1,350/oz and is shown in the following table. The Mineral Resource was split into two distinct areas: (1) the material located within a resource constraining shell, which was used as a basis for the PFS mine plan and the subsequent estimate of Mineral Reserves; and (2) the material located below the resource constraining shell that is considered to have a reasonable expectation of being mined economically from an underground mining operation. Although the PFS does not envision an underground mine, the Mineral Resource is an indication of the exploration potential below the PFS pit.
The Company is currently applying for permits to construct an underground decline approximately 1,200 metres into the underground resource area sufficient to map the mineralization, establish drill stations for infill drilling and collect bulk samples. Drilling to this depth from surface is difficult due to the topography.
| Area | Classification | | Tonnes | | Gold Grade (g/t) | | Gold Ounces |
| Ana Paula Open Pit Resources | Measured | | 7,541,000 | | 2.43 | | 590,000 |
| | Indicated | | 10,491,000 | | 1.79 | | 605,000 |
| | Total M&I | | 18,032,000 | | 2.06 | | 1,195,000 |
| | Inferred | | 249,000 | | 1.27 | | 10,000 |
| Ana Paula Underground Resources | Measured | | 41,000 | | 2.07 | | 2,800 |
| | Indicated | | 2,925,000 | | 2.81 | | 264,000 |
| | Total M&I | | 2,967,000 | | 2.80 | | 266,700 |
| | Inferred | | 621,000 | | 2.07 | | 41,400 |
| Total Resources | Measured | | 7,582,000 | | 2.43 | | 592,800 |
| | Indicated | | 13,416,000 | | 2.01 | | 869,000 |
| | Total M&I | | 20,998,000 | | 2.17 | | 1,462,700 |
| | Inferred | | 870,000 | | 1.84 | | 51,400 |
- Open Pit Mineral Resources are inclusive of Mineral Reserves and have an effective date of May 16, 2017.