Platform for Growth Corporate Update | January 2018 TSX, NYSE AMERICAN: ALO WWW.ALIOGOLD.COM
Forward Looking Statement Certain statements contained herein may constitute forward-looking statements (or “forward looking information”) and are made pursuant to the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities laws. Forward-looking statements are statements which relate to future events. Such statements include estimates, forecasts and statements with respect to, among other things, business and financial prospects, financial multiples, accretion estimates, 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 from the San Francisco Mine, the Ana Paula Preliminary Economic Assessment (PEA), including estimated internal rate of return and projected production, exploitation activities and potential and future operations. Information inferred from the interpretation of drilling results and information concerning mineral resource estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when, and if, a project is actually developed. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans, “anticipates”, believes”, “estimates”, “predicts”, “potential”, or “continue” or the negative of these terms or other comparable terminology. These forward-looking statements are based on a number of assumptions, including assumptions regarding the value of Alio Gold’s assets; 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, NPV and IRR estimates and other assumptions, projections and estimates made in the technical reports for San Francisco and Ana Paula; that mineral resources can be developed as planned; interest and exchange rates; that required financing will be obtained; general economic conditions; that labour disputes, flooding, ground instability, fire, failure of plant, equipment or processes to operate as anticipated and other risks of the mining industry will not be encountered; the price of gold, silver and other metals; competitive conditions in the mining industry; title to mineral properties; and changes in laws, rules and regulations applicable to Alio Gold. Although management of Alio Gold believes that the assumptions made and the expectations represented by such statements are reasonable, there can be no assurance that a forward-looking statement herein will prove to be accurate. Actual results and developments may differ materially from those expressed or implied by the forward-looking statements contained herein and even if such actual results and developments are realized or substantially realized, there can be no assurance that they will have the expected consequences or effects. Factors which could cause actual results to differ materially from current expectations include changes in market conditions; actual results being materially different than reserve and resource, grade, mine life, NPV, IRR and cash cost estimates and the other projections and estimates made in the technical reports for San Francisco and Ana Paula; variations in grade or recovery rates; risks relating to international operations; fluctuations in gold, silver and other metal prices and currency exchange rates; failure to obtain required financing; inability to successfully complete development projects, planned expansions or other projects within the timelines anticipated; natural disasters; adverse changes to general economic conditions or applicable laws, rules and regulations; changes in project parameters; the possibility of project cost overruns or unanticipated costs and expenses; labour disputes, flooding, ground instability, fire and other risks of the mining industry; failure of plant, equipment or processes to operate as anticipated; the risk of an undiscovered defect in title or other adverse claim; and the risk that results of exploration activities will be different than anticipated. Readers are cautioned not to place undue reliance on forward-looking information due to its inherent uncertainty. Except as required by applicable law, Alio Gold does not intend to update any forward-looking statements to conform these statements to actual results. All figures presented throughout this document are in US$ unless otherwise specified. TSX, NYSE AMERICAN: ALO www.aliogold.com 2
A Future Mid-Tier Gold Producer San Francisco Mine Sonora, Mexico Status: Operating 2017A: 83,558oz Ana Paula Project Guerrero, Mexico Status: Feasibility PFS May 2017@$1,250/oz Gold NPV US$223m, IRR 34% Ejutla Project Oaxaca, Mexico Status: Exploration Adjacent to Fortuna’s San Jose Project TSX, NYSE AMERICAN: ALO www.aliogold.com 3
San Francisco Operations 2017 guidance range 82,000 to 86,000oz with AISC<$1,000/oz • 2017 actual production 83,558oz, AISC at 30-Sept-17 $957/oz • Outlook Guidance for 2018 expected in early February • Targeting stable production profile of ~100,000 oz/yr • Gold Mineral Reserves 1 at 1-Apr-17 were 0.93Moz (55Mt at 0.527g/t gold) • Focus in 2017 was catching up on capital stripping and opening up pit • Focus in 2018 is cost reduction and improved efficiency • Short term price protection in place: • 70% of production hedged for Jan - Jun 2018 using zero cost collars • $1,250/oz put with corresponding call averaging $1,400/oz • 1 For more information on the San Francisco Mine mineral reserves and mineral resources, see the San Francisco technical report entitled “NI 43 -101 F1 Technical Report Updated Resources and Reserves and Mine Plan for the San Francisco Gold Project, Sonora, Mexico”, report date May 25, 2017 which is available on Alio Gold’s SEDAR profile at www.sedar.com. TSX, NYSE AMERICAN: ALO www.aliogold.com 4
Ana Paula Project – Located in a Highly Prolific Gold Belt Leagold – Los Filos Torex El Limon Media Luna San Luis Guajes Rey David TXG ALO Ana Paula Project Area TSX, NYSE AMERICAN: ALO www.aliogold.com 5
PFS Highlights 1,3 Robust Economics on a High Grade, High Margin Project Robust Economics on a High Grade, High Margin Project First Quartile Operating Annual average After tax NPV 5% $223M After tax NPV 5% $223M Annual average First Quartile Operating production Costs 2 production Costs 2 After tax IRR 34% After tax IRR By-product: $489/oz 116,000 oz Gold By-product: $489/oz 45% 116,000 oz Gold AISC 3 : $524/oz 166,000 oz Silver After tax payback AISC: $524/oz 166,000 oz Silver 2.6 years Life of mine High-Grade Capital Cost Life of mine High-Grade 7.5 years Capital Cost 2.36 g/t Gold 7.5 years $137.2M 2.36 g/t Gold 5.22 g/t Silver $137.2M Strip Ratio 4 5.22 g/t Silver 2.8:1 1 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 2 Source: WoodMac 2016 total cash costs (including royalties) 3 Gold price assumption US$1,250/oz 4 Excludes 7.7Mt pre-stripping TSX, NYSE AMERICAN: ALO www.aliogold.com 6
Ana Paula Advancing Towards Investment Decision • Advancing the Definitive Feasibility Study • Initiated in July 2017 • Commenced additional metallurgical test work • Advanced geotechnical and design engineering • Expected completion in Q2 2018 • Finalizing permitting • Received Change of Land Use (ETJ) approval in Sept 2017 • Received Environmental Impact Assessment (MIA) approval in April 2017 • Completed major permitting hurdles • Securing debt financing of between $90 and $100 million • Received indicative proposals and under review Conducting extensive exploration programs in 2018 • • Q1 18 - Surface exploration drilling of 6 holes to target high-grade breccia extension • Q2 18 - North Area drilling targeting open pit resource expansion • H1 18 - Underground decline being constructed to explore breccia extension & skarn target • H2 18 - Underground drilling program to commence • Regional exploration on 56,000 ha land package TSX, NYSE AMERICAN: ALO www.aliogold.com 7
2018 Exploration - Targeting Resource Expansion PFS Pit Outline P&P Reserves 1 = 13.44 Mt @ 2.36 g/t = 1.02 Moz Includes 2.3 Mt @ 5.9 g/t = 436K oz in High Grade Breccia High-Grade Breccia In-Pit Reserves Lower Grade Halo High-Grade Breccia Target Prior drilling includes 2 : 55.7 m @ 3.66 g/t 13.5 m @ 29.12 g/t 32.1 m @ 3.21 g/t Drilling values Proposed Decline Lithology Au ppm Skarn Target Prior drilling includes 2 : 14.2 m @ 8.55 g/t 22.0 m @ 5.67 g/t 14.5 m @ 5.87 g/t Symbols 1 Refer to Appendix F for further mineral reserve and mineral resource information 2 Refer to Alio Gold’s news release dated September 18, 2017 titled ‘ Alio Gold to Commence Underground Decline and TSX, NYSE AMERICAN: ALO www.aliogold.com 8 Exploration Program at Ana Paula’
Q1 2018 Surface Drilling Targeting Breccia Extension Proposed pit Proposed surface drill holes TSX, NYSE AMERICAN: ALO www.aliogold.com 9
Q2 2018 – North Area Target N “ North” Area target Proposed pit 0 500 meters TSX, NYSE AMERICAN: ALO www.aliogold.com 10
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