Alio Gold Inc (TSX:ALO) (NYSE MKT:ALO) 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.
“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.
|Depth To||Au (gpt)||Interval length
|APM-17-07||No significant assays|
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.
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