Alio Gold provides first quarter 2018 production updates from San Francisco
Thursday, Apr 12, 2018
Alio Gold Inc 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”).

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.”

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.

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.

For more informaion, please visit: https://www.aliogold.com

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