Alio Gold Inc (TSX:ALO) (NYSE MKT:ALO) (“Alio
Gold” or the “Company”), is pleased to announce that Goldcorp Inc.
(TSX:G) (NYSE:GG) has exercised its warrants that expire on October
19, 2017 for total proceeds to the Company of C$3.5 million. The
Company has also exercised a buy-back right from Goldcorp of a 1%
net smelter royalty (“NSR”) on its Ana Paula project located in
Guerrero, Mexico for US$2.9 million.
“As we continue to advance the high grade, high
margin Ana Paula project, the buy back of the 1% NSR is immediately
accretive to the project and will deliver significant value to our
shareholders over the long term,” said Greg McCunn, Chief Executive
Officer. “We are advancing the Definitive Feasibility Study for the
Project towards completion in Q2 2018 when we expect to make an
investment decision to start construction. In parallel, we have
initiated an exciting US$18 million exploration program at Ana
Paula to investigate the extension of high-grade mineralization
below the proposed open pit. Positive exploration results are
expected to enhance already robust project economics, and it
therefore made sense for us to exercise our buy-back right on the
1% NSR now. We would like to thank Goldcorp for their continued
support of the Company through the exercise of the warrants.”
Under the terms of the original asset transfer
agreement dated May 11, 2010, there was a 3% NSR on Ana Paula that
Goldcorp held with the option for Alio Gold to buy back one-third
(1%) for a fixed fee calculated on Measured and Indicated
Resources. After analyzing the cost of paying the 1% NSR based on
the current mine life, management and the Board of Directors
determined that the NSR buyback has substantially greater value and
cancellation of the 1% NSR is beneficial to the Company’s
shareholders and the economics of the Ana Paula project. After the
buy-back, the NSR held by Goldcorp on Ana Paula is now 2%.
Goldcorp has exercised 1.0 million warrants at a
price of C$3.50 per common share for a total exercise price of
C$3.5 million. Accordingly, Goldcorp acquired ownership of 1.0
million common shares. Following the exercise, Goldcorp owns 2.45
million common shares, representing 5.48% of the issued and
outstanding shares. The Company now has 44.67 million common shares
issued and outstanding.
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
exploration program is underway that includes targeting known
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.
Investor Contact
Lynette GouldVice President, Investor
Relations604-638-8976lynette.gould@aliogold.com
Cautionary Note Regarding
Forward-Looking StatementsCertain 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 and
information regarding: the Company's future mining activities,
including mining capacity, recovery, cash costs, production and
mine life; the Company's reserves and resources estimates; the
Company’s exploration and development plans, including anticipated
costs and timing thereof; the Company’s plans for growth through
exploration activities, acquisitions or otherwise; and expectations
regarding future maintenance and capital expenditures, working
capital requirements, the availability of financing and future
effective tax rates. Such forward-looking statements are based on a
number of material factors and assumptions, including, but not
limited to: that contracted parties provide goods or services in a
timely manner, that no unusual geological or technical problems
occur, that plant and equipment function as anticipated and that
there is no material adverse change in the price of gold, costs
associated with production or recovery. 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: risks and
uncertainties relating to the interpretation of drill results, the
geology, grade and continuity of mineral deposits and conclusions
of economic evaluations; results of initial feasibility,
pre-feasibility and feasibility studies, and the possibility that
future exploration, development or mining results will not be
consistent with the Company’s expectations; risks relating to
possible variations in reserves, resources, grade, planned mining
dilution and ore loss, or recovery rates and changes in project
parameters as plans continue to be refined; mining and development
risks, including risks related to accidents, equipment breakdowns,
labour disputes (including work stoppages and strikes) or other
unanticipated difficulties with or interruptions in exploration and
development; the potential for delays in exploration or development
activities or the completion of feasibility studies; risks related
to the inherent uncertainty of production and cost estimates and
the potential for unexpected costs and expenses; risks related to
commodity price and foreign exchange rate fluctuations; the
uncertainty of profitability based upon the cyclical nature of the
industry in which the Company operates; risks related to failure to
obtain adequate financing on a timely basis and on acceptable terms
or delays in obtaining governmental or local community approvals or
in the completion of development or construction activities; risks
related to environmental regulation and liability; political and
regulatory risks associated with mining and exploration; risks
related to the uncertain global economic environment; 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.
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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