Issue link: http://resourceworld.uberflip.com/i/882975
O C T O B E R / N O V E M B E R 2 0 1 7 www.resourceworld.com 49 RAMPING UP THE HIGH-GRADE GOLD BRUCEJACK MINE IN NORTHERN BC BC'S NEWEST GOLD MINE itive feasibility study," commented Greg McCunn. In mid-July, Alio Gold initiated a Definitive Feasibility Study based on the updated mineral resource estimate and mine plan as well as addi- tional metallurgical testing. The study is expected to take nine to 10 months to complete, after which, Alio will make an investment and construction decision. According to the Pre-Feasibility Study, capital costs are estimated at US $137 million. Measured and indicated resources for the pro- posed open pit mine are currently pegged at 18 million tonnes averaging 2.06 g/t gold (1.2 mil- lion ounces contained gold). Proven and probable reserves stand at 13.4 million tonnes averaging 2.36 g/t gold (1.0 million contained oz. gold). Based on an average US $1,250/oz gold price the Pre-Feasibility Study estimated an After-Tax Net Present Value (NPV 5%) of US $223 million and an Internal Rate of Return (IRR) of 34%. This assumes an average annual production of 116,000, ounces of gold and 166,000 ounces of silver over a mine life of 7.5 years. Metal recoveries are expected to be 85% for gold and 55% for silver. This robust Pre-Feasibility Study calculated that Ana Paula's All-In Sustaining Costs could be US $524/oz and lie in the first quartile of industry cash costs. Of course, this study only applies to the open pit portion of the mine. There is significant under- ground potential just under the proposed open pit limits. Alio Gold has performed limited drilling on the deeper, breccia-hosted, gold mineralization and has outlined and additional 266,700 ounces of gold (measured and indicated resource of 3.0 million tonnes averaging 2.80 g/t gold). The company intends to drive a 1,400-metre decline into the underground resource area in the latter half of 2017 to further delineate and expand underground resources. With a market capitalization of $235 mil- lion with just 43.6 million shares outstanding Alio Gold is well positioned to achieve its plans to increase gold production at its San Francisco Mine and march the Ana Paula deposit towards a production decision. n LEFT: Alio Gold's San Francisco gold mine in Sonora State, Mexico. Photo courtesy Alio Gold Inc.