Cautionary Statement on Forward Looking Information
All fgures are in US$ unless otherwise specifed
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 fnancial prospects, fnancial 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 fnancing, 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 fnancing will be obtained; general economic conditions; that labour disputes, ﬂooding, ground instability, fre, 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 fnancing; 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, fre 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.
Important Information Regarding Technical Disclosure
Technical Disclosure – Alio Gold
Taj Singh, M.Eng, P.Eng, CPA, a Qualifed Person under National Instrument 43-101 and the Vice President of Business Development of Alio Gold, approved the technical disclosure and verifed the data disclosed regarding the San Francisco Mine and the Ana Paula project contained herein.
For more information regarding the San Francisco Mine, see the 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 February 29, 2016 which is available on Alio Gold’s SEDAR profle at www.sedar.com. Mineral resources were estimated using a cut-off grade of 0.20 g/t gold for the San Francisco deposit and and La Chicharra deposit. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
For more information regarding Ana Paula, see the Ana Paula PEA entitled “Ana Paula Project Preliminary Economic Assessment, Guerrero State, Mexico”, report date March 23, 2016 (re-addressed to Alio Gold as of May 26, 2015) which is available on Alio Gold’s SEDAR profle. Mineral resources were estimated using a 0.46 g/t AuEq cutoff. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
A reader is advised that the Ana Paula PEA has only been intended to provide an initial, high-level review of the project. The PEA mine plan and economic model include the use of inferred mineral resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and there is no certainty that the PEA will be realized.
Cautionary Note to United States Investors
Alio Gold is subject to the reporting requirements of the applicable Canadian securities laws, and as a result reports its mineral reserves and resources according to Canadian standards. Canadian reporting requirements for disclosure of mineral properties are governed by National Instrument 43-101 (“NI 43-101”). The defnitions of NI 43-101 are adopted from those given by the Canadian Institute of Mining, Metallurgy and Petroleum. U.S. reporting requirements are governed by Industry Guide 7 (“Guide 7”) of the Securities and Exchange Commission (the “SEC”). These reporting standards have similar goals in terms of conveying an appropriate level of confdence in the disclosures being reported, but embody different approaches and defnitions. For example, under Industry Guide 7, mineralization may not be classifed as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. In particular, Alio Gold reports “resources” in accordance with NI 43-101. While the terms “Mineral Resource”, “Measured Mineral Resource”, “Indicated Mineral Resource” and “Inferred Mineral Resource” are recognized and required by Canadian securities laws, they are not defned terms under Guide 7 and, generally, U.S. companies are not permitted to report resources in documents fled with the SEC. As such, certain information contained in this presentation concerning descriptions of mineralization and resources under Canadian standards is not comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements of the SEC. In addition, an Inferred Mineral Resource has a great amount of uncertainty as to its existence and as to its economic and legal feasibility, and it cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies beyond Preliminary Economic Assessment. It cannot be assumed that all or any part of Measured or Indicated Resources will ever be converted into Mineral Reserves, and it cannot be assumed that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable. In addition, the defnitions of “Proven Mineral Reserves” and “Probable Mineral Reserves” under NI 43-101 differ in certain respects from the standards of Guide 7.