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Ana Paula Project

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Key Facts

Location: Guerrero, Mexico
Ownership: 100%
Land Position: 56,000 hectares
Status: Pre-Feasibility Study completed; Definitive Feasibility Study expected Q2 2018
Proposed Mine Type: Open Pit
Metals: Gold, Silver
Proposed Processing: Crushing, Milling, Gravity-ILR & Flotation-CIL
Measured & Indicated Resources (inclusive of Reserves, Open Pit Only)*: 18.0 Mt @ 2.06 g/t containing 1.2 Moz gold
Proven & Probable Reserves*: 13.4 Mt @ 2.36 g/t containing 1.0 Moz gold

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2017 Outlook

Ana Paula is a high-grade development-stage gold project that is expected to be in production in 2019. A Pre-Feasibility Study ("PFS") released in May 2017 outlined robust economics for the project, providing the basis to move forward with a Definitive Feasibility Study and investment decision in Q2 2018.

Ana Paula Project

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* The Mineral Resource & Reserve estimate is dated April 1, 2017. An updated NI-43-101 compliant technical report supporting the estimate was filed on SEDAR on May 26, 2017

PFS Highlights (US dollars)  
Capital Cost $150.6 M
Cash Costs $489/oz
Site AISC $524/oz
Total Ore Mined 13 Mt
Strip Ratio (Waste:Ore) 2.8:1
Head Grade 2.36 g/t Gold
5.22 g/t Silver
Recovery 85% Gold
55% Silver
Average Annual Production 116,000 oz Gold
166,000 oz Silver
Life of Mine 7.5 years
After Tax Economics at $1,250/oz Gold NPV5% = $223 M
IRR = 34%

A NI 43-101 technical report supporting the Pre-Feasibility Study can be found here.

Underground Potential

The breccia-hosted gold mineralization at Ana Paula is known to continue below the proposed pit outline in the Pre-Feasibility Study. The current Measured and Indicated Resource estimate for the underground portion of the deposit is 3.0 Mt grading 2.80 g/t gold for 266,700 contained gold ounces. There has been limited drilling below the proposed pit depth due to the topography in the area making deep drilling challenging and expensive. In the first quarter of 2018 the Company initiated a 4,000m surface drilling program to enhance the existing information on the deeper high-grade breccia extension which is expected to be completed by Q2 2018.

The Company has also 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. The decline is expected to cost $10.0 million including a 275 m vent raise. .


The Ana Paula Project is located in the north central part of the State of Guerrero in southern Mexico. The city of Iguala is 190 km southwest of Mexico City and 212 km from Acapulco via Highway 95. The Project concessions are accessible from Iguala via paved highway and good-quality, all-season unpaved roads. The Ana Paula Project headquarters are located in the town of Cuetzala del Progreso, 60 km southwest of Iguala. Access to the Project site is via a three km gravel road built and maintained by the Company and passable by two-wheel drive vehicles year-round.

Geology and Mineralization

The Ana Paula Project lies along the northwestern extension of the Guerrero Gold Belt. The geologic units underlying the Ana Paula Project are primarily Cretaceous interbedded limestone and shale units and carbonaceous limestones that have been intruded by intermediate sills, dikes and stocks. A large body of Tertiary intrusive rocks underlies the Ana Paula deposit. Six principal geological domains within the Ana Paula Deposit have been recognized: (1) Complex Breccia domain that sits in the core of the main Ana Paula deposit; (2) Intrusive suite domain that hosts the majority of the ore grade of the Ana Paula deposit; (3) Monolithic breccia domain located in the southern part of the deposit; (4) Sediments domain located in the eastern part of the deposit; (5) Skarn-Hornfels domain found in the deeper zones of the deposit; and (6) Semi-massive sulphide domain developed at the contacts between the skarn-hornfels and intrusive suite domains.

At least two and possibly three mineralizing events are observed on the property but the relationships and timing of these events is not currently known. In general, four gold depositional sites are recognized at Ana Paula:

  1. Quartz-sulfide and quartz-carbonate-sulfide veinlets, stockworks with sulfide clots and disseminations in both intrusions and hornfels.
  2. Narrow semi-massive sulfide contact replacement of limestone or hornfels/skarn at the intrusion contacts.
  3. Sulfide clots, rims and masses in narrow contact breccias hosted in intrusions at or near the sedimentary contacts and/or fault contacts.
  4. Associated with a sulfide constituent within breccia matrix and with sulfide replacement textures within structurally controlled breccia.


The Ana Paula Project is within the Guerrero Gold Belt which has been mined commercially for gold and silver since the early 1920’s. Since modern exploration began 20 years ago in response to changes in Mexican foreign ownership and mining laws, it has evolved into one of Mexico’s most prolific gold producing belts.

Miranda Mining Corp. (“Miranda”) acquired the Ana Paula Project concessions in 2002 and 2003 from the Mexican government. Wheaton River Minerals acquired Miranda in 2003 and was subsequently acquired by Goldcorp Inc. (“Goldcorp”) in 2005. Newstrike Capital Inc. (“Newstrike”) acquired the Ana Paula Project from Goldcorp in July 2010. Alio Gold took 100% ownership of the Ana Paula Project when it acquired Newstrike in May 2015.

Goldcorp conducted the first detailed exploration on the property between 2005 and 2009. The work programs included regional and detailed geologic mapping, rock and stream sediment sampling, airborne multispectral and magnetic survey, ground induced polarization survey, port analyzer (PIMA) alteration mapping, structural interpretation and petrologic and microprobe studies.

Newstrike’s exploration on the property from 2010 to 2015 included regional and detailed geologic mapping and sampling, airborne ZTEM and magnetic surveys, 111,627 m of core drilling in 211 holes, resource estimation, environmental studies and engineering studies including pit slope, metallurgical, process design and deposit modelling. A Preliminary Economic Assessment (“PEA”) was completed by Newstrike and updated by Alio in November 2016.

Since acquiring the property in 2015, Alio Gold conducted an extensive review of the data, re-logged 113 drill holes near the pit design area, conducted several core and reverse circulation drilling campaigns for delineation, condemnation and metallurgical testing and prepared a 3D geological reinterpretation of the deposit. An updated Mineral Resource Estimate and Pre-Feasibility Study (“PFS”) was completed in May 2017.

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