Florida Canyon Reports Record Performance

VANCOUVER, BC – Alio Gold Inc. President and CEO, Mark Backens said, “Our focus, like everyone’s, recently has been on the health and safety of our employees, contractors and communities in light of the COVID-19 pandemic. “We have been heartened to see the resiliency of our people during this challenging time, and we are hopeful that the measures enacted over the past few months have made a positive impact on minimizing the damage to our communities, people and business.  I am particularly impressed that during this challenging time, our team at Florida Canyon was able to turn in another record performance in terms of health and safety, as well as from a production standpoint.  In Q1 2020, we had zero lost-time incidents across the organization and delivered a TRIFR of nil.  In addition, this quarter Florida Canyon deposited 30% more gold and produced 21% more gold than Q4 2019.  Since Q2 of last year we have more than doubled our daily mining movements and set a record this quarter by mining over 57,000 tonnes per day.  This quarter we also announced a merger with Argonaut Gold which will result in the creation of a larger, stronger and more financially robust intermediate gold producer.

The Company’s focus is on finalizing the ramp up of operations at Florida Canyon. During Q1 2020, the Florida Canyon Mine produced 11,182 ounces of gold and 6,722 ounces of silver, a 21% and 8% increase, respectively, compared to Q4 2019. Mining capacity continues to meet expectations, setting an all-time record in Q1 2020. The average tonnage mined per day increased by 41% and 84% compared to Q4 2019 and Q3 2019, respectively. These increases were largely driven by the new loading and hauling equipment that was phased into production over Q4 2019. Further gains in future mine production are expected as more efficient mining areas are made available. During Q2 2019 and Q3 2019 when production was severely impacted by low fleet availability, mining areas were reduced in size resulting in loss of efficiency. Mining activity during Q4 2019 and Q1 2020 has focused on improving the configuration, access and size of the mining areas to increase productivity and efficiency, which is the primary factor for the increase in waste mining during Q1 2020.

Ore placed on the pad during Q1 2020 was in line with Q4 2019. Ore processed during Q1 2020 increased by 30% as a result of a 35% higher grade compared to Q4 2019. Metallurgical recovery continues to meet expectation.

The construction of the new heap leach pad (SHLP II) continued to advance during Q1 2020. Capital expenditures for SHLP II totaled $4.1 million during Q1 2020 or 27% of the total planned project capital budget. On a cash basis, expenditures were $1.4 million and were funded by the $15.0 million debt facility by Sprott. At the end of Q1 2020, the over liner crushing was 80% complete, 45% of the collection piping and over liner was placed and cut to fill activities were complete. During March, dry stacking of ore began and permit to leach was submitted to the Nevada Division of Environmental Protection. Subsequent to Q1 2020, the permit was received, and leaching activities on the first cell of SHLP II were initiated in April.