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Mineral Resources

Mineral Reserves and Mineral Resources

In a news release dated August 10, 2018, Alio reported the Mineral Reserves and Mineral Resources as of July 1, 2018 for the San Francisco Mine.  The following information regarding the 2018 mineral resources and reserves has been extracted from the press release as follows:

“The Mineral Reserve estimates at San Francisco from April 1, 2017 was updated as of July 1, 2018 utilizing the latest available information, including mining depletion over the period and in-fill and grade-control drilling carried out as part of the mining operations during the period. Mining depletion of Mineral Reserves was partly offset by expansion of the reserves in Phases 6 through 9 of the San Francisco Pit. Total proven and probable mineral reserves totaled 854,472 ounces of gold (55.5 million tonnes at 0.49 g/t) as of July 1, 2018, an approximate decrease of 74,228 ounces of gold or 8% from April 1, 2017.”

“Alio Gold Reserve and Resource Reporting Notes as of July 1, 2018:

  1. All Mineral Reserves and Mineral Resources have been calculated in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101, or the AusIMM JORC equivalent.
  2. All Mineral Resources are reported inclusive of Mineral Reserves.
  3. Mineral Resources, which are not Mineral Reserves, do not have demonstrated economic viability.
  4. Mineral Reserves are estimated using appropriate recovery rates and USD commodity prices of $1,250 per ounce of gold.
  5. Mineral Resources are estimated using USD commodity prices of $1,350 per ounce of gold.”

“Scientific and technical information contained in this news release with respect to the San Francisco Mine was reviewed and approved by Jorge Lozano, a “qualified person” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). Information regarding data verification, surveys and investigations, exploration information, quality assurance programs and quality control measures, and a summary of sample analytical or testing procedures for the San Francisco Mine are contained in the Company’s annual information form for the year ended December 31, 2017, dated March 14, 2018, and filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov (the “AIF”). Also included in the AIF is a description of the key assumptions, parameters and methods not included in this news release that are used to estimate mineral reserves and resources and a general discussion of the extent to which the estimates may be affect by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors.”

“Mineral resources which are not mineral reserves do not have demonstrated economic viability. With respect to "indicated mineral resource" and "inferred mineral resource", there is a great amount of uncertainty as to their existence and a great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of a "measured mineral resource", "indicated mineral resource" or "inferred mineral resource" will ever be upgraded to a higher category.”

Table 1 summarizes the mineral resources and reserves from the August 10, 2018, Alio Press Release.

Magna has stated that it considers the July 1, 2018 Alio mineral resources and reserves to be historical and made the following statement in its March 6, 2020 Press Release:

“The Mineral Reserves and Mineral Resources estimates were reported by Alio in its news release dated August 10, 2018, available under Alio's SEDAR profile at www.sedar.com. Mineral Reserves and Mineral Resources were prepared by Alio in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) under the supervision of a qualified person. The most recent NI 43-101 technical report on the San Francisco Mine was filed by Alio on May 25, 2017, with an effective date of April 1, 2017, and is available under Alio's SEDAR profile at www.sedar.com. The Mineral Reserves and Mineral Resources noted above are historical estimates and a qualified person has not done sufficient work on behalf of Magna to classify the historical estimate as current Mineral Resources or Mineral Reserves and Magna is not treating the historical estimate as current Mineral Resources or Mineral Reserves. Although Magna is not treating this information as current estimates, it believes Alio's work is reliable and that the information, which was made publicly available by Alio, may be of assistance to investors. The Company intends to review all project data, validate data quality, create a new geological model and then make an updated resource estimate in the upcoming months. As well, the Company will be reviewing metallurgical information and key economic parameters in order to evaluate the potential economics of an open pit gold mine and heap leach extraction facility.”

Table 1.- San Francisco Project – Historical Reserves and Resources as of July 1, 2018

Mineral Reserves Proven Probable Proven & Probable
Metric Tonnes Au g/t Contained Au Ounces Metric Tonnes Au g/t Contained Au Ounces Metric Tonnes Au g/t Contained Au Ounces
 San Francisco 17,757,023 0.518 273,741 23,359,785 0.540 405,239 41,116,808 0.514 678,980
 La Chicharra Pit 5,328,803 0.522 89,489 1,835,220 0.437 25,804 7,164,023 0.501 115,292
 Total 23,085,826 0.489 363,230 25,195,005 0.532 431,043 48,280,831 0.512 794,272
 Low-grade stockpile 7,199,000 0.260 60,200       7,199,000 0.260 60,200
 
 
Mineral Resources Measured Indicated Measured & Indicated
Metric Tonnes Au g/t Contained Au Ounces Metric Tonnes Au g/t Contained Au Ounces Metric Tonnes Au g/t Contained Au Ounces
 San Francisco 33,041,153 0.547 580,545 38,485,816 0.557 688,856 71,526,969 0.552 1,269,403
 La Chicharra Pit 6,674,718 0.550 118,028 6,019,509 0.500 96,766 12,694,227 0.526 214,794
 Total 39,715,871 0.547 698,574 44,505,325 0.549 785,621 84,221,196 0.548 1,484,197
 
Mineral Resources Inferred
Metric Tonnes Au g/t Contained Au Ounces
 San Francisco 1,725,608 0.528 29,293
 La Chicharra Pit 222,238 0.462 3,301
 Total 1,947,846 0.520 32,594

Figures may not total due to rounding

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