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Alamos Reports Exploration Results from Cerro Pelon and La Yaqui Deposits at Mulatos Mine

Alamos Gold Inc. ("Alamos" or the "Company") today reported results from the ongoing exploration program at the Cerro Pelon and La Yaqui satellite deposits at its Mulatos mine.

Highlights

  • Cerro Pelon: Multiple high grade intercepts encountered in new zone of mineralization approximately 100 metres ("m") north of the existing mineral reserve, including:
    • 14.47 g/t Au over 50.30m (15PEL012)
    • 9.65 g/t Au over 34.60m (15PEL020)
    • 2.46 g/t Au over 94.20m (15PEL010)
    • Further potential exists over an additional 900m strike length
  • La Yaqui: Step-out drilling has encountered a new zone of mineralization 500m northeast and along strike from the existing in-pit mineral reserve. Results include:
    • 1.36 g/t Au over 117.40m (15YAQ058)
    • 1.34 g/t Au over 64.00m (15YAQ061)
    • Ore-grade intercepts have also been encountered another 750m along strike to the northwest (total 1.25 kilometres ("km") from in-pit mineralization), results include:
    • 5.68 g/t Au over 15.20m (15YAQ064), approximately 350m along strike from hole 15YAQ058 and 850m from in-pit mineralization
    • 2.03 g/t Au over 32.00m (15YAQ068) approximately 750m from 15YAQ058 and 1.25km from in-pit mineralization

"We are very pleased with the early results from our exploration programs at Cerro Pelon and La Yaqui with step-out drilling indicating the potential to expand the mineral reserve and resource base at both deposits. These satellite deposits are expected to provide our lowest cost production at Mulatos and are a significant source of near term production growth. These remain our highest priority exploration targets at Mulatos. Following up on the strong results to date, we are adding additional rigs to target these new zones of mineralization through the end of this year," said John A. McCluskey, President and Chief Executive Officer.

Cerro Pelon

A first phase of infill and exploration drilling (approximately 16,500m in 81 holes) commenced at Cerro Pelon in April 2015 and has led to the definition of a new zone of mineralization (see Figures 1 and 2). This zone sits approximately 100m to the north of reserve mineralization and outside previously designed pit limits. Excellent drill results were obtained with several intercepts averaging well above the current mineral reserve grade.

Highlight intercepts include:

  • 2.37 g/t Au over 45.70m (15PEL007)
  • 3.83 g/t Au over 13.10m (15PEL008)
  • 2.46 g/t Au over 94.20m and 2.21 g/t Au over 22.60m (15PEL010)
  • 14.47 g/t Au over 50.30m (15PEL012)
  • 9.65 g/t Au over 34.60m (15PEL020)
  • 4.07 g/t Au over 15.20m and 2.24 g/t Au over 18.30m (15PEL031)
  • 4.78 g/t Au over 41.10m (15PEL049)
  • 3.94 g/t Au over 35.10m (15PEL050)
  • 4.26 g/t Au over 18.30m (15PEL058)

Further highlights from recent drilling completed at Cerro Pelon are presented in Table 1 at the end of this release.

In addition to drilling, significant mapping and sampling has been conducted over a large area around the reserve mineralization. Combined results from all programs indicate that gold mineralization at Cerro Pelon is hosted in a number of discrete zones called quartz-alunite ledges or ribs. These zones generally widen upwards from a narrower root or base and ribs intersected at Cerro Pelon to date appear to be up to 160m in depth. Given the flare / conical shape of these ledges, true widths vary depending on where drilling intersects them and the angle of drilling relative to the zone. Depth to mineralization in this new zone varies with drill holes in the western part intersecting mineralization very close to surface (within 10m) and the higher grades (in 15PEL012 and 15PEL020) occurring at approximately 90m vertical.

Exploration over the larger area has indicated potential for further quartz-alunite ledges along strike to the north. The exploration focus for the remainder of 2015 is to drill test the next 200m of strike length, with three rigs expected to complete approximately 3,000m drilling in this zone. Even further to the north, a large zone (approximately 700m by 150m) of massive silica outcrops and it is believed that fully-preserved (non-eroded) ledges may exist below this silica horizon. This zone will be the focus of Cerro Pelon exploration early in 2016.

Preliminary metallurgical test work indicates mineralization is very amenable to heap leaching. A portion of the results of this exploration drilling will be incorporated into the 2015 year-end mineral reserve and resource statement with the majority being incorporated into subsequent updates.

La Yaqui

At La Yaqui, three rigs mobilized early in 2015 to undertake an infill, condemnation and metallurgical drill program along with a large regional mapping and sampling program over an area totaling 4.3km2.

Following the completion of engineering drilling, mapping, and sampling, exploration step-out drilling commenced and has yielded encouraging results including two step-out holes 500m to the northeast of in-pit reserve mineralization as follows:

  • 1.36 g/t Au over 117.40m (15YAQ058)
  • 1.34 g/t Au over 64.00m (15YAQ061)

These intercepts are 100m apart and mineralization is open along strike. We believe this is a new zone of mineralization with potential to increase mineral resources and reserves at La Yaqui (see Figures 3 and 4). Follow-up drilling is underway around these intercepts and infilling the strike length between them and the in-pit reserve mineralization.

Mapping and sampling also indicated potential for mineralization along the silica ridge in a northwest direction from this new zone (see Figures 3 and 4). A preliminary drill program comprising widely spaced fences along this ridge was conducted. The aim was to penetrate through the silica horizon and test the vuggy-silica-altered material beneath. Some of these holes did not reach the required depths; however, a number of those that did have returned strong results. Highlights to date from this drilling include:

  • 5.68 g/t Au over 15.20m (15YAQ064) (approximately 350m along strike from 15YAQ058)
  • 2.03 g/t Au over 32.00m (15YAQ068) (approximately 750m along strike from 15YAQ058)

These results indicate ore-grade intercepts at distances of up to a 1.25km strike length from known in-pit mineralization and preliminary metallurgical test work indicates mineralization is amenable to heap leaching.

Follow up drilling will be required to fully assess the potential along this strike length and this will be conducted in a phased approach over the next 6-12 months. The next phase of drilling will include four rigs and approximately 6,600m of drilling planned over 33 holes by the end of 2015.

Further highlights from recent drilling completed at La Yaqui are presented in Table 2 at the end of this release.

Cerro Pelon and La Yaqui Project Background

Cerro Pelon and La Yaqui are located approximately 3km and 7km (straight line), respectively from the existing Mulatos operation. These deposits host a combined mineral reserve of 4.2 million tonnes grading 1.64 g/t Au, containing 220,400 ounces of gold. Both deposits are near surface, highly oxidized and amenable to open pit, heap leaching. Each project will operate with independent heap leach pads and portable crushing circuits and will not displace existing throughput capacity from the main Mulatos crushing circuit and heap leach pad. With a combined mineral reserve grade double the 2015 budget, these projects are expected to provide near term production growth at Mulatos while significantly reducing the overall cost profile.

Baseline work required for the environmental impact assessments (MIA) continues in parallel with the ongoing exploration program. In conjunction with the completion of the environmental baseline studies, the Company intends on performing further detailed economic analysis incorporating these latest exploration results. The MIA's for both deposits are expected to be completed and submitted early in 2016. Production from La Yaqui and then Cerro Pelon is expected in 2017.

Qualified Persons

Aoife McGrath, M.Sc., M.AIG, Alamos' Vice President, Exploration, who is a Qualified Person within the meaning of NI 43-101 ("Qualified Person") has reviewed and approved the technical geological and exploration content of this news release. All field work is directly supervised and directed by Kristen Simpson, P.Geo., Alamos' Exploration Manager (Mulatos), a Qualified Person as defined by NI 43-101. Chris Bostwick F.AusIMM, Alamos' Vice President, Technical Services and a Qualified Person under NI 43-101 has reviewed the engineering related technical content of this release. Drilling, sampling, QA/QC protocols and analytical methods for work areas in Mexico are as outlined in the NI 43-101 report titled, "Mulatos Project Technical Report Update" dated December 21, 2012, available on SEDAR (www.sedar.com).

Source: http://www.alamosgold.com/

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