Morgan Poliquin Discusses Almaden's Ixtaca Gold-Silver Project ...

Almaden Minerals Ltd T.AMM announced January 31 an initial resource estimate of the Ixtaca Zone on its 100%-owned Tuligtic Gold-Silver Project, located 150 kilometres east of Mexico City. At a 0.5 grams per tonne gold-equivalent cutoff, indicated resources are 57 million tonnes grading 0.52 g/t gold and 29.91 g/t silver (1.1 g/t AuEq) for 960,000 ounces gold and 54.8 million ounces silver (2.02 million ounces AuEq), and inferred resources are 41.5 million tonnes grading 0.56 g/t gold and 31.41 g/t silver (1.16 g/t AuEq) for 741,000 ounces gold and 41.9 million ounces silver (1.55 million ounces AuEq).

President/CEO Morgan Poliquin spoke to Kevin Michael Grace January 31.

RW: Tell me about your Ixtaca maiden resource estimate.

MP: We found this area and staked it. There was no history of any mines or previous exploration. The gold and silver mineralization we discovered didn?t crop out at surface, but the clay alterations we discovered often overlie gold and silver epithermal mineralization.

So we put a blind hole into it in 2010, and it was a game changer: 302 metres of 1.01 grams per tonne gold and 48 grams per tonne silver. So we spent 2.5 years drilling. We?ve drilled 225 holes, about 82,000 metres. At the end of 2012, we handed it off to an independent resource geologist and asked him to make sense of it. Of course, it?s just a snapshot; we?ve already stepped out?

RW: I was going to ask you about that. Your press release of January 24?2.9 g/t gold equivalent over 60.5 metres?that?s not included in the resource estimate, right?

MP: That?s right. We?ve shown conclusively that the resource is still growing. Our plan is to keep exploring and expanding. On a dollar-per-tonne basis, Ixtaca has roughly equal value in both gold and silver. In Mexico, this kind of rock is often oxidized and that tends to lower the silver recoveries. In our case, because it was not exposed, it was not oxidized.

We felt it was important to explain the potential recovery, so we did more comprehensive metallurgical tests than you would usually do at this stage.

RW: The press release says an 88% recovery for gold and 82% for silver.

MP: Yeah, that?s on a global basis. But for each geologic domain they are very similar. It?s very preliminary work, but it shows excellent potential for both metals.

RW: What?s your Ixtaca drilling schedule?

MP: Well, we own our own drills and drilled 50,000 metres last year. We have the same program underway for 2013, but it will be exploration dependent and geologically driven. Our drill program is about $500,000 a month all in. We have a budget of $5 million to $6 million for drilling.

RW: How much cash does Almaden have?

MP: We have $16 million in cash, plus about $3 million in refined gold.

RW: Tuligtic is 14,000 hectares. How big is Ixtaca?

MP: We?ve explored less than 1,000 hectares of Ixtaca. Ixtaca is open, and we have other gold-and silver-in-soil anomalies on the property. We have a two-pronged approach, expanding and developing the Ixtaca resource but also exploring for other zones. We think there is potential on Tuligtic apart in addition to Ixtaca.

RW: How close is Ixtaca to a preliminary economic assessment?

MP: We have a pretty good chance of doing a PEA this year. We could probably do a PEA based on what we have, but it would behoove us to do more drilling and also work on the metallurgy, the environmental aspect, the site plan and other things.

It?s not been a very fun two years for investors in this sector, but I think we have staying power. We?ve found a way through our business model of optioning and selling properties that we?ve found ourselves at very low cost and drilled at very low cost?Morgan Poliquin

RW: There was a story about Almaden by Christopher Davis on Seeking Alpha. He noted that your stock price went from $1.94 August 25 to $3.04 January 25. That?s a 56% increase at a time when the market isn?t doing very well.

MP: We?ve been able to weather the financial storms that are particularly difficult for prospectors by virtue of the fact that we?re able to monetize assets. From the time we discovered the Ixtaca deposit, we have suffered very little in the way of dilution. We?ve been able to do it largely on a cashflow-neutral basis, and that?s because we have large equity positions that we?re able to liquidate at various times. Since the Ixtaca discovery we?ve sold two deposits: Elk in Canada and Caballo Blanco in Mexico.

It?s not been a very fun two years for investors in this sector, but I think we have staying power. We?ve found a way through our business model of optioning and selling properties that we?ve found ourselves at very low cost and drilled at very low cost.

RW: Where do you see your company in two years?

MP: Moving Ixtaca long past PEA and hopefully into a development story. I think my skillset is in discovery and exploration. We?ve spent 15 years sitting in a helicopter flying around eastern Mexico landing on thousands of different places and selecting a whole bunch of claims valued virtually at zero because they?re early-stage. But we believe in our proprietary knowledge of eastern Mexico, of which we?re the pioneers. We know more about it than anybody, and I did my PhD on it.

So somewhere between now and 2015, we would hope to make a nice capital gain for shareholders with Ixtaca and then get back to our knitting, which is making new discoveries. We?ve made it very clear that we?re not miners. Our management group, me and my father [Duane Poliquin, Chairman], we have a history of our assets being bought out.

At press time, Almaden had 59.7 million shares trading at $2.53 for a market cap of $151.1 million.

Source: http://business.financialpost.com/2013/02/06/morgan-poliquin-discusses-almadens-ixtaca-gold-silver-project/

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