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Almadex (TSX-V: AMZ)(OTC: AXDDF) CEO Morgan Poliquin on Its Brand New Gold-Copper El Cobre Porphyry Discovery

October 31, 2016

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is Almadex Minerals (TSX-V: AMZ)(OTC: AXDDF) president and CEO, Mr. Morgan Poliquin. Morgan, thank you for coming on.

Morgan Poliquin: Thank you for having me again, Gerardo.

Gerardo Del Real: It's exciting times as always with Almadex. October 24th, you had another release confirming the gold-rich porphyry system at the Norte target at your El Cobre project in Veracruz, Mexico, and the headline read, "Almadex confirms gold-rich porphyry system at Norte target, El Cobre project, Mexico, hits 218 meters of 0.70 grams per ton gold, and 0.28% copper, including 80.5 meters of 1.34 grams per ton gold, and 0.46% copper." Impressive, impressive numbers. I know it's early. We've talked about that, but it's very exciting. What can you share about those results and where we are now in the program?

Morgan Poliquin: Thanks, Gerardo, for the opportunity to do that. Look, as you point out, it's only the second hole in the program, and the first hole hit something that was pretty much brand new in the project, and this followed it up. It's really nice to be able in two holes to get similar results. We're certainly drilling away with ... We note on our news release here another hole that we have completed and we're drilling a number of other holes. We feel, geologically, it's very early in the program, and we are very excited to have these results, but the earth is pretty heterogeneous, and we're not 100% sure what the orientation or the direction to chase this is exactly. This is just one plane, one drill section we're working on, so we need to drill a lot more holes to understand it.

One thing I'm convinced this is a porphyry system, and porphyries are typically intrusions, we call them, which are magma plugs that come up into the earth, and we haven't found that part of the system yet, in my opinion, so there's still a lot more figuring out to do. We're early in the program, but it's really exciting to get this tenor of gold grades. I think what's unusual about El Cobre so far is that we've got a very good gold to copper ratio. The high gold is not unusual in the world, but it's really exciting to see that, particularly in Mexico. A lot of the porphyries in Mexico are not gold-rich. This system is gold-rich, so we think it's an excellent start, these two holes. We think it's very early stages. We have multiple porphyry targets on this property, so we think that the Norte zone is one of several. We've identified four different areas where there's porphyry style mineralization. We think this is a very good indication of the potential of the property, not only the host porphyry mineralization, but for it to be significant with respect to gold.

The other thing I would point out I think is really important to understand is we're in an area that is very developed. We're in an area that has excellent infrastructure. We're about, oh, little less than 10 kilometers from a nuclear power plant, so there's power lines going over the property. There's a highway nearby, a gas line. You've been there yourself recently, Gerardo, and I think this is an excellent place to find a porphyry, because they tend to be large and have larger capital costs associated with it. Not only is it a new geologic area with great gold grades, but it's also in an area that's permissive to develop, potentially, if we're able to define something economic here. That's the key point, however, that I want to leave people with, is it's early days, and we'll be approaching this in a scientific manner, the exploration program.

Gerardo Del Real: Morgan, you mentioned me being out there and the infrastructure's just absolutely world-class. You've got the Pan-American highway, you've got the nuclear power plant, and also I think important to note is you have Caballo Blanco, which was also a discovery that you made years ago. It had been stalled for a while on the permitting front, but it appears like there's progress there, and like the group that has it now may have the political capital to advance and develop that. I got to believe that having traction on a positive note with Caballo Blanco is a big positive for El Cobre as well.

Morgan Poliquin: I believe that's the case. This is an excellent place to develop a mine. It's already a developed area, so there's no reason why this shouldn't be a focus of mining, actually, the state of Veracruz and this area. We see that the new company that ... Almadex has a royalty on Caballo Blanco, so of course we're highly invested in their success. Candelaria Mining, they're a venture listed company, and we see that they certainly ... Enough water's under the bridge with perhaps some efforts earlier that were unsuccessful. We don't think that there are local issues that are prohibitive to development. Quite the contrary. We think that this group that has the project currently will navigate the permitting process more successfully, or is very likely to. Yeah, I think we'll see some developments there over the next 12 months. Certainly that's what they're guiding their company. That would be wonderful to demonstrate permissibility of permitting in this area, because the past efforts certainly left some doubt in some people's minds.

Again, El Cobre's a different kind of a beast than the Caballo Blanco gold system. These systems can be very, very large. But that being said, they can also be complicated, so we think it's early days here, but very exciting early days at that.

Gerardo Del Real: Wonderful. Now Morgan, the other takeaway from the news release is, you mentioned the multiple porphyry centers. You also mobilized a second drill rig and drilling team, and if I understand it correctly, you're now working on the Encinal Zone, which is roughly three kilometers to the south of the Norte Zone. Can you tell us a little bit about the target there?

Morgan Poliquin: These are porphyry systems. They're very large footprints, so we have about five by five kilometers of alteration, and to put it kind of a metaphorical way, imagine the type of mushroom that has a huge cap on it. We're looking for the stems, and that mushroom cap is what we're left with to explore through to look for those stems. I hope that's a good metaphor for your listeners. Those stems could be anywhere within that mushroom cap, and we certainly have employed all the techniques that we have available to us. IP geophysics, soil samples, and we're essentially getting a response that shows that there's a large area within which to explore. Happily, we poked around mostly ourselves historically with some drill holes in the Encinal area, which is one area of the property where we have found porphyry mineralization, and there we've got some pretty good hits, but we're clearly peripheral to that mushroom stem. We think that drilling is the best way to continue to explore that system, and we'll report results as we get them. It's a question of using the drill data to vector in towards a center which we firmly believe we will find eventually.

Gerardo Del Real: Fantastic. Morgan, exciting times over at Almadex. Thank you so much for your time, and hopefully we have you back on soon as assays continue to come in from El Cobre.

Morgan Poliquin: I really appreciate it. Thank you so much. Great to be on your show.

Gerardo Del Real: Any time, Morgan. Thank you.

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