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Almadex Minerals (TSX-V: AMZ) CEO Morgan Poliquin on the Latest Impressive Drill Result at El Cobre Cu-Au Project

August 16, 2017

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining once again is CEO of Almadex Minerals (TSX-V: AMZ)(OTC: AXDDF), Dr. Morgan Poliquin. Morgan, how the heck are you this afternoon?

Morgan Poliquin: Outstanding. Thanks very much, Gerardo. Thanks for having me back on.

Gerardo Del Real: Well, thank you for coming back on, on such short notice. I needed to speak with you, you had a news release today. The headline reads, "Almadex Pulls Best Hole to Date at the Norte Zone in Mexico at the El Cobre Project with 534.9 Meters of 0.9 g/t Gold and 0.3% Copper.” Can you please share the details, Morgan? Congratulations.

Morgan Poliquin: Thank you so much. Well, doesn't happen every day that you get those kind of results. And it's nice, porphyry mineralization over that width. And near the top of the hole was the best portion. We had a sub-interval there that was even higher grade. Essentially, what we're doing since the discovery in August of 2016, a year ago now, we're starting to understand the distribution of grade, where the higher grades are. We're doing two things. We're stepping out to try to understand the distribution of this mineralization and how far it goes, as well as defining these higher grade zones that are clearly there.

So, very exciting news. It's pretty special, this doesn't happen every day. And particularly in a place like this where we're 6 kilometers from a deep sea port, from a nuclear power plant, from a highway gas line. The infrastructure here is out of the park, and we're about 200 meters above sea level. So it's a perfect place to find this sort of thing, and we still think it's early days. We don't understand how big it is. And we don't know where this high-grade is going fully, but now we're really starting to get a sense of it. It's going to be exciting, moving forward from here.

Gerardo Del Real: Well, you mentioned that interval that started at 118 meters. And, just for context, that was a 391.55 meter interval of 1.06 grams per tonne gold and 0.34% copper. You mentioned the fact that you don't know how big this is, this new high-grade component. You're not sure how big it is in scale yet, but I'm assuming it's open?

Morgan Poliquin: We believe it's open. As I say, we're doing two things. We have multiple drills and we have flexibility with our drilling program, which is something we're really proud of. Our light drills, we can move them very quickly and readily and be dynamic with the exploration. We're in a situation now where we're able to step out. And we think we have a good understanding of which direction the porphyry mineralization is going, and the controls on it. But at the same time, yeah, this high-grade zone, it is open.

And there is an orientation to it. And we think we're dialed into that. Once that happens, once you understand the geologic controls, you can then start to be a bit more systematic about flushing out the extents of the mineralization. So, all of this takes some interpretation. It also takes results, plain and simple, gold and copper grades. And I can tell you that those are slow getting out of the lab these days. It's all a process and we'd love it to go faster. But we're being systematic about it.

Gerardo Del Real: Excellent. Now, the Norte Zone is obviously shaping up to be a very, very compelling deposit. But drilling, and I'm excited about this, drilling at the Raya Tembrillo target. Where are with that, Morgan? I know that's a target that you're excited about. You mentioned that the outcrop there was one of the best you've ever seen, if I'm remembering correctly. How are things coming along on that front?

Morgan Poliquin: We're moving the drill up there right now. So we expect to get our first drilling shortly on that new zone. You can see why we have not drilled it yet. We've been a little preoccupied with some nice holes like this. But we've also had some weather that, it's a longer trail to get up there. We have these trails that go over hill and dale to move our rigs with. But there's been everything from hurricanes to a lot of rain this season in there. So we've put the drills to good use on the Norte Zone.

But finally, now, we're moving a rig up to Raya Tembrillo. It's an extremely exciting outcrop. It is a large area of outcropping porphyry mineralization, where we're getting strong gold grades at surface. And we don't know what will underlie it. But we're very hopeful that the surface outcrops will be part of a big system. So we're able to bring the drill right up on top of that. And we'll test that here shortly.

Gerardo Del Real: Excellent. Now, another zone that I believe you recently completed drilling at, is the Encinal Zone. I understand that we're awaiting assays for that zone as well. Is that accurate?

Morgan Poliquin: That is accurate. And that's another reason why, that was a very accessible zone, where we found some outcrop again, recently, with some good mineralization exposed at surface. And we put the drill there, kind of in transit to the Raya Tembrillo Zone, and we hit something pretty interesting right off the bat. And we drilled a few holes from that very same pad in different directions. To, again, try to understand which way that mineralization is going. And so, that drill is now moved up to Raya Tembrillo. And in the meantime, we'll wait for assays from Encinal, to understand how we're going to follow that up.

But we have a lot to follow up at Encinal. The first hole is obviously a good indication of that. There's another zone that we haven't even returned to, which has some past drilling. The only zone that had any significant drilling in the past, and that's our El Porvenir Zone. So, what I hope people can glean from this conversation is that there are multiple targets on the El Cobre project. And all of them have this kind of potential that we've demonstrated with the hole today.

Gerardo Del Real: I'm glad that you brought up the Porvenir Zone. Now, let's talk about that zone a bit. There were two intercepts that are notable. There was one of 48.76 meters at 1.19 grams per tonne gold and 0.12% copper. And another intercept of 106 meters at 0.36 grams per tonne gold and 0.23% copper. As far as context and scale goes, how far away is Porvenir from the Norte Zone?

Morgan Poliquin: Yeah. The Norte Zone to Encinal is about over three kilometers. And El Porvenir's about halfway in between. And that's to the southeast, roughly. And the Raya Tembrillo Zone is due south. So, there is about two kilometers. So there's quite a distance between these zones. In fact, porphyry mineralization, we'd been able to uncover it over roughly, almost five kilometers now in strike length. So it's a big area and it's a cluster of porphyry systems, which is not unusual. This type of porphyry, high gold porphyry environment, you tend to get multiple intrusive targets that form in this way. Without the detailed drilling that will come, it's hard to know which one of these things is the best. But, certainly, the surface soil crop at Raya Tembrillo is extremely exciting. That being said, it would be important to tell listeners that the surface outcrop at Norte is very unimpressive.

Gerardo Del Real: Interesting. I should mention, there's a third intercept at that Porvenir zone, that merits mentioning. And that's a 290 meter intercept at 0.39 grams per tonne gold and 0.16% copper. So, again, just for scale, that's pretty impressive when you consider how far these porphyry clusters are from each other. Can you talk a bit about the overall land package, Morgan? How large is the land package there?

Morgan Poliquin: We've got, just off the top of my head, around 9,000 hectares. So, our claims cover this entire district. That's what we consider this to be, a district of porphyry mineralization. So we're in sole control of it. And we have the ability to explore it fully with our drill rigs and also the fact that it's a highly accessible area, which I explained earlier. Good road access to the project, in general, and good trail access for diamond rigs that we can move around to all these targets.

So it's been an exciting year. And I think the work at Norte will continue to produce the results there from the drilling that we've conducted to date and report them. And we're moving towards a resource there, as we've pointed out. We think the drilling will contribute to understanding the tonnes and grade that are going to emerge. And at the same time, it's going to be exciting to see what happens at Raya Tembrillo.

Gerardo Del Real: Well, the market responded well today to the news. You were up approximately 16% on just over 300,000 shares. Even after today's increase, I believe you have a market cap, sub-$51 million Canadian. So, obviously a lot of upside. It'll be exciting to get drilling going at Raya Tembrillo. But I get the feeling that we're going to have some more things to talk about at the Norte Zone as we get further assays.

Morgan Poliquin: Well, appreciate it very much. We really look forward to having that conversation around the results as they come out. We think we have an exciting program laid out. The results will speak for themselves. But they're all moving in the right direction. Takes a while to understand these things in three dimensions. We think a picture is emerging that's pretty exciting.

Gerardo Del Real: Excellent. Morgan, I want to thank you again very much for your time today. I hope to have you back on as we get further results. Congratulations again.

Morgan Poliquin: Thank you so much. Appreciate it.

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