Gerardo Del Real: I know that you're targeting production, hopefully, for 2019. I know, in this release, you made it a point to mention that the state-owned electric utility in Mexico has confirmed the availability of power, so you're cashed-up — you have a mill. You have what's already a robust project. Tell me a bit about the exploration upside, Morgan, because I think a point that gets lost often is how much of this property is virtually unexplored.

morgan poliquin

Morgan Poliquin: Well, that's right. Just to go back to what we were initially talking about, the first time this project was ever explored in a modern way was by us. Subsequent to staking it in 2001, we finally drilled this gold area in 2010 and made this discovery. Where the discovery is located within a very large area of alteration. As listeners may, I'm sure, know through bitter experiences, that after 2010 and 2011, early 2011, the big spike in metal prices and mining stocks, they collapsed pretty precipitously, and it was very challenging times. Of course, we experienced that immediately after our discovery. Our focus has really been on defining the resource, which has been very successful, as we've been outlining, and the deposit itself and moving through these studies. We have a significant resource, and our focus has not been on exploring other areas of the property. We have the focus here, and we've been putting the pieces together to make it a robust project.

That leaves the exploration upside for us to now get back to our knitting, which is exploration, and focus on it again. We're quite excited to do that. We're starting to go around and drill other areas of the property that we've never drilled before. Of course, as I mentioned off the top, we're drilling underneath this clay alteration, and we call that blind exploration. Much like the first discovery hole, we... It doesn't occur on the surface. You're not drilling under something that's outcropping, as we call it, or just ready for you to see. We're poking away, and we expect, eventually, that we will discover more things on this property. That process is underway now, and it's exciting to be at it again.

Gerardo Del Real: Excellent, excellent. How are the recoveries, Morgan? I know the PFS [pre-feasibility study] has pretty robust recoveries.

Morgan Poliquin: Yeah. Our main unit is the limestone, which is about 85% of the deposit. For that unit, we're seeing basically 90% gold and silver recoveries that are in parallel with one another. Overall, the gold recoveries are slightly less than the silver. I think, overall, they're 84 versus 90, and that's because a lower-grade volcanic that we mine through that's on top of the limestone has lower gold recoveries in that particular unit. But the bulk of the deposit, the limestone unit, it's really the same recovery. It's very high overall recoveries of 90%.

Gerardo Del Real: Excellent, excellent. Morgan, is there anything else that you'd like to add? Can we talk a bit about how much you anticipate it's going to cost to mine per ton, because I understand it's ridiculously low?

Morgan Poliquin: Well, open-pit mining, the accessibility of the deposit, just the simple spatial nature of the deposit and the geography, if you will, allow for open-pit mining, and that's a huge boon for two reasons. When you go underground, underground mining is very expensive. Many underground mines in Mexico, as I understand it, are 75 U.S. dollars a ton to 100 U.S. dollars a ton or more. When you're mining underground, you never know exactly what you're going to be pulling out because you're basically creating a hole underground, and undesirable rock that you don't want may fall into that hole along with the rock you do want. We call that dilution, and that can reduce the grades.

In an open-pit mine, everything is exposed. As you're mining along, you can decide, there on the spot, whether you want to take this to your mill or not. It reduces the risk of dilution significantly, particularly with a big, wide deposit like this with clear visual contrast between the veins and the limestone. We think that low-cost, open-pit mining and the deposit style that we have, this big, broad vein swarm that I described in detail earlier, are ideally suited here. It's a unique situation in many respects. Yeah, open-pit mining is, just as a round number, in Mexico, is around $2 a ton. Obviously, it's vastly different than the cost of underground mining.

Gerardo Del Real: Absolutely, absolutely. Morgan, you have two rigs turning right now. What can we anticipate from Almaden here within the next 6 to 12 months? What's the plan of operation?

Morgan Poliquin: Yeah. We're doing a bankable feasibility study, and there's some drilling involved in that, as you might expect, some additional engineering studies to add to the pre-feasibility study we released earlier. There's additional work there that will be important for the feasibility study. However, we're getting back to our knitting of exploring and shooting for the moon and drilling under this clay alteration zone elsewhere, in some cases, kilometers away from the deposit. As we have meaningful information, we'll report that from the exploration program.

At the same time, we have recently — I believe it was in September. It might have been August. You'll have to correct me, Gerardo, but we put out a news release that described a drill intercept that was a surprise to us. We intersected a new zone we were not aware of that in the PFS was categorized as waste. In fact, it could well be ore if we're able to find more of it, of course. That was extremely exciting, and I think it speaks to the opportunities to improve the deposit beyond what is currently known. We'll continue to do a drilling near the resource as well.

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