Part of the Stock Digest group of websites: Visit Tech Stock Digest  

Almaden Announces Ixtaca Gold-Silver Deposit PEA Update Showing Significant Capital Savings Using the Rock Creek Mill

VANCOUVER, BC--(Marketwired - December 09, 2015) - Almaden Minerals Ltd. (TSX: AMM) (NYSE MKT: AAU) is pleased to report positive results from an updated National Instrument (NI) 43-101 compliant Preliminary Economic Assessment ("PEA Update") on its 100% owned Ixtaca Gold-Silver deposit, Mexico which incorporates the benefits of the Company's recently announced option to purchase the Rock Creek Mill.

PEA UPDATE HIGHLIGHTS (all values shown are in $US; base case uses $1150/oz gold and $16/oz silver prices):

  • Initial Capital is $100.2 million;
  • After-tax payback of initial capital in 2.6 years.
  • Pre-tax NPV(5%) of $266 million and internal rate of return of 39%;
  • After-tax (including new Mexican Mining Duties) NPV(5%) of $166 million and internal rate of return of 30%;
  • 36 million tonnes of mill feed averaging 0.76 g/t gold and 47 g/t silver (average head grade of 1.42 g/t gold equivalent using a 72:1 silver to gold ratio)
  • Total LOM production of 724,000 ounces of gold and 49 million ounces of silver (1.4 million gold equivalent ounces, or 101 million silver-equivalent ounces at a 72:1 silver to gold ratio);
  • Operating cost $684 per gold equivalent ounce, or $9.50 per silver equivalent ounce
  • 97% of the PEA Update mill feed is in the Measured and Indicated categories of the resource model.

Past PEAs filed on the project and this PEA update have been prepared by Moose Mountain Technical Services ("MMTS") and Knight Piésold Ltd. ("KP"). The conclusions and recommendations of past PEAs were that the Ixtaca deposit is potentially economically viable and the Company should proceed to a Pre-Feasibility study ("PFS"). Since that time work has commenced towards completion of a PFS, including a number of optimisation studies, and the Company has secured an option to purchase the Rock Creek Mill (see Almaden news release of October 19th, 2015).

The primary reasons for providing an update to previous PEA studies on the Ixtaca Project are to show the impact of significantly reduced initial capital cost on project economics and to demonstrate the viability of an alternate mine plan which focuses on the near surface high grade limestone hosted portions of the Ixtaca Zone deposit. This alternate mine plan is a smaller high grade scenario that still allows for expansion into a larger production scenario as described in previous Ixtaca PEAs (see Almaden news releases of April 16th, 2014 and September 3rd, 2014). In addition, this PEA Update incorporates results from various engineering studies related to the project which have been conducted since the September 2014 PEA report. This PEA Update incorporates:

  • The same resource model as the maiden PEA;
  • The Rock Creek Mill with average throughput of 7,500 tonnes per day;
  • A smaller, near surface and payback focussed pit;
  • Mine production schedule which targets higher grades earlier;
  • Optimised waste placement and tailings management facilities;
  • A 2% NSR held by Almadex Minerals Limited (TSX VENTURE: AMZ).

This PEA UPDATE is preliminary in nature as it includes inferred mineral resources which are considered too speculative geologically to have the economic considerations applied that would enable them to be categorized as mineral reserves. There is no certainty that the PEA Update forecasts will be realized or that any of the resources will ever be upgraded to reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

J. D. Poliquin, Chairman of Almaden reported, "This PEA update shows material improvements to the potential economic viability of the Ixtaca project realised through the recently-optioned Rock Creek Mill. At the same time a new mine plan is presented that optimises the mine plan for the lower metal price environment we find ourselves in by focussing on the near surface, quicker payback material. We now continue working on a PFS to further de-risk the project and initiate the permitting process."

Geology and Mineral Resources
The Ixtaca deposit is an epithermal gold-silver deposit, mostly hosted by veins in limestone and shale basement rocks with a minor component of disseminated mineralisation hosted in overlying volcanic rocks. In the September 2014 PEA the limestone host rock comprised 73% of the metal produced, volcanic 19% and blackshale 8%. In this PEA Update limestone comprises 91% of the metal produced, volcanic 7% and blackshale 2% on a gold-equivalent basis using a 72:1 silver to gold ratio.

On January 31, 2013 the Company announced a maiden resource on the Ixtaca Zone. Since that time drilling has been focused on expanding and infilling the known resource base for this PEA which utilised the NI 43-101 Compliant Updated Mineral Resource Estimate released January 22, 2014, performed by Gary Giroux, P.Eng., qualified person under the meaning of NI 43-101, and summarised in Table 3 below. The data available for the resource estimation consisted of 423 drill holes assayed for gold and silver. The estimate was constrained by three dimensional solids representing different lithologic and mineralized domains. Of the total drill holes 400 intersected the mineralized solids and were used to make the resource estimate. Capping was completed to reduce the effect of outliers within each domain. Uniform down hole 3 meter composites were produced for each domain and used to produce semi-variograms for each variable. Grades were interpolated into blocks 10 x 10 x 5 meters in dimension by Ordinary kriging. Specific gravities were determined for each domain from drill core. Estimated blocks were classified as either Measured, Indicated or Inferred based on drill hole density and grade continuity. Wireframes constraining mineralised domains were constructed based on geologic boundaries defined by mineralisation intensity and host rock type. Higher grade zones occur where there is a greater density of epithermal veining. These higher grade domains have good continuity and are cohesive in nature.

                      
MEASURED RESOURCE
AuEq Cut-off  Tonnes > Cut-off  Grade > Cut-off  Contained Metal x 1,000
(g/t)  (tonnes)  Au (g/t)  Ag (g/t)  AuEq (g/t)  Au (ozs)  Ag (ozs)  AuEq (ozs)
0.3  44,550,000  0.48  30.28  1.07  682  43,370  1,527
0.5  30,420,000  0.61  39.44  1.38  599  38,570  1,350
0.7  22,300,000  0.73  48.02  1.67  526  34,430  1,196
1.0  15,620,000  0.88  58.66  2.03  444  29,460  

Subscribe to the RSD email list and get the latest resource stock activity directly to your inbox, for free.

MARKET SUMMARY

INDICES

Name Last Change
DOW 25219.40 0.08%
S&P 500 2732.22 0.04%
NASDAQ 7239.47 0.23%
TSX 15452.64 0.29%
TSX-V 830.17 0.00%

Resource Commodities

Name Last Change
Gold 1347.29 0.45%
Silver 16.65 1.32%
Copper 3.24
Platinum 1007.50 0.000
Oil 61.68 0.55%
Natural Gas 2.56 0.86%
Uranium 24.25 N/A
Zinc 1.63 0.00%

@RSDigest ON TWITTER

Part of the Stock Digest family of websites
Small Cap Stock Digest