General Precious Metals
Almaden Minerals (TSX: AMM) CEO Morgan Poliquin on Vein Systems at Ixtaca Project
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Almaden Minerals, Dr. Morgan Poliquin. Morgan, how are you?
Morgan Poliquin: I'm excellent, thank you. And you?
Gerardo Del Real: I am well. I am so excited about your news, that my voice is going out here. You had some news that I wanted to reach out immediately and chat with you about. You discovered veins cropping out in the southeast alteration zone of the Ixtaca property and I wanted you to explain to our audience the significance of those veins. You and I have had frequent conversations about the excellent exploration upside at Ixtaca and I was hoping that you could provide some context for the non geologists like myself.
Morgan Poliquin: Great. Well, thanks for the opportunity. Yes. We're pretty excited about what we're finding at surface there. And basically what I'd like to try to explain is that these gold systems are kind of a bit like a mushroom. They are hot springs is how they formed originally and the hot fluids that transport the gold and silver come up cracks, which we call veins later on. And then the fluids kind of come out at surface in the form of a hot spring usually and they affect the rock over a big surface area. These fluids are sort of boiling and springing out and steaming and that sort of thing. In our case, we have a volcanic unit, a layer of volcanic that overlies limestone and the veins that we have found in the Ixtaca deposit are in the limestone and then it looks like the hot fluids came up and then went right through over a big area in this volcanic and affected it and kind of baked it, if you like, to clay minerals.
And so that's kind of the layman's explanation. And so in cross section, you'd kind of see a mushroom stem which is the vein coming up into this big area of clay. The area of clay in the volcanic that's above the Ixtaca deposit itself, that clay extends to the southeast for quite a distance, well over a kilometer away from the deposit. Our kind of sense was, well, maybe beneath that clay alteration somewhere else, we'll be able to find similar veining and indications that there could be veining underneath. And we found these interesting minerals, which are kind of indicative that, hey, that could happen. Which we already mentioned. And so this news release basically says, well, we went out there and in the limestone, we actually found some limestone and the contact between the volcanic and the limestone. And we found some veining there.
Obviously it's early days, we've sampled it. We haven't got the results. Luckily we were able to grab an independent geologist in these strange times, who was traveling in Mexico, who's part of the firm that we've used before and were independent on our feasibility study. And so that was very fortunate and we've sampled them. And so it's higher in the epithermal system, so we're not sure if, we're not necessarily expecting them to run, but we're hoping that they'll obviously give us some more focus and from our perspective, these are drill targets and we're really excited to be able to share the progress of this exploration program.
Gerardo Del Real: And this is exciting because the main Ixtaca zone of the Ixtaca deposit is hosted by limestone, correct? Where the veins form and there's a swarm, is that accurate?
Morgan Poliquin: That's right. And the limestone compared to the volcanic on top of it was really brittle and broke up and allowed for these fluids to be kind of focused in the veins. And then, the volcanic on top has kind of acted a bit like a sponge if you like. That's the visual that we kind of think of. And so, we know that the limestone will be underneath and in places we've found it in the southeast alteration zone in gullies and in arroyos cropping out. And so, all the indications are all adding up to a really exciting drill target. And really, obviously this was found in 2010 with our first drill hole into the Ixtaca deposit area, actually hit right in the main zone and was our discovery hole.
But before that, this was a whole new area. But now obviously we've defined something very significant. We got a feasibility study on the Ixtaca zone itself. The best place to find a new deposit is near an old deposit. It's pretty tough sledding if you want to run out and find something brand new, but we've already done that. We've defined the potential of the area, I think, through having discovered a deposit. And so obviously this is a step towards being able to really have a focused exploration drill program.
Gerardo Del Real: Let's talk about the potential for an exploration drill program because you and I just chatted earlier this month about the target, the deep target at the Ixtaca main zone and how drilling to depth was going to be a priority. You now have another target a kilometer and a half or so away. How are you prioritizing those? And is there the potential that both targets are tested?
Morgan Poliquin: Yeah, I think obviously, there's a few new variables here and so, we're extremely cautious with our crew and our communities. And so, having multiple drills and large field programs are something that may not be easy to do or desirable. We're taking it step by step, but obviously you're right, we've got multiple targets. We've also got a target called the Tano Zone that actually has some drilling in it that's along strike from the main deposit. There's a whole bunch of things to do, but I think we have to have targeted focused drill holes and drill campaigns and whether we can have two drills working on different targets at the same time, unfortunately remains to be seen and our priority is health and safety. That would be nice, but I think the best we can do right now is to really highly define the targets so that we know exactly what we want to do when we get to drill, when we finally get to be drilling.
Gerardo Del Real: Well, and I just want to remind everybody, there's already a deposit there that you have numbers. At $1,250 gold, you have a $310 million after tax NPV. That's US. Your current market cap is about half of that right now and obviously gold is a lot higher than 1,250 and silver is a lot higher than $18 an ounce. Undervalued if you never discover another ounce of gold or silver, but I suspect that there is a lot more to be discovered and I'm excited to see you get back out there and engage in that process again. Morgan, is there anything else that you'd like to add to that?
Morgan Poliquin: Yeah, I really appreciate what you're able to elucidate there. Just we've always felt since the discovery and the definition of the Ixtaca deposit, that it's kind of two projects. It's been 10 years since we made the discovery and the market that we've been in for most of those 10 years have required us to really focus on de-risking and developing the Ixtaca deposit and ultimately producing a feasibility study in 2018. We've not been able to really focus on the exploration side of things. And as I explained earlier, it was a new discovery. This whole area was not known as having this kind of potential prior to 2010 in our discovery drill hole. These epithermal vein systems, they can be comprised of multiple veins. And so that's obviously what we're hoping for here and that blue sky has just not been explored since the discovery time. We've had to focus on resources and engineering studies and those kinds of things so it's really exciting to get back to it.
Gerardo Del Real: Agreed. And just to be clear, the numbers I cited were from the PEA, the feasibility study. You actually used $17 silver and $1,275 gold. No, impressive work all the way around, Morgan. I'm looking forward to chatting again. And I know it's definitely interesting times with COVID and this new surge and being cautious, which of course is the right approach. You've always approached the community and your social license with tremendous care and that should be applauded as well.
Morgan Poliquin: Thank you very much for that.
Gerardo Del Real: Thanks, Morgan.