Categories: Precious Metals
Topics: General Precious Metals

Almadex Minerals (TSX-V: DEX)(OTC: AAMMF) CEO Morgan Poliquin on Cash, Rigs, Royalties & Drilling at Two 100%-Owned Projects

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Almadex Minerals, Dr. Morgan Poliquin. Morgan, always great to have you on. How are you today?

Morgan Poliquin: I'm great, thanks. How about you?

Gerardo Del Real: I am doing well. Thank you for asking. I am an excited Almadex shareholder, because you are drilling not just one project that I really like, but two projects that I really like. I'd love to start with the San Pedro Silver Gold Project in Jalisco, Mexico. That's a project that you've had in your portfolio for quite some time. For those that aren't familiar with you and your father and the exploration that you've pioneered especially in eastern Mexico, but in a lot of parts of Mexico, can you provide a brief overview of how these projects came to be in the Almadex portfolio? Because I know how meticulous you are about vetting projects. And then we can talk about San Pedro, and then we can follow up with the Davis/Paradise Project in Nevada, which also will see diamond drilling here.

Morgan Poliquin: Well great. Yeah, thanks for the opportunity. And San Pedro actually is a little bit unique. What we like to do is prospect with new concepts or geologic ideas really, and hone in through sort of base work that we do. In Eastern Mexico, we feel like we defined several different belts of rocks that are prospective with our own work that's seemingly academic, but it really helps hone in on areas. So things like we do our own age determinations, which seems a bit strange, but understanding the age of rocks can really help you hone in.

And so in Eastern Mexico, it was a regional concept that resulted in several discoveries over the years, but in San Pedro it's a little different actually. It's an area that we were watching and had some general ideas about, but it has had some past work, and we thought that the geology was really interesting. And when it came open for staking, we kind of jumped on it. So it was a bit more of an opportunistic acquisition, but at the same time, it's part and parcel with our regional understanding of Mexico and the geology. And we've done a little bit of work there. We've done some geophysics, we've done some soils, there's some past drilling. We've done some preliminary drilling on some targets, and we're back here to, we've honed in and some additional field work has identified some zones that are really interesting. And so what we really have, it's our generative... How we get projects in the first place I kind of explained.

But for us it's a two punch exploration program. We believe that discoveries are made through drilling early, and often in exploration, drilling is pushed off for I think two reasons. The expense of drilling, and also people tend to do a great deal of work early on just out of habit. And I think that you get a lot of geology out of drilling, and people are afraid to drill because it might be too preliminary and give them the wrong answer. We like that. We like to get geologic information, and negative information is also helpful, number one for maybe ditching a property, or number two on helping you understand it better for another round of drilling.

So we own our own diamond drills, and that's what is the big game shifter for us, is that by owning our own diamond drills in Almadex, we're able to drill extremely inexpensively. And so we believe that the drill is a prospecting tool to be used as early as possible, and as often as possible. So that's what we're doing at San Pedro, and I guess you'll probably ask me about Nevada too, where we're also going to do that.

Gerardo Del Real: I absolutely am going to ask you about Nevada, but before we get to Nevada, it is very much a luxury to own your own drills. I think you're up to how many now, six Morgan?

Morgan Poliquin: That's right, yeah.

Gerardo Del Real: And this is a combination of drills that can go way down under, to diamond drills, truly a combination of all you could possibly need as a junior exploration company, right?

Morgan Poliquin: Absolutely. We have a range of them. And we started small, and the rig that we have that... Well basically in both places, San Pedro and in Nevada, these rigs are really portable and allows you to do preliminary stage one type of drilling simply, easily, inexpensively, but also in a low impact way where they don't require major road building, which are impactful and expensive, and require a lot of permitting. But we also have some larger versions that are for deeper drilling. For example, Azucar’s El Cobre project is a porphyry that requires testing a little deeper, so we have a range of drills. Yep.

Gerardo Del Real: Excellent. And then the shameless plug, you also at times contract those out to companies where it makes sense to do so, correct?

Morgan Poliquin: Well, that's right. And when I'm often asked the question about drills, really it's people. Because drills can be purchased by anybody, but having quality people, trained people, they're our most valued asset is our people. And our people are very capable. We've found many of our drillers in local communities where we work, and have offered them the training to do this. So we have a really great team, and that's really the difference. And you're right, we can't be drilling all the time with six drills on our own projects, so we often look for places where we can do third party work for the sake of those people and keeping them busy obviously. And that enables us to have that ability on tap for our own purposes as well.

Gerardo Del Real: Excellent. Let's talk about Davis/Paradise. It's a project that I really like. It's a project that is very large, and I'm no geologist, but even I know it's complex because there's multiple styles of mineralization. Earlier this year you hit a vein target that included 13.7 meters of 2.3 grams per tonne gold and 24.1 grams per tonne silver, that also included 1.7 meters of 11.8 grams per tonne gold, and a 68.2 grams per tonne silver. What is your approach for this round of drilling at that project?

Morgan Poliquin: Yeah, it's going to be kind of twofold. We're going to follow up on that drill intercept you just mentioned. We think that there's potential that that's open to depth. And we're going to test underneath and perhaps some more, so that's one of the targets for certain. But just to step back, there's kind of a multitude of things going on there. And in fact, they may be unrelated except in location.

So we've got on the south end of the property, which initially brought us here through my regional work, I was running around testing a theory using a helicopter to get me around to a bunch of sites. And we staked this area because of this big, what we call high sulfidation alteration which is, it can host gold deposits such as Paradise Peak, which is very close to us across the valley.

And so that attracted us to the area, we staked those claims in the south. And then lo and behold, there's some veins to the north that were held by some prospectors, and they look pretty interesting and may or may not be related to the high sulfidation alteration. So the Davis vein is to the north, we've acquired that ground, and have a large consolidated project now with multiple targets. So some of the targets, it'll be preliminary testing for us, kind of first pass testing of some of the concepts that we put together with our more recent sampling and mapping, and combined with some follow up drilling at Davis. I'm not sure how much we'll get done because winter is coming and snow may fly, but we'll get as much done as we can.

Gerardo Del Real: In addition to the drills, the two projects you're drilling right now, you acquired a hundred percent of the Logan Silver Project in the Yukon earlier this year. That's a project that has, by my estimate, billions of dollars worth of metal in the ground in a historic resource. And you have a cash position that's as robust as any junior right now. What's the cash position stand at right now?

Morgan Poliquin: At the end of the last quarter, we were 17.2 million Canadian dollars.

Gerardo Del Real: And what's your market cap? Mind you, I just mentioned the drills, the two projects you're drilling, the portfolio of projects. I hadn't even mentioned the royalties. I mentioned the Logan Project, the 17 million in cash at the end of the last reporting period. And your market cap stands where?

Morgan Poliquin: Well about the same as the cash, around 18 million or so.

Gerardo Del Real: Yeah. So you get everything for free, and you can buy the cash pretty much.

Morgan Poliquin: Well yeah, I mean obviously we're in these kinds of markets right now, but we've got great shareholders. We've built this company really well. It's a relatively new company in some respects through this spin out process. We built these projects, assets, royalties, and abilities, we talked about our prospecting and our generative capacity. That's what we'll be focused on moving forward more than ever, and we have the capital to do so.

But all of these things have come from years of effort as well. I think is worth pointing out that you don't just build this overnight and it's all kind of organic growth. So yeah, with Almadex getting exposure to all those intangibles which really built the company in the first instance. And you mentioned Logan, I mean that's kind of an example. We had a 40% interest in that project that was just hanging out there so to speak, because the 60% partner was not advancing the project, and that, through a receivership we were able to buy the project back. So those are the things that we hope to, all these legacy assets that we're working on combined with our desire to and our real proven ability to add new assets as we move forward and really get these drills spinning on hopefully making the next discovery obviously. So it's an exciting time for us despite the valuation, and our focus really is discovery, and hopefully people will look at the asset base and realize that like you say, they're getting that enterprise value for free.

Gerardo Del Real: As good a speculation in the resource space as is out there. Royalties, drills, cash, a hundred percent owned projects that are seeing drilling, and drilling that has commenced or will be commencing shortly. Morgan, thank you so much for coming on. I appreciate your time as always.

Morgan Poliquin: Thank you very much. Gerardo. Likewise.

Gerardo Del Real: Good luck with those drills. We'll chat soon.

Morgan Poliquin: Okay, cheers. Take care. Bye.

Click here to see more from Almadex Minerals