Categories: Base Metals / Precious Metals
Topics: General Base Metals / General Precious Metals

Almadex Minerals (TSX-V: DEX)(OTC: AAMMF) CEO Morgan Poliquin on Getting Gold, Copper, Zinc and Drills for Free

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, great to have you back on. How are you?

Morgan Poliquin: I'm excellent. Thanks for having me on. How are you?

Gerardo Del Real: I am well, thank you for asking. You're onto what looks like another discovery, Morgan, and I reached out, because I think this could turn into an important one. It's in Nevada, it's at a project that is a very, very large land package. And your first set of results included 1.70 meters of 11.8 grams per tonne gold and 68.2 grams per tonne silver. And 13.7 meters of 2.3 grams per tonne gold, and 24.1 grams per tonne silver. This of course, at the Davis/Paradise Project in Nevada. Congrats on what looks like could be a significant discovery. I know it's early on. I know it's a large land package, I wanted to have you on so you could provide some context for us.

Morgan Poliquin: Well, thank you very much. It's a project that I identified as part of a regional program that I put together and led some years ago. So it's been in our portfolio and of course, as you know, there's been lots going on in Almadex over the years. And we've come to focus on Nevada and we had a slower start on our program. We had a partner that wasn't able to do the work, and so we took it on ourselves, which we're able to do with our own drills, which I'd love to point out, which makes us unique, I think. And this project is something I really like. Now, interestingly, I consider it, there's two parts of the property. The northern part where these drill results come from that we call Davis. We added on to the original claim area we staked to the south, and there's two different targets, I think, on this large land package. To the north, the Davis area, it's veins. Classic epithermal veins.

We think we've actually identified a high level center, which is the top of an epithermal system. So prospective to depth in theory and multiple vein zones. And to the south, which again was the reason I actually first staked the project is something very different. We have a broad, expansive area of what we call acid sulfate lithocap alteration, which can host high sulfidation gold systems, which can be high grade structurally focused like veins, but more often than not, they're large bulk tonnage gold deposits depending on how they develop and can be associated at depth with porphyry copper gold systems, of which there are both in the area.

This property is right across the valley, just a couple miles away, really from Paradise Peak, which was a high-sulfidation gold deposit with gold rich porphyry showings. And to the north of us, a company has a historic copper gold porphyry. So it's in the heartland of significant deposits. And yet we found these interesting veins to the north where we've started drilling. These drill results you quoted are really a great start. Obviously, it's very early days, but they're corroborating, confirming the presence of a vein and obviously significant gold that we saw in some historic drilling. So we've started here, but the idea would be to expand out laterally from here.

Gerardo Del Real: What comes next, Morgan?

Morgan Poliquin: Right now, we have a crew following up. We had a brief period of drilling here. We've got some more results to report. We've got the results of our surface mapping and sampling program that we hope to be able to report on soon, and hopefully that will define how we go forward. We permitted a bunch of holes for future drilling. We've only drilled a couple of the targets on the property, the Davis target here being one, and there's a huge amount to do. So I'm pretty excited about drilling it again, but I'm also cognizant of the fact that it's very, very big and we've got lots to do in our portfolio. We've just announced a new zinc acquisition in Yukon, and so from my point of view, there's probably many ways of advancing this, but the plan right now as we've spoken about is to get back and do a second round of drilling.

Gerardo Del Real: The Davis project alone could merit easily the $19 million market cap that's being assigned to Almadex right now. You mentioned the Logan Zinc Silver Project, which correct me if I'm wrong, but there's a historic resource there that shows is it billions of dollars of metal in the ground, Morgan, am I getting that correct?

Morgan Poliquin: Well, the gross value of the Logan project, there's a lot of zinc there, and of course, there's been historic resources, but there hasn't been an up-to-date economic study, so we can't say the overall economics right now. But what we can say is that there's a significant historic resource and we're working right now on updating that and making it current. But you're right, the historic resource was pretty significant and what I can say is it's a broad zone. It comes to surface and for the Yukon, it's in pretty good infrastructure, not that far from the Alaska Highway. There was a winter road that was put in. So it's pretty exciting, when you consider the nature of these kinds of metals, zinc and its strategic importance in these times. It's a pretty nice thing to have in your portfolio.

Gerardo Del Real: And just to be clear, the historic inferred resource that was prepared in 2012, showed 42.7 million tonnes with average grades of 2.76% zinc and 12.89 PPM silver. You mentioned owning the drills. We talked about the Davis/Paradise project. We talked about Logan, we talked about the tiny $19 million market cap. What's the cash position look like?

Morgan Poliquin: At the end of the last quarter, it was the same as the end of the previous quarter, which is 17.2, I think, it was million Canadian dollars. And of course we have, well, through our projects, but principally our third party drilling contracts that are in Nevada and Mexico, where the drills are. We're able to be cash flow neutral with our explorations. So, that puts us in a really unique situation. We have a lot going on in the company, and I think that confuses people sometimes because they want something simple. But this is the good kind of complicated. We have cash, we have cash flow, and we have a portfolio of royalties that we haven't discussed, some of which are feasibility study like the Ixtaca deposit, or the newly discovered El Cobre copper-gold porphyry in Mexico. We have the properties you mentioned, as well as several others, a joint venture project porphyry in Nevada, gold projects in British Columbia.

But we also have the engine that developed all of these things, which is our prospect generation skills. And we've been pretty burdened by a lot of projects for a few years, but we have some great ideas. And really it's getting that engine working again. The Davis property takes a lot of our attention as it should, and Logan will too, but we really want to be generating these assets by prospecting again. And that's my forte, that's what I do. So I see going forward a company that has the resources. So part of our cash position comes from selling a royalty last year, and it was a great opportunity and we took it.

So we actually have the internal resources in theory to fund our exploration, and we've proven that the last few quarters with our drilling operations alone. So it's an exciting time, tough markets, but we've got good projects and a significant asset base, which is diverse. Not only across different interests like royalties, property interests, and the ability to generate new assets, but also in terms of commodities, zinc, silver, copper-gold, gold-silver. So there's quite a range of things that we have exposure to.

Gerardo Del Real: So just to make sure I'm understanding the investment thesis here, you can buy the company for basically cash and get the drills for free, the royalties for free, the gold for free, the zinc for free, the copper for free, and your cash flow positive most quarters. Is that accurate?

Morgan Poliquin: Well, I think that's a reasonable assessment of where we're at right now. The last few quarters we've been cash flow neutral, or positive, despite exploring and drilling and whatnot. And we've got a diverse range of assets and we hope to add to them, quite frankly. And so it's a company that's been around for 30 years. The asset base has been developed over 30 years, and it's all being developed largely through internal exploration efforts. And I'm excited about the future. We have a long history of working in North America, and that's where we're going to remain focused.

We believe that there's the geologic frame of reference there to add to this portfolio with the ideas that we have. And we believe that the assets that we've developed, whether they be royalties, our Ixtaca royalty in Almaden, if I can put my other hat on there, we think there's obviously, we're in the challenges right now. Title and some legal and permitting challenges there as everyone knows. But that's a tremendous asset that we're exposed to. So we believe that we have the capacity to add to these assets, but in the meantime, the asset base is there in the company. So it's a very unique situation, and to be trading at cash is a bit of a surprise, but I guess there's the opportunity potentially.

Gerardo Del Real: Well said. Morgan, thank you for your time. Appreciate it as always. Looking forward to the next set of assays and what looks to be a very busy rest of the year for you and the team.

Morgan Poliquin: Thank you so much. I really appreciate it.

Gerardo Del Real: All right, chat soon.

 

 

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