Almaden Minerals Ltd. is pleased to report on the on-going development and exploration activities at the Company's 100% owned Tuligtic project and the Ixtaca gold-silver deposit located in Puebla State, Mexico.
Advanced engineering and environmental baseline studies designed to meet the requirements of a Pre-Feasibility Study ("PFS") and the submittal of an environmental permit application and risk assessment to the Mexican regulatory agency responsible for mine permitting are ongoing.
As announced on October 19, 2015, Almaden secured the option to purchase the Rock Creek mill, which only operated for several months before the mining operation was curtailed in 2008 and has been kept in excellent condition during subsequent care and maintenance. The mill was built to process 7,000 tonnes per day, and includes a three-stage crushing plant, gravity circuit, ball mill, flotation cells, leaching facilities, conveyors, metallurgical and chemical fire assay laboratories, a water treatment plant, full electrical circuitry including generators, and a number of spare parts for the ball mill and crushers.
In order to demonstrate the impact of this option agreement on Ixtaca economics, Almaden updated its preliminary economic assessment ("PEA") on Ixtaca (see Amended PEA filed on SEDAR on April 13, 2016). This study demonstrates that for initial capital costs of US$100 million, the Ixtaca project shows (after tax basis) a 30% IRR and a US$166 million NPV (5%) using $1150 gold and $16 silver all the while producing on average 108,000 ounces AuEq per year (using a 72:1 silver:gold ratio) for approximately 13 years.
In addition to reflecting the Rock Creek mill in the economics, the Amended PEA incorporates a smaller, near surface and payback-focussed pit, and optimised waste placement and tailings management facilities in addition to other changes. Subsequent site visits by the independent consulting engineering team of Moose Mountain Technical Services and Knight Piesold Ltd. have identified further optimization opportunities through updated waste placement and facilities locations. The related geotechnical, geomechanical, and hydrologic field programs will be completed to a PFS level this year, allowing for the completion of a PFS and submittal of environmental permits shortly afterwards.
To date Almaden has completed or initiated the following studies:
- Hydrologic studies including the drilling of water test wells and installation of hydrologic equipment for baseline monitoring of existing subsurface water flow and quality on the project site;
- Baseline surface water quality and flow measurements;
- Geochemical characterization of rock materials;
- Condemnation drilling of areas where mine infrastructure and waste rock placement is planned;
- Geotechnical drilling to confirm foundation, footing and subsurface material quality;
- Geomechanical drilling to confirm rock strength, hardness and pit slope parameters;
- PFS level metallurgical testwork;
- Flora and fauna studies;
- Installation of a weather station.
In addition to the ongoing PFS program, Almaden is initiating an exploration drilling program designed to test both regional and near resource targets. Recently an induced polarisation ("IP") geophysical survey was completed over a prospective but covered area, along strike and southwest of the resource. The survey was done in a roughly 2 kilometre gap in drilling between the resource area and the Tano Zone, located roughly 2 kilometres southwest along strike from the resource. The IP survey in this area defined both weak chargeability and resistivity targets similar to the responses seen in the resource area. These targets will be tested in the upcoming drill program. A complete list of targets where further work and/or drilling is planned include (see map appended to news release):
- Tano Zone: Located roughly 2 km southwest along strike from the Ixtaca resource area. Past drilling at the Tano Zone intersected 2.00 meters @ 1.76 g/t gold and 5.45 g/t silver. New IP geophysics has defined an undrilled target in this area as well as in the untested area between the Tano zone and the resource.
- SE Clay alteration zone: This area is located immediately south of the resource area and is marked by clay alteration and epithermal elemental markers similar to those observed in the volcanic hosted clay alteration immediately above the resource.
- Ixtaca East Zone: Gold values in soil and silt samples are elevated in this area of clay alteration. Further mapping is planned before drilling. This area is located to the NE along strike from the Ixtaca deposit.
- Near Resource Drilling: Resource drilling intersected veins adjacent to the resource not incorporated into the Amended PEA pit. A review of past drilling data indicates the potential for finding additional veins parallel to the Ixtaca vein system and immediately adjacent to the resource. In the Main Ixtaca Zone, IP chargeability responses correlate well with vein density and grade. Untested IP chargeability targets adjacent to the resource will also be tested in this program. The potential for near resource discovery is highlighted by Section 10 + 550E where hole TU-11-056, drilled in 2011, intersected two high grade veins which returned 1.26 metres @ 2.45 g/t gold and 854 g/t silver and 0.95 metres @ 13.86 g/t gold and 2577 g/t silver respectively (see attached section) These intersections are outside and north of the Amended PEA pit and point to the potential for additional parallel veining.
J. Duane Poliquin, chairman of Almaden commented: "We continue to advance Ixtaca towards a production decision. We are proud of our hardworking team that has allowed the Company to effect significant progress while limiting shareholder dilution despite the downturn in mining. We look forward to updating shareholders with further progress in the coming months as we focus on the preparation of a PFS study and permit submittal as well as exploration. Going forward we will begin to build a mining team to handle the final push towards production."