Categories: Precious Metals
Topics: General Precious Metals / Gold Stocks

Almadex Minerals (TSX-V: DEX)(OTC: AAMMF) CEO Morgan Poliquin on Cashed Up for Drilling, Property JV’s & Royalty Portfolio

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Almadex Minerals (TSX-V: DEX)(OTC: AAMMF), Dr. Morgan Poliquin. Morgan, great to have you back on. How are you today?

Morgan Poliquin: I'm doing excellently well. Thank you very much for having me on. How are you?

Gerardo Del Real: I am well. Thank you for asking. Look, the year is winding down and this is the busiest I think that I've seen the metals space in quite some time and maybe ever. We have copper making brand new all time highs. We have silver just recently touched brand new all time highs. We have gold firmly above the $4,200 level. And look, all of the metals look like they have a lot of runway.

You've positioned Almadex beautifully over the past several years, many, many years, I should say. And I think you positioned the company so well that it goes a little bit underappreciated just how well-structured and how positioned Almadex is for this cycle. So I want to talk projects that you plan on drilling with those drills that you own, projects that you want to joint venture, just the amount that are available, because I know lots of teams are coming out of the woodwork looking for quality projects in good jurisdictions and you have plenty there.

And then I want to talk your cash position. And by the way, you have a bunch of royalties in the portfolio as well. A lot of shots on goal for a re-rating in this market.

Morgan Poliquin: Well, thank you very much for that. Almadex is a special company. It's 30 years really in the making. We have put together a whole varied group of assets there. You mentioned royalties and obviously we're discovery oriented and that's how we've built all these different assets. We feel that the best way to create value is to dream up our own ideas using our geologic acumen and go out and test them at the earliest stages possible. And our skillset is really generating new ideas. And we've decided to focus on the Western United States. We're a North American focused company. We understand the geology from Alaska all the way down to Mexico very well. And our focus is now entirely on the Western United States. And that's a historic focus for us as well.

But we have assets, whether they be royalties or a project that maybe we'll discuss in the Yukon that are a bit more legacy, but have, we think, the potential to be significant assets for our company as we move forward. The principal focus is exploring a whole group of properties that we've put together that represent the opportunities for porphyry copper gold and epithermal gold silver discovery. And really what we're focused on is drilling them at the earliest of stages. And we own our own diamond drills. And that's one of the keys to our success. So happy to discuss all of those things.

Gerardo Del Real: Yeah, no, no, no. Let's get into it. Let's start first with the projects that you are keen to drill, because I know there's several that you've worked up targets and you're delineating drill targets for the end of this year and for 2026. So let's definitely start there.

Morgan Poliquin: We have found a porphyry lithocap, which is the top, we believe, of a porphyry system in Arizona. And we have staked that a couple of years ago. That was one of the first projects we identified as part of this new process and new paradigm of where we think porphyries might occur that aren't exposed at surface. And we called it New Hope for that reason. And we're just about to drill it. We've moved the drill and our drill team down to Arizona and we're getting set up and we expect to start before the end of the year. It's a short run till Christmas now, but the plan is to drill a couple of really, call them wildcat holes into a pretty well defined target. So porphyry systems are one of the greatest exploration targets there are. The reasons for that are they produce about 80% of the world's copper, I believe now quarter at least of the world's gold. And they're very, very large endowments of metal.

And once you know you're in a porphyry system, it's a matter of drilling it. Of course, there's significant geological risk with early stage projects. We don't know if it's too deep or faulted off or too low grade or all those sorts of things are next, but you know you're in the environment where you can hit it out of the park. So for an investment, initial investment of a couple of drill holes, and when we're doing them, they're significantly lower costs than market rates by owning our own drills and having an expert drill team in house. And if you find what you're looking for, the potential value of porphyries is enormous. Some of the big ones are worth hundreds of billions of dollars gross value. So the target is extraordinary. You're not looking to drilling around an old project and trying to expand it or something like that.

You're looking for the out of the park target. And what we can say is that the geological targets that we've identified represent that opportunity. Of course, the odds are long any individual one, and we've stacked up a whole bunch to drill, but it starts with New Hope in Arizona. And yeah, it'll be a very exciting time.

Gerardo Del Real: No, listen, that's absolutely exciting. Given your track record of discoveries, you have not one, two, not three, but several discoveries. You and your father are specialists at making those discoveries. I know that's your favorite way of adding value, as is mine, although I am not the one doing the geology and actually executing the drill program. That is what you do best, sir. Let's talk about the projects that might be of interest to a potential partner because look, you have 20 something plus projects right now. There's no way that you can work to develop all of them and drill all of them. What is available if a company is looking to work into a project that is a quality project and has the time and the skillset to do the work?

Morgan Poliquin: Yeah. We have two sets of projects that would be available. One is, as a group is sort of more advanced projects that aren't jurisdictionally where we're focused right now, or are further advanced to a stage that is beyond early stage exploration, which is the focus of the company. So in that group, we have something called Logan, and it's a zinc silver project in Yukon, and it's at resource stage. In 2023, we updated the resource to 43-101, and it's a substantial, potentially open pitable resource of zinc and silver that's right at surface. And it's got, for the Yukon, relatively good infrastructure. There was a winter road built into it. It's about, if I recall the exact numbers, 50 kilometers along that winter road from the Alaska Highway. And it's the kind of project that with zinc being a critical mineral in Canada, I'm not sure that silver is, but I know it is in the United States.

It's the kind of project that somebody could work with immediately and advance rapidly towards a preliminary economic assessment potentially and moving it forward beyond that. So that's really not our focus is advancing projects that are at that stage. Our focus is making that initial discovery. So that would be one. We have a couple of gold projects, exploration projects, pre-resource, but with pretty exciting drill targets on them in British Columbia and the Spences Bridge Belt, which our group pioneered back in the day and we're not far away from a couple of projects that are advancing nicely there, including Westhaven's gold resource and PEA. So that's an exciting belt in British Columbia and those projects, we'd love to find partners that are focused on British Columbia and can help advance those or the Yukon. On the other side of it, we have a whole group of projects in the Western United States that are like the New Hope project I described.

They're porphyry systems that are well-preserved, meaning we're seeing the tops of them and the target is to drill beneath. But in some cases we have some significant gold potential that we've identified. For example, we have one in Western New Mexico where we've got significant gold in quartzalinite alteration. We think it's the high sulfidation system associated with a porphyry system. So we've got lots of those sort of early stage projects that need advancing. We've got a rare earth element potential project also in New Mexico that has, we staked some pegmatite dikes and that area is mined historically for mica, which can occur in these environments and even very small scale selective mining historically for rare earths. So we've got a whole portfolio of projects that we've recently staked in the last two or three years. Some of them we've brought to the drill stage.

Some of them are much earlier in need of further advancing. We've got two epithermal systems, brand new to us. And we think brand new really to the world with very little, if any, modern work on them, epithermal veins that have potential for silver, one where we had some very significant silver assays come off surface that’s in Nevada and one in Western Utah. So it's quite a portfolio. Again, that group of projects are early stage and we'd be looking for groups that want to come in and advance them. We like to advance them rapidly, move to drilling at the earliest of stages. So groups that would like to conduct aggressive exploration on brand new, exciting prospects would be welcome to the portfolio.

Gerardo Del Real: No, listen, that's exciting. You have projects that you're drilling, you have projects that are available to joint venture, you have your own drills. How's the treasury between the cash position and gold the last that you looked?

Morgan Poliquin: Yeah, it's sort of a movable feast because roughly half of the treasury is in bullion. Yeah, but at the last quarter it was roughly working capital roughly around the 20 million Canadian mark. And obviously we plan to dip into that for drilling over the next year or so. And some of these other assets, particularly the advanced ones and royalties, we've been able to monetize them when the time is right. And we look to do that, again, when the time is right in order to keep the drills turning without dilution. Our last financing in which we issued stock to the public markets was in 2018. So for a junior company to be essentially almost eight years, that's an eternity in the junior markets. And our treasury is largely derived from being able to monetize assets. We're not opposed to going to markets and bringing in great new shareholders when the times are right, but we've tried to keep the company structure tight while we're doing this really aggressive early stage work and that allows shareholders to participate much better in the upside because discoveries happen when they happen and they can't be timed.

So while you're incubating these new ideas, you have to have a way of keeping shareholder value intact. And we're fortunate with this 30 year legacy history of exploration across the continent that we have these assets in hand. We sold a royalty a few years ago, and that's a big chunk of why we're able to avoid going to the markets and dilute shareholders. So that's the other part of this process is that this is research and development and it's very high risk. The odds of any individual project becoming a mine are long. But that being said, we're in this for that discovery, which adds tremendous value immediately from the drill bit. And you just have to have a way of hanging in there. And as you said earlier getting as many pucks on net as you possibly can. So hopefully that's a good overview for people and highlights some of the value.

We didn't talk about royalties, but through the process of selling assets over the years, we try to retain a carried trailing interest in the form of a royalty. Royalties in the last number of years and decades have been valued better than mining projects, lower discount rates and things like that. It's perceived that royalties have lower risk. They're attached to the same projects that have the same risk, but that's the way the markets often value them. We have a portfolio of royalties that are not producing, they're not cash flowing, but they're all attached to exploration projects, some which are active and some which are not and so on. But we anticipate being able to grow that portfolio. And there will be a stage when there'll be enough potential future value in it that it is our expectation that we'll be able to move that forward and potentially monetize that as well.

So those are kind of the things that are the glue. And we're out there obviously always trying to create the next group of royalties or value. And ultimately the main goal here is to drill that hole, which changes the paradigm and is the discovery that adds the value immediately for everybody.

Gerardo Del Real: No, listen, there's a lot of value there. I can make a pretty good argument. I think that you could break Almadex up into three companies, a royalty company, an exploration company, and a company that just does the prospect generator thing where your joint venturing projects and retaining part ownership, you happen to have that all under one banner and you happen to be executing and operating in jurisdictions that are top-notch.

And so no, I encourage everybody to, if you have a project that you're looking for, reach out to Morgan. If you want to look at a company that provides, like Morgan said, lots of shots on goal, Almadex definitely checks a lot of boxes there. Morgan, have a great holiday, a great Christmas, a great end to the year. Excited for drilling. Excited to see what your next discovery is. Thank you for the time as always.

Morgan Poliquin: And thank you so much, Gerardo. Have a wonderful Christmas to you and your family and all your audience.

Gerardo Del Real: Thank you. Appreciate it.

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