Categories: General Market Commentary / Precious Metals
Topics: General Market Commentary / General Precious Metals

Next takeout? Almaden Minerals Reports Robust PFS

April 3, 2017

I've stated for quite some time that Almaden Minerals (TSX:AMM) (NYSE: AAU) has one of the best polymetallic deposits available -- the Ixtaca deposit in Puebla State, Mexico.

I believe the company just put potenital suitors on the clock to get the check ready.

The company just released a new pre-feasibility study (PFS) and it's going to get some well-deserved attention.

Here are the highlights:

HIGHLIGHTS (all values shown are in $US; base case uses $1250/oz gold and $18/oz silver prices):
Pre-tax NPV(5%) of $484 million and internal rate of return of 54%;

After-tax NPV(5%) of $310 million and internal rate of return of 41%;

Initial Capital of $117 million;

After-tax payback of initial capital in 2.2 years;

Total LOM production of 1.04 million ounces of gold and 70.9 million ounces of silver doré produced on site (2.07 million gold equivalent ounces, or 143 million silver-equivalent ounces at a 69:1 silver to gold ratio);

Average annual production over the first 9 years of 88,780 ounces gold and 5.47 million ounces silver (168,100 gold equivalent ounces, or 11.6 million silver equivalent ounces);

Operating cost $706 per gold equivalent ounce, or $10.20 per silver equivalent ounce;

All-in Sustaining Costs ("AISC"), including operating costs, sustaining capital, expansion capital, private and public royalties, refining and transport of $862 per gold equivalent ounce, or $12.50 per silver equivalent ounce;

Proven and Probable Minerals Reserves of 65 million tonnes averaging 0.62 g/t gold and 37.8 g/t silver (average head grade of 1.16 g/t gold equivalent using a 69:1 silver to gold ratio).

J. D. Poliquin, Chairman of Almaden reported, "We are very pleased to have advanced Ixtaca from a blind discovery in 2010 to its current position as an outstanding inventory of precious metals in a well established mining jurisdiction with a very robust economic profile. We are now looking forward to further developing this deposit through permitting, more advanced engineering and continued drilling of portions of the Ixtaca deposit that remain open as well as other targets on what remains a largely unexplored property."

Congrats to the team. The next time I congratulate the Almaden team may be when the company is bought out. We'll have an interview with Almaden CEO Morgan Poliquin up soon to provide some more insight.