Is Almadex Minerals the Perfect Junior Gold Mining Stock?

It owns 19 properties, 18 royalties, 6 drills... and $3 million worth of gold bullion.

And it’s trading for less than the sum of its parts.

Almadex Minerals (TSX-V: DEX)(OTC: AAMMF) just might be the perfect junior gold stock. 

That’s because it offers investors exposure to multiple facets of the gold business. 

It owns royalties. It owns projects that are joint ventured. It owns projects that it’s exploring itself. And it owns its own drills. 

With all those assets — plus a very attractive share structure and seasoned management — Almadex presents one of the better and most compelling opportunities in the entire resource space.

At its core, Almadex is a prospect generator… meaning it stakes properties, and then options them out to be explored by a partner that pays for the privilege while Almadex retains a royalty. 

But it also explores some of the very prospective properties on its own. Prior major discoveries include: 

• Ixtaca — Now held by Almaden Minerals. It’s one of the world’s next great gold-silver mines at over 4 million ounces of gold equivalent in permitting with a mill secured. It’s a major takeout target. Almadex retains 2% NSR.
• El Cobre — Now held by Azucar Minerals. This is a large copper-gold porphyry project that international major Goldfields came in and took an early stake in. Almadex retains 1.75% NSR.
• Caballo Blanco — A very large gold deposit that was sold in 201. Almadex retains 1.5% NSR.

In all of those cases, Almadex Minerals (TSX-V: DEX)(OTC: AAMMF) retains the net smelter royalty (NSR).

Right now, it has two projects optioned out to joint venture partners. 

• Willow — This gold copper project near Yerington in Nevada has been optioned to Abacus Mining for shares, work commitments, and a carried interest. Almadex retains 25% of the project and doesn’t have to pay anything as it’s advanced to a Feasibility Study. 
• Paradise Valley — A past producer in Nevada. Makara mining optioned 60% of the project for cash, shares, and work commitments. Almadex retains 40% and is the operator.
• Spences Bridge — Two projects in this hot area of British Columbia have been optioned to Independence Gold for shares. Independence can earn in to 60% of the project. 

Almadex owns a few other royalties in that British Columbia area, including:

• 2.0% NSR on Westhaven’s Skoonka Project
• 2.0% NSR on Westhavens Prospect Valley Project

It recently received US$10 million by selling its 2.0% NSR on Gold Mountain’s Elk Project (which is heading into production).

With all these assets, and the recent cash infusion, Almadex Minerals is trading with a market cap of just C$16 million.

That is quite absurd considering it also has C$16 million in cash.

It is literally trading for cash value with no value being assigned to any of its other royalties, projects, gold, or drills. 

Other royalty companies at similar stages are trading at multiples of Almadex’s current valuation. 

Here to tell us how the company is going to achieve a re-rating to the upside is Morgan Poliquin, the President and CEO of Almadex Minerals. You hear from him below. 

He runs the company along with his father Duane Poliquin, who is chairman. 

Together, the team has over 200 years of combined experience in prospecting, exploration, and geochemistry:

Duane Poliquin, Founder and Chairman: Duane Poliquin received his degree in Geological Engineering in 1962 and has been continuously active in mining exploration around the world.

In 1972, Duane identified the Santa Fe gold property in Nevada and formed Westley Mines Ltd. to explore the project. Westley was taken over and transitioned into production.

Before founding Almaden, Duane discovered an extension to the Nevada Sheelite Mine as well as the Apex germanium-gallium mine - a specialty metals deposit in Utah that contained over one million tons of mineralized material with a gross value of over $1,000 per ton.

After founding Almaden and doing an IPO in 1986, Duane identified the Trinidad gold deposit in Mexico which was subsequently sold with a royalty retained to Eldorado Gold Corporation and became that company’s second mine.

Morgan Poliquin, President & CEO: Morgan Poliquin (Duane's son) earned his Masters of Science in Geology at the University of Auckland, studying geothermal systems and epithermal gold deposits.

His Ph.D. in Geology from the University of Exeter involved studying the geology and mineral deposits of eastern Mexico. His Ph.D. research was combined with the prospecting program he led in Eastern Mexico for Almaden. This exploration directly led to the Company’s involvement in the Caballo Blanco and Ixtaca projects.

Morgan oversees and directs the company's prospecting and property exploration programs, while his father manages the corporate and technical direction of Almaden.

The Poliquins have discovered multiple economic deposits. And they’re on the hunt again with Almadex Minerals, backed by cash and gold in the bank, a fleet of drills, near-term production royalties, and properties being explored by partner companies. 

Here to tell you everything you need to know about why you should take a look at Almadex before exploration season this summer is President and CEO Morgan Poliquin.

Interview with Morgan Poliquin

CEO, Almadex Minerals

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Almadex Minerals, Mr. Morgan Poliquin. Morgan, how are you?

Morgan Poliquin: I'm excellent. Thank you. How are you?

Gerardo Del Real: I am well. Thank you for coming on. I think we were overdue for an update on Almadex. I joke with colleagues that Almadex, and I mean it, but I joke that Almadex is kind of like the Swiss Army knives of exploration royalty and project generator companies for the simple fact that you really do it all. You have your own drills, you have multiple, very prospective properties. You have multiple joint ventures on properties that are highly prospective for discoveries, and you also have multiple royalties. I think Almadex presents one of the better and most compelling opportunities in the entire resource space.

I would love for you to give us the context on today's news because I thought you did a great job outlining the different approaches, that multi-pronged approach that the company uses.

Morgan Poliquin: Yeah, thank you very much. Well, look, we have quite an assortment of assets. We've got, obviously, the royalty portfolio. And I think this agreement speaks very, very clearly to the value there. A lot of the royalties derive from our exploration, which is the real thrust of the company. That's the energy. That's the lifeblood.

And we are really looking forward to pursuing the exploration ideas that we have. We tend to look for things that don't exist and find them, and that process has been quite successful for us. So the royalty portfolio is, obviously, something that can sustain that effort.

The third thing we have is we have a number of diamond drills, and we’ve put them to good use on our own properties over the years quite successfully. We think that finding mines are all about the proof-machine, which is the diamond drill, which is very expensive to do with third parties, typically.

And if you have your own drills, you can speed up the process. You can reduce the cost of the process and, thereby, fueling that engine. The odds of finding a mine are very long. I like to use sporting metaphors in Canada here… we talk about putting more pucks on net… If you don't shoot the puck, you can’t score… and the more you shoot, the more you score!

So that's kind of the three prongs of our company, and, really, we've been able to drill for third parties as well and use that to sustain us in that way. So Almadex is inheriting this legacy of years of prospecting in the form of these royalties, in the form of building a drilling enterprise, and in the form of the projects that we have in the company that are the result of the exploration.

So that's a long way of saying… I'm really excited about the future and, quite frankly, using this new money to explore and find the next set of projects with the aim of making a discovery, of course.

Gerardo Del Real: I believe that your market cap is around C$16 million. It's now mostly backed by cash, right? What do you plan here in the next quarter or two, and how do you plan to explore that substantial portfolio that you've developed over the years?

Morgan Poliquin: Well, there's two ways of exploring. Obviously, you can drill your own projects, and that's been successful for us. But you can't drill them all at any one time… and we also like partnerships.

We have a company called Abacus that's, I believe, currently drilling a property of ours in Nevada. We had a partnership in Nevada on another property we're really excited about, and that company wasn't able to proceed due to some financing issues. And we've had partners this year that were unable to get work done due to a variety of logistical issues.

So we actually have a number of projects that are optioned out, and we want to keep going with those partnerships while we drill certain properties ourselves. So that is still the plan going forward. And obviously, we want to compliment that with doing some exploration work. And typically, we've been working in North America, and we'll continue to do so.

Obviously, COVID changes your perspective. And we have a lot of ideas in Canada, in the US, and in Mexico. And we focus a lot on Mexico. And I see us being more diverse. I see us focusing more on some of the places we used to work a lot more in; Canada and Nevada. But obviously, Mexico is a place we'll continue to work in.

Gerardo Del Real: Excellent! Well, I'm looking forward to seeing how you allocate the capital. Congratulations on unlocking substantial value by selling the 2% NSR on the Elk property for US$10.63 million. Anybody that's familiar with you and your background knows what you do best is explore and discover economic deposits. I am excited to see what you're able to do with this US$10.6 million given the quality of the portfolio you've spent decades putting together for Almadex Minerals. Anything to add to that, Morgan?

Morgan Poliquin: No, thanks for the opportunity. Hopefully that was a good summary for people, and thank you very much for having us on and highlighting this.

Gerardo Del Real: Alright, hopefully we're chatting soon and more frequently, Morgan. Thank you.

Morgan Poliquin: Thank you.