Almaden raising $7 million for Ixtaca gold-silver project

Drilling at Almaden's Tuligtic Project in Pueblo State, Mexico which covers the Ixtaca gold-silver deposit. Source: Almaden Minerals Ltd.

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Drilling at Almaden’s Tuligtic Project in Pueblo State, Mexico which covers the Ixtaca gold-silver deposit. Source: Almaden Minerals Ltd.

Almaden Minerals Ltd. [AMM-TSX; AAU-NYSE] on Friday May 11 announced a proposed non-brokered private placement financing of up to seven million units. The aim is to raise $7 million at a price of $1 per unit. Almaden said it intends to use the proceeds of the offering for exploration and development activities relating to the Ixtaca Project and for general corporate purposes. Sprott Capital Partners, a division of Sprott Private Wealth LP, will act as finders in connection with the offering.

Almaden owns 100% of the Tuligtic Project in Pueblo State, Mexico with the 7,200-hectare Tuligtic claim covering the Ixtaca gold-silver deposit, estimated to contain 65 million tonnes of proven and probable reserves, averaging 0.62 g/t gold and 37.8 g/t silver.

That material is expected to support an open pit mine that would produce 1.04 million ounces of gold and 70.9 million ounces of silver over a projected 14-year life span beginning in 2019, according to a pre-feasibility study. Average annual production over the first nine years is expected to be 88,780 ounces of gold and 5.47 million ounces of silver (168,100 gold equivalent ounces, or 11.6 million silver equivalent ounces). All in sustaining costs are pegged at US$862 per gold equivalent ounce and US$12.50 per silver equivalent ounce.

On March 21, 2018, Almaden released an update on environmental and engineering work relating to the feasibility study at the Ixtaca Project. It said the company has selected a team of independent engineers, including SRK Consulting (U.S.), Inc. and Moose Mountain Technical Services to lead the feasibility study.

Almaden recently released assay results from drill holes that targeted new and significant mineralization located in the upper portion of a pit that was modelled as waste material for stripping in the company’s prefeasibility study.

“These results confirm the discovery of a new zone of mineralization in the volcanic and limestone lithologies,” the company said.

Highlights include 16.40 metres of 2.25 g/t gold and 25.3 g/t silver in drill hole TU-17-508, one of eight holes released on Wednesday May 9.

“We are very encouraged to be outlining this new mineralized zone in an area modelled as waste for stripping within our PFS (pre-feasibility) pit and look forward to the inclusion of this new zone in future mine plans,” said Almaden Chairman J.D. Poliquin.

“Ongoing drilling will continue to seek more such zones, even as the engineering work and feasibility study progress,” Poliquin said.

The Almaden CEO said that the recent drilling results show the potential of the Ixtaca gold-silver deposit to grow.

Almaden shares were down 5.61% or $0.06 to $1.01 in early afternoon trading on Friday. The 52-week range is $2.06 and 92 cents.

The Tuligtic Project is located 120 km southeast of the Pachuca Mine, one of the largest gold and silver deposits in Mexico. Pachuca boasts historic production of 1.4 billion ounces of silver and 7 million ounces of gold. Tuligtic is also well-located in the industrial heart of Puebla State.

While Almaden will continue to focus on the prefeasibility study, Poliquin said he sees the potential for additional discoveries and resource growth. “We are at the top of a fully preserved epithermal system and over the next several months exploration drilling will also test for additional vein zones beneath alteration elsewhere on the property,” he said.

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