Almaden Minerals Ltd. [AMM-TSX; AAU-NYSE] shares were active Wednesday December 20 after the company released new assay results from an ongoing exploration and development program at the 100%-owned Tuligtic Project in Pueblo State, Mexico.
The 7,200-hectare Tuligtic claim covers the Ixtaca gold-silver deposit, which is 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 over 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.
Almaden said the latest batch of assay results are 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.
“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 jumped 3.25% or $0.04 to $1.27 in late morning trading Wednesday. The 52-week range is $2.33 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 pre-feasibility 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.