VANCOUVER — Almadex Minerals (TSXV: AMZ; US-OTC: AXDDF) president and CEO Morgan Poliquin and his team are among the top mineral explorers in eastern Mexico, and they may have another impressive discovery on their handst.
The company’s attention is locked on the El Cobre copper-gold porphyry discovery, 75 km northwest of the major port city of Veracruz, which generated promising drill intercepts earlier this year.
The company is a spin-off from Almaden Minerals (TSX: AMM; NYSE-MKT: AAU), and has 20 properties and 20 royalties. The corporate restructuring separated earlier stage exploration assets from Almaden’s development-stage, multimillion-ounce Ixtaca silver-gold project, 95 km north of Puebla city.
Alsmaden is advancing Ixtaca towards a prefeasibility study, and could have its permits by early 2018.
“Almaden is now really a single-asset development vehicle, and there’s an outcome where Ixtaca is acquired by someone else,” Poliquin said during an interview.
“In that scenario there’d likely be a spin-out company, and we preferred to get out ahead of it and do it on our shareholders’ terms. Almadex has upside exposure to Ixtaca, while really clarifying the story … for both companies,” he added.
The new Almadex exploration vehicle turned its attention to El Cobre, where Almadex’s team had defined a “large multi-stage and phase porphyry system, with at least four centres located along more than 4 km of strike extent.”
The four copper-gold porphyry targets at El Cobre — namely Los Banos, El Porvenir, Norte and Villa Rica — are defined by copper-gold soil anomalies, positive magnetic features and an “extensive” induced-polarization (IP) chargeability anomaly.
Almadex’s priority was following up on promising drill intercepts dating back to 2008, which include 41.2 metres averaging 0.42 gram gold per tonne and 0.3% copper in hole 08-CBCN-022 at the Notre zone. The company’s efforts paid off in August when follow-up hole 16-10 cut 163.5 metres grading 0.68 gram gold and 0.3% copper from 153 metres deep. The intercept hit a zone of “intense” quartz stockwork veining, potassic alteration and copper-gold mineralization.
“We’ve had a great run based on those results, and we think we’re on the fringes of a large porphyry centre, or centres. We’re seeing over 4 km of mineralization, so the key is to focus on where the core intrusive area of the system is located,” Poliquin said.
“We’re drilling in a succession of volcanic rocks, and our interpretation is that the grades are constrained by lithology. There’s a horizontal distribution to the higher gold and copper grades, and the IP anomaly we’ve identified is increasing in strength as we move south. The data had pointed in that direction already, but these recent holes also fit that interpretation,” he said.
Norte is located at the north end of a large area of intense hydrothermal alteration, high magnetics and chargeability geophysical responses, as well as a broad zone of anomalous gold, copper and molybdenum in soils.
Mineralization is interpreted to be lithologically controlled and hosted by country rocks distal to the core of a porphyry system.
Almadex intends to move south along a drill grid towards larger, untested targets like the Villa Rica zone. The company recently shipped a “more powerful drill” for its next round of exploration.
Results from Norte released on Nov. 9 are highlighted by 38.5 metres of 0.55 gram gold and 0.2% copper from 275 metres deep in hole 16-13.
“A systematic approach to drill is what’s needed at El Cobre, because gold-porphyry systems are often different from large-scale copper systems. They tend to be much more discrete, so when you have the scale of geophysical anomaly we have, you can’t just drill a couple holes and feel like you’ve tested it,” Poliquin added. “We’re putting a drill program together that’s focused on stepping out and following up on that model.”
Almadex’s shares have surged nearly 118%, or 82¢, since the news of the Norte discovery in August, en route to a $1.52 close at press time.
The company has 44.3 million shares outstanding for a $66 million press-time market capitalization, and reported working capital of $8.5 million at the end of September.
“We’ve had quite a run in our stock based on the discovery of this broad zone … we’ve seen the markets retract a little bit, but we have a strong working capital position that gives us flexibility. There’s no urgency to raise money, but it would be prudent for us,” Poliquin said.