Almaden Minerals (TSX: AMM) CEO Morgan Poliquin on Partnering with Local Community Group to Open a Community Water Reservoir Near the Ixtaca Mine in Mexico
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of what I believe is one of the most compelling speculations in the junior resource sector right now, Almaden Minerals (TSX: AMM)(NYSE: AAU), Dr. Morgan Poliquin. Morgan, how are you this afternoon?
Morgan Poliquin: I am excellent. Thank you very much, and you?
Gerardo Del Real: I am well. Interesting times in the market, obviously. Let's get right to it. You had some pretty good news this morning from Almaden.
You announced that you've partnered with a local community group that's focused on irrigation development. I want you to provide some context as to what you're doing with that group because I think it speaks to the decade-plus of quality work that you and the team at Almaden have been able to execute on down there and which is why I know you have a lot of community support.
We'll talk about that in a bit, but let's talk about the news. You're opening a local community water reservoir. That's exciting. Congrats.
Morgan Poliquin: Yeah, thanks very much. Well, we're really pleased to provide an update for everyone on some of these milestones that we're able to meet. We, obviously, have been working in these communities for a long time. As you said, it's a decade now, this year it will be, since the initial discovery hole is announced for the Ixtaca deposit. But we were working on the project for almost a decade before that, early stage exploration until that discovery.
Obviously, during the course of that amount of time, you get to know local communities. Our shareholders, I think, are really keen to, even before discovery is made, even before a deposit is found as explorers that are going into remote and often very poor areas, we like to have a very strong legacy that we leave regardless of what resources we find and create, which our view is the ultimate form of investment is to create a new resource for, in this case, the people of Mexico that will provide tax revenue, jobs, and so on for years to come.
But before that happens, we like to try to find ways that we can help. This is, obviously, one of those ways. This local community near the project, within the project area and very close to where we propose to build a mine, the Ixtaca deposit. Their supply of water wasn't something that they had complete control over. They didn't have the infrastructure to be able to satisfy their agricultural needs. They came to us with this proposal and we were really happy to, obviously, support that sort of a thing. This is stage one, creating the reservoir and the membrane.
I should add that this project that we announced today has nothing to do with the water reservoir that's part of the mine project and is part of the environmental permit that we've submitted. That's a completely separate reservoir. This is something that the community put forward themselves, and is independent of that. These are the really exciting things that when you're working in communities like this and are engaging with them that you find are really impactful and really important immediately. We are very grateful to be able to participate in such a thing.
Gerardo Del Real: I know that what I've described as a permitting impasse, that that's working its way through the higher courts and the administration there. I don't want you to comment on that because I understand and respect that it's a delicate time.
Can you provide me four or five reasons – and this is a rhetorical question, I just want to hear it from you – on why you shouldn't be having any permitting issues? Because in my opinion, you should not be having any permitting issues. I know what's going on.
It's not Almaden specific, but there's been comments made by several people that reference Almaden and point to the company as if this was something that Almaden caused as opposed to, what I consider, a fringe NGO trying to overturn the constitutionality of mining in Mexico, basically.
So, without getting too much into that, could you tell us a bit about the project, the things that Almaden and the team has done, and why you shouldn't have any permitting issues, which is why, ultimately, I believe this permitting impasse will be resolved in a favorable way.
Morgan Poliquin: Yeah. Well, thank you very much for that opportunity. It's always great to have it. Just very briefly, to touch on what you said, yeah, that's the way we see things as we laid out in the news release before this, is that our project is being used as a test case to change the constitution of Mexico. We don't think it's really about our project in that sense.
Our focus is the communities within the area of impact. As far as we're aware, we are perhaps the first or certainly one of the first development companies in the mining sector to do a social impact assessment, which is a requirement by law in Mexico in the oil and gas sector. A social impact assessment is a broad, ethnological, sociological study that comes up with an understanding of what the community's wants and needs and concerns are.
We did that with an independent group. Obviously, as we already discussed, we've been working with these communities for many years and the results of that included access to water. We incorporated that into our feasibility study. That's one of the reasons why we have a water dam, a freshwater dam. It's a requirement of the mine infrastructure to divert fresh water around the mine infrastructure, a very common thing. We have an arroyo, a seasonal gully if you want to call it that, that goes through the mine infrastructure area.
So, there is a plan to divert freshwater around the mine infrastructure as I said. And so we've studied and planned for, in the feasibility study with our independent engineers, a water reservoir, freshwater dam, which actually enhances local access to fresh water. I've also done the sufficient studies in the feasibility work to show that we eliminated a tailings dam, which reduces, as always, the risk. There's no dam so there can't be a tailings dam failure. So we have dry stack or filtered tailings.
We also have rock that is thankfully naturally buffering. It's a limestone host rocks, so the risk of acid rock drainage, obviously, with buffering host rock, it's very much different as we've reported. We also are very fortunate to be in an area where there are no substantial resettlement or village relocations required. It's private property. All the property and surface rights in the area of the mine we've been able to purchase that the company owns, we've been able to purchase. We have got our archeological clearances.
Gerardo Del Real: You've checked all the boxes is what you're trying to say, Morgan. You've checked all the boxes that you're supposed to check with the feasibility to get it to where it's supposed to be, which is, obviously, a favorable permitting decision. Right?
Morgan Poliquin: Well, we're fortunate with our natural setting, with the geography as I mentioned. But we have worked very hard to try to reach out and we believe have gained the trust and confidence of many of the really proximal and relevant local communities in those areas. I think this is a signal hopefully to our shareholders of some of that work coming into fruition in a bit more of a demonstrable way. It's fine to say that you have the support of local communities, but it's a completely different thing to get a letter of thanks that this investment is helping improve our access to freshwater or water for agriculture, and this will help people stay than move away.
Those are the kind of letters that really warm you. Certainly, I feel very gratified that we've been able to have that kind of an impact even before mine is built, which we really believe in will be a dramatic leap, a positive impact. That's our intention here. I think it's just nice to be able to demonstrate that because otherwise it's just words. We continue working with those local communities, but we don't take their trust and confidence lightly. We know it's something that can be lost as with any relationship. We continue to work very hard to have our ears and eyes open to the wants and needs and concerns, all of the above, and work together. We consider them, the local communities, to be our primary stakeholders and partners in building this project.
Gerardo Del Real: That's well said. I've been to the property, I've spoken with people from the community, I've seen the overwhelming support. And I just want to close out by just highlighting some numbers really quick.
Your after-tax NPV on the project as it stands, using $1,425 gold, which obviously we're much higher, and $20 silver, which of course we're a little bit lower, is $466 million US. Your current market cap is $53 million Canadian.
So I don't know how much more context I can provide as to the opportunity. I hope that people are able to do their own due diligence and make their own decision. Again, I'm biased, I'm a shareholder, longtime supporter of the company, but for good reason. I'm looking forward to the day that that permit comes in and the rapid re-rating that I think will happen. And so that's my take on it, Morgan.
Anything else that you'd like to add to that?
Morgan Poliquin: Well, I think we've covered it really well. Thank you so much for the opportunity, really appreciate speaking to your subscribers again.
Gerardo Del Real: Appreciate it, Morgan. Look forward to chatting soon hopefully with some positive news.
Morgan Poliquin: Thank you so much. Take care.
Gerardo Del Real: Bye now.
Morgan Poliquin: Bye for now.