Almaden Minerals (TSX: AMM) CEO Morgan Poliquin on Permitting & Exploration Upside at Ixtaca
Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the president and CEO of Almaden Minerals, Dr. Morgan Poliquin. Morgan, how are you?
Morgan Poliquin: Oh, well, I'm okay. How are you, Gerardo?
Gerardo Del Real: I am well. It's an interesting day. Let's get right into it. The stock is down some 30%, which I think presents a phenomenal opportunity, and I'm going to try to explain why. There was news yesterday after market and the headline reads, "The court confirms Almaden's original Ixtaca claim block." I'm going to give my 2 cents briefly and then allow you to correct me if I'm off on any of this. This is being interpreted, the news release, the way that I take it, because I've had several subscribers write in, people believe that your permit application was rejected, which I want to make sure I'm clear about upfront is completely untrue. Correct, Morgan?
Morgan Poliquin: That's right. This news release does not pertain to our permit in any way. It pertains to our appeal about which set of claims the company owns. And we have mineral title and we have our permit still in process, and I'd be happy to get into the details about that.
Gerardo Del Real: Excellent. So again, just to be clear, the permitting process is ongoing. A judge has already ruled in a separate ruling that SEMARNAT, who has the authority to issue that permit, can proceed with its review and it's doing so. Correct?
Morgan Poliquin: That's right. We have no reason ... Look, the SEMARNAT last year halted the review of our permit submission for the Ixtaca project. And the basis for halting that is a lawsuit against the Mexican government that utilizes our mineral claims as a basis for that lawsuit against the Mexican government. And recently in September, we announced that the judge in that case, had let SEMARNAT know that this lawsuit against the Mexican government, which utilizes our claims, is not a basis for them halting their review. So we have no reason to believe that the review will not proceed. And we hope that SEMARNAT will get back onto their review. But in no way have we been informed that our permit is rejected. That is not with this news release relates to.
Gerardo Del Real: And so let's talk about what this news release does relate to. It relates to claims that the company had dropped because it didn't need them nor want them for purpose of building the mine or exploring other potential deposit types. It was a land package that was not consequential for the project and was dropped several years ago. Is that accurate, Morgan?
Morgan Poliquin: That's right. So basically explorers like myself always stake large claims. Unbeknownst to us when we staked these large claims back in 2001, 2002, I believe, the very extreme Southeast corner of this original large claim block partially covered a community's legal area. And that is in a completely different drainage. We don't cross that community to access the Ixtaca project area. We have no interest in exploring in that community. And that same community, some I believe 10, 15 years after, something like that, after we staked those claims filed a lawsuit against the Mexican government saying that the mineral title regime is unconstitutional and using our larger claims to do that. And basically, we looked at that and said, "Well, we don't need the area that covers this community." We put out maps in February pertaining to this. It's roughly eight kilometers away. So we dropped that area of the claim block overlapping this community’s land and reduced our claims to a smaller area just over the mine area.
And so that's what we did. And we legally did that and we had a reduced claim. And this community and their agents we presume basically asked for us to keep the larger set of claims so that they could maintain their lawsuit on the constitutionality of the mining law. And so they effectively, this ruling that we're describing today is a ruling that is correct that we have to own these larger set of claims. We have the same rights, either set of claims that we own, but we want to make it clear that we don't want these claims. We're being essentially, I guess, one could say compelled to own this larger set of claims, but both sets of claims include mining rights over the Ixtaca project.
The difference is this larger set of claims is attached to a lawsuit against the Mexican government. But that lawsuit, a judge has said, is no reason for our permit to be to the held up by SEMARNAT, as I explained. We would have liked to have kept our smaller claims We'd been advised that we can't be forced to own claims we don't want. But the situation currently is that this larger set of claims is the claims that we have, but they afford the same mineral rights as any other claim. The only difference is they're being utilized to sue the Mexican government, essentially and are attached to this lawsuit.
Gerardo Del Real: Excellent. So again, just to summarize, the permitting process is ongoing. We are waiting on SEMARNAT to issue its decision. That continues. You actually have more land than you did yesterday morning when you awoke. So it's not land that is needed for the mine. It's not land that you want to explore or care to explore. And it's actually land that the company had forsaken and now is being defacto forced legally to take back on. So you actually have a larger land package than you had, not one that you want to have, but you have been advised by your council that you're going to pursue all options to make sure that the claims that you want to keep are, of course, which are in good standing are kept, and these other claims, which are not material to the operation, are not kept in the portfolio. Is that accurate?
Morgan Poliquin: Yeah, essentially. Back in February, February 27, we announced all of this, that our claims were the larger original claim block attached to the lawsuit and that we were appealing this. This news we are discussing today is that our appeal to not have the larger claims was rejected. So the claim status we described in February is essentially the same, us owning this larger set of claims. We nevertheless also have administrative challenges ongoing with the mines department as we've also mentioned in our news releases that this is incorrect, that we shouldn't be owning claims that we don't want. But the fact is we own mineral title over the Ixtaca deposit with the larger claims.
The area of environmental impact, the area of social impact of the Ixtaca project is far outside of this community which has filed the lawsuit against the Mexican government. We don't travel through this community to get to the project which is in a completely different drainage. And we believe that on the project area, which we're focused on, which is roughly speaking, please consult the maps of our February 27th news release, I think it will be very clear that this community is roughly eight kilometers away from our mine area. And we believe we have, as we've reported, strong community relations in the mine area. We have, we believe, strong support for the project. You've come there and seen that I think for yourself. We also have an MOU signed with a water user demonstrating that and many other ongoing social projects at the same time. We own surface rights that are in the mine area.
I think over the years, the proponents of this lawsuit against the Mexican government had been successful, unfortunately, in conveying the idea that this community somehow relates to the mine area and have been certainly successful in maintaining this larger claim block so that they can keep their lawsuit going on. But as we pointed out, either set of claims, we own the mineral title over the Ixtaca area and our permit is ongoing. At this point, we've been advised that we have no reason to believe that this lawsuit should impact the permit. And in fact, the judge basically said as much in September. So I'm disappointed that the people may, as you described, have misunderstood this news release, and I hope this can be part of clarifying the real situation for them.
Gerardo Del Real: Before I let you go Morgan, I have to pick your brain obviously. You're a geologist and an incredibly successful one. I am not a geologist, but I have been to the project. I've always, always appreciated the exploration upside. And you had some news on the 25th of November where you announced that the Pathfinder elements validated the Southeast alteration zone for potential, which indicates the potential for epithermal veining. That's an important release. And I'd love for you to touch on that briefly before I let you go, because I think it speaks not just to what's already there, but the exploration upside on the claims that you do want to keep.
Morgan Poliquin: Well, that's right. We are focused on the exploration on the project right now. That's a great thing that we can be doing as a company while we wait for resolution on the permits. And we do believe that this project has a lot of geological upside and potential that needs to be explored. The best place to find new things is near a known deposit. And so that's what we're trying to do. And right now we've been able to report that we've had field programs on the go and we're really excited about the potential for drilling, as we've said, in the new year.
Gerardo Del Real: Fantastic. I'm looking forward to it. Morgan, thank you for jumping on the phone with me so quickly and providing the timely update. And again, I think today presents a heck of an opportunity. So thanks again.
Morgan Poliquin: Well thank you, Gerardo, for the time. Appreciate it very much.
Gerardo Del Real: Chat soon.
Morgan Poliquin: Yeah. Take care. Bye.