Almadex Minerals (TSX-V: AMZ) CEO Morgan Poliquin on New Mineralized Holes and the Potential for Much More at El Cobre

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me is president and CEO of Almadex Minerals (TSX-V: AMZ)(OTC: AXDDF), Dr. Morgan Poliquin. Morgan how are you?

Morgan Poliquin: I'm excellent. Thank you. Thank you so much for having me on again.

Gerardo Del Real: Thank you for being back on. You had news yesterday in the evening time if I'm not mistaken, and I'm going to just read the headline. It reads Almadex hits 414.36 meters of .11% copper and .16 grams per tonne gold, including 74.5 meters of .19% copper and .38 grams per tonne gold. You also provided a project overview of El Cobre and discussed the targets that you're beginning to drill. I wanted to get into first the hole and the release and your thoughts there, and then maybe segue into the exploratory drilling that's going on in other parts of what's a pretty substantial land package.

Morgan Poliquin: Great. Thank you very much. First on the headline on the drill hole, of course, this follows up holes 10 and 12, which we have previously announced, I believe in August was when we announced, what we consider to be a discovery hole. The grades in hole 10 were higher than this. This is the third hole in the program, and we're just trying to understand which direction the grades that we hit in hole 10 and then 12, which was even better, which direction that goes. It's a process. It's very early days. I would point out to listeners that the hole 10 and 12 were both ... Hole 10 to begin with was following up an old drill hole that was drilled by a partner of ours in 2008 that ended in about 40 meters of around .3% copper and .4 grams gold. Pretty exciting grades to end a hole in.

I'd been itching to get back there, and we drilled hole 10 and, low and behold, we have a long intersection of those kinds of grades, with even higher grades. It's been a very exciting start the last couple of months. The drilling that we're doing now at the Norte Zone and the hole we have announced today are all part of a process to figure out what's controlling the mineralization, which direction it's going, and I don't think we figured it out yet, but the kind of grades we've intersected will have a control to them. There's a few more holes to drill before we really understand the right direction to be drilling and how to tackle this to try to see if there's a deposit we can build around it.

Obviously, it's very early days, but that's one side of things, which I think this hole today is showing lots of things, mostly geologically, we got to figure out the controls and that's going well, I think, from my perspective. On the other side of it is the other important to talk about the context. This is a very large porphyry system. In fact, the hole that we drilled to follow up that I mentioned earlier from 2008 was really before we'd done the deep geophysics, which was a very expensive program, but I think is going to be very useful. It's on the fringes of this large system where the original hole was and the Norte Zone itself.

That's something that is very important. We don't want to lose the forest for the trees. We put out some of that data here just to remind people. A lot of it's in our technical report that we filed as part of part of the Almadex spinout over a year ago, but obviously, there's 20 years of data that new shareholders might not be able to dig through all that data. It's public, but it can be hard to find and so we wanted to make sure we reminded people in this news release how large the system is and the fact that we're just following up old holes that were clearly from a geophysical point of view and a geologic point of view in my mind peripheral.

We are not in the center of this system where we are at El Norte. It's clear from the geology that we're seeing in the ... Our interpretation is that we're not drilling the core of the system. When you look at the broader context, there's huge anomalies that are showing that it is a large system and that we're on the fringes. While we want to, we believe there's room for El Norte to grow and possibly become a deposit, and we're in the exploration stage there and figuring it out. At the same time, there's a much larger system to be focused on, so really those are two separate things. We're going to tackle both of them.

There's some really exciting targets that we've yet to drill. We think El Norte is indicating the potential of those targets in the rest of the system, as well as being a bonafide target itself.

Gerardo Del Real: Excellent. Excellent. We talked about context, and you mentioned the other targets that are there. Just historically, I know that Porvenir Zone has had phenomenal numbers, 290 meters of .39 grams per ton gold and .16% copper, including 80 meters at .59 grams per ton gold and .24% copper. That's at El Porvenir, which obviously has seen limited drilling, but has seen some drilling. Villar Rica is actually, I believe, the biggest target that you have, and that, if I understand it correctly, is completely untested. Is that right?

Morgan Poliquin: That's right. The Villa Rica target is a very large area of magnetics response and high chargeability, which basically means... everyone knows what a magnet is and the introduction of magnetite, which usually comes with the copper, gives you a high magnetic response when you fly over with a helicopter and measure what we call magnetic susceptibility. What we have there is a large magnetic target, magnetic response target, and it's associated with high copper and soils. We take soil samples on a grid. There is copper and gold values in there, as well as what we call IP chargeability.

Chargeability is a really neat and simple concept that's used with exploring for porphyry systems. You basically have a generator and you put a charge into the ground and you measure the time that the charge takes to decay, meaning wear off, and if the ground holds on to a charge longer, it's measured in milliseconds, so it's a very fine measurement, then obviously you've got some metal in the ground that's retaining the charge. Where you have longer times or higher chargeability, you can be very certain you're dealing with sulfides. We have a very large chargeability feature, and we've shown that in the maps.

Villa Rica is a coincident gold, copper, and soil and molybdenum, which goes with these porphyry systems along with chargeability and magnetics. Everything's lining up there. Porphyries, particularly the big ones, are complicated. There's one in Australia that I think is very similar geologically to us, and they found now four deposits in this camp and some of them are associated with magnetics highs. Some of them are associated with magnetics lows. Some of them are located in the margins. What we can say is that we've got a large system with multiple targets. They're all permissive for porphyry mineralization.

When you look at the El Porvenir Zone, essentially that's more than 2 kilometers away from the Norte Zone, which is at the north end of the chargeability feature, which is still open we think to the north. We haven't done further lines to the north, but we still think it's open. That's the important part of this news release is to put this in ... This is in an isolated single point target that we're entirely focused upon. This is part of a bigger picture that is going to take some time to figure out and we think is permissive for something really large.

Gerardo Del Real: Excellent. When can we expect that Villa Rica target to begin to be tested via the drill bit? I understand that you recently purchased a drill that can drill down as far as 2 kilometers. Was that right?

Morgan Poliquin: That's right. Sometimes if we look at Reservoir, great discovery in Serbia, which was in a partnership with Freeport, that started at about 400 meters depth. I think it was sold for about 800 million dollars, so it was a wonderful story for those shareholders that were involved, but porphyries can be mined from open pits near surface, but increasingly, the higher grade ones are found at depth, and that's Oyu Tolgoi and many around the world. You need to be able to explore the full depth extent if you want to understand the system and you want to make sure you're not overlooking something which can be very high grade and mine from underground like Reservoir.

Look, we got the drills to do that and we can drill very inexpensively. Typically, drilling deep holes is a very expensive proposition, but our in-house drilling allows us to do it cheaply and effectively. In terms of of Villa Rica, your question when we're going to get there and many of the other targets in the property, we've been happily focused on the Norte Zone for obvious reasons here, and we're ramping up. We're doing a lot of geologic work. The Villa Rica Zone is so large that you either commit to drilling a large number of holes to vector in or you try to be more intelligent about it. We're going to ultimately probably do both, but we're doing some very inexpensive geologic work right now, which will enable us to, we think next year, in the new year, be able to target more effectively, but 2017 will be a year of El Cobre for Almadex. We expect to explore the entire property, as well as following up on the Norte results.

Gerardo Del Real: Excellent. Excellent. Just to remind everybody, you now own six of your own drills. Is that correct? Five plus the one that's being built now?

Morgan Poliquin: That's exactly right.

Gerardo Del Real: Wonderful. Cash position, Morgan. How does the treasury look?

Morgan Poliquin: From the last quarter there, we're about C$3.5 million in the treasury, and we've got about C$2.5 million in Canadian terms in physical gold, 9999 gold, and about C$1.5 million in other people's equities that are fairly liquid. We're in good shape to do the work that we've outlined.

Gerardo Del Real: Excellent. You're cashed up. You got the drills. In the meantime, drilling at El Norte continues. Is that correct?

Morgan Poliquin: That's exactly right, and we're planning on basically having a 2-pronged approach as I've been outlining here. Obviously, continuing to follow up the Norte Zone and try to understand where it's going so that we can do a concerted drill program there that's focused correctly, and then running around and exploring other parts of the property, both on the surface and with a drill rig.

Gerardo Del Real: Excellent. Morgan, I want to thank you for your time. Thank you so much for coming back on. I'd encourage everybody to go to click on the news release. There is a lot of great maps and plans there at the end of the news release you can click on to get a better idea of the scale of the project and the potential there. Morgan, anything you'd like to add?

Morgan Poliquin: I think we've done a great job. I really appreciate the opportunity.

Gerardo Del Real: Thank you, Morgan.

Morgan Poliquin: Thank you so much.