Form 6-K ALMADEN MINERALS LTD For: Jan 24

January 25, 2019 5:16 PM EST

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13A-16 or 15D-16

of the Securities Exchange Act of 1934

 

For the month of January 2019

 

Commission File Number: 001-32702

 

Almaden Minerals Ltd.

(Translation of registrant's name into English)

 

Suite 210 – 1333 Johnston St., Vancouver, B.C. Canada V6H 3R9

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

  Form 20-F
     
  Form 40-F

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulations S-T Rule 101(b)(1): ☐

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulations S-T Rule 101(b)(7): ☐

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

  Yes
     
  No

 

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-

 

 

 

Signature

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Almaden Minerals Ltd.
Dated: January 25, 2019    
  By: 

 /s/ Douglas McDonald                         
Douglas McDonald

Vice President

 

 

 

 

 

 

 

 

 

Exhibit Index

 

Exhibit Description of Exhibit
   
99.1 Technical Report

 

 

 

 

 

 

 

Exhibit 99.1

 

 

 

 

     

 

 

Ixtaca Gold-Silver Project

Puebla State, Mexico

NI 43-101 Technical Report on the Feasibility Study

 

 

 

 

   
 
 

 

 

 

 

Submitted to:

Almaden Minerals Ltd.

 

 

Effective Date: 24 January 2019

 

 

   

Report Authors:

Tracey Meintjes, P.Eng.

Jesse Aarsen, P.Eng.

Kristopher Raffle, P.Geo.

G.H. Giroux, P.Eng.

Clara Balasko, P.E.

Edward Wellman PE, PG, CEG    

 

 

Company:

Moose Mountain Technical Services

Moose Mountain Technical Services

Apex Geoscience Ltd

Giroux Consultants Ltd

SRK Consulting

  SRK Consulting

   

 

 

 

 

 

 

 

 Page 1

  
 Ixtaca Feasibility Study – Technical Report

 

Certificate Of Qualified Person

 

 

I, Tracey Meintjes, P.Eng., of Vancouver B.C. do hereby certify that:

1. I am a Metallurgical Engineer with Moose Mountain Technical Services with a business address at 1975 1st Avenue South, Cranbrook, BC, V1C 6Y3.
2. This certificate applies to the technical report entitled “Ixtaca Gold-Silver Project, Puebla State, Mexico, NI 43-101 Technical Report on the Feasibility Study” dated 24 January 2019 (the “Technical Report”).
3. I am a graduate of the Technikon Witwatersrand, (NHD Extraction Metallurgy – 1996)
4. I am a member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia (#37018).
5. My relevant experience includes metallurgy and process engineering, and mine planning in South Africa and North America. My experience includes both operations and metallurgical process development including base metals, precious metals, industrial minerals, coal, uranium and rare earth metals. My precious metals project experience includes both operations and metallurgical process development. I have been working in my profession continuously since 1996.
6. I am a “Qualified Person” for the purposes of National Instrument 43-101 (the “Instrument”).
7. I visited the Property from on 01 to 02 July 2014, 15 to 16 March 2016, 04 to 05 October 2016, 24 October 2017, 08 December 2017, 12 April 2018, 19 to 20 March 2018, 03 to 04 May 2018, and  01 November 2018.
8. I am responsible for Sections 1.1, 1.14, 1.15, 1.16, 1.17, 1.18, 1.19, 1.2, 2, 3, 13, 17, 18.1, 18.2, 18.3, 19, 20.1.7, 20.2, 20.3, 22, 24, 25.1, 25.11, 25.12, 25.13, 25.5, 26.4, 26.7, 26.8, 26.9, as well as processing portions of Section 21 of the Technical Report. 
9. I am independent of Almaden Minerals as defined by Section 1.5 of the Instrument.
10. I have been involved with the Ixtaca Project during the preparation of previous Technical Reports.
11. I have read the Instrument and the Technical Report has been prepared in compliance with the Instrument.
12. As of the date of this certificate, to the best of my knowledge, information, and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

 

Dated the 24th day of January 2019

 

 

“ORIGINAL SIGNED AND SEALED”

________________________

Signature of Qualified Person

Tracey D. Meintjes, P.Eng.

 

 

 Page 2

  
 Ixtaca Feasibility Study – Technical Report

 

Certificate Of Qualified Person

 

 

I, Jesse J. Aarsen, B.Sc. Mining Engineering, P.Eng., of Penticton B.C. do hereby certify that:

1. I am an Associate (Mining Engineer) with Moose Mountain Technical Services with a business address of 1975-1st Avenue South, Cranbrook BC, V1C 6Y3.
2. This certificate applies to the technical report entitled “Ixtaca Gold-Silver Project, Puebla State, Mexico, NI 43-101 Technical Report on the Feasibility Study” dated 24 January 2019 (the “Technical Report”)
3. I graduated with a Bachelor of Science degree in Mining Engineering Co-op from the University of Alberta in April 2002.
4. I am a member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia (#38709).
5. I have worked as a mining engineer for a total of 14 years since my graduation from university. I have also taken a 2 year period for personal travel throughout the world. My relevant experience for the purpose of the Technical Report includes:
  2002 to 2005 – employed at complex coal mine in the Elk Valley working as a short range, long range, dispatch, and pit engineer. Preparation of budget levels mine plans and cost inputs, oversaw operation of personal designs and acting in supervisory-role positions as needed.
  Since 2007 – Consulting mining engineer specializing in mine planning and project development. Completion of mine plans for complex coal operating mines in north-eastern British Columbia and an open-pit copper/molybdenum mine in central British Columbia. Supervisory role in large multi-disciplinary studies for projects in both coal and hard-rock settings in Canada and Mongolia. Responsible for building several coal geology and block models and calculation of mineral resources under the supervision of a P.Geo.
6. I have read the definition of “qualified person” set out in National Instrument 43-101 (“the Instrument”) and certify that by reason of my education, affiliation with a professional associations and past relevant work experience, I am a “Qualified Person” for the purposes of the Instrument.
7. I have visited the site on April 30-May 01, 2013, August 27-28, 2014, March 15-16, 2016, Dec 12-16, 2016, and May 16-18, 2018.
8. I have prepared and am responsible Sections 1.13, 15, 16.1, 16.2, 16.3, 16.4.1, 16.4.3, 16.4.4, 16.5.1, 16.6, 16.7, 16.8, 16.9, 18.5, 25.7, 25.8, 26.3.1, 26.3.2, as well as the mining components of Section 21 of the Technical Report.
9. I am independent of Almaden Minerals applying the tests in Section 1.5 of the Instrument.
10. I have been involved with the Ixtaca Project during the preparation of previous Technical Reports.
11. I have read the Instrument, and the Technical Report has been prepared in compliance with the Instrument.
12. As of the date of this certificate, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

 

Dated the 24th day of January 2019

 

“ORIGINAL SIGNED AND SEALED”

________________________

Signature of Qualified Person

Jesse J. Aarsen, B.Sc., P.Eng.

 

 Page 3

  
 Ixtaca Feasibility Study – Technical Report

 

Certificate Of Qualified Person

 

 

I, Kristopher J. Raffle, B.Sc., P.Geo., of Vancouver B.C. do hereby certify that:

1. I am an Associate (Mining Engineer) with Moose Mountain Technical Services with a business address of 1975-1st Avenue South, Cranbrook BC, V1C 6Y3.
2. This certificate applies to the technical report entitled “Ixtaca Gold-Silver Project, Puebla State, Mexico, NI 43-101 Technical Report on the Feasibility Study” dated 24 January 2019 (the “Technical Report”)
3. I graduated with a Bachelor of Science degree in Mining Engineering Co-op from the University of Alberta in April 2002.
4. I am a member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia (#38709).
5. I have worked as a mining engineer for a total of 14 years since my graduation from university. I have also taken a 2 year period for personal travel throughout the world. My relevant experience for the purpose of the Technical Report includes:
  2002 to 2005 – employed at complex coal mine in the Elk Valley working as a short range, long range, dispatch, and pit engineer. Preparation of budget levels mine plans and cost inputs, oversaw operation of personal designs and acting in supervisory-role positions as needed.
  Since 2007 – Consulting mining engineer specializing in mine planning and project development. Completion of mine plans for complex coal operating mines in north-eastern British Columbia and an open-pit copper/molybdenum mine in central British Columbia. Supervisory role in large multi-disciplinary studies for projects in both coal and hard-rock settings in Canada and Mongolia. Responsible for building several coal geology and block models and calculation of mineral resources under the supervision of a P.Geo.
6. I have read the definition of “qualified person” set out in National Instrument 43-101 (“the Instrument”) and certify that by reason of my education, affiliation with a professional associations and past relevant work experience, I am a “Qualified Person” for the purposes of the Instrument.
7. I have visited the site on April 30-May 01, 2013, August 27-28, 2014, March 15-16, 2016, Dec 12-16, 2016, and May 16-18, 2018.
8. I have prepared and am responsible Sections 1.13, 15, 16.1, 16.2, 16.3, 16.4.1, 16.4.3, 16.4.4, 16.5.1, 16.6, 16.7, 16.8, 16.9, 18.5, 25.7, 25.8, 26.3.1, 26.3.2, as well as the mining components of Section 21 of the Technical Report.
9. I am independent of Almaden Minerals applying the tests in Section 1.5 of the Instrument.
10. I have been involved with the Ixtaca Project during the preparation of previous Technical Reports.
11. I have read the Instrument, and the Technical Report has been prepared in compliance with the Instrument.
12. As of the date of this certificate, to the best of my knowledge, information and belief, the Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

 

Dated the 24th day of January 2019

 

“ORIGINAL SIGNED AND SEALED”

________________________

Signature of Qualified Person

Kristopher J. Raffle, B.Sc., P.Geo.

 

 Page 4

  
 Ixtaca Feasibility Study – Technical Report

 

Certificate Of Qualified Person

 

 

 

I, G.H. Giroux, P.Eng. MASc, of Vancouver B.C., do hereby certify that:

1. I, G.H. Giroux, of 982 Broadview Drive, North Vancouver, British Columbia, do hereby certify that:
2. I am a consulting geological engineer with an office 982 Broadview Dr. North Vancouver, British Columbia.
3. I am a graduate of the University of British Columbia in 1970 with a B.A. Sc. and in 1984 with a M.A. Sc., both in Geological Engineering.
4. I am a member in good standing of the Association of Professional Engineers and Geoscientists of the Province of British Columbia.
5. I have practiced my profession continuously since 1970.  I have had over 40 years’ experience estimating mineral resources.  I have previously completed resource estimations on a wide variety of precious metal deposits both in B.C. and around the world, many similar to the Ixtaca project.
6. I have read the definition of “qualified person” set out in National Instrument 43-101 (“NI 43-101”) and certify that by reason of my education, past relevant work experience and affiliation with a professional association (as defined in NI 43-101), I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.
7. I am responsible for the preparation of Section 1.11, 14, and 25.6 of the Technical Report titled “Ixtaca Gold-Silver Project, Puebla State, Mexico, NI 43-101 Technical Report on the Feasibility Study” dated 24 January 2019 (the “Technical Report”).   
8. I have not visited the Property.
9. I have completed previous resource estimates on the Property that is the subject of the Technical Reports in 2013, 2014 and 2017.
10. As of the effective date of the Technical Report, to the best of my knowledge, information and belief, the portions of the Technical Report for which I am responsible contain all scientific and technical information that is required to be disclosed to make the portions of the Technical Report for which I am responsible not misleading.
11. I am independent of the issuer applying all of the tests in Section 1.5 of NI 43-101.
12. I have read NI 43-101, and the portions of the Technical Report for which I am responsible have been prepared in compliance with NI 43-101.

 

Dated the 24th day of January 2019

 

“ORIGINAL SIGNED AND SEALED”

________________________

Signature of Qualified Person

G. H. Giroux, P.Eng., MASc.

 

 

 Page 5

  
 Ixtaca Feasibility Study – Technical Report

 

Certificate Of Qualified Person

 

 

I, Clara Balasko, MSc, PE of Reno, Nevada do hereby certify that:

1. I am Consultant, Civil Engineer of SRK Consulting (U.S.), Inc., 5250 Neil Road, Suite 300, Reno, NV, USA, 89502.
2. This certificate applies to the technical report titled “Ixtaca Gold-Silver Project, Puebla State, Mexico, NI 43-101 Technical Report on the Feasibility Study” with an Effective Date of January 24, 2019 (the “Technical Report”).
3. I graduated with a degree in Bachelors of Science in Geology from Texas A&M University in 2000. In addition, I have obtained a Master’s of Science in Geological Engineering from University of Nevada, Reno in 2003. I am a Professional Engineer in Civil Engineering of the Arizona and Nevada Boards of Technical Registration. I have worked as a Civil Engineer for a total of 15 years since my graduation from university. My relevant experience includes planning and conducting geotechnical investigations for tailings storage facility foundation and embankment design, design for construction, operation and closure of tailings storage facilities, calculating tailings storage facility water balances for operation and closure, and performing slope stability assessments. 
4. I have read the definition of “qualified person” set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.
5. I visited the Ixtaca Property on 5 to 13 April, 2018 for 8 days and on 16 to 19 May, 2018 for 3 days. 
6. I am responsible for the preparation of Sections 1.15.1 , 1.15.2 , 16.5.2, 18.4, 18.6, 18.7, 20.1.1, 20.1.2, 20.1.3, 20.1.4, 20.1.5, 20.1.6, 20.4, 25.10, 26.2, 26.5, and tailings/rock Co-disposal facility and rock storage facility foundation preparation, water management, and mine closure portions of 21 and 26.6. of the Technical Report.  
7. I am independent of the issuer applying all the tests in section 1.5 of NI 43-101.  
8. I have not had prior involvement with the property that is the subject of the Technical Report. 
9. I have read NI 43-101 and Form 43-101F1 and the sections of the Technical Report I am responsible for have been prepared in compliance with that instrument and form.
10. As of the aforementioned Effective Date, to the best of my knowledge, information and belief, the sections of the Technical Report I am responsible for contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

 

 

Dated this 24th Day of January 2019.

 

“ORIGINAL SIGNED AND SEALED”

________________________

 

Clara Balasko, MSc, PE

 

Civil Engineer #50059 (Arizona exp. 09/30/2021)

 

 Page 6

  
 Ixtaca Feasibility Study – Technical Report

 

 

CERTIFICATE OF QUALIFIED PERSON

 

I, Edward C. Wellman, PE do hereby certify that:

1. I am a Principal Consultant (Rock Mechanics) of SRK Consulting (U.S.), Inc., 1125 Seventeenth Street, Suite 600, Denver, CO, USA, 80202.
2. This certificate applies to the technical report titled “Ixtaca Gold-Silver Project, Puebla State, Mexico, NI 43-101 Technical Report on the Feasibility Study” with an Effective Date of January 24, 2019 (the “Technical Report”).
3. I graduated with a Bachelor of Science degree in Geosciences from the University of Arizona in 1994. I graduated with a Master of Science in Geological Engineering from the University of Nevada in 1997. In addition, I have obtained Professional Engineering Licenses in the states of Arizona, California, Colorado, Hawaii, Illinois, Iowa, Maryland, Michigan, Nevada, New Mexico, Utah, and Alaska. I am also a Registered Geologist and Certified Engineering Geologist in the state of California. I am a Member of the Society of Mining, Metallurgy & Exploration, Association of Environmental and Engineering Geologists, and the American Society of Civil Engineers. I have worked as a Geological Engineer for a total of 21 years since my graduation from university. My relevant experience includes over 20 years of experience in mining (base metals, gold, industrial minerals), and civil tunneling for public utilities, wineries and the private sector. My experience includes slope stability analysis of open-pit slopes, waste rock and heap leach piles, and preparation of analysis and technical reports suitable for agency review. My underground areas of expertise include rock mechanics for block cave mining, large excavations and shafts, cavability studies, subsidence including surface and underground interaction. I am also versed in geotechnical instrumentation and monitoring programs, from inception to evaluating excavation performance. My experience includes rock mass characterization and probabilistic analysis for pit slope and ground reinforcement design. I am also experienced in numerical modeling and is a developer of fragmentation analysis codes. 
4. I have read the definition of “qualified person” set out in National Instrument 43-101 (NI 43-101) and certify that by reason of my education, affiliation with a professional association (as defined in NI 43-101) and past relevant work experience, I fulfill the requirements to be a “qualified person” for the purposes of NI 43-101.
5. I visited the Ixtaca Project Site located in the Mexico on October 24-25, 2017 for 2 days.
6. I am responsible for the preparation of Sections 1.12, 16.4.2, 25.9, and 26.3.3 of the Technical Report. 
7. I am independent of the issuer applying all the tests in section 1.5 of NI 43-101. 
8. I have not had prior involvement with the property that is the subject of the Technical Report.  
9. I have read NI 43-101 and Form 43-101F1 and the sections of the Technical Report I am responsible for have been prepared in compliance with that instrument and form.
10. As of the aforementioned Effective Date, to the best of my knowledge, information and belief, the sections of the Technical Report I am responsible for contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.

 

Dated this 24th Day of January, 2019.

 

“ORIGINAL SIGNED AND SEALED”

________________________________

Edward C. Wellman, PE

Geological Engineer #15318 (Nevada exp. 6/30/2020)

Principal Consultant (Rock Mechanics)

 

 Page 7

  
 Ixtaca Feasibility Study – Technical Report

 

 

TABLE OF CONTENTS

 

1.0 Summary 21
  1.1 Introduction 21
  1.2 Property Description and Location 22
  1.3 Accessibility, Climate, Local Resources, Infrastructure, Physiography 22
  1.4 History 22
  1.5 Geological Setting and Mineralization 23
  1.6 Exploration 24
  1.7 Drilling 24
  1.8 Sample Preparation, Analyses and Security 25
  1.9 Data Verification 26
  1.10 Metallurgy 26
  1.11 Resource Estimate 27
  1.12 Geomechanical 28
    1.12.1 Ash Tuff and Upper Volcanics 29
    1.12.2 Rock Units (Limestone, Shale, Dikes) 29
  1.13 Proposed Development Plan 29
  1.14 Production and Processing 32
  1.15 Tailings Co-disposal and Water Management 33
    1.15.1 West T/RSF 33
    1.15.2 Water Management 33
  1.16 Capital and Operating Costs 34
  1.17 Economic Analysis 34
  1.18 Environmental and Social Considerations 37
  1.19 Project Execution Plan 38
  1.20 Conclusions and Recommendations 39
2.0 Introduction 40
3.0 Reliance on Other Experts 42
4.0 Property Description and Location 43
5.0 Accessibility, Climate, Local Resources, Infrastructure and Physiography 47
6.0 History 48
7.0 Geological Setting and Mineralization 50
  7.1 Regional Geology 50
  7.2 Property Geology 52
  7.3 Mineralization 56
    7.3.1 Steam Heated Alteration, Replacement Silicification and Other Surficial Geothermal Manifestations at Ixtaca 61
8.0 Deposit Types 65
  8.1 Epithermal Gold-Silver Deposits 65
    8.1.1 The Ixtaca Zone Epithermal System 68
  8.2 Porphyry Copper-Gold-Molybdenum and Lead-Zinc Skarn Deposits 70
9.0 Exploration 71
  9.1 Rock Geochemistry 71
  9.2 Soil and Stream Sediment Geochemistry 71

 

 Page 8

  
 Ixtaca Feasibility Study – Technical Report

 

  9.3 Ground Geophysics 74
    9.3.1 Magnetics 74
    9.3.2 Induced Polarization/Resistivity 75
    9.3.3 CSAMT/CSIP 76
  9.4 Exploration Potential 76
10.0 Drilling 82
  10.1 Main Ixtaca and Ixtaca North Zones 86
  10.2 Chemalaco Zone 93
11.0 Sample Preparation, Analyses and Security 100
  11.1 Sample Preparation and Analyses 100
    11.1.1 Rock Grab and Soil Geochemical Samples 100
    11.1.2 Almaden Drill Core 101
    11.1.3 Author’s Drill Core 102
  11.2 Quality Assurance / Quality Control Procedures 103
    11.2.1 Analytical Standards 103
    11.2.2 Blanks 111
    11.2.3 Duplicates 112
  11.3 Independent Audit of Almaden Drillhole Database 114
    11.3.1 Collar Coordinate and Downhole Survey Databases 114
    11.3.2 Drill Core Assay Database 114
12.0 Data Verification 115
13.0 Mineral Processing and Metallurgical Testing 116
  13.1 Introduction 116
  13.2 Metallurgical Test Work History 116
  13.3 Samples 119
  13.4 Mineralogy 121
    13.4.1 Limestone 121
    13.4.2 Volcanic 122
    13.4.3 Black Shale 124
  13.5 Diagnostic Leaching 127
    13.5.1 Limestone 128
    13.5.2 Volcanic 128
    13.5.3 Black Shale 128
  13.6 Comminution Test Work 129
    13.6.1 Limestone 130
    13.6.2 Volcanic 130
    13.6.3 Black Shale 130
  13.7 Ore Sorting 130
    13.7.1 How it works 131
    13.7.2 Limestone Ore Sort Amenability Tests 132
    13.7.3 Limestone Ore Sort Performance  Tests 133
    13.7.4 Black Shale Ore Sort Performance Tests 136
    13.7.5 Volcanic Ore Sort Performance Tests 138
  13.8 Whole Ore Leaching 140
  13.9 Gravity Concentration 140
    13.9.1 Limestone 140

 

 Page 9

  
 Ixtaca Feasibility Study – Technical Report

 

    13.9.2 Volcanic 144
    13.9.3 Black Shale 146
  13.10 Flotation of Gravity Tails 149
    13.10.1 Flotation Optimization (2016) 149
    13.10.2 Flotation Variability Test Work (2018) 150
  13.11 Leaching of gravity concentrate 153
  13.12 Leaching of flotation concentrate 154
    13.12.1 Limestone 154
    13.12.2 Volcanic 159
    13.12.3 Black Shale 160
  13.13 Leach Residue Detox 166
  13.14 Carbon Adsorption and Merrill-Crowe 166
  13.15 Settling tests and Filtration 167
  13.16 Recommended Flowsheet 169
  13.17 Metallurgical Performance Projections 169
  13.18 Aggregate test work on Ixtaca Limestone Waste Rock 171
14.0 Mineral Resource Estimates 173
  14.1 Data Analysis 173
  14.2 Composites 178
  14.3 Variography 179
  14.4 Block Model 182
  14.5 Bulk Density 182
  14.6 Grade Interpolation 184
  14.7 Classification 186
  14.8 Block Model Verification 190
15.0 Mineral Reserve Estimates 194
  15.1 Cut-Off Grade 194
  15.2 Loss and Dilution 194
  15.3 Mineral Reserves 195
16.0 Mining Method 196
  16.1 Introduction 196
  16.2 Mining Study Basis 196
    16.2.1 Mine Planning Datum 196
    16.2.2 Resource Classes 196
    16.2.3 Metallurgical Recovery for Mine Planning 196
    16.2.4 Cut-off Grade 196
    16.2.5 Mining Dilution and Loss 197
  16.3 Economic Pit Limits 197
    16.3.1 LG Cost Inputs 197
    16.3.2 LG Slope Inputs 198
    16.3.3 LG Sensitivity Cases 198
  16.4 Detailed Pit Designs 201
    16.4.1 Pit Phase Selection 201
    16.4.2 Pit Design Slope Inputs and Bench Configuration 201
    16.4.3 Haul Road Design Parameters 202
    16.4.4 Pit Design Results 202

 

 Page 10

  
 Ixtaca Feasibility Study – Technical Report

 

  16.5 Rock Storage Facilities 206
    16.5.1 RSF Design Inputs 206
    16.5.2 South RSF Surface Water Management 207
  16.6 Mine Haul Road Designs 210
  16.7 Ore Stockpiles 210
  16.8 Mine Production Schedule 211
    16.8.1 End of Period Maps 214
    16.8.2 Pre-Production Mine Operations (Year -1) 214
  16.9 Mine Operations 218
    16.9.1 Direct Mining Unit Operations (Contractor) 219
    16.9.2 GME and Technical (Owner) 222
    16.9.3 Mine Operations Organizational Chart 223
17.0 Recovery Methods 224
  17.1 Process Flowsheet 224
  17.2 Acquisition of the Rock Creek Processing Plant 226
  17.3 Process Design Criteria 226
  17.4 Process Description 228
    17.4.1 General 228
    17.4.2 Crushing and Ore Sorting 228
    17.4.3 Fine Ore Stockpile 229
    17.4.4 Processing Plant 229
  17.5 Reagents and Power Consumption 236
  17.6 Process Water and Power 237
18.0 Project Infrastructure 238
  18.1 Site Access 238
  18.2 Power 238
  18.3 Fuel 238
  18.4 Water Supply 240
  18.5 Mine Maintenance Facility 243
  18.6 Tailings Management 243
    18.6.1 Tailings Storage Alternatives 244
    18.6.2 Design Criteria Summary 244
    18.6.3 Tailings and Rock Storage Design 247
    18.6.4 West Tailings and Rock Storage Facility Closure 251
  18.7 Site Wide Water Management 252
19.0 Market Studies and Contracts 253
  19.1 Market Studies 253
  19.2 Commodity Price Projections 253
  19.3 Comments on Section 19 253
20.0 Environmental Studies, Permitting and Social or Community Impact 254
  20.1 Environmental Studies 254
    20.1.1 Meteorology 254
    20.1.2 Surface Hydrology 255
    20.1.3 Surface Water Quality 255
    20.1.4 Groundwater 258
    20.1.5 Groundwater Quality 262

 

 Page 11

  
 Ixtaca Feasibility Study – Technical Report

 

    20.1.6 Geochemistry 264
    20.1.7 Flora and Fauna 265
  20.2 Permitting 267
  20.3 Social and Community Engagement 268
    20.3.1 Local Communities 268
    20.3.2 Community Engagement 268
    20.3.3 Land Acquisition 270
    20.3.4 Potential Social or Community Requirements and/or Plans 270
  20.4 Mine Closure 270
    20.4.1 Open Pit 270
    20.4.2 West Tailings and Rock Storage Facility 271
    20.4.3 South Rock Storage Facility 271
    20.4.4 Water Dams 271
    20.4.5 Buildings 271
    20.4.6 Roads 271
    20.4.7 Diversions 272
    20.4.8 Wells 272
    20.4.9 Monitoring 272
21.0 Capital and Operating Costs 273
  21.1 Introduction 273
  21.2 Capital Costs 273
    21.2.1 Responsibilities 274
    21.2.2 Basis of Estimate 274
  21.3 Operating Cost Estimate 281
    21.3.1 Operating Cost Summary 281
    21.3.2 Mining 281
    21.3.3 Processing 282
    21.3.4 General & Administration (G&A) 283
  21.4 Closure Cost Estimate 283
22.0 Economic Analysis 284
  22.1 Cautionary Statement 284
  22.2 Assumptions 284
  22.3 Taxes and Mining Duties 285
  22.4 Analysis 285
  22.5 Economic Results and Sensitivities 287
23.0 Adjacent Properties 289
  23.1 Cuyoaco Property 289
  23.2 Minera Frisco S.A. de C.V. Espejeras 289
24.0 Other Relevant Data and Information 290
  24.1 Preliminary Development Schedule 290
25.0 Interpretation and Conclusions 291
  25.1 Introduction 291
  25.2 Mineral Tenure, Surface Rights 291
  25.3 Geology and Mineralization 291
  25.4 Exploration, Drilling and Analytical Data Collection in Support of Mineral Resource Estimation 291

 

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  25.5 Metallurgical Testwork 292
  25.6 Mineral Resource Estimates 292
  25.7 Mineral Reserves 293
  25.8 Mine Plan 293
  25.9 Geomechanical 293
  25.10 Tailings, Rock, and Water Management 294
  25.11 Environmental, Permitting and Social Considerations 296
  25.12 Capital and Operating Cost Estimates 296
  25.13 Economic Analysis 296
26.0 Recommendations 297
  26.1 Geology and Exploration 297
  26.2 Tailings, Rock, and Water Management Recommendations 297
  26.3 Mining Recommendations 298
    26.3.1 Open Pit Mining 298
    26.3.2 Underground Mining Potential 298
    26.3.3 Geomechanical recommendations 299
  26.4 Metallurgy and Process Recommendations 300
  26.5 Environmental Recommendations 300
  26.6 Infrastructure Recommendations 300
  26.7 Aggregate Potential 300
  26.8 Cement Potential 300
  26.9 Risk Assessment 301
  26.10 Budget 301
27.0 References 303
APPENDIX A - LIST OF DRILL HOLES 306

 

 

 

 

 


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LIST OF TABLES

 

Table 1-1 Ixtaca Zone Measured, Indicated and Inferred Mineral Resource Statement 27
Table 1-2 Recovered In-pit Reserve and Diluted Grade 30
Table 1-3 Ore Sort Mill Feed grade improvement 32
Table 1-4 Average Life of Mine Process Recoveries from Mill Feed 33
Table 1-5 Projected Initial Capital Costs (USD million) 34
Table 1-6 Summary of Average LOM Operating Costs ($/tonne mill feed) 34
Table 1-7 Revenue before transport, refining, and royalties 35
Table 1-8 Summary All-in sustaining cost (exclusive of initial capital) 35
Table 1-9 Summary of Ixtaca Economic Sensitivity to Precious Metal Prices (Base Case is Bold) 35
Table 1-10 Summary of Economic Results and Sensitivities to Operating Costs ($ Million) 36
Table 1-11 Summary of Economic Results and Sensitivities to Exchange Rate ($ Million) 36
Table 1-12 Summary of Economic Results and Sensitivities to Capital Cost ($ Million) 36
Table 2-1 QPs, Section of Report Responsibility, and Site Visits 40
Table 4-1 Tuligtic Property Mineral Claims 43
Table 4-2 Exploitation Claim Minimum Expenditure/Production Value Requirements 46
Table 8-1 Classification of Epithermal Deposits 67
Table 10-1 Tuligtic Property Drilling Summary 2010-2016 82
Table 10-2 Tuligtic Property Down Hole Survey Statistics 85
Table 10-3 Section 10+675E Significant Drill Intercepts (Main Ixtaca and Ixtaca North Zones) 89
Table 10-4 Section 10+375E Significant Drill intercepts (Main Ixtaca Zone) 92
Table 10-5 Section 50+050N Significant Drill intercepts (Chemalaco Zone) 94
Table 12-1 Authors Independent Drill Core Sample Assays 115
Table 13-1 History of Metallurgical testing campaigns for the Ixtaca Project 117
Table 13-2  Variability Samples for Stage 3 Metallurgical Test Work - Limestone Sample Head Assays 120
Table 13-3 Limestone Ore Sample Chemical and mineral composition 121
Table 13-4 Volcanic Sample Chemical and mineral composition 123
Table 13-5 Black Shale Sample Chemical and mineral composition 125
Table 13-6 Stage 1 and 2 Comminution Results (2014 and 2016) 129
Table 13-7 Limestone Comminution Variability Results (2018) 129
Table 13-8 Limestone Ore Sort Test Results Summary 134
Table 13-9 Limestone Ore Sort Mass Balance Summary 135
Table 13-10 Black Shale Ore Sort Test Results Summary 136
Table 13-11 Black Shale Ore Sort Mass Balance Summary 138
Table 13-12 Black Shale Ore Sort Test Results Summary 138
Table 13-13 Volcanic Ore Sort Mass Balance Summary 140
Table 13-14 2013 Limestone EGRG results 141
Table 13-15 2016 Limestone EGRG results 141
Table 13-16 2013 Volcanic EGRG results 144
Table 13-17 2016 Volcanic EGRG results 144
Table 13-18 2013 Black Shale EGRG results 146
Table 13-19 2016 Blackshale EGRG results 146
Table 13-20 Flotation Conditions 150
Table 13-21 Ultrafine gravity concentration on flotation rougher concentrate 165
Table 13-22 Carbon Loading and Merrill-Crowe tests 167

 

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Table 13-23 Static Thickener Tests 168
Table 13-24 Dynamic Thickener Tests 168
Table 13-25 Ixtaca ore Ore Sort Performance 169
Table 13-26 Limestone Process Plant Metallurgical Projections 170
Table 13-27 Volcanic and Black Shale Process Plant Metallurgical Projections 170
Table 13-28 Ixtaca limestone aggregate testing standards 171
Table 13-29 Ixtaca limestone testing of aggregate potential 172
Table 14-1 Assay Statistics for Gold and Silver Sorted by Mineralized Zone 177
Table 14-2 Capped Levels for Gold and Silver 177
Table 14-3 Capped Assay Statistics for Gold and Silver Sorted by Domain 178
Table 14-4 3m Composite Statistics for Gold and Silver Sorted by Mineralized Zone 178
Table 14-5 Pearson Correlation Coefficients for Au – Ag Geologic Domains 179
Table 14-6 Semivariogram Parameters for Gold and Silver 180
Table 14-7 Specific Gravity Determinations Sorted by Cross Section 183
Table 14-8 Specific Gravity Determinations Sorted by Lithology 183
Table 14-9 Kriging Parameters for Gold in Each Domain 185
Table 14-10 Measured Resource for Total Blocks 189
Table 14-11 Indicated Resource for Total Blocks 189
Table 14-12 Inferred Resource for Total Blocks 189
Table 14-13 Measured + Indicated Resource for Total Blocks 190
Table 14-14 Comparison of Composite Mean Au Grade to Block Mean Au Grade 190
Table 15-1 Metal Prices and NSP 194
Table 15-2 Process Recoveries for Block Model NSR coding 194
Table 15-3 Dilution Grades 195
Table 15-4 Mineral Reserves 195
Table 16-1 Metallurgical Recovery Assumptions 196
Table 16-2 LG Operating Cost Inputs 198
Table 16-3 Bench Face Angles 198
Table 16-4 Inter-Ramp Angles (Final) 198
Table 16-5 Ixtaca Ultimate Pit Limit Contents (NSR>=$12.50) 200
Table 16-6 Ixtaca Pit Recommended Slope Angles – Final Walls 202
Table 16-7 RSF Capacities 210
Table 16-8  Production Schedule Summary 212
Table 16-9 Hauler Cycle Time Assumptions 220
Table 16-10 Primary Mining Fleet Schedule For Key Periods 221
Table 16-11 Mine Operations Support Equipment For Key Periods 221
Table 17-1 Summary of Process Initial Design Criteria 226
Table 17-2 Reagents and Consumables Summary 237
Table 18-1 Regional Rainfall Data 240
Table 18-2 Ixtaca West Tailings and Rock Storage Facility Design Criteria Summary 244
Table 21-1 Initial Capital Cost Summary 273
Table 21-2 Sustaining Capital Cost Summary 273
Table 21-3 Expansion Capital Cost Summary 274
Table 21.4 Allowances for Contingencies 279
Table 21-5 LOM Operating Cost Summary 281
Table 21-6 Mining Operating Cost Summary 282

 

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Table 21-7 Process Initial Operating Cost Summary 282
Table 21-7 Process Personnel 283
Table 21-8 Annual G&A Costs 283
Table 22-1 Inputs for Economic Analysis 285
Table 22-2 Cash Flow Summary 286
Table 22-3 Summary of Ixtaca Economic Sensitivity to Precious Metal Prices (Base Case is Bold) 287
Table 22-4 Summary of Economic Results and Sensitivities to Operating Costs ($ Million) 287
Table 22-5 Summary of Economic Results and Sensitivities to Exchange Rate ($ Million) 288
Table 22-6 Summary of Economic Results and Sensitivities to Capital Cost ($ Million) 288
Table 26-1 Recommendations Budget 302

 

 

 

 

 

 

 

 


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 Ixtaca Feasibility Study – Technical Report

 

LIST OF FIGURES

 

Figure 1-1 Ixtaca General Arrangement 31
Figure 4-1 General Location 44
Figure 4-2 Tuligtic Property Mineral Claims 45
Figure 7-1 Regional Geology 51
Figure 7-2 Geology of the Ixtaca Area 53
Figure 7-3 Chert Limestone 54
Figure 7-4 Shale (Calcareous Silstone) from the Chemalaco Zone 55
Figure 7-5 Post Mineral Unconsolidated Volcanic Ash Deposits. Generally less than 1m thick 56
Figure 7-6 Looking to the east of Cerro Caolin with Relative positions of Altered Volcanics, Unconformity, Limestone and the Main Ixtaca Vein Swarm 58
Figure 7-7 Photo of Cerro Caolin of the Main Ixtaca Vein Swarm From North Looking to the South Showing the Contact between the Clay Altered Volcanic and Limestone Units 59
Figure 7-8 Example of Banded Veining of the Main Ixtaca Vein Swarm Zone of 59
Figure 7-9 Altered, Veined and Mineralised Volcanics 61
Figure 7-10 The Vein System of the Ixtaca Main Zone 63
Figure 7-11 Photo (2001) of Historic Clay Exploration Pits in Clay Altered Volcanic Rocks. Looking to West. Photo Taken from near Section 10+300 64
Figure 8-1 Schematic Cross-section of an Epithermal Au-Ag Deposit 65
Figure 8-2 Photos of Epithernal Veining from Ixtaca, Hishikari Japan and Well Scale from the Active Geothermal System, Broadlands Ohaaki, New Zealand 66
Figure 8-3 Selected styles and geometry of epithermal deposits illustrating the structural setting of the limestone hosted veining at Ixtaca, a vein swarm and local stockwork. Taken from Sillitoe (1993). 70
Figure 9-1 Exploration Overview Showing Gold in Soil Anomalies and Extent of Geophysical Surveys 73
Figure 9-2 Gold in Soil Anomalies, ASTER Satellite Hydroxyl responses and Target Areas 74
Figure 9-3 IP Chargeability and Resistivity Section Showing Soil Results and Targets. The red target was drill tested with hole TU-10-001 and resulted in the Discovery of the Main Ixtaca Vein Swarm Zone 75
Figure 9-4 Exploration Targets on the Tuligtic Project 77
Figure 9-5 ASTER Satellite Hydroxyl (Clay) responses Outlining Clay Altered Volanics 78
Figure 9-6 Overview Photo of the Waihi Vein Deposit New Zealand. Historic Martha Pit on vein swarm in foreground. Surface projections of the concealed and more recently discovered Favona and Correnso veins also shown. 80
Figure 9-7 Cross Section of the Favona Vein Swarm  and System, Waihi Deposit New Zealand showing the concealed nature of the deposit 80
Figure 9-8 Model for Further Exploration at the Tuligtic Project 81
Figure 10-1 100 Azimuth Section (Looking East) Showing the Assay Results of Discovery hole TU-10-001 which intersected the Main Ixtaca Zone Vein Swarm 84
Figure 10-2 Drillhole Locations 88
Figure 10-3 Section 10+675E through the Ixtaca Main and North Zones 97
Figure 10-4 Section 10+375E through the Ixtaca Main Zone 98
Figure 10-5 Section 50+050N through the Chemalaco Zone 99
Figure 11-1 QA/QC Analytical Standards 106
Figure 11-2 QA/QC Blanks 112

 

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Figure 11-3 QA/QC Duplicates 113
Figure 13-1 Ixtaca Metallurgical Domains 116
Figure 13-2 Plan View Of Drill holes used for Stage 1 and 2 Metallurgical Test Work 119
Figure 13-3  Location of Variability Samples for Stage 3 Metallurgical Test Work – 3D View from NW 120
Figure 13-4  Limestone ore: estimated percentage deportment by mineral species 122
Figure 13-5  Volcanic: estimated percentage deportment by mineral species 124
Figure 13-6  Black Shale: estimated percentage deportment by mineral species 126
Figure 13-7  Black Shale: organic carbon mineral distribution 126
Figure 13-8  Gold diagnoistic Leach 127
Figure 13-9  Silver diagnoistic Leach 128
Figure 13-10: Typical Limestone high grade veining (GMET-17-04 at 88 to 89 m depth) 130
Figure 13-11: XRT Ore Sorting 131
Figure 13-12: Tomra high capacity commercial XRT Ore Sorting Machine 132
Figure 13-13: Ixtaca XRT Amenability Test Images 132
Figure 13-14: Limestone Ore Sort Mass Balance 135
Figure 13-15: Black Shale Concentrate Yield vs Tailings Au Grade 137
Figure 13-16: Black Shale Ore Sort Mass Balance 137
Figure 13-17: Volcanic Ore Sort Mass Balance 139
Figure 13-18: Limestone gravity recovery vs grind size 142
Figure 13-19: 2018 Limestone gravity recovery vs head grade (P80 = 75 µm) 142
Figure 13-20: 2018 Limestone Gold - industrial gravity recovery model 143
Figure 13-21: 2018 Limestone Silver - industrial gravity recovery model 143
Figure 13-22: 2018 Volcanic Gold - industrial gravity recovery model 145
Figure 13-23: 2018 Volcanic Silver - industrial gravity recovery model 145
Figure 13-24: 2016 Black Shale Gold recovery sensitivty to number of passes 147
Figure 13-25: 2018 Black Shale Gold - industrial gravity recovery model 148
Figure 13-26: 2018 Black Shale Silver - industrial gravity recovery model 148
Figure 13-27: Summary of Gold recovery by flotation grindsize (2016) 149
Figure 13-28: Summary of Silver recovery by flotation grindsize (2016) 149
Figure 13-29: Gold recovery to combined flotation and gravity concentrate by head grade 151
Figure 13-30: Silver recovery to combined flotation and gravity concentrate by head grade 151
Figure 13-31: Gold flotation recovery sensitivity to flotation reagent 152
Figure 13-32: Silver flotation recovery sensitivity to flotation reagent 152
Figure 13-33: Gravity concentrate intensitve leach gold recovery 153
Figure 13-34: Limestone Gold Leach Rates Limestone (2016) 155
Figure 13-35: Limestone Silver Leach Rates Limestone (2016) 155
Figure 13-36: Carbon absorption rates 156
Figure 13-37: Carbon absorption capacity test – gold loading 156
Figure 13-38: Carbon absorption capacity test – silver loading 157
Figure 13-39: CIL Gold recovery vs head grade 157
Figure 13-40: CIL Silver recovery vs head grade 158
Figure 13-41: CIL – Gold in Solution 158
Figure 13-42: Volcanic gold leach kinetics at different grind sizes 159
Figure 13-43: Volcanic silver leach kinetics at different grind sizes 159
Figure 13-44: Black Shale carbon backscatter images 160
Figure 13-45: Black Shale carbon rejection exploratory testwork 161

 

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Figure 13-46: Ultrafine gravity concentration of black shale at Metsolve laboratory 163
Figure 13-47: Black Shale – gravity concentration of preflotation concentrate 164
Figure 13-48: Black Shale – gravity concentration of flotation rougher concentrate 165
Figure 13-49: Black Shale impact of organic carbon content on gold recovery 166
Figure 13-50: Block Diagram of Recommended Ixtaca Flowsheet 169
Figure 14-1 Plan View Showing the Mineralized Volcanic Ash solid and all drill holes 174
Figure 14-2 Plan View Showing the Main HG zone in red, the North Limb HG zone in green and the North East HG zone in magenta. 175
Figure 14-3 Plan View Showing Main LG in yellow, North Limb LG in blue and NE LG in grey. 176
Figure 14-4 Plan View of Mineralized Volcanic Ash showing the different quadrants for estimation. 180
Figure 14-5 Isometric View Looking NW Showing Mineralized Blocks. 182
Figure 14-6 Ixtaca 2202 Level Plan Showing Estimated Gold in Blocks 192
Figure 14-7 Ixtaca 2100 Level Plan Showing Estimated Gold in Blocks 193
Figure 16-1 Ixtaca Pit Shell Resource Contents by Case 199
Figure 16-2 Discounted Cashflow by Price Case 200
Figure 16-3 Plan view of selected LG shell (Case 15) 201
Figure 16-4  Phase 1 203
Figure 16-5  Phase 2 203
Figure 16-6  Phase 3 204
Figure 16-7  Phase 4 204
Figure 16-8  Phase 5 205
Figure 16-9  Phase 6 205
Figure 16-10 Phase 7 206
Figure 16-11 Extent of South RSF Unsuitable Material Removal 208
Figure 16-12 South RSF Underdrainage Collection System 209
Figure 16-13 RSF Locations 210
Figure 16-14  Crusher Feed Summary by Rock Type 213
Figure 16-15  Crusher Feed Gold and Silver Grades by Year 213
Figure 16-16  Material Movement by Year 214
Figure 16-17  End of Pre-Production Period 215
Figure 16-18  End of Year 1 216
Figure 16-19  End of Year 5 217
Figure 16-20  End of Year 11 (Life of Mine) 218
Figure 16-21  Org Chart 223
Figure 17-1 Summarized flowsheet for Ixtaca – Block Flow Diagram 225
Figure 17-2 Crushing And Ore Sort Layout 230
Figure 17-3 Stockpile Layout and Section 231
Figure 17-4 Processing Plant Layout 232
Figure 17-5 Grinding and Gravity Concentration Section 1-1 233
Figure 18-1 Ixtaca Project Roads 239
Figure 18-2 Water Balance Flow Schematic 241
Figure 18-3 Overall Site Water Management Plan – Year 10 242
Figure 18-4 West Tailings and Rock Storage Facility General Arrangement - LOM 245
Figure 18-5:  West T/RSF LOM Layout 246
Figure 18-6 –  West Tailings and Rock Storage Facility Foundation Preparation 248

 

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Figure 18-7  West Tailings and Rock Storage Facility Northern Portion Cross Section - LOM 249
Figure 18-8 West Tailings and Rock Storage Facility Southern Portion Cross Section - LOM 249
Figure 18-9  Typical Underdrain Configuration 250
Figure 20-1 Surface and Ground Water Quality Sampling Sites 257
Figure 26-1  Section View of Au>=$0.5 below the FS pit - looking South -East 299

 

 

 

 

 

 

 

 

 

 

 

 

 

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 Ixtaca Feasibility Study – Technical Report

 

1.0Summary

 

1.1Introduction

 

This Technical Report on the Feasibility Study (“FS”) of the Ixtaca Gold-Silver Project (the “Project”) has been prepared for Almaden Minerals Ltd. (“Almaden” or “the Company”) by Moose Mountain Technical Services (“MMTS”) in conjunction with APEX Geoscience Ltd., Giroux Consultants Ltd, (“GCL”) and SRK Consulting (U.S.), Inc (“SRK”). The Ixtaca Project is 100% owned by Almaden, subject to a 2% NSR owned by Almadex Minerals Ltd. (“Almadex”), and encompasses the Ixtaca Zone Deposit (Ixtaca Gold-Silver Deposit) that includes the Ixtaca Main, North, and Chemalaco Zones of the Tuligtic Property.

 

All currency amounts are referred to in U.S. dollars (USD) unless otherwise indicated.

 

The FS uses:

·An updated resource model;
·The Rock Creek Mill with average throughput of 7,650 tonnes per day;
·A throughput ramp-up to 15,300 tonnes per day of mill feed in Year 5;
·Base case metal prices of $US 1275/oz gold and $US 17/oz silver (75:1 silver-to-gold ratio).

 

FS highlights:

 

· Average annual production of 108,500 ounces gold and 7.06 million ounces silver (203,000 gold equivalent ounces, or 15.2 million silver equivalent ounces) over first 6 years; 
· After-tax IRR of 42% and after-tax payback period of 1.9 years;
· After-tax NPV of $310 million at a 5% discount rate;
· Initial Capital of $174 million;
· Conventional open pit mining with a Proven and Probable Mineral Reserve of 1.39 million ounces of gold and 85.2 million ounces of silver (See Table 1-2);
· Pre-concentration uses ore sorting to produce a total of 48 million tonnes of mill feed averaging 0.77 g/t gold and 47.9 g/t silver (1.41 g/t gold equivalent over life of mine; 2.03 g/t gold equivalent over first 6 years); 
· Average LOM annual production of 90,800 ounces gold and 6.14 million ounces silver (173,000 gold equivalent ounces, or 12.9 million silver equivalent ounces);
· Operating cost $716 per gold equivalent ounce, or $9.55 per silver equivalent ounce;
· All-in Sustaining Costs (“AISC”), including operating costs, sustaining capital, expansion capital, private and public royalties, refining and transport of $850 per gold equivalent ounce, or $11.30 per silver equivalent ounce. 
· Elimination of tailings dam by using filtered tailings significantly reduces the project footprint and water usage.

 

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1.2Property Description and Location

 

The Tuligtic Property (the “Property”) is held 100 percent (%) by Compania Minera Gorrión S.A. de C.V. (“Minera Gorrión”), a wholly owned subsidiary of Almaden Minerals Ltd. (together referred to as “Almaden”). The Property originally consisted of approximately 14,000 hectares, but during 2015 Almaden filed an application to reduce the aggregate claim size to those areas still considered prospective. The Tuligtic Property currently comprises seven mineral claims totalling 7,220 hectares (ha) located within Puebla State, 80 kilometres (km) north of Puebla City, and 130km east of Mexico City. Almadex Minerals Ltd. holds a 2% Net Smelter Return Royalty (NSR) on the Property.

 

1.3Accessibility, Climate, Local Resources, Infrastructure, Physiography

 

The Tuligtic Property is road accessible and is located within Puebla State, 80 kilometres (km) north of Puebla City, and 130km east of Mexico City. The Ixtaca Deposit within the Tuligtic Property is located 8km northwest of the town of San Francisco Ixtacamaxtitlán, the county seat of the municipality of Ixtacamaxtitlán, Puebla State.

 

The topography on the Tuligtic Property is generally moderate to steep hills with incised stream drainages. Elevation ranges from 2,300 metres (m) above sea level in the south to 2,800m in the north. Vegetation is dominantly cactus and pines and the general area is somewhat cultivated with subsistence vegetables, bean and corn crops. The region has a temperate climate with average temperatures ranging from 16°C in June to 12°C in December. The area experiences an average of 600 to 720 mm of precipitation annually with the majority falling during the rainy season, between June and September.

 

Electricity is available on the Property from the national electricity grid that services nearby towns such as Santa Maria and Zacatepec.

 

Almaden has secured through purchase agreements with numerous independent owners approximately 1,139 hectares required for the proposed production plan. This was completed through friendly land purchase agreements with locals, considering fair market value. There are no communities that require relocation as part of the Project development. Mineral Claim owners have the right to obtain the temporary occupancy, or creation of land easements required to carry out exploration and mining operations, under the Federal Mining Law.

 

1.4History

 

Throughout the Property there is evidence that surficial clay deposits have once been mined prior to Almaden’s acquisition of the project. Almaden acquired the Cerro Grande claims of the Tuligtic Property by staking in 2001 following the identification of surficial clay deposits that have been interpreted to represent high-level epithermal alteration. Subsequent geologic mapping, rock, stream silt, soil sampling, and induced polarization (IP) geophysical surveys identified porphyry copper and epithermal gold targets within an approximately 5 x 5km area of intensely altered rock. In July 2010, Almaden initiated a diamond drilling program to test epithermal alteration within the Tuligtic Property, resulting in the discovery of the Ixtaca Zone. The first hole, TU-10-001 intersected 302.42 metres (m) of 1.01g/t Au and 48g/t Ag and multiple high grade intervals including 44.35m of 2.77g/t Au and 117.7g/t Ag.

 

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1.5Geological Setting and Mineralization

 

The Tuligtic Property covers a roughly 5 by 5 kilometre area of high level epithermal alteration characterised by intense kaolinite-alunite alteration and silicification in volcanic rocks. This alteration is interpreted to represent the upper portion of a well preserved epithermal system.

 

The epithermal system is hosted by both volcanic rocks and older carbonate units. Minor disseminated and vein mineralisation is hosted by the volcanic rocks (referred to as tuff, ash and volcanics). The bulk of the deposit is hosted by the carbonate units as vein swarms.

 

Within the Tuligtic Property, variably cherty and bedded light grey to dark coloured limestone (referred to as limestone) of the Late Jurassic to Early Cretaceous Upper Tamaulipas formation is underlain by transitional calcareous clastic rocks including minor brown grainstones, and thinly bedded grey, black and green coloured shaley units (referred to as shale or black shale). The brown grainstone marks the transition between limestone and shale. During the Laramide orogeny, this entire carbonate package was intensely deformed into a series of thrust-related east verging anticlines. The shale units appear to occupy the cores of the anticlines while the limestone units occupy the cores of major synclines at the Ixtaca Zone. The carbonate units are crosscut by intensely altered intermediate composition dykes. The deformed Mesozoic sedimentary sequence is discordantly overlain by epithermal altered Cenozoic bedded crystal tuff of the upper Coyoltepec subunit (referred to as volcanic, ash and tuff).

 

The Ixtaca deposit is a low sulphidation epithermal vein system. Most of the gold silver mineralisation occurs as zones of high grade vein and veinlets (vein swarms) in the carbonate basement units. A small portion of the gold silver mineralisation occurs above the unconformity as disseminated mineralisation in the altered volcanic rocks. The mineralisation is not oxidised and is hosted by classic banded and colloform low-sulphidation style carbonate-quartz veining. Spatially widespread polished section and SEM mineralogic studies of mineralised epithermal veins demonstrate that the gold is dominantly hosted by electrum (an alloy of gold and silver) and the gold-silver sulphide uytenbogaardtite (Ag3AuS2). Apart from electrum and uytenbogaardite, the dominant silver minerals are silver rich polybasite, pyrargerite, proustite and naumannite. The ore minerals are accompanied by minor pyrite, galena (no silver detected in the SEM work on the galena) and sphalerite. The mineral assemblage is very similar to other precious metal low sulphidation vein systems worldwide with low base metal contents.

 

To date two main vein orientations have been identified in the Ixtaca deposit:

·060 degrees trending sheeted veins hosted by limestone;
·330 degrees trending veins hosted by shale;

 

The bulk of the resource and over 80% of the recoverable metal in the FS is hosted by the limestone in the Main Ixtaca and Ixtaca North zones as swarms of sheeted and anastomosing high grade banded epithermal veins. There is no disseminated mineralisation within the host rock to the vein swarms, which is barren and unaltered limestone. To the northeast of the limestone hosted mineralisation, the Chemalaco zone, a 330 striking and west dipping vein zone hosted by shale, also forms part of the deeper resource.

 

The Main Ixtaca and Ixtaca North vein swarms are spatially associated with two altered and mineralised sub parallel ENE (060 degrees) trending, sub-vertical to steeply north dipping dyke zones. The Main Ixtaca dyke zone is approximately 100m wide and consists of a series of 2m to over 20m true width dykes. The Ixtaca North dyke zone is narrower and comprises a steeply north-dipping zone of two or three discrete dykes ranging from 5 to 20m in width.

 

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Individual veins within the Main Ixtaca and Ixtaca North vein zones cannot be separately modelled. Wireframes were created that constrain the higher grade, more densely veined areas, however as the vein swarms are anastomosing and sheeted in nature, these wireframes include significant barren limestone material enclosed by veins within the vein swarm.

 

The Main and North zones have been defined over 650m and tested over 1000m strike length with high-grade mineralization intersected to depths up to 350m vertically from surface. The strike length of the Chemalaco Zone has been extended to 450m with high-grade mineralization intersected to a vertical depth of 550m, or approximately 700m down-dip. In 2016 Almaden conducted a drill program to test for additional veins to the north of the Ixtaca North Zone. This program resulted in better definition of the Ixtaca North zone and successfully demonstrated that limestone mineralisation remains open to the north and at depth.

 

The Chemalaco Zone dips moderately-steeply at approximately 22 degrees to the WSW. An additional sub-parallel zone has been defined underneath the Chemalaco Zone dipping 25 to 50 degrees to the WSW, intersected to a vertical depth of 250m, approximately 400m down-dip over a 250m strike length. The Chemalaco zone remains open to depth and along strike to the northwest. Additional parallel veins further to the east have been identified in core and the zone remains open in this direction as well.

 

1.6Exploration

 

Between 2001 and 2013, Almaden’s exploration at the Tuligtic Property included geologic mapping and prospecting, alteration mineralogical characterization, rock and soil geochemical sampling, ground magnetics, IP and resistivity, Controlled Source Audio-frequency Magnetotelluric (CSAMT), and Controlled Source Induced Polarization (CSIP) geophysical surveys resulting in the identification of additional anomalous zones including the Ixtaca, Ixtaca East, Caleva, Azul, Sol zones, Tano, and SE Alteration zones.  Since 2010, a total of 590 diamond drillholes have been drilled at the Tuligtic Property, totalling 192,121 m (not including geotechnical holes). During this timeframe the Company focussed on Ixtaca Zone Deposit resource and development work which has meant that many of the epithermal targets have not yet been tested by drilling.

 

1.7Drilling

 

The 230 holes drilled between July, 2010 and November 13, 2012 totalled 83,346m and identified the Main Ixtaca, Ixtaca North and Chemalaco zones. Diamond drilling at 25 to 50m section spacing defined the Main Ixtaca and Ixtaca North as NE-oriented sub-vertical zones and a strike length of approximately 650m. High-grade mineralization was intersected to depths of 200 to 300m vertically from surface. The Chemalaco Zone was identified as dipping moderately-steeply over a strike length of 350m along a series of five ENE (070 degrees) oriented sections spaced at intervals of 50 to 100m. High grade mineralization having a true-width ranging from less than 30 and up to 60m was intersected beneath approximately 30m of tuff to a vertical depth of 550m, or approximately 600m down-dip.

 

During 2013 and subsequent to the November 13, 2012 cut-off of the maiden mineral Resource Estimate, Almaden drilled 198 holes totalling 55,467m. A total of 79 holes were drilled at the Main Ixtaca Zone, 40 holes at the Ixtaca North Zone and 79 holes at the Chemalaco Zone. Drilling during 2013 focused on expanding the deposit and upgrading resources previously categorized as Inferred to higher confidence Measured and Indicated categories.

 

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Drilling during 2014 and 2015, subsequent to the 2014 Resource Estimate, Almaden had completed 52 additional drill holes totalling 17,128m (49 within the Ixtaca Deposit and 3 exploration drill holes outside the Ixtaca Deposit. Of the holes drilled within the Ixtaca Deposit during 2014 through 2016, 4 were metallurgical holes that twinned existing holes. The remainder were exploration holes testing mineralized zones at depth.

 

Drilling during 2014 through 2016 comprised 86 additional drill holes totalling 28,131m (including 3 exploration drill holes at the (Casa) Azul Zone, and 1 at the Tano Zone). Of the holes drilled within the Ixtaca Deposit during 2014, 2015, and 2016, 4 were metallurgical holes that twinned existing holes and 27 were geotechnical holes. During 2016 a total of 33 holes totalling 10,514m further delineated and expanded the Ixtaca North Zone mineralization as well as identifying new veins to the north and at depth. The remainder were exploration holes testing mineralized zones at depth below the PEA pit described in this report. Past drilling at the Casa Azul zone intersected porphyritic intrusive and limestone-skarn mineralization returning locally elevated zinc, copper and silver values.

 

Drilling during 2017 through 2018 comprised 76 additional drill holes totalling 25,176m. Of the holes drilled within the Ixtaca Deposit during 2017 and 2018, 4 were metallurgical holes that twinned existing holes and 11 were geotechnical holes. During 2017 and 2018 a total of 21 additional holes were drilled in the Main zone, 18 in the Ixtaca North zone, and 5 additional holes in the Chemalaco Zone. The remainder were exploration holes drilled at surface in the surrounding areas.

 

1.8Sample Preparation, Analyses and Security

 

All strongly altered or epithermal-mineralized intervals of core have been sampled. Almaden employs a maximum sample length of 2 to 3m in unmineralized lithologies, and a maximum sample length of 1m in mineralized lithologies. During the years 2010 and 2011 Almaden employed a minimum sample length of 20cm. The minimum sample length was increased to 50cm from 2012 onwards to ensure the availability of sufficient material for replicate analysis. Drill core is half-sawn using industry standard diamond core saws. After cutting, half the core is placed in a new plastic sample bag and half are placed back in the core box. Sample numbers are written on the outside of the sample bags and a numbered tag placed inside the bag. Sample bags are sealed using a plastic cable tie. Sample numbers are checked against the numbers on the core box and the sample book.

 

ALS Minerals (ALS) sends its own trucks to the Project to take custody of the samples at the Santa Maria core facility and transports them to its sample preparation facility in Guadalajara or Zacatecas, Mexico. Prepared sample pulps are then forwarded by ALS personnel to the ALS North Vancouver, British Columbia laboratory for analysis.

 

Drill core samples have been subject to gold determination via a 50 gram (g) AA finish FA fusion with a lower detection limit of 0.005ppm Au (5ppb) and upper limit of 10ppm Au (ALS method Au-AA24). Over limit gold values (>10ppm Au) are subject to gravimetric analysis (ALS method Au-GRA22). Silver, base metal and pathfinder elements for drill core samples are analyzed by 33-element ICP-AES, with a 4-acid digestion, a lower detection limit of 0.5ppm Ag and upper detection limit of 100ppm Ag (ALS method ME-ICP61). Over limit silver values (>100ppm Ag) are subject to 4-acid digestion ICP-AES analysis with an upper limit of 1,500ppm Ag (ALS method ME-OG62). Ultra-high grade silver values (>1,500ppm Ag) are subject to gravimetric analysis with an upper detection limit of 10,000ppm Ag (Ag-GRA22).

 

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Drill core samples are subject to Almaden’s internal QA/QC program that includes the insertion of analytical standard, blank and duplicate samples into the sample stream. A total of fifteen QA/QC samples are present in every 100 samples sent to the laboratory. QA/QC sample results are reviewed following receipt of each analytical batch. QA/QC samples falling outside established limits are flagged and subject to review and possibly re-analysis, along with the ten preceding and succeeding samples.

 

1.9Data Verification

 

Mr. Kristopher J. Raffle, P.Geo., first visited the Tuligtic Property from October 17 to October 20, 2011. Additional visits to the Tuligtic Property have been carried out by Mr. Raffle on September 23, 2012 and November 20, 2013. During each of the property visits Mr. Raffle completed a traverse of the Ixtaca Zone, observed the progress of ongoing diamond drilling operations, and recorded the location of select drill collars. Almaden’s complete drill core library has been made available and Mr. Raffle reviewed mineralized intercepts from a series of holes across the Ixtaca Zone. Mr. Raffle has collected quartered drill core samples as ‘replicate’ samples from select reported mineralized intercepts.

 

Based on the results of the traverses, drill core review, and ‘replicate’ sampling Mr. Raffle has no reason to doubt the reported exploration results. The analytical data is considered to be representative of the drill samples and suitable for inclusion in the Resource Estimate. In addition to the in-house Quality Assurance Quality Control (QAQC) measures employed by Almaden, Kris Raffle, P.Geo. of APEX Geoscience Ltd., completed an independent review of Almaden’s drillhole and QAQC databases. The review included an audit of approximately 8% of drill core analyses used in the mineral resource estimate. A total of 10,885 database gold and silver analyses were verified against original analytical certificates. Similarly, 10% of the original drill collar coordinates and down hole orientation survey files were checked against those recorded in the database; and select drill sites were verified in the field by Kris Raffle, P.Geo. The QAQC audit included independent review of blank, field duplicate and certified standard analyses. All QAQC values falling outside the limits of expected variability were flagged and followed through to ensure completion of appropriate reanalyses. No discrepancies were noted within the drillhole database, and all QAQC failures were dealt with and handled with appropriate reanalyses.

 

1.10Metallurgy

 

Metallurgical test work and mineralogy has been undertaken on each of the Ixtaca Zone metallurgical domains between 2012 and 2018 at a number of laboratories.

 

There are 3 distinct metallurgical domains hosting precious metal mineralization at Ixtaca:

 

·Limestone ore contains most of the economic mineralization and contributes 75% of metal production in the FS (90% of metal production in the payback period).
·Volcanic ore contributes 12% of metal production in the FS.
·Black Shale ore contributes 13% of metal production in the FS.

 

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The testwork has consistently demonstrated that economic mineralization responds well to processing by pre-concentration with XRT ore sorting, gravity concentration, intensive leaching of gravity concentrate, flotation, flotation concentrate regrind, leaching with 24 hours Carbon-in-Leach (CIL) to complete gold leaching and 72 hours of agitated leach to complete silver leaching.

 

The majority of economic mineralization is fine grained, requiring a primary grind P80 of 75 μm for liberation, and regrind prior to leaching.

 

Test work has demonstrated repeatable good overall recoveries for gold and silver in the primary Limestone ore domain. Silver over all recoveries from the volcanic and black shale domains is good. Gold recoveries in volcanic and black shale are poor due to refractory mineralization in the volcanic and preg-robbing organic carbon in the black shale. Ongoing test work indicates that gold recovery improvements in the black shale can be achieved with organic carbon rejection by carbon pre-flotation or flotation cleaning using an organic carbon depressant. Good carbon rejection and subsequent leach recovery was also achieved by ultra fine gravity concentration of black shale concentrates.

 

1.11Resource Estimate

 

On January 31, 2013 the Company announced a maiden resource on the Ixtaca Zone, which was followed by a resource update on January 22, 2014 and another on May 17, 2017. Since that time an additional 104 holes have been completed, and this data is also included in the Mineral Resource Estimate which has been prepared in accordance with NI 43-101 by Gary Giroux, P.Eng., qualified person ("QP") under the meaning of NI 43-101, and summarised in Table 1-1. The data available for the resource estimation consisted of 649 drill holes assayed for gold and silver. Wireframes constraining mineralised domains were constructed based on geologic boundaries defined by mineralisation intensity and host rock type. Higher grade zones occur where there is a greater density of epithermal veining. These higher grade domains have good continuity and are cohesive in nature.

 

Of the total drill holes, 558 intersected the mineralised solids and were used to make the resource estimate. Capping was completed to reduce the effect of outliers within each domain. Uniform down hole 3 meter composites were produced for each domain and used to produce semivariograms for each variable. Grades were interpolated into blocks 10 x 10 x 6 meters in dimension by ordinary kriging. Specific gravities were determined for each domain from drill core. Estimated blocks were classified as either Measured, Indicated or Inferred based on drill hole density and grade continuity.

 

Table 1-1 shows the Measured, Indicated and Inferred Mineral Resource Statement with the Base Case 0.3 g/t AuEq Cut-Off highlighted from the 8 July 2018 Resource Statement. Also shown are the 0.5, 0.7 and 1.0 g/t AuEq cut-off results. AuEq calculation is based on average prices of $1250/oz gold and $18/oz silver.

 

Table 1-1 Ixtaca Zone Measured, Indicated and Inferred Mineral Resource Statement

MEASURED RESOURCE
AuEq Cut-off Tonnes > Cut-off Grade>Cut-off Contained Metal x 1,000
(g/t) (tonnes) Au (g/t) Ag (g/t) AuEq (g/t) Au (oz) Ag (oz) AuEq (oz)
0.30 43,380,000 0.62 36.27 1.14 862 50,590 1,591

 

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0.50 32,530,000 0.75 44.27 1.39 788 46,300 1,454
0.70 25,080,000 0.88 51.71 1.63 711 41,700 1,312
1.00 17,870,000 1.06 61.69 1.95 608 35,440 1,118
INDICATED RESOURCE
AuEq Cut-off Tonnes > Cut-off Grade>Cut-off Contained Metal x 1,000
(g/t) (tonnes) Au (g/t) Ag (g/t) AuEq (g/t) Au (oz) Ag (oz) AuEq (oz)
0.30 80,760,000 0.44 22.67 0.77 1,145 58,870 1,994
0.50 48,220,000 0.59 30.13 1.02 913 46,710 1,586
0.70 29,980,000 0.74 37.79 1.29 715 36,430 1,240
1.00 16,730,000 0.96 47.94 1.65 516 25,790 888
INFERRED RESOURCE
AuEq Cut-off Tonnes > Cut-off Grade>Cut-off Contained Metal x 1,000
(g/t) (tonnes) Au (g/t) Ag (g/t) AuEq (g/t) Au (oz) Ag (oz) AuEq (oz)
0.30 40,410,000 0.32 16.83 0.56 412 21,870 726
0.50 16,920,000 0.44 25.43 0.80 237 13,830 436
0.70 7,760,000 0.57 33.80 1.06 142 8,430 264
1.00 3,040,000 0.79 43.64 1.42 77 4,270 139

 

1.Ixtaca Mineral Resources Estimate have an effective date of 8 July 2018. The Qualified person for the estimate is Gary Giroux, P.Eng.

2.Base Case 0.3 g/t AuEq Cut-Off grade is highlighted. Also shown are the 0.5, 0.7 and 1.0 g/t AuEq cut-off results. AuEq calculation based on average prices of $1250/oz gold and $18/oz silver. The Base Case cut-off grade includes consideration of the open pit mining method, 90% metallurgical recovery, mining costs of $1.82/t, average processing costs of $11.7, G&A costs of $1.81/t

3.Mineral Resources are reported inclusive of those Mineral Resources that have been converted to Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

4.The estimate of Mineral Resources may be materially affected by environmental, permitting, legal or other relevant issues. The Mineral Resources have been classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves in effect as of the date of this report.

5.All figures were rounded to reflect the relative accuracy of the estimates and may result in summation differences.

 

1.12Geomechanical

 

SRK completed a geomechanical investigation program on site for the Project from February 12, 2018 to April 27, 2018. Drilling commenced on February 12, 2018 and was completed on April 23, 2018. The program was designed to characterize geomechanical conditions in support of the development of the FS pit design. The slope angle recommendations contained in this report may be used for final design and mine planning, subject to completion of the recommendations contained in Section 26.3.3 of this report. SRK notes that all large earthwork and open pit projects at a final design level will be modified and changed based on slope monitoring, observed conditions, and recommendations of professional engineers engaged on the project.

 

Four major geomechanical domains have been identified in the project. The rock slopes are composed of limestone and shale and an ash tuff volcanic domain that controls the stability of the upper 50 to 250 meters (m) of the ground. The volcanic ash tuff domain is a very weak rock unit that has engineering properties similar to stiff soils. It is weak and easily erodible. A fourth domain of dikes was identified but is not a significant percentage of the final wall rock slopes. In SRK’s opinion, the quality and quantity of core hole data and rock mass characterization is sufficient for a FS study.

 

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1.12.1Ash Tuff and Upper Volcanics

 

Rock quality designation (RQD) values of the volcanic domain are in the 0 to 20 range. Even though larger piece lengths were observed the rock hardness was less than R2 (weak rock with strengths less than 5 MPa) not meeting the RQD criteria. The rock mass rating (RMR76) ranges from 30 to 50, which indicates a weak and poor to fair quality rock mass.

 

When the ash tuff cuts are exposed they will be subjected to the deformation, erosion, and failure mechanisms because of their low strength. Even though the ash tuff slope cuts have been designed to meet the minimum slope acceptance criteria at a factor of safety of 1.3, some local slope failure mechanisms might occur that are not addressed by global or inter-ramp stability analysis. These failure mechanisms include gullying, piping, and erosion. These mechanisms will be exacerbated by precipitation onto exposed slopes that have not been vegetated or covered by erosion control. Berm and bench surfaces should be graded at 2° to 3° to assist drainage off benches.

 

1.12.2Rock Units (Limestone, Shale, Dikes)

 

The rock units consist of limestone, shale, and dikes. Structural features (discontinuities) encountered during this field investigation consisted of joints, lithological contacts, veins, dikes, foliation, faults, shear zones, and fractures in these three domains.

 

The limestone domain is characterized as moderately strong rock with UCS values ranging from 10 to 40 megapascals (MPa). RQD values in the limestone range from 60 to 100. The limestone is moderately jointed and has a rock mass rating ranging from 50 to 70 indicating a good rock mass.

 

The shale domain is a weak rock mass with UCS values ranging from 5 to 20 MPa. The shale unit is a highly foliated and weak rock mass and has a varying foliation dipping between 40° to 50° at a dip direction of 250°. RQD values in the shale range from 50 to 100 and the rock mass rating ranges from 40 to 65, which indicates a fair to good quality rock mass. The bulk of the final wall will be controlled by the rock mass properties of the shale domain.

 

The intrusive dikes have not been differentiated in the geotechnical model as they will be governed by the strength of the shale or limestone rock mass. The dikes are characterized as strong with UCS values ranging from 50 to 70 MPa and have a RMR76 of 55 to 80 indicating the dikes are a strong and good rock mass where present.

 

1.13Proposed Development Plan

 

A FS level mining design, production schedule, and cost model has been developed for the Ixtaca Zone of the Tuligtic Property. This current work focuses on the near surface high grade limestone hosted portions of the Ixtaca Zone deposit. The mine schedule includes an open pit mining operation with a process plant to produce gold and silver doré. The plant will operate initially at an average plant throughput of 7,650 tonnes per day (tpd) and expanding to 15,300 tpd by Year 5. The process plant includes conventional crushing, ore sorting, grinding, gravity, flotation, and concentrate leaching using CIL. Mining will use a contractor owned and operated fleet.

 

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A series of pit optimizations have been completed using the resource block model, applying a range of metal prices and recoveries, estimated costs for mining, processing, and pit slopes. The operational pits are designed based on the optimized shell, and the potentially mineable portion of the resource is estimated within those pits. The ultimate pit contains a total of 73.1 million tonnes of crusher feed at a strip ratio of 4.45:1. The crusher feed tonnages include mining recovery and mining loss & dilution. Mineral Reserves are shown in the Table below assuming a diluted NSR cut-off grade of $14/t and are stated as Run-of-Mine (ROM) which represent tonnes of ore delivered to the crusher (pre ore-sorting):

 

Table 1-2 Recovered In-pit Reserve and Diluted Grade

 

  ROM Tonnes Diluted Average Grades Contained
Metal
  (millions) Au (g/t) Ag (g/t) Au - '000 oz Ag - '000 oz
Proven 31.6 0.70 43.5 714 44,273
Probable 41.4 0.51 30.7 673 40,887
TOTAL 73.1 0.59 36.3 1,387 85,159

 

Notes to Mineral Reserve table:

· Mineral Reserves have an effective date of November 30, 2018.The qualified person responsible for the Mineral Reserves is Jesse Aarsen, P.Eng of Moose Mountain Technical Services.
· The cut-off grade used for ore/waste determination is NSR>=$14/t
· All Mineral Reserves in this table are Proven and Probable Mineral Reserves. The Mineral Reserves are not in addition to the Mineral Resources but are a subset thereof. All Mineral Reserves stated above account for mining loss and dilution.
· Associated metallurgical recoveries (gold and silver, respectively) have been estimated as 90% and 90% for limestone, 50% and 90% for volcanic, 50% and 90% for black shale.
· Reserves are based on a US$1,300/oz gold price, US$17/oz silver price and an exchange rate of US$1.00:MXP20.00.
· Reserves are converted from resources through the process of pit optimization, pit design, production schedule and supported by a positive cash flow model.
· Rounding as required by reporting guidelines may result in summation differences. 

 

 

The Ixtaca General Arrangement layout is show in Figure 1-1.

 

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Figure 1-1        Ixtaca General Arrangement

 

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1.14Production and Processing

 

The Study incorporates the Rock Creek process plant which has been purchased by Almaden. Run of mine ore will be crushed in a three-stage crushing circuit to -9 mm.

 

Product from the secondary crusher will be screened in to coarse (+20mm), mid-size (12 to 20 mm), and fine (-12mm) fractions. Coarse and mid-size ore will be sorted by an XRT ore sort machine to eject waste rock. Fine ore will bypass the ore sorting and is sent directly to the mill.

 

The Study incorporates ore sorting, test work for which has shown the ability to separate barren or low grade limestone host rock encountered within the vein swarm from vein and veined material (see Almaden news release of July 16th 2018). Ore sort waste from Limestone and Black Shale is below waste/ore cutoff grade and is placed in the waste rock dump. Ore sort ‘waste’ from the Volcanic unit is low grade ore and will be stockpiled for processing later in the mine life. Ore sorting pre-concentration increases the mill feed gold and silver grades by 32% and 31% respectively compared to run of mine (ROM) grades. Table 1-3 shows ROM grades with ore sort waste removed from the ROM, and the resulting mill feed.

 

Table 1-3       Ore Sort Mill Feed grade improvement

 

    ROM Ore sort Mill
    Ore Waste Feed
Limestone million tonnes 51.5 18.8 32.7
Au g/t 0.572 0.24 0.763
Ag g/t 37.5 12.0 52.2
Black Shale million tonnes 12.2 6.3 5.8
Au g/t 0.517 0.25 0.806
Ag g/t 44.4 20.0 70.8
Volcanic million tonnes 9.4 - 9.4
Au g/t 0.790 - 0.790
Ag g/t 18.6 - 18.6
TOTAL million tonnes 73.1 25.1 48.0
Au g/t 0.591 0.24 0.773
Ag g/t 36.3 14.0 47.9

 

Crushed ore is transported to the grinding circuit by an over land conveyor. Grinding to 75 microns is carried out by with ball milling in a closed circuit with cyclones. Cyclone underflow is screened and the screen undersize is treated in semi-batch centrifugal gravity separators to produce a gravity concentrate.

 

The gravity concentrate will be treated in an intensive cyanide leach unit with gold and silver recovered from electrowinning cells.

 

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The cyclone overflow will be treated in a flotation unit to produce a flotation concentrate. After regrinding the flotation concentrate leaching will be carried out in 2 stages. CIL leaching for 24 hours will complete gold extraction, followed by agitated tank leaching to complete silver leaching. A carbon desorption process will recover gold and silver from the CIL loaded carbon, and a Merrill Crowe process will recover gold and silver from pregnant solution from the agitated leach circuit.

 

Cyanide destruction on leach residue is carried out using the SO2/Air process. Final tailings are thickened and filtered then dry stacked and co-disposed with mine waste rock.

 

Average process recoveries from mill feed to final product over the life of mine are summarized in Table 1-4 for each ore type.

 

Table 1-4       Average Life of Mine Process Recoveries from Mill Feed

 

  Gold Silver
Limestone 88.5% 86.8%
Volcanic 64.4% 76.3%
Black Shale 54.5% 84.7%

 

1.15Tailings Co-disposal and Water Management

 

1.15.1West T/RSF

 

The FS mine plan will not include a separate tailings management facility. Instead the tailings and waste rock will be co-disposed in the West Tailings and Rock Storage Facility (West T/RSF or Co-disposal). Tailings produced by the flotation process will be sent through a ceramic vacuum filter to achieve a volumetric moisture content of approximately 15% to 20%. The filtered tailings will be surrounded by a limestone waste rock buttress and will be deposited inside the buttress and compacted in layers with waste rock. Approximately 48 million tonnes of tailings and 216 million tonnes of waste rock consisting of limestone, volcanics, and black shale will be stored in the West Tailings and Rock Storage Facility.

 

1.15.2Water Management

 

Diversion channels are designed around project facilities to manage upstream stormwater, runoff from RSF slopes and to minimize seepage into the open pit highwall. The channels route flow through sediment settling ponds before releasing water downstream of the project.

 

The operational top surface of the West Tailings and Rock Storage Facility (West T/RSF) will be sloped to drain all stormwater to lined sumps. A pumping and piping system from the sumps will convey all stormwater runoff from the 100-year, 24-hour storm event from the filtered tailings surface to the process plant.

 

Stormwater runoff collected in the open pit will be pumped from a sump at the pit bottom to the Pit Collection Pond located outside the pit. In addition, passive groundwater inflows to the pit will also be collected in the pit sump and pumped to the Pit Collection Pond. From the Pit Collection Pond stormwater and passive groundwater will either pumped to the process plant or will gravity flow to the sediment pond before being released downstream of the project.

 

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Two water storage reservoirs, upstream of the Fresh Water Dam and Water Storage Dam, collect and store upstream runoff as sources of fresh water for the process plant. The Water Storage Dam also supplies a consistent flow of fresh water to the downstream communities.

 

1.16Capital and Operating Costs

 

The capital cost and operating estimates for the Ixtaca Project are developed to a level appropriate for a FS. All capital and operating costs are reported in USD unless specified otherwise. The overall capital cost estimate meets the American Association of Cost Engineers (AACE) Class 3 requirement of an accuracy range between -10% and +15% of the final project cost.

 

The total estimated initial capital cost is $174.2 million and sustaining capital (including expansion capital of $64.5 million) is $111.3 million over the LOM. The estimated expansion capital of $64.5 million will be funded from cashflow. The estimated LOM operating costs are $26.8 per tonne mill feed.

 

The initial capital costs are summarized in Table 1-5 below:

 

Table 1-5      Projected Initial Capital Costs (USD million)

 

  $ Millions
Direct Costs  
  Mining $22.2
  Process $80.2
  Onsite Infrastructure $24.3
  Offsite Infrastructure $7.5
Indirects, EPCM, Contingency and Owners Cost $39.9
Total $174.2
* Numbers may not add due to rounding

 

The LOM average costs are summarized in Table 1-6 below:

 

Table 1-6      Summary of Average LOM Operating Costs ($/tonne mill feed)

 

Mining costs $/tonne milled $15.2
Processing $/tonne milled $10.5
G&A $/tonne milled $1.1
Total $/tonne milled $26.8
*Numbers may not add due to rounding

 

1.17Economic Analysis

 

The FS project economics are based on gold price of $1275/oz and silver price of $17/oz derived from current common peer usage. The project revenue is split between gold and silver with 53% of the revenue coming from gold and 47% from silver. The after-tax economic analysis includes a corporate income tax rate of 30% as well as the two new mining duties:

a)7.5% special mining duty and,
b)0.5% extraordinary mining duty.

 

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LOM Revenue for gold and silver are summarized in Table 1-7.

 

Table 1-7      Revenue before transport, refining, and royalties

 

  Revenue
$ million %
Gold 1,205 53%
Silver 1,074 47%
Total 2,279 100%

 

All in unit sustaining costs are summarized in Table 1-8.

 

Table 1-8      Summary All-in sustaining cost (exclusive of initial capital)

  Total
$ million
$/ oz AuEq

$/ oz

AgEq

Cash operating Cost 1,283  716 9.6   
Sustaining Capital Cost 111  62 0.8
Almadex Royalty 45  25  0.3
Mexican royalty taxes   66  37 0.5
Refining + Transport 17  9 0.1
Total 1,522  850 11.3

 

A summary of financial outcomes comparing base case metal prices to alternative metal price conditions are presented in Table 1-9. Alternate prices cases consider the project’s economic outcomes at varying prices witnessed at some point over the three years prior to this study.

 

Table 1-9       Summary of Ixtaca Economic Sensitivity to Precious Metal Prices (Base Case is Bold)

 

Gold Price ($/oz) 1125 1200 1275 1350 1425
Silver Price ($/oz) 14 15.5 17 18.5 20
 
Pre-Tax NPV 5% ($million) 229 349 470 591 712
Pre-Tax IRR (%) 35% 46% 57% 67% 77%
Pre-Tax Payback (years) 2.0 1.8 1.6 1.4 1.3
 
After-Tax NPV 5% ($million) 151 233 310 388 466
After-Tax IRR (%) 25% 34% 42% 49% 57%
After-Tax Payback (years) 2.6 2.1 1.9 1.7 1.5

 

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A sensitivity analysis on metal prices (Table 1-9), operating costs (Table 1-10), foreign exchange rate (Table 1-11), and capital costs (Table 1-12), shows that the Project is most sensitive to fluctuations in gold price and foreign exchange rate assumptions, and less sensitive to variations in capital and operating costs.

 

Table 1-10    Summary of Economic Results and Sensitivities to Operating Costs ($ Million)

  Lower Case Base Case Upper Case
  Pre-Tax After-Tax Pre-Tax After-Tax Pre-Tax After-Tax
Opex ($/t milled) -10% $26.8/t +10%
NPV (5% discount rate) $565 $371 $470 $310 $376 $249
Internal Rate of Return (%) 64% 47% 57% 42% 49% 36%
Payback (years) 1.5 1.7 1.6 1.9 1.7 2.0

 

The Ixtaca project is also sensitive to the exchange rate between U.S. dollars and Mexican Pesos (“MXN”). The FS assumes an exchange rate of 20 MXN per U.S. dollar, and the following table shows the sensitivity of project economics to different exchange rates assuming base case metals prices.

 

Table 1-11     Summary of Economic Results and Sensitivities to Exchange Rate ($ Million)

  Lower Case Base Case Upper Case
  Pre-Tax After-Tax Pre-Tax After-Tax Pre-Tax After-Tax
Exchange Rate (MXN:USD) 18 20 22
NPV (5% discount rate) $409 $270 $470 $310 $521 $342
Internal Rate of Return (%) 52% 38% 57% 42% 62% 45%
Payback (years) 1.7 2.0 1.6 1.9 1.5 1.8

 

The Initial Capital cost is estimated to be US$174.2 million. The following table shows the sensitivity of project economics to a 10% change in the initial capital costs, assuming base case metals prices.

 

Table 1-12     Summary of Economic Results and Sensitivities to Capital Cost ($ Million)

 

  Lower Case Base Case Upper Case
  Pre-Tax After-Tax Pre-Tax After-Tax Pre-Tax After-Tax
Initial Capital ($M) -10% 174.2 +10%
NPV (5% discount rate) $493 $326 $470 $310 $448 $294
Internal Rate of Return (%) 65% 48% 57% 42% 51% 37%
Payback (years) 1.5 1.7 1.6 1.9 1.7 2.0

 

The sensitivity analysis demonstrates robust economics.

 

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1.18Environmental and Social Considerations

 

Almaden has undertaken significant Environmental and Community/Social programs. These will continue as the Project progresses into advanced studies. The Environmental Impact Assessment (MIA) has been submitted to the regulators. Currently there are no known issues that can materially impact the ability to extract the mineral resources at the Ixtaca Project. Previous and ongoing environmental studies include meteorology, water quantity and quality, and flora and fauna.

 

Extensive geochemical studies have evaluated the potential for acid rock drainage and metal leaching from the waste rock and tailings using globally accepted standardised methods of laboratory testing and in compliance with Mexican regulations. Most of the waste rock at Ixtaca is limestone, and the studies of both waste rock and tailings have consistently shown that there is more than enough neutralising potential present in the waste rock to neutralise any acid generated. Testing to date also indicates low potential for metal leaching.

The mine will not require the resettlement of any communities. Successful engagement with the local communities proximate to the Project has been a cornerstone of the operation to date and continues to be a key focus for Almaden through Project development.

 

Open, transparent communication with stakeholders has been fundamental to Almaden’s approach since staking the original Tuligtic claims in 2001. Over the past several years, Almaden has interacted with over 20,000 people from over 53 communities and 8 different states in the following ways:

 

·Coordinated nine large community meetings, with total attendance at these meetings approaching 4,100 people;
·Taken a total of approximately 480 people, drawn from local communities, to visit 24 mines;
·Arranged 46 sessions of “Dialogos Transversales”, wherein community members are invited to attend discussions with experts on a diverse range of issues relating to the mining industry such as an overview of Mexican Mining Law, Human Rights and Mining, mineral processing, explosives, water in mining, risk management, and mine infrastructure amongst other things;
·Opened a central community office in the town of Santa Maria Zotoltepec, which is continually open to community members and includes an anonymous suggestion box;
·Invested in a “mobile mining module” which allows company representatives to establish a temporary presence in communities more distant from the project, and allows for those interested to learn more about the project;
·Employed as many local people as possible, reaching up to 70 people drawn from five local communities. Almaden operates the drills used at the project, and hence can draw and train a local workforce as opposed to bringing in external contractors;
·Initiated a program of scholarships for top performing local students, with 130 scholarships granted to date to individuals from 23 different communities (79 women and 51 men);
·Established several clubs, including reading, dancing, football, music, and theatre clubs, to contribute to the vitality of local communities;

 

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·Focused on education, enabling over 4,300 people to be positively impacted by our investments, such as rehabilitation of school-related infrastructure, donation of electronic equipment, and scholarships for top-performing students.

 

In 2017, Almaden engaged a third-party consultant to lead a community consultation and impact assessment at the Ixtaca project. In Mexico, only the energy industry requires completion of such an assessment (known in Mexico as a Trámite Evaluación de Impacto Social, or “EVIS”) as part of the permitting process. The purpose of these studies is to identify the people in the area of influence of a project (“Focus Area”), and assess the potential positive and negative consequences of project development to assist in the development of mitigation measures and the formation of social investment plans. To Almaden’s knowledge, this is the first time a formal EVIS has been completed in the minerals industry in Mexico, and as such reflects the Company’s commitment to best national and international standards in Ixtaca project development.

 

The EVIS and subsequent work on the development of a Social Investment Plan were conducted according to Mexican and international standards such as the Guiding Principles on Business and Human Rights, the Equator Principles, and the OECD Guidelines for Multinational Enterprises and Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractive Sector.

 

Fieldwork for the EVIS was conducted by an interdisciplinary group of nine anthropologists, ethnologists and sociologists graduated from various universities, who lived in community homes within the Ixtaca Focus Area during the study to allow for ethnographic immersion and an appreciation for the local customs and way of life. This third-party consultation sought voluntary participation from broad, diverse population groups, with specific attention to approximately one thousand persons in the Focus Area.

 

This extensive consultation resulted in changes to some elements of the mine design, including the planned construction of a permanent water reservoir to serve the local area long after mine closure, and the shift to drystack filtered waste management.

 

Positive impacts to the socio-economy of the region are expected to continue as the Project is developed into a mine and becomes a source of more jobs. Almaden plans to continue its open communication with the communities to provide for realistic expectations of any proposed mining operation and the social impacts of such a development.

 

1.19Project Execution Plan

 

A summary of key milestones for the project execution plan include:

·Permit submission by Q1 2019
·Permit Approvals by Q4 2019
·Ixtaca construction starts in Q4 2019
·Rock Creek plant transported to Ixtaca site end of Q1 2020
·Plant startup in Q2 2021

 

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1.20Conclusions and Recommendations

 

The Ixtaca deposit is well suited for a potential mining operation. A FS level 11-year mine plan has robust economics and it is recommended that the project proceed to permitting and detailed design.

 

A significant opportunity to produce by-products from the limestone waste and tailings is described in Section 26.

 

 

 

 

 

 

 

 

 

 

 

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2.0Introduction

 

Almaden Minerals Ltd. requested Moose Mountain Technical Services (“MMTS”) prepare a Technical Report (the Report) on the results of a feasibility study for the Ixtaca Gold-Silver Project in Mexico. The Ixtaca Gold-Silver Deposit (or “Ixtaca Project”) of the Tuligtic Property, is 100 percent (%) held by Compania Minera Gorrión S.A. de C.V. (Minera Gorrión), a wholly owned subsidiary of Almaden Minerals Ltd. (together referred to as “Almaden”), subject to a 2% NSR in favour of Almadex Minerals Ltd. The Tuligtic Property currently comprises seven mineral claims totalling 7,220 hectares (ha) within Puebla State, Mexico (Figure 4-1 and Figure 4-2).

 

The following people served as the Qualified Persons (QPs) as defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects:

 

·Tracey Meintjes P.Eng., Principal Consultant, MMTS
·Jesse Aarsen P.Eng., Senior Associate - Mine Engineering, MMTS
·Gary Giroux P.Eng., Consulting geological engineer, Giroux Consultants Ltd
·Kris Raffle P.Geo., Principal (Geologist), APEX Geoscience Ltd
·Clara Balasko P.E., Senior Consultant, SRK
·Edward Wellman PE, PG, CEG, Principal Consultant (Rock Mechanics), SRK

 

QPs site visits and report section responsibility are shown in Table 2-1.

 

Table 2-1      QPs, Section of Report Responsibility, and Site Visits

Qualified Person Site Visit Dates Scope Of Personal Inspection
Tracey Meintjes

01 to 02 July 2014
15 to 16 March 2016
04 to 05 October 2016

24 October 2017

08 December 2017

12 April 2018

19 to 20 March 2018

03 to 04 May 2018

01 November 2018

Reviewed resource area, processing, tailings, waste rock, water storage dam, access roads. Reviewed core samples. Confirmed several drill collar locations using handheld GPS. Visited nearby power substation. Inspected community relations office and mobile community centres. Interviewed Santa Maria community water committee chairman and reviewed locations of community water distribution.
Jesse Aarsen

30 April to 01 May 2013
27 to 28 August 2014

15 to 16 March 2016

12 to 16 December 2016

16 to 18 May 2018

Reviewed open pit, waste rock dump, general site conditions. Reviewed drill core. Hosted potential contract miner site review for cost estimation purposes.
Gary Giroux No Site Visit No Personal Inspection
Kris Raffle 17 to 20 October 2011
23 September 2012
20 November 2013

Completed a traverse of the Ixtaca Zone, observed the progress of ongoing diamond drilling operations and recorded the location of select drill collars consistent with those reported by Almaden.

Reviewed mineralized intercepts in drill core from a series of holes across the Ixtaca Zone. Collected quartered drill core samples as ‘replicate’ samples from select reported mineralized intercepts.

Clara Balasko

 

5 to 13 April 2018

16 to 19 May 2018

Observed the tailings and rock storage facility site investigation drilling as well as the facility footprints of the Fresh Water Dam and Rock Storage Facilities. Observed the plant area site investigation drilling and test pitting as well as the facility footprints of the Fresh Water Dam, Rock Storage Facilities, and Water Storage Dam

 

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Edward Wellman

 

October 24-25, 2017 Observed site conditions in vicinity of the proposed open pit, waste rock dump and plant site.

 

 

The authors, in writing this report use sources of information as listed in the references section. Government reports have been prepared by qualified persons holding post-secondary geology, or related university degree(s), and are therefore deemed to be accurate. These reports, which are used as background information, are referenced in this Report in the “Geological Setting and Mineralization” Section 7.0 below.

 

All currency amounts are referred to in United States dollars (USD) where indicated. All units in this Report are metric and Universal Transverse Mercator (UTM). Coordinates in this report and accompanying illustrations are referenced to North American Datum (NAD) 1983, Zone 14.

 

 

 

 

 

 

 

 

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3.0Reliance on Other Experts

 

With respect to legal title to the seven mineral claims which together comprise the Tuligtic Property, the authors have relied on the opinion of Lic. Alberto M. Vàzquez. In a report provided to the authors on 18 January 2019, Mr. Vàzquez warrants that Minera Gorrión maintains 100% ownership of the seven mineral claims comprising the Tuligtic Property.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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4.0Property Description and Location

 

The Tuligtic property was staked by Almaden in 2001, following the identification of surficial clay deposits that were interpreted to represent high-level epithermal alteration. The Property originally consisted of approximately 14,000 hectares, but during 2015 Almaden filed applications to reduce the aggregate claim size at Tuligtic to those areas still considered prospective. The Property is held 100% by Minera Gorrion S.A. de C.V., a subsidiary of Almaden Minerals Ltd. through the holding company, Puebla Holdings Inc., subject to a 2% NSR in favour of Almadex Minerals Ltd. The Property currently consists of seven mineral claims totaling 7,220 hectares (Table 4-1, and Figure 4-2).

 

Table 4-1      Tuligtic Property Mineral Claims

 

Claim Name Claim Number Valid Until Date Area (hectares)
Cerro Grande - R1 245486 March 5, 2053 2773
Cerro Grande  -R3 245488 March 5, 2053 824
Cerro Grande - R4 245486 March 5, 2053 540
Cerro Grande - R5 245490 March 5, 2053 785
Cerro Grande - R6 245491 March 5, 2053 938
Cerro Grande 2 - R2 245493 February 23, 2059 652
Cerro Grande 2 - R3 245494 February 23, 2059 708
Total 7220

 

The Property is located at: 19 degrees 40 minutes north latitude and 97 degrees 51 minutes west longitude; or UTM NAD83 Zone 14 coordinates: 618,800m east and 2,176,100m north. The Tuligtic Property is road accessible and is located within Puebla State, 80 kilometres (km) north of Puebla City, and 130km east of Mexico City.

 

Following an amendment to the Mining Law of Mexico (the “Mining Law”) on April 28, 2005, there is no longer a distinction between the exploration mining concessions and exploitation mining concessions. The Mining Law permits the owner of a mining concession to conduct exploration for the purpose of identifying mineral deposits and quantifying and evaluating economically usable reserves, to prepare and to develop exploitation works in areas containing mineral deposits, and to extract mineral products from such deposits. Mining concessions have a duration of 50 years from the date of their recording in the Registry and may be extended for an equal term if the holder requests an extension within five years prior to the expiration date.

 

To maintain a claim in good standing holders are required to provide evidence of the exploration and/or exploitation work carried out on the claim under the terms and conditions stipulated in the Mining Law, and to pay mining duties established under the Mexican Federal Law of Rights, Article 263. Exploration work can be evidenced with investments made on the lot covered by the mining claim, and the exploitation work can be evidenced the same way, or by obtaining economically utilizable minerals. The Regulation of the Mining Law indicates the minimum exploration expenditures or the value of the mineral products to be obtained (Table 4-2).

 

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Figure 4-1    General Location

 

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Figure 4-2     Tuligtic Property Mineral Claims

 

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Table 4-2       Exploitation Claim Minimum Expenditure/Production Value Requirements

Area (hectares) Fixed quota in Pesos

Additional annual quota per hectare in MXN Pesos

(USD per hectare)

  (MXN Pesos) Year 1 Year 2-4 Year 5-6 Year 7+
<30

348.48

(20.98)

13.92

(0.84)

55.74

(3.36)

83.63

(5.03)

84.96

(5.11)

30 - 100

697.02

(41.96)

27.83

(1.68)

111.52

(6.71)

167.29

(10.07)

167.30

(10.07)

100 - 500

1,394.02

(83.92)

55.74

(3.36)

167.29

(10.07)

334.56

(20.14)

334.56

(20.14)

500 - 1000

500 - 1000

4,182.12

(251.76)

51.58

(3.10)

159.37151.92

334.56

(20.14)

669.14

(40.28)

1000 - 5000

8,364.27

(503.52)

47.40

(2.85)

153.34

(9.23)

334.56

(20.14)

1,338.28

(80.56)

5000 - 50000

5000 - 50000

29,274.95

(1,762.31)

43.22

(2.60)

147.78

(8.90)

334.56

(20.14)

2,676.56

(161.13)

> 50000

278,809.03

(16,783.94)

39.03

(2.35)

139.40

(8.39)

334.56

(20.14)

2,676.562,55

1.4413)

 

The Tuligtic Property is currently subject to annual exploration/exploitation expenditure requirements of approximately US$757,000 per year however the Company has significant historic expenditures to offset these requirements as appropriate.

 

Subject to the Mexico Mining Laws, any company conducting exploration, exploitation and refining of minerals and substances requires previous authorization from the Secretary of Environment and Natural Resources (SEMARNAT). Because mining exploration activities are regulated under Official Mexican Norms (specifically NOM-120) submission of an Environmental Impact Statement (“Manifestacion de Impacto Ambiental” or “MIA”) is not required provided exploration activities do not exceed disturbance thresholds established by NOM-120. Exploration activities require submission to SEMARNAT of a significantly less involved “Preventive Report” (Informe Preventivo) which outlines the methods by which the owner will maintain compliance with applicable regulations. If the exploration activities detailed within the Preventive Report exceed the disturbance thresholds established by NOM-120, SEMARNAT will inform the owner that an MIA is required within a period of no more than 30 days.

 

The present scale of exploration activities within the Tuligtic Property are subject to NOM-120 regulation. In future, if significantly increased levels of exploration activities are anticipated submission of an Environmental Impact Statement may be required. Almaden has negotiated voluntary surface land use agreements with surface landowners within the exploration area prior to beginning activities. To date Almaden has secured through purchase agreements 1,139.8 hectares, from numerous independent owners.

 

The authors are not aware of any environmental liabilities to which the Property may be subject, or any other significant risk factors that may affect access, title, or Almaden’s right or ability to perform work on the Property.

 

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5.0Accessibility, Climate, Local Resources, Infrastructure and Physiography

 

The Ixtaca deposit, the epithermal gold-silver target within the Tuligtic Property, is located 8km northwest of the town of San Francisco Ixtacamaxtitlán, the county seat of the municipality of Ixtacamaxtitlán, Puebla State.

 

The Project is accessible by driving 40km east along Highway 119 from Apizaco; an industrial centre located approximately 50km north of Puebla City, and then north approximately 20km along a paved road to the town of Santa Maria. The trip from Apizaco to site can be driven in approximately 1.5 hours. There is also access to the Property using gravel roads from the northeast via Tezhuitan and Cuyoaco, from the south via Libres and from the northwest via Chignahuapan. The Xicohtencatl Industrial complex lies 30km southwest by paved road from the Tuligtic Property, and houses agricultural, chemical, biomedical and industrial manufacturing facilities and is serviced by rail. Puebla, the fourth largest city in Mexico has a population in excess of four million people, and includes one of the largest Volkswagen automotive plants outside Germany.

 

The topography on the Tuligtic Property is generally moderate to steep hills with incised stream drainages. Elevation ranges from 2,300 metres (m) above sea level in the south to 2,800m in the north. Vegetation is dominantly cactus and pines and the general area is somewhat cultivated with subsistence vegetables, bean and corn crops. The region has a temperate climate with mean monthly temperatures ranging from 16°C in June to 12°C in January. The area experiences approximately 714 mm of precipitation annually with the majority falling during the rainy season, between June and September. Annual evapotranspiration is estimated to be 774 mm.

 

Exploration can be conducted year round within the Property; however, road building and drilling operations may be impacted by weather to some degree during the rainy season.

 

Electricity is available on the Property from the national electricity grid that services nearby towns such as Santa Maria and Zacatepec.

 

 

 

 

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6.0History

 

Throughout the Property there is evidence that surficial clay deposits have once been mined. This clay alteration attracted Almaden to the area and has been interpreted to represent high-level epithermal alteration. To the authors’ knowledge no modern exploration has been conducted on the Project prior to Almaden’s acquisition of claims during 2001 and there is no record of previous mining; as such, this is a maiden discovery.

 

On May 9, 2002, Almaden entered into a joint venture agreement with BHP Billiton World Exploration Inc. (BHP) to undertake exploration in eastern Mexico. Initial helicopter-borne reconnaissance programs were completed in May 2003 and March 2004 on select targets within the joint venture area of interest. The work resulted in the acquisition of five (5) separate properties, in addition to the previously acquired Cerro Grande claim of the present day Tuligtic Property. Following a review of the initial exploration data, effective January 20, 2005, BHP relinquished its interest in the six properties to Almaden (Almaden, 2005). The joint venture was terminated in 2006 (Almaden, 2006).

 

During January 2003, Almaden completed a program of geologic mapping, rock, stream silt sampling and induced polarization (IP) geophysical surveys at the Tuligtic Property (then known as the “Santa Maria Prospect”). The exploration identified both a porphyry copper and an epithermal gold target within an approximately 5 x 5km area of intensely altered rock. At the porphyry copper target, stockwork quartz-pyrite veins associated with minor copper mineralization overprint earlier potassic alteration within a multi-phase intrusive body. A single north-south oriented IP survey line identified a greater than 2km long elevated chargeability response coincident with the exposed altered and mineralized intrusive system. Volcanic rocks exposed 1km to the south of the mineralized intrusive display replacement silicification and sinter indicative of the upper parts of an epithermal system (the “Ixtaca Zone”). Quartz-calcite veins returning anomalous values in gold and silver and textural evidence of boiling have been identified within limestone roughly 100m below the sinter. The sinter and overlying volcanic rocks are anomalous in mercury, arsenic, and antimony (Almaden, 2004).

 

Additional IP surveys and soil sampling were conducted in January and February 2005, further defining the porphyry copper target as an area of high chargeability and elevated copper, molybdenum, silver and gold in soil. A total of eight (8) east-west oriented lines, 3km in length, spaced at intervals of 200m have been completed over mineralized intrusive rocks intermittently exposed within gullies cutting through the overlying unmineralized ash deposits (Almaden, 2006).

 

The Tuligtic Property was optioned to Pinnacle Mines Ltd. in 2006 and the option agreement was terminated in 2007 without completing significant exploration (Almaden, 2007).

 

The Property was subsequently optioned to Antofagasta Minerals S.A. (Antofagasta) on March 23, 2009. During 2009 and 2010 Antofagasta, under Almaden operation, carried out IP geophysical surveys and a diamond drill program targeting the copper porphyry prospect (Figure 7-2, Figure 9-1). Three additional IP survey lines were completed, and in conjunction with the previous nine (9) IP lines, a 2 x 2.5km chargeability high anomaly, open to the west and south, was defined (Almaden, 2011). The 2009 drilling consisted of 2,973m within seven (7) holes that largely intersected skarn type mineralization.

 

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Highlights of the drill program include:

 

·38m of 0.13% Copper (Cu) from 164 to 202m and 0.11% Cu from 416 to 462m within hole DDH-01;
·20m of 0.17% Cu from 94 to 114m and 26m of 0.14% Cu from 316 to 342m in hole DDH-02;
·58m of 0.17% Cu from 366 to 424m in hole DDH-03 (including 14m of 0.27% Cu from 410 to 424m);
·2m of 0.63% Cu from 18 to 20m in hole DDH-04; and
·20m of 0.11% Cu from 276 to 296m and 8m of 0.13% Cu in hole DDH-05.

 

Molybdenum values are anomalous ranging up to 801 parts-per-million (ppm) (0.08%). Elevated gold values were also encountered including 2m of 1.34 grams-per-tonne (g/t) from 178 to 180m in DDH-01.

 

On February 16, 2010, Almaden announced that Antofagasta terminated its option to earn an interest in the Property (Almaden, 2009).

 

In July 2010, Almaden initiated a preliminary diamond drilling program to test epithermal alteration within the Tuligtic Property, resulting in the discovery of the Ixtaca Zone. The target was based on exploration data gathered by Almaden since 2001 including high gold and silver in soil and a chargeability and resistivity high anomaly (derived from an IP geophysical survey conducted by Almaden) topographically beneath Cerro Caolin, a prominent clay and silica altered hill. This alteration, barren in gold and silver, was interpreted by Almaden to represent the top of an epithermal system which required drill testing to depth. The first hole, TU-10-001 intersected 302.42 metres of 1.01g/t gold and 48g/t silver and multiple high grade intervals including 44.35 metres of 2.77g/t gold and 117.7g/t silver.

 

 

 

 

 

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7.0Geological Setting and Mineralization

 

7.1Regional Geology

 

The Ixtaca Project is situated within the Trans Mexican Volcanic Belt (TMVB), a Tertiary to recent intrusive volcanic arc extending approximately east-west across Mexico from coast to coast and ranging in width from 10 to 300km (Figure 7-1). The TMVB is the most recent episode of a long lasting magmatic activity which, since the Jurassic, produced a series of partially overlapping arcs as a result of the eastward subduction of the Farallon plate beneath western Mexico (Ferrari, 2011). The basement rocks of the eastern half of the TMVB are Precambrian terranes, including biotite orthogneiss and granulite affected by granitic intrusions, grouped into the Oaxaquia microcontinent (Ferrari et al., 2011; Fuentes-Peralta and Calderon, 2008). These are overlain by the Paleozoic Mixteco terrane, consisting of a metamorphic sequence known as the Acatlan complex and a fan delta sedimentary sequence known as the Matzitzi formation. Another sedimentary complex is found on top of the Mixteco terrane, represented by various paleogeographic elements such as the Mesozoic basins of Tlaxiaco, Zongolica, Zapotitlan, and Tampico-Misantla (Fuentes-Peralta and Calderon, 2008). The subducting plates associated with the TMVB are relatively young, with the Rivera plate dated at 10Ma (million years) and the Cocos plate at 11 to 17Ma.

 

The timing and nature of volcanism in the TMVB has been described by Garcia-Palomo et al. (2002). The oldest volcanic rocks in the central-eastern part of the TMVB were erupted approximately 13.5Ma ago, followed by a nearly 10Ma hiatus. Volcanic activity in the area resumed around 3.0-1.5Ma. The composition of volcanic rocks ranges from basalt to rhyolite and exhibits calc-alkaline affinity. Extensive silicic volcanism in this area has been related to partial melting of the lower crust, hydrated by infiltration of slab-derived fluids during flat subduction (Ferrari et al., 2011). The Sierra Madre Occidental (SMO) style of volcanism is silicic and explosive as opposed to intermediate and effusive volcanism characteristic of the TMVB. Volcanic centres in the region have been controlled by NE-SW trending normal faults, associated with horst-and-graben structures, resulting from a stress field with a least principal stress (σ3) oriented to the NW.

 

The regional trend of the arc rocks is WNW; though more northerly trending transforms faults, forming at a high angle to the TMVB, provide a structural control on the volcanic units (Coller, 2011). Compressional strike-slip and extensional faults also developed as a result of compressional and extensional periods during subduction. The NE-SW San Antonio fault system, which is still active during Late Pliocene, before the reactivation of the Taxco-Queretaro fault system, is characterized by extensional left-lateral oblique- slip kinematics (Coller, 2011). Bellotti et al. (2006) show that NNW trending regional faults have been right lateral in the Miocene, whereas the NNE to N-S trending faults observed at Ixtaca by Coller (2011) are related to the regional horst-and-graben development and likely to be purely extensional with possibly a component of right lateral movement, or transtensional.

 

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Figure 7-1     Regional Geology

 

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7.2Property Geology

 

The stratigraphy of the Tuligtic area can be divided into two main sequences: a Mesozoic sedimentary rock sequence related to the Zongolica basin and a sequence of late Tertiary igneous extrusive rocks belonging to the TMVB (Fuentes-Peralta & Calderon, 2008; Tritlla et al., 2004). The sedimentary sequence is locally intruded by plutonic rocks genetically related to the TMVB (Figure 7-2). The sedimentary complex at Tuligtic corresponds to the Upper Tamaulipas formation (Reyes-Cortes 1997). This formation, Late Jurassic to Early Cretaceous in age, is regionally described (Reyes-Cortes, 1997) as a sequence of grey-to-white limestone, slightly argillaceous, containing bands and nodules of black chert (Figure 7-3). The drilling conducted by Almaden allows for more detailed characterisation of the Upper Tamaulipas Formation carbonate units in the Tuligtic area. The sequence on the Project consists of clastic calcareous rocks. The limestone unit variably bedded, generally light grey but locally dark grey to black, with local chert rich sections graded into what have been named transition units and shale (also black shale). The transition units are brown calcareous siltstones and grainstones. These rocks are not significant in the succession but mark the transition from limestone to underlying calcareous shale. Typical of the transition units are coarser grain sizes. The lower calcareous “shale” units exhibit pronounced laminated bedding and is typically dark grey to black in colour, although there are green coloured beds as well. The shale units appear to have been subjected to widespread calc-silicate alteration (Figure 7-4).

 

Both the shale and transition units have very limited surface exposure and may be recessive. The entire carbonate package of rocks has been intensely deformed by the Laramide orogeny, showing complex thrusting and chevron folding in the hinge zones of a series of thrust-related east verging anticlines in the Ixtaca area (Tritlla et al., 2004; Coller, 2011). The calcareous shale units appear to occupy the cores of the anticlines while the thick bedded limestone units occupy the cores of major synclines identified in the Ixtaca zone.

 

The Tamaulipas Formation carbonate rocks are intruded in the mid-Miocene by a series of magmatic rocks. The compositions are very variable, consisting of hornblende-biotite-bearing tonalites, quartz-plagioclase-hornblende diorites, and, locally, aphanitic diabase dykes (Carrasco-Nunez et al., 1997). In the central part of the Tuligtic Property porphyry mineralization is hosted by and associated with a hornblende-biotite-quartz phyric granodiorite body. The contact between the granodiorite and the limestone is marked by the development of a prograde skarn.

 

In the Ixtaca deposit epithermal area of the Project, the limestone basement units are crosscut by intermediate dykes that are often intensely altered. In the vicinity of the Ixtaca zone these dykes are well mineralized especially at their contacts with limestone country rock. Petrography has shown that epithermal alteration in the dykes, marked by illite, adularia, quartz and pyrite overprints earlier calc-silicate endoskarn mineralogies (Leitch, 2011). Two main orientations are identified for dykes in the Ixtaca area; 060 degrees (parallel to the Main Ixtaca and Ixtaca North zones) and 330 degrees (parallel to the Chemalaco Zone).

 

An erosional unconformity surface has been formed subsequent to the intrusion of the porphyry mineralization-associated granodiorites. This paleo topographical surface locally approximates the current topography. Although not well exposed the unconformity is marked by depression localised accumulations of basal conglomerate comprised of intrusive and sedimentary boulders.

 

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Figure 7-2     Geology of the Ixtaca Area

 

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Figure 7-3     Chert Limestone

 

This deformed Mesozoic sedimentary sequence is discordantly overlain by late Cenozoic extrusive rocks whose genetic and tectonic interrelations are yet to be fully explained. Two main volcaniclastic units are recognized in the area of Tuligtic: the Coyoltepec Pyroclastic deposit and the Xaltipan Ignimbrite (Carrasco-Nunez et al., 1997). Both units are covered by a thin (up to 1m) quaternary ‘tegument’ (Morales-Ramirez 2002) of which only a few patches are left in the area of the Property, but it is still widespread in the surrounding areas. This tegument is unconsolidated and composed of a very recent ash fall tuff rich in heavy minerals (mainly magnetite, apatite, and pyroxene).

 

The extensively altered pre-mineral Coyoltepec pyroclastic deposit is divided by Carrasco-Nunez et al. (1997) into two subunits: the lower Coyoltepec subunit, which is not exposed in the area of the Project, consists of a stratified sequence of surge deposits and massive, moderately indurated pyroclastic flow deposits with minor amounts of pumice and altered lithic clasts.

 

The upper Coyoltepec subunit, the main unit outcropping in the Tuligtic area, consists of a basal breccia or conglomerate overlain by bedded crystal tuff (volcanic). The basal breccia is comprised of a lithic rhyolite tuff matrix composed of massive, indurated, coarse-gravel sized, lithic-rich pyroclastic flow deposits with pumice, andesitic fragments, free quartz, K-feldspar, plagioclase crystals, and minor amounts of limestone and shale clasts (Tritlla et al., 2004). The Coyoltepec volcanics (referred to as ash, volcanic and tuff) are altered and mineralized. Gold silver mineralization is marked by widespread disseminated pyrite and quartz-calcite veinlets. The Coyoltepec volcanics are locally oxidised and weathered near surface and along structures.

 

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Figure 7-4     Shale (Calcareous Silstone) from the Chemalaco Zone

 

The post-mineral Xaltipan ignimbrite is not seen in the Ixtaca area and mainly found in topographic lows south of the Tuligtic Property. It consists of a very recent (0.45 ± 0.09Ma, Carrasco-Nunez et al., 1997), pinkish to brownish-grey rhyolitic ignimbrite unit with different grades of welding, containing abundant pumice fragments, andesite lithic fragments, and small clasts of black obsidian (Tritlla et al., 2004; Figure 7-5).

 

 

 

 

 

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Figure 7-5    Post Mineral Unconsolidated Volcanic Ash Deposits. Generally less than 1m thick

 

7.3Mineralization

 

Two styles of alteration and mineralization are identified in the area: (1) copper- molybdenum porphyry style alteration and mineralization hosted by diorite and quartz- diorite intrusions; (2) silver-gold low-sulphidation epithermal quartz-bladed calcite veins hosted by carbonate rocks and spatially associated with overlying volcanic hosted texturally destructive clay alteration and replacement silicification.

 

Outcropping porphyry-style alteration and mineralization is observed in the bottoms of several drainages where the altered intrusive complex is exposed in erosional windows beneath post mineral unconsolidated ash deposits. Multiple late and post mineral intrusive phases are identified crossing an early intensely altered and quartz-veined medium-grained feldspar phyric diorite named the Principal Porphyry. Other intrusive types include late and post mineral mafic dykes and an inter-mineral feldspar-quartz phyric diorite. Late mineral mafic dykes are fine grained and altered to chlorite with accessory pyrite. Calc-silicate (garnet-clinopyroxene) altered limestone occurs in proximity to the intrusive contacts and is crosscut by late quartz-pyrite veins. Early biotite alteration of the principal porphyry consists of biotite-orthoclase flooding of the groundmass. Quartz veins associated with early alteration have irregular boundaries and are interpreted to be representative of A-style porphyry veins. These are followed by molybdenite veins which are associated with the same wall rock alteration. Chalcopyrite appears late in the early alteration sequence. Late alteration is characterized by intense zones of muscovite-illite-pyrite overprinting earlier quartz-K-feldspar-pyrite ± chalcopyrite veining and replacing earlier hydrothermal orthoclase and biotite. Stockwork quartz-pyrite crosscuts the A-style veins and is associated with muscovite-illite alteration of biotite. The quartz-sericite alteration can be texturally destructive resulting in white friable quartz-veined and pyrite rich rock. Pyrite is observed replacing chalcopyrite and in some instances chalcopyrite remains only as inclusions within late stage pyrite grains.

 

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Epithermal mineralization on the Tuligtic Property is considered to have no genetic relationship to the porphyry alteration and mineralization described above. The epithermal system is well preserved and there is evidence of a paleosurface as steam heated kaolinite and replacement silica alteration occur at higher elevations where the upper part of the Coyoltepec pyroclastic deposit is preserved (Figure 7-6 below looks toward Cerro Caolin with Relative positions of Altered Volcanics, Unconformity, Limestone and the Main Ixtaca Vein Swarm).

 

The Upper Tamaulipas formation carbonates (limestone and shale units), the dykes that crosscut it and the upper Coyoltepec volcanic subunit (variously referred to as volcanics, tuff or ash) are the host rocks to the epithermal system at Ixtaca. The epithermal alteration occurs over a roughly 5 by 5 kilometre area and occurs as intense kaolinite-alunite alteration and silicification in volcanic rocks. This alteration is interpreted to represent the upper portion of a well preserved epithermal system. The bulk of the mineralisation occurs in the carbonate (limestone and shale) as colloform banded epithermal vein zones (Figure 7-7and Figure 7-8). Unlike many epithermal vein systems in Mexico, the bulk of the veining in the Ixtaca zone has low base metal contents and gold and silver occur as electrum and other sulphides. SEM work has demonstrated that silver does not occur with galena or tetrahedrite in any significant way. In the main limestone unit (80% of recoverable metal in the FS) the silver to gold ratio of the mineralisation is roughly estimated to average ~65:1 while in the shale it is roughly estimated to be slightly higher at ~75:1.

 

The veining of Ixtaca epithermal system displays characteristics representative of low and intermediate sulphidation deposits. These include typical mill feed and gangue mineralogy (electrum Ag-sulphides, sphalerite, galena, adularia, quartz and carbonates), mineralization dominantly in open space veins (colloform banding, cavity filling).

 

At the base of the overlying clay altered volcanics disseminated gold-silver mineralisation occurs in association with pyrite and minor veining (Figure 7-9). Locally this mineralisation can be high grade but largely associated with lower Ag:Au ratios roughly estimated to average 20:1.

 

To date two main vein orientations have been identified in the Ixtaca deposit:

·060 trending sheeted veins hosted by limestone;
·330 trending veins hosted by shale;

 

The bulk of the resource and over 80% of the mill feed is hosted by the limestone in the Main Ixtaca and Ixtaca North zones as swarms of sheeted and anastomosing high grade banded epithermal veins. There is no disseminated mineralisation within the host rock to the vein swarms, which is barren and unaltered limestone. To the northeast of the limestone hosted mineralisation, the Chemalaco zone, a 330 striking and west dipping vein zone hosted by shale, also forms part of the deeper resource.

 

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Figure 7-6     Looking to the east of Cerro Caolin with Relative positions of Altered Volcanics, Unconformity, Limestone and the Main Ixtaca Vein Swarm

 

 

 

 

 

 

 

 

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Figure 7-7     Photo of Cerro Caolin of the Main Ixtaca Vein Swarm From North Looking to the South Showing the Contact between the Clay Altered Volcanic and Limestone Units

 

 

Figure 7-8     Example of Banded Veining of the Main Ixtaca Vein Swarm Zone of

 

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The Main Ixtaca and Ixtaca North vein swarms are spatially associated with two altered and mineralised sub parallel ENE (060 degrees) trending, sub-vertical to steeply north dipping dyke zones. The Main Ixtaca dyke zone is approximately 100m wide and consists of a series of 2m to over 20m true width dykes. The Ixtaca North dyke zone is narrower and comprises a steeply north-dipping zone of two or three discrete dykes ranging from 5 to 20m in width.

 

Individual veins and veinlets within the Main Ixtaca and Ixtaca North vein swarm zones cannot be separately modelled. Wireframes were created that constrain the higher grade, more densely veined areas, however as the vein swarms are anastomosing and sheeted in nature, therefore these wireframes include significant barren limestone material enclosed by veins within the vein swarm (See Figure 7-10).

 

The Main and North zones have been defined over 650m and tested over 1000m strike length with high-grade mineralization intersected to depths up to 350m vertically from surface. In 2016 Almaden conducted a drill program to test for additional veins to the north of the Ixtaca North Zone. This program resulted in better definition of the Ixtaca North zone and was successfully demonstrated that limestone mineralization remains open to the north and at depth.

 

The Chemalaco Zone dips moderately-steeply at approximately 22 degrees to the WSW. The strike length of the Chemalaco Zone has been extended to 450m with high-grade mineralization intersected to a vertical depth of 550m, or approximately 700m down-dip. An additional sub-parallel zone has been defined underneath the Chemalaco Zone dipping 25 to 50 degrees to the WSW, intersected to a vertical depth of 250m, approximately 400m down-dip over a 250m strike length. The Chemalaco zone remains open to depth and along strike to the northwest. Additional parallel veins further to the east have been identified in core and the zone is remains open in this direction as well. In the Chemalaco zone, assays indicate that, while mineralisation appears similar in core, higher silver grades occur in the upper portion of the drilled area and higher gold grades occur at depth.

 

The Main Ixtaca, Ixtaca North and Chemalaco vein zones are largely concealed by overlying altered volcanic rocks although the limestone and Main Ixtaca zone of veining does crop out on the west side of Cerro Caolin, the hill under which the Main Ixtaca Zone occurs. The volcanics above the Main Ixtaca Zone are intensely clay altered and locally silicified but barren of significant gold and silver at surface. The Cerro Caolin volcanic hosted clay alteration zone extends to the SE roughly one kilometer and represents a significant drill target.

 

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Figure 7-9     Altered, Veined and Mineralised Volcanics

 

Studies of mineral assemblages in hand specimen, transmitted and reflected light microscopy and SEM analyses have been carried out in order to construct a paragenetic sequence of mineral formation. This work completed by Herrington (2011) and Staffurth (2012) reveals that veining occurs in three main stages. The first stage is barren calcite veining. This is followed by buff brown and pink colloform carbonate and silicate veins containing abundant silver minerals and lower gold. The third stage of veining contains both gold and silver mineralization. The dominant gold-bearing mineral is electrum, with varying Au:Ag ratios. The majority of grains contain 40-60wt (weight) % gold but a few have down to 20wt% (Staffurth, 2012). Gold content occasionally varies within electrum grains, and some larger grains seem to be composed of aggregates of several smaller grains of differing composition (Staffurth, 2012). Electrum often appears to have been deposited with late galena-clausthalite both of which are found as inclusions or in fractures in pyrite. It is also closely associated with silver minerals as well as sphalerite and alabandite. Gold is also present in uytenbogaardtite (Ag3AuS2). This mineral is associated with electrum, chalcopyrite, galena, alabandite, silver minerals, and quartz in stage three mineralization (Herrington, 2011; Staffurth, 2012). Apart from electrum and uytenbogaardtite, the dominant silver bearing minerals are polybasite (-pearceite) minor argentian tetrahedrite plus acanthite-naumannite, pyrargyrite and stephanite. They are associated with sulphides or are isolated in gangue minerals (Staffurth, 2012).

 

7.3.1Steam Heated Alteration, Replacement Silicification and Other Surficial Geothermal Manifestations at Ixtaca

 

One of the most striking features of the Ixtaca epithermal system is the kaolinite alteration, replacement silicification, and sinter carapace that remains uneroded immediately above the Ixtaca Zone (Figure 7-11). This alteration has been identified over a roughly 5 x 5km area and is interpreted to represent the upper levels of a preserved epithermal system. All three alteration types have formed in the volcanic units.

 

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When the source alkali- chloride epithermal fluids boil, along with water vapour, CO2 and H2S also separate. These gases rise and above the water table H2S condenses in the vadose zone forming H2SO4. Near surface the H2SO4 alters volcanic rocks to kaolinite and alunite and can dissolve volcanic glass (Hedenquist and Henley 1985b). This process is interpreted to be responsible for the kaolinite alteration, known as steam-heated alteration in the economic geology literature (eg. White and Hedenquist, 1990). The resulting silica laden fluid can transport and re precipitate silica at the water table in permeable host rocks. This mechanism can result in large tabular alteration features often referred to as a silica caps. Since gold is not transported by the gases or sulphuric acid, the silica cap is usually devoid of gold and silver, which is the case at Ixtaca (White and Hedenquist, 1990).

 

Sinter is diagnostic of modern epithermal systems where silica-rich fluids emanate as hot springs at the earth’s surface. Sinters are the highest level manifestation of an epithermal system and consequently the first feature to be removed by erosion. Most epithermal gold-silver deposits that have been recognized show some degree of erosion and ancient sinters are typically poorly preserved in the geological record. The presence of preserved steam heated and replacement silica alteration and sinter at Ixtaca is thus a clear indication that the deposit has not been significantly affected by erosion. At Ixtaca, the sinter facies and replacement silicification, where preserved, are located within the altered volcanic units.

 

Large areas of steam heated alteration zone remain unexplored on the property and, like at the Ixtaca deposit, have the potential to overlie epithermal gold silver veins. Perhaps most significantly the SE volcanic hosted clay alteration zone extends for a kilometer to the southeast from Cerro Caolin.

 

 

 

 

 

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Figure 7-10     The Vein System of the Ixtaca Main Zone

 

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Figure 7-11     Photo (2001) of Historic Clay Exploration Pits in Clay Altered Volcanic Rocks. Looking to West. Photo Taken from near Section 10+300

 

 

 

 

 

 

 

 

 

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8.0Deposit Types

 

The principal deposit-type of interest on the Tuligtic Property is low- to intermediate- sulphidation epithermal gold-silver mineralization (Figure 8-1) This style of mineralization is recognised at the Ixtaca Zone but property scale high level epithermal alteration suggests that mineralization of this type can exist elsewhere on the Project. These deposits are described more fully below. The Tertiary bodies intruding the Tamaulipas Limestones and the tertiary volcanics, makes the Property also prospective for Porphyry copper-gold-molybdenum (Cu-Au-Mo) and peripheral Pb-Zn Skarn deposits.

 

8.1Epithermal Gold-Silver Deposits

 

Gold and silver deposits that form at shallow crustal depths (<1,500m) are interpreted to be controlled principally by the tectonic setting and composition of the mineralizing hydrothermal fluids. Three classes of epithermal deposits (high-sulphidation, intermediate-sulphidation and low-sulphidation) are recognized by the oxidation state of sulphur in the mineralogy, the form and style of mineralization, the geometry and mineralogy of alteration zoning, and the mill feed composition (Hedenquist et al., 2000; Hedenquist and White, 2005). Overlapping characteristics and gradations between epithermal classes may occur within a district or even within a single deposit. The appropriate classification of a newly discovered epithermal prospect can have important implications to exploration (Table 8-1).

 

Figure 8-1    Schematic Cross-section of an Epithermal Au-Ag Deposit

 

 

 

High-sulphidation and intermediate-sulphidation systems are most commonly hosted by subduction-related andesite-dacite volcanic arc rocks, which are dominantly calc-alkaline in composition. Low-sulphidation systems are more restricted, generally to rift-related bimodal (basalt, rhyolite) or alkalic volcanic sequences. The gangue mineralogy, metal contents and fluid inclusion studies indicate that near neutral pH hydrothermal fluids with low to moderate salinities form low- and intermediate-sulphidation class deposits whereas high-sulphidation deposits are related to more acidic fluids with variable low to high salinities. Low- and intermediate-sulphidation deposits are typically more vein-style while high-sulphidation deposits commonly consist primarily of replacement and disseminated styles of mineralization with subordinate veining. The characteristics of silver-gold mineralization in the Ixtaca Zone include banded, colloform and brecciated carbonate-quartz veining including locally abundant Mn-carbonate and rhodochrosite indicate that this is primarily a low to intermediate-sulphidation epithermal district (Figure 8-2).

 

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Several of the larger examples of this deposit type occur in Mexico and include the prolific historic epithermal districts of Pachuca, Guanajuato and Fresnillo. Nevertheless these districts are base metal rich while Ixtaca is a precious metals deposit.

 

 

Figure 8-2     Photos of Epithernal Veining from Ixtaca, Hishikari Japan and Well Scale from the Active Geothermal System, Broadlands Ohaaki, New Zealand

 

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Table 8-1      Classification of Epithermal Deposits

  Low-Sulphidation Intermediate-Sulphidation High-Sulphidation
Metal Budget Au- Ag, often sulphide poor Ag - Au +/- Pb - Zn; typically sulphide rich Cu - Au - Ag; locally sulphide-rich
Host Lithology bimodal basalt-rhyolite sequences andesite-dacite; intrusion centred district andesite-dacite; intrusion centred district
Tectonic Setting rift (extensional) arc (subduction) arc
Form and Style of Alteration/ Mineralization vein arrays; open space veins dominant; disseminated and replacement mill feed minor stockwork mill feed common; overlying sinter common; bonanza zones common vein arrays; open space veins dominant; disseminated and replacement mill feed minor; stockwork mill feed common; productive veins may be km-long, up to 800m in vertical extent veins subordinate, locally dominant; disseminated and replacement mill feed common; stockwork mill feed minor.
Alteration Zoning mill feed with quartz-illite-adularia (argillic); barren silicification and propylitic (quartz-chlorite-calcite +/- epidote) zones; vein selvedges are commonly narrow mill feed with sericite-illite (argillic-sericitic); deep base metal-rich (Pb-Zn +/- Cu) zone common; may be spatially associated with HS and Cu porphyry deposits mill feed in silicic core (vuggy quartz) flanked by quartz-alunite-kaolinite (advanced argillic); overlying barren lithocap common; Cu-rich zones (enargite) common
Vein Textures chalcedony and opal common; laminated colloform-crustiform; breccia; bladed calcite (evidence for boiling) chalcedony and opal uncommon; laminated colloform-crustiform and massive common; breccias; local carbonate-rich, quartz-poor veins; rhodochrosite common, especially with elevated base metals chalcedony and opal uncommon; laminated colloform-crustiform veins uncommon; breccia veins; rhodochrosite uncommon
Hydrothermal Fluids low salinity, near neutral pH, high gas content (CO2, H2S); mainly meteoric moderate salinities; near neutral pH low to high salinities; acidic; strong magmatic component?
Examples McLaughlin, CA; Sleeper and Midas, NV; El Penon, Chile; Hishikari, Japan Arcata Peru; Fresnillo Mexico; Comstock NV; Rosia Montana Romania Pierina Peru; Summitville CO

*Altered after Taylor, 2007

 

The low- and intermediate-sulphidation epithermal gold-silver deposits are generally characterised by open space fill and quartz-carbonate veining, stockworks and breccias associated with gold and silver often in the form of electrum, argentite and pyrite with lesser and variable amounts of sphalerite, chalcopyrite, galena, rare tetrahedrite and sulphosalt minerals, which form in high-level (epizonal) to near-surface environments.

 

The epithermal veins form when carbonate minerals and quartz precipitate from a cooling and boiling alkali-chloride fluid. Alkali-chloride geothermal fluids are formed from magmatic gases and convecting groundwater and are near neutral in composition. These fluids convect in the upper crust perhaps over a 10km deep vertical interval and can transport gold, silver and other metals. At roughly 2km depth, these fluids begin to boil, releasing CO2 and H2S (carbon-dioxide and hydrogen-sulphide). Both these now separated gases form separate fluids, each forming alteration zones with distinct mineralogy (Hedenquist et al., 2000).

 

Above the water table H2S condenses in the vadose zone to form a low pH H2SO4 (hydrogen-sulphate) dominant acid sulphate fluid (Hedenquist and White, 1990). These fluids can result in widespread tabular steam-heated alteration zones dominated by fine grained and friable kaolinite and alunite. Steam-heated waters collect at the water table and create aquifer-controlled strataform blankets of dense silicification known as silica caps (Shoenet al., 1974; Hedenquist et al., 2000). Since gold is not transported by the gases or sulphuric acid, the silica cap and overlying kaolinite alteration is usually devoid of gold and silver (Hedenquist et al. 2000).

 

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Bicarbonate fluids are the result of the condensation of CO2 in meteoric water. These fluids are also barren of gold and silver and generally form carbonate dominated alteration on the margins of the geothermal cell.

 

As the source alkali chloride fluids boil and cool quartz and carbonate deposit in the fractures along which the fluids are ascending to form banded carbonate-quartz veins. Gold and silver present within the fluid also precipitate in response to the boiling of the fluid. Potassium-feldspar adularia is also a common mineral that deposits in the veins in response to boiling. As carbonate and quartz precipitates individual fractures can be sealed and the boiling fluid must then find another weak feature to continue rising. Gases which accumulate beneath the sealed fracture causes the pressure to increase until the seal is broken. This results in a substantial change in pressure, which propagates catastrophic boiling in turn causing gold, bladed calcite, and amorphous silica to precipitate rapidly. Once the fluids return to equilibrium the quartz crystals again precipitate under passive conditions and seal the vein again until the process recurs. This episodic sealing and fracturing results in the banded textures common in these vein systems.

 

Mill feed zones are typically localized in structures, but may occur in permeable lithologies. Upward-flaring mill feed zones centred on structurally controlled hydrothermal conduits are typical. Large (bigger than 1m wide and hundreds of metres in strike length) to small veins and stockworks are common with lesser disseminations and replacements. Vein systems can be laterally extensive but mill feed shoots have relatively restricted vertical extent. High-grade ores are commonly found in dilational zones in faults at flexures, splays and in stockworks.

 

These deposits form in both subaerial, predominantly felsic, volcanic fields in extensional and strike-slip structural regimes and island arc or continental andesitic stratovolcanoes above active subduction zones. Near-surface hydrothermal systems, ranging from hot spring at surface to deeper, structurally and permeability focused fluid flow zones are the sites of mineralization. The mill feed fluids are relatively dilute and cool solutions that are mixtures of magmatic and meteoric fluids. Mineral deposition takes place as the solutions undergo cooling and degassing by fluid mixing, boiling and decompression.

 

8.1.1The Ixtaca Zone Epithermal System

 

The epithermal veining at the Ixtaca deposit occurs largely as vein swarms in the host carbonate rocks. Veins also occur in the overlying altered volcanics but the volcanic mineralisation is largely disseminated in nature. Fluid flow is interpreted to have been restricted to fractures in the basement carbonate units, forming veins. In the more permeable volcanic units above fluids appear to have dispersed forming lower grade mineralisation associated with disseminated pyrite ( Figure 8-1).

 

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The bulk of the epithermal veining in the Ixtaca deposit occurs as subparallel branching veins and veinlets and local stockworks called vein swarms (Figure 8-3). This is common for epithermal vein systems that occur in brittle lithologies like the limestone host rock at Ixtaca. Similar vein swarms occur and have been mined in several epithermal systems worldwide including Waihi New Zealand, McLauphlin and Mesquite California (Sillitoe, 1993).

 

 

Figure 8-3     Selected styles and geometry of epithermal deposits illustrating the structural setting of the limestone hosted veining at Ixtaca, a vein swarm and local stockwork. Taken from Sillitoe (1993).

 

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8.2Porphyry Copper-Gold-Molybdenum and Lead-Zinc Skarn Deposits

 

In Porphyry Cu-Au-Mo deposit types, stockworks of quartz veinlets, quartz veins, closely spaced fractures, and breccias containing pyrite and chalcopyrite with lesser molybdenite, bornite and magnetite occur in large zones of economically bulk-mineable mineralization in or adjoining porphyritic intrusions and related breccia bodies. Disseminated sulphide minerals are present, generally in subordinate amounts. The mineralization is spatially, temporally and genetically associated with hydrothermal alteration of the host rock intrusions and wall rocks.

 

These deposit types are commonly found in orogenic belts at convergent plate boundaries, commonly linked to subduction-related magmatism. They also occur in association with emplacement of high-level stocks during extensional tectonism related to strike-slip faulting and back-arc spreading following continent margin accretion (Panteleyev, 1995).

 

Many Au skarns are related to plutons formed during oceanic plate subduction, and there is a worldwide spatial, temporal and genetic association between porphyry Cu provinces and calcic Au skarns. The Au skarns are divided into two types. Pyroxene-rich Au skarns tend to be hosted by siltstone-dominant packages and form in hydrothermal systems that are sulphur-rich and relatively reduced. Garnet-rich Au skarns tend to be hosted by carbonate-dominant packages and develop in more oxidizing and/or more sulphur-poor hydrothermal systems. The gold is commonly present as micron-sized inclusions in sulphides, or at sulphide grain boundaries. To the naked eye, mill feed is generally indistinguishable from waste rock. Due to the poor correlation between Au and Cu in some Au skarns, the economic potential of a prospect can be overlooked if Cu-sulphide-rich outcrops are preferentially sampled and other sulphide-bearing or sulphide-lean assemblages are ignored (Ray, 1998).

 

 

 

 

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9.0Exploration

 

Between 2004 and 2017, Almaden’s exploration at the Tuligtic Property has included ASTER satellite hydroxyl alteration studies, surface lithology and alteration mapping, rock and soil geochemical sampling, ground magnetics, IP and resistivity, Controlled Source Audio-frequency Magnetotelluric (CSAMT), and Controlled Source Induced Polarization (CSIP) geophysical surveys. The work to date has resulted in the identification of eight anomalous areas: the Ixtaca, SE Clay Alteration, Tano, Ixtaca East, Caleva, Azul West, Azul and Sol zones (Figure 7-2 and Figure 9-1, Figure 9-2). Detailed exploration results for the Tuligtic Property have been disclosed in a previous Technical Report for the Tuligtic Property by Raffle et al. (2013) and are summarized below.

 

9.1Rock Geochemistry

 

B Between 2004 and 2017 a total of 654 rock geochemical samples have been collected on the Property over a 6 x 6km area. Rock sampling, guided by concurrent soil geochemical surveys, has been concentrated around the Ixtaca Zone and an area extending 4km to the NNE over the copper porphyry target located between the Caleva and Azul zone soil geochemical anomalies (Figure 7-2, Figure 9-1, Figure 9-2).

 

Rock grab samples collected by Almaden are from both representative and apparently mineralized lithologies in outcrop, talus and transported boulders within creeks throughout the Property. Rock samples ranging from 0.5 to 2.5 kilograms (kg) in weight and are placed in uniquely labelled poly samples bags and their locations are recorded using handheld GPS accurate to plus or minus 5m accuracy.

 

Of the 654 rock grab samples collected, a total of 53 samples returned assays of greater than 100 parts-per-billion (ppb) gold (Au), and up to 6.14 grams-per-tonne (g/t) Au. A total of 52 rock samples returned assays of greater than 10g/t silver (Ag) and up to 600g/t Ag.

 

Gold and silver mineralization occurs within the Ixtaca Zone, and is associated with anomalous arsenic, mercury (± antimony). To the northeast of the Ixtaca Zone zinc, copper and locally anomalous gold, silver and lead (± arsenic) values occur in association with calc-silicate skarn and altered intrusive rocks.

 

Basement carbonate units, altered intrusive, and locally calc-silicate skarn mineralization occur as erosional windows beneath altered and locally mineralised volcanic. Surface mineralization at the Ixtaca Zone occurs as limestone boulders containing quartz vein fragments and high level epithermal alteration within overlying volcanic rocks as well several small outcrops of epithermal veined limestone. Epithermal alteration and mineralization is observed overprinting earlier skarn and porphyry style alteration and mineralization. Numerous small skarn-related showings exist at the north end Project. Near the Caleva soil anomaly, a small (200 x 100m)skarn zone hosts sphalerite, galena and chalcopyrite quartz vein stockwork mineralization along the contact zone between limestone and altered and mineralized intrusive rocks to the east.

 

9.2Soil and Stream Sediment Geochemistry

 

The collection of 4,760 soil samples by Almaden between 2005 and 2011 resulted in the identification of eight anomalous areas: the Ixtaca, SE Clay Alteration Zone, Tano, Ixtaca East, Tano, Caleva, Azul West, Azul and Sol zones (Figure 7-2). During 2013, an additional 1,035 soil samples have been collected to extend soil grid lines to the west and locally infill existing grid lines, for a total of 5,795 soil samples.

 

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Samples have been collected at 50m intervals along a series of 200m spaced east-west oriented lines. Infill lines spaced at 100m have been completed over gold and silver anomalies at the Caleva and Ixtaca East zones, and The Tano Zone roughly 2.5km west of the Ixtaca Zone. Subsequently, detailed 50m x 50m grid sampling of the Ixtaca Zone and select grid infill of the Azul and Sol zones was completed. Soil samples are collected by hand from a small hole dug with a non-metallic pick or hoe. The sample depth is typically 10cm, or at least deep enough to be below the interpreted surficial organic layer. Sample bags are labelled with a unique sample number.

 

Based on the distribution of soil geochemical anomalies and the mapped geology it is apparent that the locally occurring thin (<2 m) thick overlying and unconsolidated post mineral volcanics and soil deposits obscure rock geochemical anomalies from the underlying epithermal system. Significant and anomalous precious metal in soils occur where this unit has been eroded away and volcanic and carbonate hosted mineralisation occurs at surface. Anomalous thresholds (greater than the 95th percentile) for gold and silver are calculated to be 17.1ppb Au and 0.59ppm Ag, respectively. A total of 288 samples contain anomalous Au, including 141 samples with coincident Ag anomalies.

 

The Ixtaca Zone drainage area produces the largest Au and Ag response within the Tuligtic Property (Figure 9-1, Figure 9-2). Base metals do not correlate significantly with the Ixtaca Zone, and epithermal trace metal suite elements anomalies occur peripherally within altered volcanic rocks.

 

Roughly 2 km to the southwest at approximately 240 degrees, along strike from the Ixtaca deposit is the Tano zone of high gold and silver in soil where there has been a limited number of exploration holes drilled (highest gold intercept of 1.00 meters of 27.50 g/t gold and 57.7 g/t silver in hole TU-18-541). In the intervening 2 kilometers between the Tano Zone and Ixtaca deposit soils were not significantly anomalous but this is an area covered in post mineral material.

 

Similarly, along strike at 060 azimuth, roughly 2 km to the northeast the Ixtaca deposit, is the Ixtaca East zone of clay alteration and high gold in soil. Two drainages from this area returned high gold in silt, 700 and 900 ppb respectively.

 

Base metals correlate well with Au-Ag at the Caleva, Azul, and Sol zones to such an extent they are best termed Cu-Zn (Au-Ag) anomalies. (Figure 7-2, Figure 9-1. Figure 9-2). Significant high level epithermal suite trace element soil anomalies occur from Cerro Caolin (immediately above the Main Ixtaca Zone) to over a kilometer to the southeast in an area of outcropping clay altered volcanic. This anomaly and clay alteration defines the SE Alteration zone.

 

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Figure 9-1     Exploration Overview Showing Gold in Soil Anomalies and Extent of Geophysical Surveys

 

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Figure 9-2     Gold in Soil Anomalies, ASTER Satellite Hydroxyl responses and Target Areas

 

9.3Ground Geophysics

 

9.3.1Magnetics

 

During 2010, Almaden completed an 84 line-km ground magnetic survey over a 4km by 4.5km area covering the copper porphyry target area north of the Ixtaca Zone (Figure 9-1). The survey comprised a series of 200m spaced east-west oriented lines with magnetic readings collected at 12.5m intervals along each line.

 

The survey identified a broad poorly defined, approximately 100 nano-Tesla (nT) magnetic high anomaly that corresponds in part with mapped altered quartz-monzonite porphyry rocks. Numerous, 30 to 50nT short strike length NNW trending linear magnetic high anomalies parallel the regional structural grain, and the strike of bedding within Upper Tamaulipas formation calcareous rocks suggesting structural and/or lithologic control of magnetic anomalies.

 

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9.3.2Induced Polarization/Resistivity

 

Concurrent with 2010 ground magnetic surveys, Almaden completed 108 line-km of 100m “a” spacing pole-dipole induced polarization (IP) / resistivity geophysical surveys over the project area. The survey employed a series of overlapping east-west and north-south oriented lines spaced at intervals of 100m. Additional N-S lines were surveyed in 2016 between the eastern edge of the Ixtaca zone and the Tano zone totalling 13 line-km.

 

Resistivity anomalies appear to be controlled largely by the distribution of more resistive basement carbonate lithologies. Resistivity low (conductive) anomalies are common along local topographic high ridges and plateaus where significant thicknesses of more conductive altered volcanic rocks remain. Nevertheless the discovery drillhole TU-10-001, targeted a coincident chargeability and resistivity high interpreted to represent epithermal veining beneath the barren clay alteration of Cerro Caolin. The Main Ixtaca vein zone was intersected where this anomaly occurs. Many similar resistivity and chargeability highs were detected in the IP survey and require drill testing.

 

 

Figure 9-3     IP Chargeability and Resistivity Section Showing Soil Results and Targets. The red target was drill tested with hole TU-10-001 and resulted in the Discovery of the Main Ixtaca Vein Swarm Zone

 

The survey also defines a 1,000 x 200m north-northwest trending 20 to 30mV/V chargeability anomaly coincident with mapped calc-silicate skarn mineralization and the Caleva Zone soil geochemical anomaly (Figure 9-3). While poorly constrained by a single north-south oriented survey line, the anomaly extends a further 1 km north over the porphyry copper anomaly area. Partial survey coverage of the Ixtaca East Zone multi-element soil geochemical anomaly defines a 700 x 500m elliptical 7 to 15mV/V chargeability anomaly along its western margin.

 

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9.3.3CSAMT/CSIP

 

During 2011, Zonge International Inc. on behalf of Almaden completed a Controlled Source Audio-frequency Magnetotelluric (CSAMT) and Controlled Source Induce Polarization (CSIP) geophysical survey at the Tuligtic Property over a 6 by 4km area (Figure 9-1).

 

The survey totalled 48.5 line-km, including six lines oriented N-S (N16E azimuth, CSAMT and CSIP), and eight perpendicular E-W oriented lines (N104E azimuth, CSAMT only). Survey line spacing varied from 170 to 550m utilizing an array of six 25m dipoles.

 

2-D (N-S Line) smooth-model resistivity data defines a NW trending resistivity anomaly west of the Ixtaca Main Zone, and an E-W trending resistivity anomaly through the Ixtaca Zone. The NW trending anomaly passes through drill sections 10+200E to 10+400E, and may reflect limestone rocks on the west limb of an east-verging antiform. A similar NW trending conductive anomaly immediately to the east may represent calcareous shale rocks within the core of the antiform. The significance of the E-W trending anomaly is not known given the context of the current geologic model.

 

2-D (E-W Line) smooth-model resistivity data shows a strong resistivity anomaly associated with the core of the Ixtaca Main Zone, and surface outcropping limestone. To the northeast, a resistivity anomaly coincident with the Chemalaco Zone may reflect complex structural geology patterns and the relatively resistive limestone and Chemalaco Dyke lithologies.

 

A number of subvertical resistivity and conductivity anomalies are evident in the 1-D and 2-D inversions. These anomalies likely represent structures that could also host veins. Further review of this data is planned in order to better define drill targets based on this survey.

 

9.4Exploration Potential

 

The Ixtaca deposit occurs within a large zone of high level epithermal alteration hosted by volcanic rocks, the distribution of which is readily defined by ASTER satellite hydroxyl responses (Figure 9-2). The Ixtaca deposit was found in 2010 with hole TU-10-001, which was designed to test a coincident high gold and silver in soil anomaly along with a high chargeability/high resistivity induced polarisation response occurring underneath a portion of the high level epithermal volcanic hosted clay alteration zone (Cerro Caolin). This hole intersected the core of the Main Ixtaca vein swarm. Subsequent drilling since 2010 focussed on developing and upgrading confidence of a resource immediately adjacent to this discovery, as well as holes required for engineering and hydrologic purposes. During this timeframe the Company focussed on this resource and development work which has meant that many of the epithermal targets have not yet been tested by drilling.

 

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Figure 9-4     Exploration Targets on the Tuligtic Project

 

The known vein zones remain open in several directions. A drill program in 2016 was focussed on testing veins to the north of the Ixtaca North vein swarm and successfully identified several new zones of veining in this direction, suggesting that the potential for further veins to the north exists. To the south additional drilling is required to fully define the extent of the Main Ixtaca vein swarm beyond the known extents of which there is significant alteration at surface in the overlying volcanic. At depth the Chemalaco Zone remains open as it does along strike to the north.

 

The history of exploration at Cerro Caolin shows that the clay altered volcanics overlie significant epithermal vein deposits in this area. The alteration from Cerro Caolin extends to the south and southeast over a kilometer from Cerro Caolin. This area is highly anomalous in epithermal trace elements and is a high priority drill target for concealed epithermal veins.

 

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Figure 9-5     ASTER Satellite Hydroxyl (Clay) responses Outlining Clay Altered Volanics

 

To the west and southwest mapping and geochemistry is hampered by the thin layer of unconsolidated post mineral volcanic cover. Nevertheless, gold in soil geochemistry and hydroxyl responses have highlighted the Tano zone, located roughly 2 km along the strike extent of the Ixtaca vein system to the southwest (240/060 Azimuth) in a window of exposure beneath the post mineral cover. While the limited drilling to date at the Tano zone has identified veining and gold silver mineralisation (26.00 meters of 1.93 g/t gold and 3.37 g/t silver including 1.00 meters of 27.50 g/t gold and 57.70 g/t Au in hole TU-18-541) this work clearly indicates that the system persists to the southwest beyond the Ixtaca zone and highlights this approximately 2 km distance as prospective for concealed veins beneath cover (Figure 9-4 and Figure 9-5).

 

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Similarly to the Northeast, roughly 2 km at 060 along strike from the Ixtaca deposit, a zone of alteration and gold in soils has been identified and named the Ixtaca East zone. Significant gold in stream sediments have been returned from drainages of this area (700 and 900 ppb gold respectively) and indicate the potential for the epithermal to extend into this area.

 

The Ixtaca vein deposit was discovered beneath barren alteration. Much of the property is either covered by this alteration or thin post mineral cover. The Ixtaca vein deposit is an epithermal low sulphidation vein system that manifests itself as vein swarms in the brittle carbonate host rocks and disseminated mineralisation in the more permeable volcanic rocks that overly the carbonates. At the Waihi deposit in New Zealand, an epithermal system that formed under similar geochemical conditions with similar vein textures, new discoveries have been made over more than 100 years of exploration history. Some of the most recent discoveries at Waihi, including the Favona vein system, do not have surface manifestations (Figure 9-6 and Figure 9-7). The clay alteration footprint at Ixtaca clearly indicates the potential for additional concealed veins at Ixtaca.

 

 

Figure 9-6     Overview Photo of the Waihi Vein Deposit New Zealand. Historic Martha Pit on vein swarm in foreground. Surface projections of the concealed and more recently discovered Favona and Correnso veins also shown.

 

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Figure 9-7     Cross Section of the Favona Vein Swarm and System, Waihi Deposit New Zealand showing the concealed nature of the deposit

 

Based on the data gathered to date from the drilling and the Ixtaca deposit, and taken in the context of how epithermal systems manifest worldwide, an exploration model for further exploration has been developed by Almaden and is presented in Figure 9-8.

 

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Figure 9-8     Model for Further Exploration at the Tuligtic Project

 

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10.0Drilling

 

The purpose of the 2018 Technical Report is to provide a technical summary and updated mineral Resource Estimate with respect to the Ixtaca Deposit in relation to diamond drilling completed subsequent to the November 13, 2012 cut-off date of the maiden mineral Resource Estimate (Raffle et al., 2013). Since 2010, a total of 590 diamond drillholes have been drilled at the Tuligtic Property, totalling 192,121 m (not including 54 geotechnical holes) (Figure 10-2). Drilling progress since 2010 is summarized below (Table 10-1).

 

The Main Ixtaca Zone of mineralization has been defined as a sub-vertical body trending northeast over a 650m strike length (Figure 10-2). The Ixtaca North Zone has been further defined over a 400m strike length as two discrete parallel sub-zones having a true-thickness of 5 to 35m, and spaced 20 to 70m apart (Figure 10-4). The Chemalaco Zone (Figure 10-2, Figure 10-5) is moderate to steeply WSW dipping that has been defined over a 450m strike length with high-grade mineralization intersected to a vertical depth of 600m or approximately 700m down-dip.

 

Table 10-1     Tuligtic Property Drilling Summary 2010-2016

Year Holes Drilled (total m) Main Ixtaca Zone Ixtaca North Zone Chemalaco Zone
2010

14

(6,465m)

-      Discovered as sub-vertical body trending NE defined over 400m strike    
2011

85 (30,644m)

 

-      Defined over 600m strike -      Discovered as parallel sub-vertical zone to Ixtaca Main  
2012*  131 (46,237m; *includes 5 holes 1,375m at Tano Zone outside resource area)

-      Defined over 650m strike

-      High-grade mineralization intersected to 300m

-      Defined over 400m strike

-      High-grade mineralization intersected to 300m

-      Discovered as a WSW moderate-steeply dipping body, defined over 350m strike, trending approximately N-S

-      High-grade mineralization intersected to 550m (600m down-dip)

2013** 198 (55,467m)

-       Tested over 1,000m strike

-       High-grade mineralization intersected to 300m

 

-      Delineated as two distinct parallel zones

-       High-grade mineralization intersected to 32m

-       Defined over 450m strike as splayed body dipping 55 degrees WSW with overall down-dip 700m

-       Splayed subzone dips 25-50 degrees, defined over 250m strike, 400m down-dip

2014

40

(13,967m; *includes 3 holes 1,359m at Azul Zone outside resource area)

-      Metallurgical test holes twinning existing holes -      Exploration holes testing mineralization outside and at depth below PEA pit

-      Exploration holes testing mineralization outside and at depth below PEA pit

-       Metallurgical test holes twinning existing holes

 

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Year Holes Drilled (total m) Main Ixtaca Zone Ixtaca North Zone Chemalaco Zone
2015

12

(3,161m)

-      Exploration holes testing mineralization outside and at depth below PEA pit

-           

 

-       Exploration holes testing mineralization outside and at depth below PEA pit

-         

2016 34
(11,004m; *includes 1 hole 490m at Tano Zone outside resource area)
  -       Further delineation and expansion of the North Zone -           
2017 56
(18,756m)
-      Further delineation and expansion of the Main Zone -       Further delineation and expansion of the North Zone -        Further delineation and expansion of the Chemalaco Zone
2018

20

(6420m)

-      Further delineation and expansion of the Main Zone -            -      Further delineation and expansion of the Chemalaco  Zone

*All holes drilled up to November 12, 2012 Maiden Mineral Resource Estimate Cut-off

**All holes drilled subsequent to November 12, 2012 Cut-off, and all 2013 drilled holes

 

In July 2010 Almaden initiated a preliminary diamond drilling program to test epithermal alteration within the Tuligtic Property, resulting in the discovery of the Main Ixtaca Zone. The first hole, TU-10-001, intersected 302.42m of 1.01g/t Au and 48g/t Ag and multiple high grade intervals including 1.67m of 60.7g/t Au and 2,122g/t Ag (Figure 10-1). Almaden drilled 14 holes totalling 6,465m during 2010, defined the Main Ixtaca Zone over a 400m strike length, and initiated drilling along 50m NNW oriented sections. During 2011, Almaden drilled an additional 85 holes totalling 30,644m, which resulted in the discovery of the Ixtaca North Zone and testing of the Main Ixtaca Zone over a 600m strike length on 50m sections. Almaden discovered the Chemalaco Zone in early 2012 and continued drilling of the Ixtaca North and Main Ixtaca zones. Almaden drilled 131 holes totalling 46,237m on the Property from the beginning of 2012 until the November 13, 2012 maiden mineral Resource Estimate cut-off, for a total of 83,346m in 230 drillholes.

 

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Figure 10-1    100 Azimuth Section (Looking East) Showing the Assay Results of Discovery hole TU-10-001 which intersected the Main Ixtaca Zone Vein Swarm

 

During 2013 and subsequent to the November 13, 2012 cut-off of the maiden mineral Resource Estimate, Almaden drilled 198 holes totalling 55,467m (428 holes in total up to the end of 2013 comprising the Resource Estimate of Raffle and Giroux, 2014). A total of 79 holes have been drilled at the Main Ixtaca Zone, 40 holes at the Ixtaca North Zone and 79 holes at the Chemalaco Zone. Drilling during 2013 focused on expanding the deposit and upgrading resources previously categorized as Inferred to higher confidence Measured and Indicated categories.

 

Drilling during 2014 through 2016 comprised 116 additional drill holes totalling 37,969m (including 3 exploration drill holes at the (Casa) Azul Zone and 1 at the Tano Zone; (Figure 9-1). Of the holes drilled within the Ixtaca Deposit during 2014, 2015, and 2016, 31 were geotechnical holes. During 2016 a total of 63 holes totalling 20,352m further delineated and expanded the Main and North Zone mineralization. The remainder were exploration holes testing mineralized zones at depth below the pit described in this report. Drilling at the Casa Azul zone returned intersected porphyritic intrusive and limestone-skarn mineralization returning locally elevated zinc, copper and silver values.

 

Drilling during 2017 through 2018 comprised 76 additional drill holes totalling 25,176m. Of the holes drilled within the Ixtaca Deposit during 2017 and 2018, 4 were metallurgical holes that twinned existing holes and 11 were geotechnical holes. During 2017 and 2018 a total of 21 additional holes were drilled in the Main Ixtaca zone, 18 in the Ixtaca North zone, and 5 additional holes in the Chemalaco Zone. The remainder were exploration holes drilled at surface in the surrounding areas.

 

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Of the 590 holes to date, approximately 236 holes have been completed on the Main Ixtaca Zone, 169 at the Ixtaca North Zone, and 148 at the Chemalaco Zone (Figure 10-2). The diamond drillholes range from a minimum length of 26.82m to a maximum of 701m, and average 320m. All drilling completed at the Ixtaca Zone has been diamond core of NQ2 size (5.08 cm diameter). Drilling has been performed using four diamond drills owned and operated by Almaden via its wholly owned operating subsidiary Minera Gavilán, S.A. de C.V. The 2010 through 2018 diamond drill programs have been completed under the supervision of Almaden personnel. Drillhole collars have been spotted using a handheld GPS and compass, and subsequently have been surveyed using a differentially corrected GPS. Each of the holes is marked with a small cement cairn inscribed with the drillhole number and drilling direction.

 

Drillholes have been surveyed down hole using Reflex EZ-Shot or EX-Trac instruments following completion of each hole. Down hole survey measurements have been spaced at 100m intervals during 2010 drilling and have been decreased to 50m intervals in 2011. During 2012 and 2013, select drillholes within all three mineralized zones have been surveyed at 15m intervals. All drilling during 2014 through 2018 were surveyed at 15m intervals. A total of 7,208 drillhole orientation measurements (excluding 590 collar surveys) have been collected for an average down hole spacing of 26.67m. A total of 40 drillholes (12,171m), apart from the collar survey, have not been surveyed downhole; and a total of five drillholes (1,672m) have been surveyed at the end of hole only. Drillholes having no down hole survey have been assumed to have the orientation of the collar. Drillhole data has been plotted in the field and has been inspected. Down hole data returning unrealistic hole orientations have been flagged and removed from the database. Down hole survey summary statistics are provided in Table 10-2, below.

 

At the rig, drill core is placed in plastic core boxes labeled with the drillhole number, box number, and an arrow to mark the start of the tray and the down hole direction. Wooden core blocks are placed at the end of each core run (usually 3m, or less in broken ground). Throughout the day and at the end of each shift drill core is transported to Almaden’s Santa Maria core logging, sampling and warehouse facility.

 

Table 10-2 Tuligtic Property Down Hole Survey Statistics

  Number of Drillholes Metres
Number of Down Hole Surveys 7,208 192,121
Average Survey Spacing (not including casing) 590 26.67
Drillholes (No Down Hole Survey) 40 (7%) 12,171
Drillholes (End Of Hole Survey Only) 5 (1%) 1,672
Drillholes (15m Survey Spacing) 294 (55%) 91,044
Drillholes (50m Survey Spacing) 151 (32%) 52,968
Drillholes (100m Survey Spacing) 24 (5%) 9,089

 

Geotechnical logging is comprised of measurements of total core recovery per-run, RQD (the total length of pieces of core greater than twice the core width divided by the length of the interval, times 100), core photography (before and after cutting), hardness testing and measurements of bulk density using the weight in air-weight in water method.

 

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Drill core is logged based on lithology, and the presence of epithermal alteration and mineralization. All strongly altered or epithermal-mineralized intervals of core are sampled. Almaden employs a maximum sample length of 2 to 3m in unmineralized lithologies, and a maximum sample length of 1m in mineralized lithologies . During the years 2010 and 2011 Almaden employed a minimum sample length of 20cm. The minimum sample length was increased to 50cm from 2012 onwards to ensure the availability of sufficient material for replicate analysis. Geological changes in the core such as major alteration or mineralization intensity (including large discrete veins), or lithology are used as sample breaks.

 

The Upper Tamaulipas formation, the dykes that crosscut it and the upper Coyoltepec volcanic subunit are the main host rocks to the epithermal vein system at Ixtaca. In the Main and Ixtaca North zones veining strikes dominantly ENE-WNW (060 degrees) parallel to a major dyke trend and at a very high angle to the N to NNW bedding and fold structures within the limestones. The veins of the Chemalaco Zone are hosted by the shaley carbonate units (black shale) and strike to the NNW, dipping to the SSW. In the footwall to Chemalaco Zone a parallel dyke has been identified which is altered and mineralized. The Chemalaco Zone and the dyke are interpreted to strike parallel to bedding and to core an antiform comprised of shale.

 

10.1Main Ixtaca and Ixtaca North Zones

 

The Main Ixtaca and Ixtaca North zones have a strike length of approximately 650m and have been drilled at 25 and 50m section spacing. The vast majority of holes have been drilled at an azimuth of 150 or 330 degrees and at dips between 45 and 60 degrees from horizontal although several holes were drilled with a 100 Azimuth early in the program. Infill drilling at 25m sections has also been completed over the majority of the Ixtaca North Zone and in the central area of the Main Ixtaca Zone. Diamond drilling has intersected high-grade mineralization within the Main Ixtaca and Ixtaca North vein zones to depths of 200 to 300m vertically from surface. High-grade zones occur within a broader zone of mineralization extending laterally (NNW-SSE) over 1000m and to a vertical depth of 600m below surface (Table 10-3 and Figure 10-3).

 

The epithermal vein system at the Main Ixtaca and Ixtaca North zones is roughly associated with two parallel ENE (060 degrees) trending, subvertical to steeply north dipping dyke zones. The dykes predate mineralization and trend at a high angle to the N to NNW bedding and fold structures within the limestone.

 

At the Main Ixtaca Zone, a series of dykes ranging from less than 2m to over 20m true width occur within an approximately 100m wide zone (Figure 10-3, Figure 10-4). Wider dykes often correlate within individual drill sections, where they are inferred to pinch or splay. The broader dyke zone itself is relatable between sections, although individual dykes are typically not continuous between sections. The dyke zone hosting the Ixtaca North Zone is narrower, comprising a steeply north-dipping zone of two or three discrete dykes ranging from 5 to 20m in width. Epithermal vein mineralization occurs both within the dykes and sedimentary host rocks, with the highest grades often occurring within or proximal to the dykes. Vein density decreases outward to the north and south from the dyke zones resulting in the formation of two high-grade vein swarms. The dykes are often intensely altered and are interpreted to control the distribution of the epithermal vein system at Ixtaca to the extent that they may have provided a conduit for ascending hydrothermal fluids, and an important rheological contrast resulting in vein formation within and along the margins individual dykes, and laterally within the adjacent limestone. On surface, the Main Ixtaca and Ixtaca North zones are separated by a steep sided ENE trending valley (Figure 10-3, Figure 10-4).

 

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The lateral (WSW-ENE) extent of the epithermal vein system is controlled by N to NNW bedding and fold structures in basement rocks of the limestone unit. Drilling indicates Main Ixtaca and Ixtaca North zone mineralization is bound within an ENE-verging asymmetric synform. The synform is cored by a structurally thickened sequence of limestone that grades laterally and at depth through calcareous siltstone and grainstone transition units, into dark grey to laminated calcareous shale at depth. Based on increased vein density, including the presence of broad alteration zones and networks of intersecting epithermal veins, the relatively brittle limestone is a preferential host to Main Ixtaca and Ixtaca North vein swarms.

 

 

 

 

 

 

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Figure 10-2      Drillhole Locations

 

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Table 10-3        Section 10+675E Significant Drill Intercepts (Main Ixtaca and Ixtaca North Zones)

Hole ID From (m) To (m) Interval (m) Gold (g/t) Silver (g/t) AuEq*(g/t)
TU-12-120 260.9 290.9 30 0.74 96.7 2.6
including 260.9 266.1 5.2 2.78 437 11.3
TU-12-124 116.5 301.5 185 1 60.5 2.2
including 167.5 181.4 13.9 6.04 179.7 9.5
TU-12-127 155.95 186 30.05 0.7 56.7 1.8
including 174 186 12 1.05 105.7 3.1
TU-12-127 210 233.5 23.5 1.02 20.2 1.4
including 213.9 218.3 4.4 3.92 86 5.6
TU-12-127 243 285.6 42.6 0.57 10.8 0.8
TU-12-127 297 314 17 0.38 8.7 0.5
TU-12-132 64.5 204.2 139.7 0.22 18 0.6
including 137 166.6 29.6 0.35 27.8 0.9
including 148.25 153.3 5.05 1.16 79 2.7
including 174.4 204.2 29.8 0.33 34.1 1
TU-12-136 63.1 123.6 60.5 0.84 48.9 1.8
including 82.2 93 10.8 1.1 85.2 2.8
including 98 110.5 12.5 1.84 98.5 3.8
TU-13-324 32.92 62 29.08 1.31 16.5 1.6
including 42.5 57.75 15.25 2.1 23.7 2.6
including 43 45.25 2.25 1.71 72 3.1
TU-13-324 113.5 128 14.5 0.25 47 1.2
including 120 121 1 0.59 117.5 2.9
including 125 128 3 0.79 155 3.8
TU-13-324 154 174 20 0.08 29.1 0.6
including 160 161 1 0.42 167 3.7
including 167.5 172 4.5 0.07 53.4 1.1
TU-13-325 128.5 136.5 8 0.58 132.2 3.2
TU-13-325 190 236.5 46.5 1.06 53.1 2.1
including 193.4 216 22.6 1.72 97.2 3.6
including 194 195.2 1.2 2.05 147 4.9
including 203.9 205 1.1 3.97 175 7.4
including 210.5 216 5.5 4.4 240.8 9.1
TU-13-388 199 229.5 30.5 0.67 23.9 1.1
TU-13-388 337.5 346.5 9 1.35 287.5 6.9
including 339.25 340.35 1.1 6.54 1982.7 45.2
TU-13-388 363.5 416 52.5 0.58 50.3 1.6
including 363.5 378.4 14.9 0.74 87 2.4
including 372 378.4 6.4 1.19 138.9 3.9
including 390 403.9 13.9 1.11 82.9 2.7
including 398.6 401.1 2.5 1.78 173 5.1
TU-17-504 65.20 71.00 5.80 0.31 1.6 0.3
TU-17-504 80.00 89.00 9.00 0.30 0.7 0.3
TU-17-504 108.00 182.50 74.50 0.66 45.1 1.6
including 108.00 122.50 14.50 1.02 20.4 1.4

 

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Hole ID From (m) To (m) Interval (m) Gold (g/t) Silver (g/t) AuEq*(g/t)
including 130.00 149.00 19.00 1.19 121.2 3.6
including 164.70 168.45 3.75 1.23 95.5 3.1
TU-17-504 227.40 291.70 64.30 0.79 74.4 2.3
including 232.65 236.10 3.45 1.58 97.4 3.5
including 258.50 269.00 10.50 3.54 306.9 9.7
TU-17-504 306.50 353.35 46.85 0.49 68.6 1.9
including 319.30 320.00 0.70 22.30 2600.0 74.3
TU-17-504 372.50 383.45 10.95 0.64 19.3 1.0
TU-17-504 417.70 427.80 10.10 0.74 19.0 1.1
TU-17-508 51.60 74.30 22.70 0.44 0.8 0.5
including 54.60 60.60 6.00 1.13 1.6 1.2
TU-17-508 97.50 143.50 46.00 0.74 26.2 1.3
including 101.50 129.00 27.50 1.02 38.6 1.8
including 123.50 125.50 2.00 3.39 385.0 11.1
TU-17-508 170.00 182.30 12.30 0.24 23.2 0.7
TU-17-508 230.40 232.80 2.40 0.73 126.7 3.3
TU-17-508 259.00 276.00 17.00 0.85 91.1 2.7
including 263.30 276.00 12.70 1.03 98.6 3.0
including 263.30 268.60 5.30 2.00 204.8 6.1
TU-17-508 372.60 373.80 1.20 0.61 87.5 2.4
TU-17-508 399.50 411.00 11.50 0.47 15.8 0.8
TU-17-508 435.10 440.00 4.90 0.45 9.4 0.6
TU-17-508 451.40 467.80 16.40 2.25 25.3 2.8
including 452.00 455.70 3.70 8.67 95.9 10.6
TU-17-520 64.00 73.00 9.00 0.50 1.7 0.5
including 64.00 68.00 4.00 0.75 1.9 0.8
TU-17-520 108.60 129.00 20.40 0.89 11.1 1.1
including 116.50 126.00 9.50 1.65 19.5 2.0
including 117.50 124.50 7.00 2.07 22.4 2.5
including 122.50 124.50 2.00 4.33 39.2 5.1
TU-17-520 142.00 150.60 8.60 0.13 6.3 0.3
TU-17-521 65.50 73.50 8.00 0.66 0.7 0.7
including 67.50 71.50 4.00 0.98 1.4 1.0
TU-17-521 108.00 124.50 16.50 0.56 9.8 0.8
including 120.50 124.50 4.00 1.02 21.6 1.5
TU-17-521 148.00 151.00 3.00 0.45 22.9 0.9
TU-17-521 155.00 155.75 0.75 3.93 227.0 8.5
TU-17-521 184.50 195.10 10.60 1.35 132.8 4.0
including 184.50 190.80 6.30 1.92 205.8 6.0
including 185.60 186.20 0.60 4.37 769.0 19.8
including 188.30 188.90 0.60 11.40 1100.0 33.4
TU-17-522 69.60 80.00 10.40 0.63 1.3 0.7
including 73.00 77.00 4.00 1.05 2.4 1.1
TU-17-522 98.00 148.50 50.50 0.73 11.4 1.0
including 117.50 128.00 10.50 2.45 24.4 2.9

 

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Hole ID From (m) To (m) Interval (m) Gold (g/t) Silver (g/t) AuEq*(g/t)
TU-17-522 196.60 200.56 3.96 0.06 7.8 0.2
TU-17-524 61.25 71.50 10.25 0.31 0.7 0.3
including 64.00 67.00 3.00 0.53 1.0 0.6
TU-17-524 115.00 128.15 13.15 0.70 8.3 0.9
including 123.00 127.00 4.00 1.31 18.9 1.7
TU-17-525 47.50 52.45 4.95 0.42 0.2 0.4
TU-17-525 90.50 122.50 32.00 0.82 25.0 1.3
including 98.00 107.35 9.35 2.01 42.9 2.9
including 101.00 106.00 5.00 2.75 53.2 3.8
TU-17-525 146.95 150.00 3.05 2.19 104.9 4.3
TU-17-525 164.80 169.50 4.70 0.76 56.5 1.9
including 167.10 168.45 1.35 2.09 149.8 5.1
TU-17-525 178.55 180.10 1.55 0.11 10.8 0.3
TU-17-526 45.50 50.50 5.00 0.27 0.2 0.3
TU-17-526 96.00 110.70 14.70 0.91 26.6 1.4
TU-17-526 156.45 158.95 2.50 0.29 26.5 0.8
TU-17-526 169.25 170.40 1.15 0.56 57.5 1.7
TU-17-526 183.00 190.90 7.90 0.11 6.7 0.2
TU-17-528 107.20 117.45 10.25 1.16 25.6 1.7
including 111.40 115.40 4.00 1.35 39.8 2.1
TU-17-528 125.50 127.50 2.00 1.21 375.8 8.7
TU-17-528 187.90 189.50 1.60 0.08 16.5 0.4

*Gold Equivalent based on a price of $1,250/ounce gold and $18/ounce silver*

 

 

 

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Table 10-4      Section 10+375E Significant Drill intercepts (Main Ixtaca Zone)

Hole ID From
(m)
To
(m)
Interval
(m)
Gold
(g/t)
Silver
(g/t)
AuEq*
(g/t)
TU-11-065 26.00 126.80 100.80 0.58 46.2 1.5
including 26.00 74.78 48.78 0.95 77.0 2.5
including 43.60 68.00 24.40 1.67 134.4 4.4
including 49.80 59.80 10.00 3.05 198.8 7.0
TU-11-067 24.30 145.00 120.70 1.02 72.6 2.5
including 36.50 136.80 100.30 1.20 85.0 2.9
including 54.90 96.30 41.40 1.91 144.1 4.8
including 63.55 85.50 21.95 2.75 210.1 7.0
including 65.60 80.85 15.25 3.26 253.4 8.3
including 107.20 116.95 9.75 2.54 112.6 4.8
including 125.55 127.43 1.88 2.51 242.2 7.3
TU-12-202 26.50 66.50 40.00 0.35 1.4 0.4
including 26.50 38.00 11.50 0.78 0.5 0.8
TU-12-202 137.10 172.50 35.40 0.62 12.3 0.9
including 139.10 145.10 6.00 2.57 35.4 3.3
TU-12-202 249.30 260.80 11.50 0.10 16.7 0.4
TU-12-211 31.20 187.85 156.65 0.59 28.6 1.2
including 70.70 84.50 13.80 0.97 82.9 2.6
including 97.80 105.65 7.85 1.07 59.4 2.3
including 129.85 142.40 12.55 1.38 53.3 2.4
including 172.85 183.85 11.00 0.91 56.7 2.0
TU-13-389 21.34 95.50 74.16 1.02 50.9 2.0
including 47.00 71.00 24.00 1.52 60.6 2.7
including 51.50 69.00 17.50 1.92 64.4 3.2
including 88.60 95.50 6.90 2.54 139.9 5.3
TU-13-389 104.00 106.80 2.80 2.86 169.3 6.2
TU-13-391 16.00 126.00 110.00 0.62 42.0 1.5
including 48.16 89.50 41.34 1.16 76.2 2.7
including 48.16 59.30 11.14 1.79 110.9 4.0
including 71.80 84.50 12.70 1.40 106.4 3.5
including 71.80 74.50 2.70 3.06 230.3 7.7
TU-13-393 27.43 141.80 114.37 0.92 53.7 2.0
including 54.50 81.50 27.00 1.03 76.0 2.6
including 56.00 62.20 6.20 2.21 150.5 5.2
including 89.95 124.70 34.75 1.67 70.4 3.1
including 100.30 104.00 3.70 2.08 89.0 3.9
including 110.40 118.30 7.90 4.42 158.7 7.6

*Gold Equivalent based on a price of $1,250/ounce gold and $18/ounce silver

 

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Mineralized limestone, shale and the cross-cutting dykes are unconformably overlain by bedded crystal tuff, which is also mineralized. Mineralization within tuff rocks overlying the Ixtaca Zone occurs as broad zones of alteration and disseminated sulphides having relatively few veins. High-grade zones of mineralization are locally present within the tuff vertically above the Main Ixtaca and Ixtaca North vein systems and dykes. The high-grade zones transition laterally into low grade mineralization, which together form a broad tabular zone of mineralization at the base of the tuff unit.

 

10.2Chemalaco Zone

 

The Chemalaco Zone (also known as the Northeast Extension) of the Ixtaca deposit has an approximate strike length of 450m oriented roughly north-south (340 azimuth) and has been drilled via a series of ENE (070 degrees) oriented sections spaced at intervals of 25 to 50m, and near-surface oblique NNW-SSE oriented drillholes (Figure 10-2). The Chemalaco Zone dips moderately-steeply at 55 degrees WSW. High grade mineralization having a true-width ranging from less than 30 and up to 60m has been intersected beneath approximately 30m of tuff to a vertical depth of 550m, or approximately 700m down-dip. An additional sub-parallel zone has been defined underneath the Chemalaco having a true-width ranging from 5 to 40m and dipping 25 to 50 degrees to the WSW, resulting in a splayed zone extending from near-surface to a vertical depth of 250m. The sub-parallel zone has an approximate down-dip length up to 400m over a 250m strike length (Table 10-5,Figure 10-5).

 

The Chemalaco Zone vein zone lies northeast of the Main Ixtaca Zone and occurs within the hinge zone of a shale cored antiform. Near surface, along the apex of the antiform, a zone of structurally thinned, brecciated, and mineralized limestone is unconformably overlain by mineralized tuff rocks (Figure 10-4). At a vertical depth of 80m below surface, high-grade shale-hosted mineralization dips moderately-steeply at 25 to 55 degrees WSW sub-parallel to the interpreted axial plane of the antiform. The footwall of the high-grade zone is marked by a distinct 20 to 30m true-thickness felsic porphyry dyke (Chemalaco Dyke), which is also mineralized. The Chemalaco Dyke has been intersected in multiple drillholes ranging from 250 to 550m vertically below surface, and its lower contact currently marks the base of Chemalaco Zone mineralization.

 

The Chemalaco Zone remains open to depth and a long strike to the north. The system also remains open to the east as the limit of veining has not been defined across strike in this direction.

 

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Table 10- 5     Section 50+050N Significant Drill intercepts (Chemalaco Zone)

Hole ID From
(m)
To
(m)
Interval
(m)
Gold
(g/t)
Silver
(g/t)
AuEq*
(g/t)
TU-12-190 85.00 89.00 4.00 0.25 0.5 0.3
TU-12-190 100.00 112.00 12.00 0.17 1.9 0.2
TU-12-190 259.00 272.90 13.90 0.17 12.3 0.4
TU-12-190 278.85 321.00 42.15 1.06 47.4 2.0
including 293.50 300.50 7.00 1.34 72.0 2.7
including 306.00 317.80 11.80 1.67 71.7 3.1
including 310.00 314.00 4.00 2.45 116.4 4.7
TU-12-190 377.90 386.00 8.10 0.24 2.8 0.3
TU-12-194 83.50 87.50 4.00 0.46 2.8 0.5
TU-12-194 112.60 124.00 11.40 0.22 4.4 0.3
TU-12-194 272.50 279.50 7.00 0.15 40.9 0.9
TU-12-194 294.50 300.00 5.50 0.14 81.1 1.7
TU-12-194 313.00 371.80 58.80 1.04 19.4 1.4
including 317.60 347.00 29.40 1.63 23.9 2.1
TU-12-199 66.00 70.00 4.00 0.26 2.4 0.3
TU-12-199 91.00 93.80 2.80 0.19 3.0 0.2
TU-12-199 344.20 424.00 79.80 0.84 20.6 1.2
including 365.70 385.70 20.00 1.19 25.6 1.7
including 396.50 402.50 6.00 1.43 16.0 1.7
including 408.30 423.40 15.10 1.48 37.6 2.2
including 414.30 416.10 1.80 4.90 175.5 8.3
TU-12-205 81.00 132.00 51.00 0.51 6.0 0.6
including 101.50 106.00 4.50 3.41 6.1 3.5
TU-12-205 254.50 293.50 39.00 0.61 88.8 2.3
including 255.50 281.20 25.70 0.86 127.8 3.3
including 256.00 272.40 16.40 1.08 164.8 4.3
including 256.00 265.00 9.00 1.57 244.5 6.3
TU-12-205 312.00 319.00 7.00 0.19 207.2 4.2
TU-13-265 488.40 531.80 43.40 0.50 9.2 0.7
including 500.60 507.20 6.60 2.15 11.6 2.4
including 504.20 507.20 3.00 3.36 17.1 3.7
TU-13-265 539.00 545.00 6.00 0.07 22.2 0.5
TU-13-265 550.30 558.00 7.70 0.07 28.1 0.6
TU-13-268 41.30 56.25 14.95 0.05 11.5 0.3
TU-13-268 61.25 120.50 59.25 0.11 41.1 0.9
including 74.90 79.75 4.85 0.25 126.9 2.7
including 103.00 106.00 3.00 0.23 81.2 1.8
TU-13-268 133.00 138.00 5.00 0.03 22.3 0.5
TU-13-268 151.50 208.00 56.50 0.36 42.0 1.2
including 166.00 178.50 12.50 0.56 91.4 2.3
including 166.00 167.50 1.50 0.74 223.7 5.1
including 192.00 199.50 7.50 0.75 51.6 1.8
TU-13-268 222.75 239.00 16.25 0.08 14.6 0.4
TU-13-272 48.00 138.50 90.50 0.20 31.4 0.8

 

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Hole ID From
(m)
To
(m)
Interval
(m)
Gold
(g/t)
Silver
(g/t)
AuEq*
(g/t)
including 66.05 70.20 4.15 0.44 49.5 1.4
including 77.50 84.80 7.30 0.29 71.1 1.7
including 112.75 119.75 7.00 0.43 40.1 1.2
including 129.00 138.50 9.50 0.41 114.0 2.6
TU-13-272 146.00 161.00 15.00 0.22 47.1 1.1
including 147.00 148.50 1.50 0.65 252.7 5.6
TU-13-272 187.00 193.50 6.50 0.11 11.5 0.3
TU-13-272 220.00 231.00 11.00 0.14 9.5 0.3
TU-13-275 68.50 84.00 15.50 0.15 10.6 0.4
TU-13-275 105.00 112.00 7.00 0.11 15.8 0.4
TU-13-275 120.00 134.50 14.50 0.18 6.2 0.3
TU-13-275 149.00 227.00 78.00 0.39 23.8 0.9
including 164.50 193.50 29.00 0.43 43.3 1.3
TU-13-275 254.00 258.00 4.00 0.01 13.5 0.3
TU-13-287 106.00 131.00 25.00 0.11 15.2 0.4
including 122.00 125.00 3.00 0.30 50.3 1.3
TU-13-287 156.50 182.00 25.50 0.66 102.3 2.7
including 168.00 170.08 2.08 4.35 975.0 23.3
TU-13-289 134.00 153.00 19.00 0.22 48.4 1.2
including 144.50 151.80 7.30 0.40 82.8 2.0
TU-13-289 160.00 188.00 28.00 0.21 10.8 0.4
TU-14-419 52.00 122.50 70.50 0.17 33.7 0.8
including 92.25 115.50 23.25 0.27 64.9 1.6
including 110.00 115.50 5.50 0.34 114.4 2.6
TU-14-419 131.00 168.00 37.00 0.37 70.4 1.8
including 161.75 165.00 3.25 2.50 420.8 10.9
TU-14-419 189.00 194.00 5.00 0.20 39.1 1.0
TU-14-420 52.40 102.00 49.60 0.27 21.1 0.7
including 81.00 89.50 8.50 0.85 54.1 1.9
TU-14-420 114.00 186.00 72.00 0.25 22.1 0.7
including 212.00 223.00 11.00 0.14 12.2 0.4
TU-18-535 49.50 71.50 22.00 0.31 1.9 0.4
including 59.40 61.50 2.10 0.57 3.2 0.6
TU-18-535 240.00 242.00 2.00 0.19 16.2 0.5
TU-18-535 432.75 524.60 91.85 0.49 11.1 0.7
including 447.25 452.60 5.35 0.69 23.5 1.2
including 457.60 478.35 20.75 0.77 19.5 1.2
including 459.70 464.70 5.00 0.96 29.7 1.6
including 470.30 477.75 7.45 1.12 19.3 1.5
including 514.10 524.60 10.50 1.34 9.4 1.5
including 514.10 516.50 2.40 2.26 12.5 2.5
TU-18-537 83.90 133.50 49.60 0.35 6.2 0.5
including 90.00 102.50 12.50 0.67 6.9 0.8
TU-18-537 234.50 241.00 6.50 0.14