A small NYSE-listed company controls one of the world’s best silver-gold deposits....
Almaden’s Ixtaca Contains Over 200 Million Ounces of Silver Equivalent… Worth $800 Million
Shares need to rise at least 10X to match that value...
You Can Buy All That Silver for 40-Cents Per Ounce!
Almaden Minerals (TSX: AMM)(NYSE: AAU) controls one of the most undervalued, production-ready silver projects in the world.
Called Ixtaca, the company has been exploring and developing the project for over a decade. And now its time is almost here.
The project contains proven and probable reserves of 85.159 million ounces of silver and 1.387 million ounces of gold. That is 2.5 million gold equivalent ounces or 189.2 million silver equivalent ounces.
Shares of Almaden Minerals trade around $0.50.
It has a market cap of $75 million. At the current valuation, you’re buying all that silver for $0.40 per ounce. In gold terms, you’re buying it for $30 per ounce.
The average enterprise value per ounce for companies in this sector is $75 per ounce of gold.
Making Almaden Minerals one of the most attractive valuations in the entire precious metals exploration and development space.
It needs to go up 150% just to be properly valued in line with its peers.
There are numerous events in motion that could make that a reality in short order. You’ll hear about them firsthand in the interview below with CEO Morgan Poliquin.
You’re also about to see several other factors that show why the company could — and should — ultimately be valued even higher than its peers.
It all starts with the economics of the Ixtaca project, which are already show via a feasibility study in 2018.
Ixtaca’s Economics
Ixtaca is located in Puebla State, Mexico. There is power on site and paved roads to within two kilometers.
It is a very large precious metals deposit divided nearly equally between silver and gold. In that respect, it’s easier to think about it in either gold equivalent or silver equivalent terms.
The feasibility showed a mine that would produce 173,000 of gold equivalent for 11 years at and all-in sustaining cost of US$850 per ounce.
In silver equivalent terms, it would produce 12.9 million million ounces per year for 11 years at an AISC of US$11.30.
Using a gold price of $1,450 and silver price of $20 — both of which we’re well above — the project has a net present value of US$466 million and internal rate of return of 57%.
Almaden shares were sold down over the past year amid permitting delays and gold retracement from record prices in 2020.
Its current market cap of $75 million is just 16% of that $466 million NPV, meaning the stock needs to go up 6X to be fully valued.
And that’s without including the additional NPV the project now has since gold is now well above $1,425 and silver is well above $20.
So there is even more than 6X upside already baked in.
The Mill
Most companies have to build a mill when they start mining, which is a very costly endeavor.
But Almaden’s management had the foresight to buy a mill during the gold mining downturn for pennies on the dollar. So now the company owns a mill that would cost $75 million to build in today’s market.
Rock Creek Mill Secured: 7,000 tpd plant
Purchased for US$6.5M and approx. 400,000 shares
FS plan: plant to be dismantled and transported to Mexico for use at the Ixtaca project
The mill operated from Sept. to Nov. 2008 only, prior to being put on care and maintenance
Currently dismantled and containerized in Nome, awaiting shipping to Mexico
Items comprising the mill include (amongst other things) 3-stage crushing, ball mill and related equipment, Falcon gravity concentrators, CIL tanks agitator and discharge pumps, tailings thickening circuit, fully-equipped laboratory, gold room, water treatment plant, various screens and conveyers, assorted ancillary equipment, and spare parts.
Put another way, the mill that Almaden owns is worth the same as the company’s entire market cap… meaning the stock is getting zero value for the gold-silver deposit!
The Team
Almaden Minerals has one of the best management teams in the business, and it fully owns what is likely to become a world-class gold and silver mine within the next several years — right in line with a new bull market in gold and silver.
The company's highly experienced and successful management team has discovered multiple deposits that become economic. And that's one of the key things to look for when investing in companies looking to prove and de-risk a project.
The team has over 200 years of combined experience in prospecting, exploration, and geochemistry:
Duane Poliquin, Founder and Chairman: Duane Poliquin received his degree in Geological Engineering in 1962 and has been continuously active in mining exploration around the world.
In 1972, Duane identified the Santa Fe gold property in Nevada and formed Westley Mines Ltd. to explore the project. Westley was taken over and transitioned into production.
Before founding Almaden, Duane discovered an extension to the Nevada Sheelite Mine as well as the Apex germanium-gallium mine - a specialty metals deposit in Utah that contained over one million tons of mineralized material with a gross value of over $1,000 per ton.
After founding Almaden and doing an IPO in 1986, Duane identified the Trinidad gold deposit in Mexico which was subsequently sold with a royalty retained to Eldorado Gold Corporation and became that company’s second mine.
Morgan Poliquin, President & CEO: Morgan Poliquin (Duane's son) earned his Masters of Science in Geology at the University of Auckland, studying geothermal systems and epithermal gold deposits.
His Ph.D. in Geology from the University of Exeter involved studying the geology and mineral deposits of eastern Mexico. His Ph.D. research was combined with the prospecting program he led in Eastern Mexico for Almaden. This exploration directly led to the Company’s involvement in the Caballo Blanco and Ixtaca projects.
Morgan oversees and directs the company's prospecting and property exploration programs, while his father manages the corporate and technical direction of Almaden.
The Poliquins have shown over a long period of time that they know how to judiciously use company funds to make new discoveries that build value. Plus, Duane Poliquin has been instrumental in bringing numerous top-grade mining projects through early prospecting and exploration into workable mines.
The Disconnect & Opportunity
In 2019, a non-governmental organization (NGO) sued the Mexican President, Congress, and Senate to change the mining law.
The lawsuit was not against Almaden, but it cites the Ixtaca claims as part of the suit against the Mexican government. As a result, the permitting was suspended.
Almaden then sued to resume the permitting process, and as a result the permitting process was allowed to continue in September 2020. In December, the company was notified it had not received approval.
Almaden is currently working towards submitting a revised environmental permit application while also planning to advance high priority exploration targets at Ixtaca.
And owning shares now — with gold and silver prices on the rise — is looking like a very solid window of opportunity.
To tell us more about the project and its upside, we have an exclusive interview with President and CEO Morgan Poliquin.
Exclusive Interview with Morgan Poliquin
President and CEO, Almaden Minerals
A 10X Re-Rating
When investing in mining ventures there is always a risk versus reward ratio to be calculated.
Here you have a project that’s been all but abandoned by the market.
Almaden Minerals’ stock is being valued for less than the mill it owns… meaning no value is being assigned to the four million ounces of gold equivalent resource.
And no value is being assigned to the very clear exploration upside that exists on the project.
When the permitting process moves forward, the stock will be re-rated quickly.
At current gold and silver prices, the net present value on the project is in the $800 million to $1 billion dollar range — more than 10X what Almaden is currently valued.
Making now the time to take a close look at Almaden and the world class Ixtaca deposit.
You can do that now at AlmadenMinerals.com.
— Resource Stock Digest Research