Morgan Poliquin
President and CEO
Almaden Minerals
View from the Top

Ixtaca: Gold, Silver and Limestone

Thu, 10/17/2019 - 16:12

Q: What steps are you taking to obtain the social and environmental licenses to operate the Ixtaca gold-silver deposit?
A: Ixtaca is a leading-edge project with strong documented community support, modern dry-stack tailings management with no tailings dam. It also provides a new permanent fresh water dam and reservoir for both the mine and community to use, which can be handed over to local communities at closure. The company completed an EVIS, an independent social impact assessment, conducted a documented widescale open consultation program and is working on a social investment plan directly with local communities. Almaden Minerals has received an INAH clearance for development.
Almaden Minerals takes social licenses very seriously and in the last 10 years has carried out consultations through more than 20,000 interactions in over 35 communities. It has monthly technical meetings in the community providing community members access to outside technical experts and has provided mine tours for around 500 community members to see operating mines elsewhere in Mexico as part of the company’s informed consent initiatives. The company has now held nine large informational meetings attended by over 4,100 people since 2012.
Recently, the RPI meeting for the MIA for full mining, submitted earlier in 2019, was conducted peacefully and attended by around 2,000 community members. The company believes that there is strong local support as evidenced by over 800 people signing a declaration of support that was delivered to SEMARNAT, a memorandum of understanding signed with local water users and the municipality including mining in development priorities. The mine will create a new permanent water reservoir for both mine and community use. The mine is located outside of any parks or restricted areas and the company has received a letter from PROFEPA stating that it has been in compliance throughout the exploration stage. The mine area has excellent geography and geology. The waste and tailings are mostly limestone that is highly neutralizing and could potentially be used commercially as cement or in other products.
Q: What will the financing scheme for Ixtaca look like?
A: We will need US$175 million to build the mine and have appointed Auramet International as the project’s financing adviser. While it is a difficult market, we believe that we will find the necessary funding, which goes together with the permitting. Almaden will prioritize these two issues in 2019. We think the debt financing market is competitive and while US$175 million seems like a large number, it is very reasonable considering that the feasibility study showed that the first six years of the project averaged production of around 200,000 gold-equivalent ounces.
Q: What comes next to ramp up Ixtaca and what is your timeline for the project?
A: We expect a response to our MIA application by December 2019 or earlier. We are one of the first projects seeking approval from the AMLO administration and so far it has been very interactive. We feel that there are many questions being asked and feel that is positive. The company still feels comfortable working in Mexico because it is a mining country that understands the industry. In return, we are open to any questions that the industry or the people may have about our project. Ixtaca is personal to us as we discovered it and developed it, so we really want it to be the best project that we can build.
Q: What is the relationship between Almadex, Almaden and Azúcar Minerals and why have them as separate entities?
A: Each has a different business strategy. Almaden is focused on the Ixtaca discovery, made in 2010. In 2015, we created a new company called Almadex, which made a second discovery in Veracruz: El Cobre. Newcrest Mining invested 19.19 percent into Azúcar Minerals, equal to US$18 million, which separated this company from Almadex.