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When I grow up I want to be a rock star!

Professional athlete, celebrity, and millionaire are all common goals many youths aspire to (or “yoots” as Joe Pesci calls them in My Cousin Vinny).

Based on their biographies, I’d guess all Duane and Morgan Poliquin wanted to do was find Gold, and LOTS of it. This father-son Gold hunting team has a long track record of discovery. Starting with Santa Fe in the 1970′s, Duane the dad (pictured left) and son Morgan have gone on to find Nevada Sheelite, Trinidad Gold mine, Caballo Blanco deposit, and the Ixtaca Gold-Silver deposit.

Anyone wishing to win alongside them can play via Almaden Minerals (AMM, TSX) and Almadex Minerals (AMZ- TSX-V). Insiders, including Duane and Morgan, own approximately 15% of each.

$30 per-ounce for this large advanced stage Gold project?…

…for that price I’m a buyer.

Almaden Minerals owns 100% of the Ixtaca Gold-Silver deposit. Nestled within the 14,000 hectare “Tuligtic” Property, Ixtaca is located in Puebla, Mexico. Paved roads are within 2 km of Ixtaca and there is power on site. The Pachuca mine, one of the largest Gold and Silver deposits in Mexico with historic production of 1.4 billion ounces of Silver and 7 million ounces of Gold, is located 120 km northwest.

In 2010, Almaden drilled its first hole, “TU-10–01” in the Ixtaca Zone and intersected 302.4 m of 1.01 g/t Au and 48 g/t Ag. Since then, over 400 holes and 136,000 m have been drilled in the area. The Ixtaca Gold-Silver deposit currently hosts an NI-43–101 Measured and Indicated resource of approximately 93 million tonnes grading 0.55 g/t Au and 32 g/t Ag, for a total of 1.65 million ounces of Gold and 96.7 million ounces of Silver.

Speaking in terms of Gold equivalent, Almaden uses a 2 g/t AuEq cut-off grade and has 3.5 million Gold ounces.

As the image above indicates, Almaden has numerous regional targets in the Ixtaca area.  In the months to come it will drill 3 zones – one northeast (Ixtaca East), one immediately south (SE Clay), and another 2 km southwest (Tano Zone) along strike of Ixtaca’s resource area.

According to Almaden’s June 13 news release:  “Advanced engineering and environmental baseline studies designed to meet the requirements of a Pre-Feasibility Study (‘PFS’) and the submittal of an environmental permit application and risk assessment to the Mexican regulatory agency responsible for mine permitting are ongoing.”

7,000 tpd Rock Creek mill…

On October 19, 2015, Almaden secured the option to purchase the Rock Creek mill, which only operated for several months before the mining operation was curtailed in 2008. The mill was built to process 7,000 tonnes per day and is in excellent condition. The downward chart below is a thing of beauty. Almaden has reduced capital expenditures at Ixtaca to such an extent it will likely become a mine (defying the 1-in-10,000 odds).

Almaden’s updated PEA, filed with SEDAR on April 13, 2016, estimates pre-production costs of $100 million (U.S.).  Ixtaca shows a solid 30% IRR (after tax) and a $166 million (U.S.) NPV (5% discount rate) using $1,150 Gold and $16 Silver. Over an estimated 13-year mine life, annual production would be 55,660 ounces Gold and 3,754,000 ounces Silver. Assuming a production decision is made, all-in sustaining costs at Ixtaca are expected to be $796 per ounce AuEq.

Assuming the PEA assumptions remain and precious metal prices stay as they are now, Almaden would generate more than $45 million operating cash flow (ie: 100,000 ounces Gold at $796 AISC) annually. Comparing this hypothetical 100,000 ounce Gold producer to recent acquisitions in the sector, it would imply Almaden would eventually be worth around $300 million.

As of the last financial update (post-financing), Almaden had about $8.5 million (CDN) in cash and no debt. Its share structure is solid with only 81.3 million outstanding.  Market cap is now $165 million (CDN) after today’s close of $2.03 with the stock up more than 50 cents over the last 5 trading sessions.

Prefer a levered bet on the Poliquins?…

Almadex Minerals (AMZ, TSX-V) is a spin-out from Almaden that holds exploration projects and royalties. This strong portfolio of assets is the direct result of over 35 years of prospecting, discovery, and deal-making by Duane and Morgan.

Consisting of a seasoned team of Mexican geologists and drillers, 5 company-owned drills, plus $6.5 million in cash, bullion and marketable securities, Almadex is well-positioned to keep the Poliquin’s winning streak going!

Just 4 weeks ago, Almadex confirmed the presence of porphyry mineralization (intersecting 1.5 m of 109 g/t Au and 0.15% Cu) in at least 4 separate zones at its 7,500 hectare El Cobre Project. Observe the strategic location – just south of the Timmins Gold (TMM, TSX) Caballo Blanco Project.

Duane Poliquin, AMZ Chairman, commented:  “We have an outstanding portfolio of mineral projects and we are pleased to have commenced drilling on the most advanced, El Cobre. We are exploring a very large zone of alteration hosting several porphyry systems and expect that this round of drilling will better define the systems for future drilling. These first results are from only one of the targets identified and clearly demonstrate the potential of the Encinal target while providing important data for the drilling we are planning based on these results. ”

List of Almadex’ assets (all projects 100%-owned)…

1. West of the Elk Gold mine in Southern British Columbia’s Gold Belt, Almadex has 4 projects across a 42,570 hectare area;

2. Property in Nevada including the Willow Project covering an area of intense hydrothermal alteration interpreted to represent a porphyry “lithocap”, the hydrothermal alteration overlying a large porphyry system with significant Copper, Gold and Molybdenum potential;

3. Almadex considers Mexico as being one of the least developed and most prospective areas for geological exploration in the world. Excellent geology coupled with a welcoming political, economic, and social environment make Mexico a premier country in which to explore and invest (12 projects in Mexico). Los Venados is 1 of 12, in the image below, notice the strategic location – directly east of Agnico Eagle’s (AEM, TSX) La India Mine and just northwest of Alamos Gold’s (AGI, TSX) Mulatos mine.

4. 15 royalties including a 2% NSR on “Tuligtic” (Almaden’s pre-production project) and a 5% NSR on “Caballo Blanco” (a Timmins Gold project located near a producing mine).

With a current share price of 38 cents, Almadex Minerals’ market cap is $17 million.

Considering its strong portfolio of 20 exploration projects and 15 royalties, I consider AMZ a fabulous buy, right here, right now (frankly, I’m disappointed with myself for not recognizing the inherent value in Almadex months ago). However, when throwing in the Poliquins (people factor) and roughly $6.5 million worth of cash, Gold bullion, and investments – Almadex remains an absolute steal, despite being up more than 130% year-to-date.

*I don’t own any at the moment, but I plan to, and my fingers are crossed AMZ will go down between now and then (although, who in their right mind would be selling?).

About the writer:  Daniel T. Cook, the newest member of the BMR team, is from the great state of Texas.  Daniel has a strong passion for the junior resource sector and has followed the Venture and broader markets with great interest since he bought his first stock 18 years ago at the age of 12.  He’s also a licensed investment professional who was a Bright Future’s Scholar at the University of Central Florida, graduating in 2010 with a major in Finance.  We know our readers will enjoy his material and benefit from his wisdom and insight.  We welcome him aboard!