Royalty: Tuligtic

Puebla State, Mexico

Gold & Silver

Operator: Almaden Minerals Ltd

Royalty: NSR: 2.0%

The 14,000 hectare Tuligtic claim was identified and acquired by Almaden Minerals Ltd. during its 2001 regional Mexican exploration program.

Tuligtic is located 120 kilometers southeast of 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.

The project is well-located in the industrial heart of Puebla State. It is easily accessible from Mexico City, and 95 kilometers north of Puebla city. A rail-serviced industrial park is 25 kilometers away, and regional power is provided by the Laguna Verde nuclear power station, located 200 kilometers to the east on a deep sea port.

Almaden | Caballo Blanco

History of the Project

Within the Tuligtic claim, field work identified a 5 square hectare area of intensely altered rocks that contains several prospective targets, including the Ixtaca Zone.

In 2010, a drill program was designed to test a small outcrop. Due to the limited surface exposure of the Ixtaca vein system, three holes were fanned out in a small area, each in a different direction. In August , Almaden reported assay results from first hole ever drilled in the Ixtaca zone: TU-10-01 intersected 302.42 metres of 1.01g/t gold and 48g/t silver and multiple high grade intervals including 1.67 metres of 60.7g/t gold and 2122g/t silver.

Following Discovery Hole TU-10-01, extensive drilling has traced mineralization over one kilometer in a northeasterly orientation and showed the Main Ixtaca Zone to be a broad and robust vein system intersected by multiple high grade veinlets in a variety of orientations.

Drilling has also identified two additional zones: the Ixtaca North Zone and the Northeast Extension. To date over 450 holes and 150,000 meters have been drilled in the area. The Ixtaca Deposit currently hosts an N.I. 43-101 compliant Measured and Indicated resource of approximately 93 million tonnes grading 0.55 g/t Au and 32 g/t Ag, for a total of 1.65M ounces of gold and 96.7M ounces of silver.

Preliminary Economic Assessment

On December 9, 2015, Almaden Minerals Ltd. announced results of an updated PEA which reflected the significant capital cost savings resulting from the optioned Rock Creek Mill, as well as an alternate mine plan. Total initial capital is now US$100 million, a significant reduction from the $496 million initial capital assumed in the Maiden PEA of April, 2014.

The PEA Update incorporates:

  • The same resource model as the maiden PEA;
  • The Rock Creek Mill with average throughput of 7,500 tonnes per day;
  • A smaller, near surface and payback focussed pit;
  • Mine production schedule which targets higher grades earlier;
  • Optimised waste placement and tailings management facilities;
  • The 2% NSR held by Almadex.

Key highlights of the PEA Update include:

  • (using US$1,150/oz Au and US$16/oz Ag):
  • Initial Capital of $100.2 million;
  • After-tax payback of initial capital in 2.6 years.
  • Pre-tax NPV(5%) of $266 million and internal rate of return of 39%;
  • After-tax (including new Mexican Mining Duties) NPV(5%) of $166 million and internal rate of return of 30%;
  • 36 million tonnes of mill feed averaging 0.76 g/t gold and 47 g/t silver (average head grade of 1.42 g/t gold equivalent using a 72:1 silver to gold ratio);
  • Total LOM production of 724,000 ounces of gold and 49 million ounces of silver (1.4 million gold equivalent ounces, or 101 million silver-equivalent ounces at a 72:1 silver to gold ratio);
  • Operating cost $684 per gold equivalent ounce, or $9.50 per silver equivalent ounce;
  • 97% of the PEA Update mill feed is in the Measured and Indicated categories of the resource model.

This PEA will be filed on SEDAR under the profile of Almaden Minerals Ltd.

It should be noted that this PEA is preliminary in nature as it includes inferred mineral resources which are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA forecasts will be realized or that any of the resources will ever be upgraded to reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.