Entering text into the input field will update the search result below

Almaden Minerals: Low Price, Attractive Project, Permitting Issues

Aug. 03, 2018 4:10 PM ETAlmaden Minerals Ltd. (AAU), AMM:CA19 Comments


  • The sensor-based ore sorting should improve the economics of the Ixtaca Project notably.
  • A feasibility study incorporating the sensor-based ore sorting should be completed by the end of 2018.
  • The recent drill results indicate that the updated resource estimate that should be completed by the end of 2018 will present bigger resources and probably also reserves.
  • The permitting seems to be the main issue of the Ixtaca Project, the permits are expected in late 2019 or early 2020 now.
  • At the current market capitalization of $66 million, Almaden Minerals is very attractively valued.

The weak precious metals market and some delays to the Ixtaca Project development schedule have a negative impact on Almaden Minerals' (NYSE:AAU) share price. Almaden's share can by bought approximately 50% cheaper than 1-year ago. And given the current state of the precious metals market, it is hard to expect any meaningful share price growth in the near term. However, the Ixtaca Project is very good and shares of Almaden offer a significant upside potential. Moreover, the recent developments indicate that the feasibility study that is expected by the end of this year should deliver a notable improvement to the PFS results.

The Ixtaca Project is located in the Puebla State, Mexico. The deposit contains measured and indicated resources of 1.97 million toz gold and 109 million toz silver, or 3.55 million toz of gold equivalent, at a gold equivalent grade of 0.9 g/t. There are also inferred resources that contain 457,000 toz gold and 28.97 million toz silver (874,000 toz of gold equivalent). A substantial part of the resources has been converted into reserves that contain 1.29 million toz gold and 78.83 million toz silver. It equals to 2.43 million toz of gold equivalent at a gold equivalent grade of 1.17 g/t.

Source: Almaden Minerals

But the resources will most probably grow further, as Almaden's properties are highly prospective. A new mineralized zone was discovered only 1.2 kilometers to the south-west of the Ixtaca deposit. Some of the best drill results from the Tano zone include 89.5 meters grading 0.83 g/t gold and 2.3 g/t silver, 9.65 meters grading 0.66 g/t gold and 41.8 g/t silver or 10 meters grading 2.11 g/t gold and 1.6 g/t silver. Also, the Ixtaca deposit alone will probably experience some further growth. For example, an interval of 101.45 meters grading 1.94 g/t gold and

This article was written by

Peter Arendas profile picture

I am an associate professor at the University of Economics in Bratislava, Department of Banking and International Finance. My dissertation was focused on commodity markets and my habilitation was focused on the calendar anomalies. I have more than 15 years of investing experience. My investments mostly focus on small- and mid-cap companies in the resource sector. Since May 2019, I have been preparing regular monthly reports focused on the precious metals royalty & streaming industry. Based on positive feedbacks and numerous inquiries, I decided to launch a Marketplace Service named "Royalty & Streaming Corner", which provides an in-depth analysis of this exciting market segment, as well as investment ideas from the mining industry.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in AAU over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (19)

razztraffic profile picture
Does anyone have a good idea WHEN are they expecting permits to come through? how many permits have been filed for? timeline of milestones necessary to a final construction decision? I'm new to the company, so please cut me some slack if I'm not yet up to speed on things that are well known to you.
Peter Arendas profile picture
In my opinion, there is no exact timeline right now, as the permitting process has been suspended (almadenminerals.com/...)
in at .54 for 4k shares thinking I will add same size tmw at .49 if possible then every 20 percent down after and will hold long as needed. No way that a small environmental group wins against mexican billionaire investor and owner's first completed mine project (think they have some serious surprises in store). In my opinion I think this is an easy win long term biggest question is it worth the resources when so many other great miners have been beaten down..
Adrian Day profile picture
Good concise summary, as usual. I agree with most but have a comment. The anti-mine protests in this case are particularly egregious. the individual leading the protests does not live in the area of the mine; his so-called organization is funded by unions; and there is little support among the local people (where Almaden has done a very good job of educating the locals about mining, including sponsoring trips to nearby mine operations). No surprise that they have a protest at Almaden's Vancouver headquarters. I bet no-one from the proposed mine area in Mexico attended that protest! (Our firm holds over 5% of the shares of Almaden.)
Peter Arendas profile picture
Yes, I read somewhere that only 4 of the Vancouver protesters were from Mexico and only 1 of them comes from the Ixtaca Project area. However, they were able to get some publicity and the impact on the share price was pretty negative. The sooner Almaden gets the permits, the better.
Brady RS profile picture
Great article!
It is making me a bit nervous to continuously get google alerts with news about heavy opposition to the project.
I agree that negative media coverage has negatively affected Almaden's market cap. How could it not? Do a google search and all you get is news coverage about very large demonstrations. You and Mr. Day, who says owns 5% of the company, might be downplaying this risk by only mentioning the Vancouver protest (which does look kind of phony).
It seems that opposition to the project political turmoil in Mexico (also taking into account the new leftist government) might keep making us nervous about holding on to these stocks.

Hopefully, Almaden secures the permits soon, I don't undertand why it is taking so long if they mentioned in their 20F that the draft for the Environmental Impact Assessment is in review, almost ready to be submitted.
Peter Arendas profile picture
Could you share some links to the news, please? I tried to find some news about the heavy opposition, but google shows me only the Vancouver protests and some news releases from PODER.
Saltcreep profile picture
I still own too many shares here... I bought a bunch of AAU shares a while back, and afterwards was asleep at the wheel ignoring them, until a few months ago, when a poster here alerted about real opposition to the development of the mine. I checked it out a bit, and as far as I can tell the concerns are genuine. As a result I quickly sold a portion of my shares, but I remained a bit too greedy and held on to a bunch. Now my thinking is that I'll just keep the remaining shares and see what happens. They'll either do some real work to address the issues at stake and get a permit, or it's just lost money. Mentally I've written off my investment in AAU. But if the mine does get the go ahead there should suddenly be a nice windfall for me out of the blue. :)
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.