Almaden Reports 42% After-Tax IRR with 203,000 Ozs GOLD Equivalent Production PER Year over First 6 Years from Feasibility Study FOR the Ixtaca Precious Metals Project, Mexico
NEWS RELEASE
December 11, 2018
Trading Symbols:
TSX: AMM; NYSE American: AAU
www.almadenminerals.com
ALMADEN REPORTS 42% AFTER-TAX IRR WITH 203,000 OZS GOLD EQUIVALENT
PRODUCTION PER YEAR OVER FIRST 6 YEARS FROM FEASIBILITY STUDY FOR THE
IXTACA PRECIOUS METALS PROJECT, MEXICO
Vancouver, B.C. Almaden Minerals Ltd. (“Almaden” or “the Company”; TSX: AMM; NYSE American:
AAU) is pleased to report positive results of the independent Feasibility Study (the “Study”) prepared in
accordance with National Instrument 43-101 (“NI 43-101”) for its 100% owned Ixtaca precious metals deposit,
located in Puebla State, Mexico. The Study and resulting mine plan incorporate significant changes from an
earlier Pre-Feasibility Study published by the Company (see Almaden news release of April 3 rd , 2017) including
filtered (dry stack) tailings, ore sorting, increased throughput and an improved mine schedule. Collectively the
changes result in a reduced project footprint and improved economics.
All values shown are in $US.
Base case uses $1275/oz gold and $17/oz silver prices.
Gold and silver equivalency calculations assume 75:1 ratio.
Highlights
Average annual production of 108,500 ounces gold and 7.06 million ounces silver (203,000 gold
equivalent ounces, or 15.2 million silver equivalent ounces) over first 6 years;
After-tax IRR of 42% and after-tax payback period of 1.9 years;
After-tax NPV of $310 million at a 5% discount rate;
Initial Capital of $174 million;
Conventional open pit mining with a Proven and Probable Mineral Reserve of 1.39 million ounces of
gold and 85.2 million ounces of silver (See Table 2);
Pre-concentration uses ore sorting to produce a total of 48 million tonnes of mill feed averaging 0.77 g/t
gold and 47.9 g/t silver (2.03 g/t gold equivalent over first 6 years, 1.41 g/t gold equivalent over life of
mine);
Average LOM annual production of 90,800 ounces gold and 6.14 million ounces silver (173,000 gold
equivalent ounces, or 12.9 million silver equivalent ounces);
Operating cost $716 per gold equivalent ounce, or $9.55 per silver equivalent ounce;
All-in Sustaining Costs (“AISC”), including operating costs, sustaining capital, expansion capital, private
and public royalties, refining and transport of $850 per gold equivalent ounce, or $11.30 per silver
equivalent ounce.
Elimination of tailings dam by using filtered tailings significantly reduces the project footprint and water
usage.
J. D. Poliquin, Chairman of Almaden stated, "We have advanced Ixtaca from our blind discovery in 2010 to
its current position as an outstanding inventory of precious metals in a well-established mining jurisdiction
with a very robust economic profile. Significant potential remains to increase resources through continued
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drilling of portions of the Ixtaca project that remain open as well as other targets on this largely unexplored
property. In the meantime, we are looking forward to further developing this deposit through permitting and
construction to demonstrate our commitment to modern, responsible mining and the potential for Ixtaca to
be a strong economic engine for the Company and the region in which it is located."
Study
Almaden engaged a team of consultants led by Moose Mountain Technical Services (“MMTS”) to undertake this
Study. MMTS was responsible for mining, metallurgy, processing, infrastructure and the economic evaluation,
APEX Geoscience Ltd. for exploration and drill data QA/QC, Giroux Consultants for the resources estimation,
and SRK Consulting (U.S.), Inc. (“SRK”) for aspects related to geotechnical, tailings and water management.
Table 1 – Summary of the Economics of the Ixtaca Feasibility Study
Amount
Pre-Tax NPV (5%) $ 470 million
Pre-Tax IRR 57 %
Pre-Tax Payback 1.6 Years
Post-Tax NPV (5%) $310 million
Post-Tax IRR 42 %
Post-Tax Payback 1.9 Years
Initial Capital $ 174 million
Life of Mine 11 Years
Waste/ ROM ore ratio 4.5:1
Years 1 - 6 Life of Mine (LOM)
Cash Operating Cost ($/AuEq oz.) 667 716
AISC ($/AuEq oz.) 810 850
Annual Gold production (000's oz.) 108 90
Annual Silver production (000's oz.) 7,071 6,160
Annual Gold equivalent production (000's oz.) 202 173
Average mill feed grade (g/t) Au 1.10 0.77
Average mill feed grade (g/t) Ag 69.3 47.9
Average mill feed grade (g/t) AuEq 2.03 1.41
1. Economics assume a Gold Price of $1275/Oz and Silver Price of $17/Oz and are estimated on a 100%
equity basis.
Geology and Mineral Resource Estimate
The Ixtaca deposit is an epithermal gold-silver deposit, mostly occurring as anastomosing (branching and re-
connecting) vein zones hosted by limestone and shale basement rocks with a minor component of disseminated
mineralisation hosted in overlying volcanic rocks. The wireframe models constructed to define the overall vein
zones therefore contain interspersed irregular zones of barren limestone dilution. In this Study the limestone unit
hosts 75% of the metal produced, the volcanic unit hosts 12% and the black shale unit hosts 13% on a gold-
equivalent basis. The Mineral Resources for Ixtaca are presented in Table 2.
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Table 2- Summary of Ixtaca Mineral Resources
MEASURED RESOURCE
AuEq Cut-
off Tonnes > Cut-off Grade>Cut-off Contained Metal x 1,000
(g/t) (tonnes) Au (g/t) Ag (g/t) AuEq
(g/t) Au (ozs) Ag (ozs) AuEq
(ozs)
0.30 43,380,000 0.62 36.27 1.14 862 50,590 1,591
0.50 32,530,000 0.75 44.27 1.39 788 46,300 1,454
0.70 25,080,000 0.88 51.71 1.63 711 41,700 1,312
1.00 17,870,000 1.06 61.69 1.95 608 35,440 1,118
INDICATED RESOURCE
AuEq Cut-
off Tonnes > Cut-off Grade>Cut-off Contained Metal x 1,000
(g/t) (tonnes) Au (g/t) Ag (g/t) AuEq
(g/t) Au (ozs) Ag (ozs) AuEq
(ozs)
0.30 80,760,000 0.44 22.67 0.77 1,145 58,870 1,994
0.50 48,220,000 0.59 30.13 1.02 913 46,710 1,586
0.70 29,980,000 0.74 37.79 1.29 715 36,430 1,240
1.00 16,730,000 0.96 47.94 1.65 516 25,790 888
INFERRED RESOURCE
AuEq Cut-
off Tonnes > Cut-off Grade>Cut-off Contained Metal x 1,000
(g/t) (tonnes) Au (g/t) Ag (g/t) AuEq
(g/t) Au (ozs) Ag (ozs) AuEq
(ozs)
0.30 40,410,000 0.32 16.83 0.56 412 21,870 726
0.50 16,920,000 0.44 25.43 0.80 237 13,830 436
0.70 7,760,000 0.57 33.80 1.06 142 8,430 264
1.00 3,040,000 0.79 43.64 1.42 77 4,270 139
1. Ixtaca Mineral Resources Estimate have an effective date of 8 July 2018. The Qualified person for the estimate is Gary Giroux,
P.Eng.
2. Base Case 0.3 g/t AuEq Cut-Off grade is highlighted. Also shown are the 0.5, 0.7 and 1.0 g/t AuEq cut-off results. AuEq
calculation based average prices of $1250/oz gold and $18/oz silver. The Base Case cut-off grade includes consideration of the
open pit mining method, 90% metallurgical recovery, mining costs of $1.82/t, average processing costs of $11.7, G&A costs of
$1.81/t
3. Mineral Resources are reported inclusive of those Mineral Resources that have been converted to Mineral Reserves. Mineral
Resources that are not Mineral Reserves do not have demonstrated economic viability.
4. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal or other relevant issues. The
Mineral Resources have been classified according to the CIM Definition Standards for Mineral Resources and Mineral Reserves in
effect as of the date of this news release.
5. All figures were rounded to reflect the relative accuracy of the estimates and may result in summation differences.
Mine Plan
The Ixtaca gold-silver project is planned as a typical open pit mining operation using contractor mining. Initial
production will ramp up to a mill feed rate of 7,650 tonnes per day followed by an expansion to 15,300 tonnes
per day from Year 5 onwards.
An ore control system is planned to provide field control for the loading equipment to selectively mine ore grade
material separately from the waste.
Mining operations will be based on 365 operating days per year with three 8 hour shifts per day.
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Processing
The Study reflects the Rock Creek process plant which has been purchased by Almaden. Run of mine ore will
be crushed in a three-stage crushing circuit to -9 mm.
The Study also incorporates ore sorting, test work for which has shown the ability to separate barren or low
grade limestone host rock encountered within the vein swarm from vein and veined material (see Almaden news
release of July 16 th 2018). Product from the secondary crusher will be screened in to coarse (+20mm), mid-size
(12 to 20 mm), and fine (-12mm) fractions. Coarse and mid-size ore will be sorted by an XRT ore sort machine
to eject waste rock. Fine ore will bypass the ore sorting and is sent directly to the mill.
Ore sort waste from Limestone and Black Shale is below waste/ore cutoff grade and is placed in the waste rock
dump. Ore sort ‘waste’ from the Volcanic unit is low grade ore and will be stockpiled for processing later in the
mine life. Ore sorting pre-concentration increases the mill feed gold and silver grades by 32% and 31%
respectively compared to run of mine (ROM) grades. Table 3 shows ROM grades with ore sort waste removed
from the ROM, and the resulting mill feed.
Table 3 Ore Sort Mill Feed grade improvement
ROM Ore sort Mill
Ore Waste Feed
million tonnes 51.5 18.8 32.7
Au g/t 0.572 0.24 0.763 Limestone
Ag g/t 37.5 12.0 52.2
million tonnes 12.2 6.3 5.8
Au g/t 0.517 0.25 0.806 Black Shale
Ag g/t 44.4 20.0 70.8
million tonnes 9.4 - 9.4
Au g/t 0.790 - 0.790 Volcanic
Ag g/t 18.6 - 18.6
million tonnes 73.1 25.1 48.0
Au g/t 0.591 0.24 0.773 TOTAL
Ag g/t 36.3 14.0 47.9
Crushed ore is transported to the grinding circuit by an over land conveyor. Grinding to 75 microns is carried out
with ball milling in a closed circuit with cyclones. Cyclone underflow is screened and the screen undersize is
treated in semi-batch centrifugal gravity separators to produce a gravity concentrate.
The gravity concentrate will be treated in an intensive leach unit with gold and silver recovered from
electrowinning cells.
The cyclone overflow will be treated in a flotation unit to produce a flotation concentrate. After regrinding the
flotation concentrate leaching will be carried out in 2 stages. CIL leaching for 24 hours will complete gold
extraction, followed by agitated tank leaching to complete silver leaching. A carbon desorption process will
recover gold and silver from the CIL loaded carbon, and a Merrill Crowe process will recover gold and silver
from pregnant solution from the agitated leach circuit.
Cyanide destruction on leach residue is carried out using the SO 2/Air process. Final tailings are thickened and
filtered then dry stacked and co-disposed with mine waste rock.
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Average process recoveries from mill feed to final product over the life of mine are summarized in Table 4 for
each ore type.
Table 4 Average Life of Mine Process Recoveries from Mill Feed
Gold Silver
Limestone 88.5% 86.8%
Volcanic 64.4% 76.3%
Black Shale 54.5% 84.7%
Water and Waste Management
One of Almaden’s top priorities at Ixtaca is water quality and a mine plan that provides a permanent and
consistent long-term supply of water for residents. The plan outlined in the Study has evolved through the open
dialogue between the Company and residents over the past number of years and as part of the Social
Investment Plan consultation (see section below on “Community”).
Rainfall in the Ixtaca vicinity falls primarily during a relatively short rainy season. With no local water storage
facilities, the flash flows of water are currently lost to the communities. Under the Study, rainwater will be
captured during the rainy season in the water storage reservoir and slowly released during the dry season, for
use by both the mining operation and local residents.
Extensive geochemical studies have evaluated the potential for acid rock drainage and metal leaching from the
waste rock and tailings using globally accepted standardised methods of laboratory testing and in compliance
with Mexican regulations. Most of the waste rock at Ixtaca is limestone, and the studies of both waste rock and
tailings have consistently shown that there is more than enough neutralising potential present in the waste rock
to neutralise any acid generated. Testing to date also indicates low potential for metal leaching. These results
along with the excellent access to potential markets in the growing industrial state of Puebla, indicate the
potential for rock waste and tailings from the Ixtaca deposit to be secondary resources such as aggregate and
cement feedstock. These opportunities will be fully examined in 2019 as part of the Company’s commitment to
best sustainable practices.
In consideration of these findings and the hydrologic conditions at Ixtaca, Almaden and its consultants reviewed
Best Available Technology and Best Applicable Practice in the design and planning of tailings management at
Ixtaca, which resulted in selecting a dry-stack tailings facility which would include co-disposal of waste with
filtered tailings, use much less water than traditional slurry facilities, reduce the mine footprint, allow for better
dust control, and enable earlier rehabilitation of the tailings and waste disposal areas.
Mineral Reserve Estimate
Mineral Reserves in Table 5, have been developed by MMTS with an effective date of November 30, 2018, and
are classified using the 2014 CIM Definition Standards. The Mineral Reserves are based on an engineered
open pit mine plan.
Table 5 – Mineral Reserves
Tonnes
Diluted Average
Grades Contained Metal
(millions) Au (g/t) Ag (g/t) Au - '000 ozs Ag - '000 ozs
Proven 31.6 0.70 43.5 714 44,273
Probable 41.4 0.51 30.7 673 40,887
TOTAL 73.1 0.59 36.3 1,387 85,159
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1. Mineral Reserves have an effective date of November 30, 2018. The qualified person responsible for the Mineral
Reserves is Jesse Aarsen, P.Eng of Moose Mountain Technical Services.
2. The cut-off grade used for ore/waste determination is NSR>=$14/t
3. All Mineral Reserves in this table are Proven and Probable Mineral Reserves. The Mineral Reserves are not in
addition to the Mineral Resources but are a subset thereof. All Mineral Reserves stated above account for mining
loss and dilution.
4. Associated metallurgical recoveries (gold and silver, respectively) have been estimated as 90% and 90% for
limestone, 50% and 90% for volcanic, 50% and 90% for black shale.
5. Reserves are based on a US$1,300/oz gold price, US$17/oz silver price and an exchange rate of
US$1.00:MXP20.00.
6. Reserves are converted from resources through the process of pit optimization, pit design, production schedule
and supported by a positive cash flow model.
7. Rounding as required by reporting guidelines may result in summation differences.
Legal, political, environmental, or other risks that could materially affect the potential development of the Mineral
Reserves are provided below under the heading “Forward-Looking Statements”.
Capital and Operating Costs
Initial capital cost for the Ixtaca gold-silver project is $174 million and sustaining capital (including expansion
capital) is $111 million over the LOM. The estimated expansion capital of $64.5 million will be funded from
cashflow in Year 4 for the throughput ramp-up in Year 5. Estimated LOM operating costs are $26.8 per tonne
mill feed. The following tables summarize the cost components:
Table 6 – Initial Capital Costs ($ millions)
Mining 22.2
Process 80.2
Onsite Infrastructure 24.3
Offsite Infrastructure 7.5
Indirects, EPCM, Contingency and Owner’s Costs 39.9
Total 174.2
Table 7 – Expansion Capital Costs ($ millions)
Mining $ 1.2
Process $ 56.9
Infrastructure $ 1.5
Indirects, EPCM, Contingency and Owner’s Costs $ 5.0
Total $ 64.5
Table 8 – LOM Average Operating Costs ($)
Mining costs $/tonne milled $15.2
Processing $/tonne milled $10.5
G&A $/tonne milled $1.1
Total $/tonne milled $26.8
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Economic Results and Sensitivities
A summary of financial outcomes comparing base case metal prices to alternative metal price conditions are
presented below. The Study base case prices are derived from current common peer usage, while the alternate
cases consider the project’s economic outcomes at varying prices witnessed at some point over the three years
prior to this study.
Table 9 - Summary of Ixtaca Economic Sensitivity to Precious Metal Prices (Base Case is Bold)
Gold Price ($/oz) 1125 1200 1275 1350 1425
Silver Price ($/oz) 14 15.5 17 18.5 20
Pre-Tax NPV 5% ($million) 229 349 470 591 712
Pre-Tax IRR (%) 35% 46% 57% 67% 77%
Pre-Tax Payback (years) 2.0 1.8 1.6 1.4 1.3
After-Tax NPV 5% ($million) 151 233 310 388 466
After-Tax IRR (%) 25% 34% 42% 49% 57%
After-Tax Payback (years) 2.6 2.1 1.9 1.7 1.5
Community Consultations
Almaden has a long history of engagement with communities in the region around the Ixtaca project. Amongst
many other initiatives, the Company has trained and employed drillers and driller helpers from the local area,
held nine large-scale community meetings totalling over 4,100 people, taken 480 local adults on tours of
operating mines in Mexico, and held monthly technical meetings on a diverse range of aspects relating to the
mining industry and the Ixtaca project. On December 9, 2018, Almaden hosted the most recent large-scale
community meeting which was attended by over 800 people, including representatives of the new Federal
Government in Mexico.
In 2017, Almaden engaged a third-party consultant to lead a community consultation and impact assessment at
the Ixtaca project. In Mexico, only the energy industry requires completion of such an assessment (known in
Mexico as a Trámite Evaluación de Impacto Social, or “EVIS”) as part of the permitting process. The purpose of
these studies is to identify the people in the area of influence of a project (“Focus Area”), and assess the
potential positive and negative consequences of project development to assist in the development of mitigation
measures and the formation of social investment plans. To Almaden’s knowledge, this is the first time a formal
EVIS has been completed in the minerals industry in Mexico, and as such reflects the Company’s commitment
to best national and international standards in Ixtaca project development.
The EVIS and subsequent work on the development of a Social Investment Plan were conducted according to
Mexican and international standards such as the Guiding Principles on Business and Human Rights, the
Equator Principles, and the OECD Guidelines for Multinational Enterprises and Due Diligence Guidance for
Meaningful Stakeholder Engagement in the Extractive Sector.
Fieldwork for the EVIS was conducted by an interdisciplinary group of nine anthropologists, ethnologists and
sociologists graduated from various universities, who lived in community homes within the Ixtaca Focus Area
during the study to allow for ethnographic immersion and an appreciation for the local customs and way of life.
This third-party consultation sought voluntary participation from broad, diverse population groups, with specific
attention to approximately one thousand persons in the Focus Area.
This extensive consultation has resulted in changes to some elements of the mine design, including the planned
construction of a permanent water reservoir to serve the local area long after mine closure, and the shift to dry-
stack filtered waste management. The Company looks forward to advancing further elements of the community
Social Investment Plan as mine permitting and construction advance.
For more information on Almaden’s interactions with the local communities please visit
http://www.almadenminerals.com/index.html and https://twitter.com/proixtaca?lang=en .
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Economic Contributions
The Study anticipates that approximately 600 direct jobs will be created during the peak of construction, and 420
jobs will be generated during operations. Assuming base case metal prices, under this Study Ixtaca is
anticipated to generate approximately US$130 million in Federal taxes, US$50 million in State taxes and US$30
million in Municipal taxes.
Closure and Reclamation
Mine waste areas will be reclaimed and re-vegetated at the end of mining activity. At closure, all buildings will be
removed and remaining facilities, except for the water storage dam (WSD), will be reclaimed and re-vegetated.
The WSD and the availability of this water to the local communities will remain after closure.
Opportunities
Several opportunities excluded from the base case economics have been identified in the Study.
Results from the ore sorting tests identified several opportunities to increase the ore sort efficiency and
could result in a further increase in mill feed grades. These opportunities will be investigated with future
test work.
Gold extraction recoveries in the minor black shale unit are currently impeded by the presence of
carbonaceous material. Recent test work including carbon pre-flotation and ultra-fine gravity separation
has demonstrated that the carbon can be liberated and removed with a significant improvement in gold
recovery. This test work is ongoing and is expected to improve the black shale gold recovery.
Test work carried out on Ixtaca limestone waste rock samples concluded that Ixtaca limestone waste
rock is suitable for many types of concrete use and other applications such as shotcrete, subgrade,
asphalt aggregate or railroad ballast with little effort and processing. Concrete produced with tests on
Ixtaca limestone aggregate performed very well, achieving the 28-day design compressive strength of
30 MPa already at 7 days, and more than 40 MPa at 28 and 56 days.
Ixtaca is connected by 60 km of paved road to the industrial city Apizaco, 120 km of paved road to the
state capital of Puebla, and 170 km of paved road to Mexico City.
The sale of limestone ore sort rejects (a waste product) as an aggregate presents a very significant
potential source of revenue to the project at no additional capital or operating cost to the project. There
is also potential to sell some of the ROM waste rock as an aggregate.
Fine aggregate from crushing and grinding operations is also expected to perform in a similar way to the
coarse aggregate. Chemical analysis of the fine aggregate indicates that it is also suitable as a raw
material for the production of lime cement or Portland cement if properly processed and blended with
suitable silica aluminates.
Next Engineering and Development Steps
The Company is pursuing the optimization opportunities noted above and will shortly submit its environmental
permit application to Mexican authorities.
A NI 43-101 technical report for this Study will be filed on SEDAR (www.sedar.com) within 45 days.
Qualified Persons, Quality Control and Assurance
The independent qualified persons responsible for preparing the Study are: Jesse Aarsen, P.Eng. and Tracey
Meintjes, P.Eng. of MMTS; Edward Wellman PE, PG, CEG and Clara Balasko, P.E. of SRK; Kris Raffle, P.Geo.
of APEX Geoscience Ltd.; and Gary Giroux, M.A.Sc., P.Eng. of Giroux Consultants Ltd.; all of whom act as
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