Almadex taps into Mexico’s overlooked porphyry potential

VANCOUVER — Prospect generator Almadex Minerals (TSXV: AMZ; US-OTC: AXDDF) has pulled the best drill hole to date at its El Cobre gold-copper property, 75 km south of the port city of Veracruz in eastern Mexico.

The company intercepted 535 metres of 0.9 gram gold per tonne and 0.3% copper from 119 metres deep during infill and step-out drilling at the property’s Norte porphyry gold-copper target. The interval includes 145 metres of 1.77 grams gold and 0.45% copper.

Shares of Almadex gained 22¢ to $1.28 after the news, and have since settled at $1.18 at press time.

“We are moving towards a resource, but it’s still too early to say how large the deposit will be,” Almadex president and CEO Morgan Poliquin tells The Northern Miner during a phone interview. “We haven’t defined the extent of these high-grade intercepts as much as we’d like, and the zone itself is still open.”

Norte is one of four porphyry targets that make up a 4 km long cluster at the 75 sq. km property. Norte, along with Encinal, El Porvenir and Villa Rica, are defined by copper- and gold-in-soil anomalies that coincide with positive features in magnetic and induced polarization geophysical surveys.

Only Norte has seen any appreciable drilling, Poliquin points out.

The company found Norte’s high-grade zone in drilling last year, and has since drilled 15 definition holes for 10,500 metres.

At Encinal, first-pass drilling this year revealed 35 metres of 0.73 gram gold and 0.20% copper, with more results pending.

The last drill program at El Porvenir was in 2013. Results included 18 metres of 1.42 grams gold, and geophysical anomalies noted at depth remain to be tested.

But the most “exciting” target on the property, Poliquin says, is Villa Rica.

“When you put the whole dataset together and look at the property … Villa Rica is the main target,” he says. “It has the largest geophysical anomaly and the best soils, yet it has never been drilled before. We sent a team out to prospect it, and they found large areas of outcropping porphyry mineralization, which is extremely rare to find … especially in areas with excellent infrastructure such as at El Cobre.”

Rock and chip samples taken this year from Villa Rica’s Raya Tembrillo target average 1.5 grams gold. Both the soil and geophysical anomaly measures 2.5 km by 1 km at surface.

Almadex intends to continue drilling at Norte and Encinal, and is mobilizing a rig to drill the first hole at Villa Rica.

Almadex Minerals president and CEO Morgan Poliquin (left) and director Larry Segerstrom at the El Cobre copper-gold project in Veracruz, Mexico. Credit: Almadex Minerals.

Poliquin says that gold-rich porphyries — such as those found at El Cobre — are “found in clusters, and you don’t know if they’ll join up at depth. At Newcrest’s Cadia Valley gold mine in Australia, the deposit started 30 years ago with a smaller, lower-grade porphyry and evolved into the high-grade Ridgeway deposit. Now they’ve found the eastern zone that connects it at depth.”

Almadex first entered eastern Mexico in 1992 as Almaden Minerals (TSX: AMM; NYSE-MKT: AAU), a prospect generator active since 1986.

Poliquin, who completed a PhD thesis on the geology and deposits of eastern Mexico, was drawn to the region for its untapped mineral potential.

Almaden went on to discover the 1 million oz. Caballo Blanco gold deposit, and the 4 million equivalent oz. gold Ixtaca deposit.

Ixtaca, which Almadan is advancing towards a production decision, led to the spin-out of Almadex in 2015.

“We were the pioneer and first mover in terms of junior exploration companies in that part of the world,” Poliquin says. “We found a terrane that was never recognized before. Everything we found, including El Cobre, is brand-new.”

Core from the El Cobre discovery hole. Credit: Almadex Minerals.

He reckons that eastern Mexico’s mineral occurrences may have been overlooked because most explorers in the country stick to the historical mining camps.

“There’s a general assumption that the Spanish (colonial) prospectors already found everything,” he says. “Mexico is an excellent geological terrane, and you can still find big deposits next to historical mining camps — take Mag Silver’s Juanicipio silver discovery next to Fresnillo, for example. Mexico is a great jurisdiction, and there’s an opportunity here to do exploration.

“We’ve found three deposits in eastern Mexico and there could be many more.”

Almadex is fully funded to meet its exploration goals, with $3.6 million in its treasury as of June.

Shares of the company have traded within a 52-week range of 73¢ to $2, and closed at $1.18 at press time. The company has 48 million shares outstanding for a $59-million market capitalization.