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Almaden Minerals announces Goldgroup to start $8.5m exploration program at Caballo Blanco in Mexico

Published: 20:56 15 Sep 2010 BST

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Almaden Minerals (TSX: AMM) (NYSE Amex: AAU) has said that Goldgroup Mining (TSX: GGA) will begin a US$8.5 Million 30,000 metre drilling and exploration program on Almaden's Caballo Blanco gold project located in Veracruz, Mexico near the end of this month.

Goldgroup has an option to acquire a 70% interest in the Caballo Blanco project from Almaden, which will be taken with this proposed program.

Almaden will retain a 30% carried interest in the project, until Goldgroup completes a feasibility study.

The 30,000 metre multi-drill diamond and reverse circulation drill program has been designed to expand and upgrade the current NI 43-101-compliant mineral resource estimate at the La Paila anomaly of the Northern Zone, and to test other prospective areas for mineralization, including targets at the Red Valley and Highway zones, the company said.

A technical report from May this year addressed only the La Paila area of the Northern Zone, where 32 diamond drill holes defined a mineral resource of 34.3 million tonnes averaging 0.60 g/t Au (139,000 oz Au indicated; and 517,000 oz Au inferred).

Goldgroup also plans to conduct further ground geophysics, surface sampling, metallurgical testing and the construction of several underground adits for purposes of bulk sampling and geological mapping, as well as an environmental impact study.

"We are very pleased with this news of the imminent commencement of drilling at Caballo Blanco. It has been over a year since there has been drilling at Caballo Blanco, despite a new discovery having been made. The Caballo Blanco and nearby El Cobre projects are both underexplored and highly prospective projects in our portfolio," said chairman of Almaden J.D. Poliquin.

Almaden has assembled mineral exploration projects, including the Ixtaca Zone, through its grass roots exploration efforts. Currently five projects (Caballo Blanco, Tropico, Nicoamen River, Matehuapil and Merit), are optioned to separate third parties who each have the right to acquire an interest in the respective project from Almaden through making certain payments and exploration expenditures. Four further projects are held in joint ventures.

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