Almaden Minerals (TSE:AMM)(NYSE MKT:AAU) rallied 12% after unveiling drill results from the Ixtaca zone at its Tuligtic project in Mexico, completing the infill drilling program designed to upgrade resources.
Of the highlights, the company said it hit 62 metres of 0.96 grams per tonne (g/t) gold and 76.4 g/t silver, or 2.5 g/t gold equivalent.
"Today's holes once again show the continuity of this part of the Ixtaca deposit," said chairman J.D. Poliquin.
"The infill drilling program, designed to upgrade the confidence of our resource base is now complete. We are now focused on exploring other areas within our high prospective 14,000 hectare concession, which holds the potential for additional entirely separate gold-silver discoveries."
The results reported today from the Ixtaca drill program were not included in the preliminary economic assessment on the deposit, released in April of this year. The drilling, which was carried out after the latest resource update and economic report, was designed to upgrade the resources remaining in the inferred category to the higher measured and indicated categories.
The preliminary economic assessment on its Ixtaca gold-silver deposit released in April boasted an after tax IRR of 22%. Under the base case scenario using prices of US$1,320 per ounce of gold and US$21 per ounce of silver, the pre-tax net present value after tax was estimated at $437 million, at a 5% discount rate.
The open pit mine is projected to produce an average of 130,000 ounces of gold and 7.8 million ounces of silver per year, for a period of just over 12 years, at an average rate of 30,000 tonnes per day. Pre-production capital is pegged at US$496 million, while sustaining capital is estimated at US$106 million, with a projected payback period of four years.
The PEA was based on an updated resource estimate released this past January, which showed 1.35 million gold equivalent ounces in the measured category at the base case cutoff of 0.5 g/t, with another 2.18 million ounces in the indicated category.
The Ixtaca deposit was discovered by Almaden in August 2010 on claims staked by the company, which will continue to explore and grow the deposit, as it looks to progress to the pre-feasibility stage and initiate the permitting process.
Shares advanced 12% to C$1.68 on Wednesday, extending year-to-date gains to over 35%.