UNITED STATES
SECURITIES AND EXCHANGE COMMISION
Washington, D.C. 20549
FORM 20-F
( ) REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
EXCHANGE ACT OF 1934
OR
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2014
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
OR
( ) SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Date of event requiring this shell company report
For the transition period from _____________________ to ____________________
Commission file number 001-32702
ALMADEN MINERALS LTD.
(Exact name of Registrant as specified in its charter)
British Columbia, Canada
(Jurisdiction of incorporation or organization)
750 West Pender Street, #1103, Vancouver, British Columbia V6C 2T8
(Address of principal executive offices)
Korm Trieu, ktrieu@almadenminerals.com, 750 West Pender Street, #1103, Vancouver, BC V6C 2T8
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class
Name of each exchange on which registered
Common Stock without Par Value NYSE MKT
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the
close of the period covered by the annual report.
68,728,321
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act.
( ) Yes ( X ) No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file
report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
( ) Yes ( X ) No
Indicate by check mark weather the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.
( X ) Yes ( ) No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web
site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant
was required to submit and post such files).
( ) Yes ( ) No
As a foreign private issuer that prepares its financial statements in accordance with International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board
(“IASB”), the Registrant is required to submit to the SEC and post on its corporate website Interactive
Data Files (as defined by Item 11 of Regulation S-T) pursuant to Rule 405 of Regulation S-T.
However, it is the view of the SEC’s Division of Corporation Finance and Office of the Chief Accountant
that the Registrant is not required to submit to the SEC and post on its corporate website Interactive
Data Files until the SEC specifies on its website an IFRS taxonomy for use by foreign private issuers in
preparing their Interactive Data Files.
As of the submission date of this Annual Report on Form 20-F, the SEC has not specified an IFRS
taxonomy for the Registrant to use in preparing its Interactive Data Files.
Indicate by check mark weather the registrant is a large accelerated filer, an accelerated filer or a non-
accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange
Act.
Large accelerated filer ( )
Accelerated filer ( )
Non-accelerated filer (X)
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements
included in this filing:
U.S. GAAP ( )
International Financial Reporting Standards as issued
by the International Accounting Standards Board
(X)
Other ( )
2
If “Other” has been checked in response to the previous question, indicate by check mark which financial
statement item the registrant has elected to follow.
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
( ) Item 17 ( ) Item 18
( ) Yes ( X ) No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDS DURING THE PAST
FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section
12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
( ) Yes ( ) No
3
TABLE OF CONTENTS
Page
Glossary of Geologic and Mining Terms
Notes Concerning Terminology Related to Resources and Reserves
Cautionary Note to U.S. Investors Regarding Mineral Resource and Mineral Reserve Estimates
Cautionary Note Regarding Forward-Looking Statements
Item 1
Item 2
Item 3
Item 4
Item 5
Item 6
Item 7
Item 8
Item 9
Item 10
Item 11
Item 12
Item 13
Item 14
PART I
Identity of Directors, Senior Management and Advisers
Offer Statistics and Expected Timetable
Key Information
Information on the Company
Operating and Financial Review and Prospects
Directors, Senior Management and Employees
Major Shareholders and Related Party Transactions
Financial Information
The Offer and Listing
Additional Information
Quantitative and Qualitative Disclosures About Market Risk
Description of Securities Other than Equity Securities
PART II
Defaults, Dividend Arrearages and Delinquencies
Material Modifications to the Rights of Security Holders and
Use of Proceeds
Item 15
Controls and Procedures
Item 16A
Item 16B
Item 16C
Item 16D
Item 16E
Item 16F
Item 16G
Item 16H
Item 17
Item 18
Item 19
Signatures
Audit Committee Financial Expert
Code of Ethics
Principal Accountant Fees and Services
Exemptions from the Listing Standards for Audit Committees
Purchase of Equity Securities by the Issuer and Affiliated Purchasers
Change in Registrant’s Certifying Accounts
Corporate Governance
Mine Safety Disclosure
PART III
Financial Statements
Financial Statements
Exhibits
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Glossary of Geologic and Mining Terms
Adularia: A colourless, moderate to low-temperature variety of orthoclase feldspar typically with a relatively high
barium content. It is a prominent constituent of low sulphidation epithermal veins.
Alkalic Intrusive: An igneous rock emplaced below ground level in which the feldspar is dominantly sodic and or
potassic.
Alkalinity: The chemical nature of solutions characterized by a high concentration of hydroxyl ions.
Alteration: Usually referring to chemical reactions in a rock mass resulting from the passage of hydrothermal
fluids.
Andesite: A dark-coloured, fine-grained extrusive rock that, when porphyritic, contains phenocrysts composed
primarily of zoned sodic plagioclase (esp. andesine) and one or more of the mafic minerals (eg. Biotite, horn-blende,
pyroxene), with a ground-mass composed generally of the same minerals as the phenocrysts; the extrusive
equivalent of diorite. Andesite grades into latite with increasing alkali feldspar content, and into dacite with more
alkali feldspar and quartz. It was named by Buch in 1826 from the Andes Mountains, South America.
Anomalous: A geological feature, often subsurface, distinguished by geological, geochemical or geophysical
means, which is detectably different than the general surroundings and is often of potential economic value.
Anomaly: Any concentration of metal noticeably above or below the average background concentration.
Argillic: A form of alteration characterized by the alteration of original minerals to clays.
Arsenopyrite: A sulphide of arsenic and iron with the chemical composition FeAsS.
Assay: An analysis to determine the presence, absence or quantity of one or more components.
Axis: An imaginary hinge line about which the fold limbs are bent. The axis of a fold can be at the top or
bottom of the fold, can be tilted or horizontal.
Batholith: An intrusion, usually granitic, which has a large exposed surface area and no observable bottom.
Usually associated with orogenic belts.
Bathymetry survey: A geophysical survey that uses echo sounding to determine water depth.
Breccia: Rock consisting of more or less angular fragments in a matrix of finer-grained material or cementing
material.
Brecciated: Rock broken up by geological forces.
Bulk sample: A very large sample, the kind of sample to take from broken rock or of gravels and sands when
testing placer deposits.
Calc-silicate: Calcium-bearing silicate minerals. These minerals are commonly formed as a result of the
interaction of molten rock and its derived, hot hydrothermal fluids with very chemically reactive calcium
carbonate (limestone). Calc-silicate minerals include garnet, pyroxene, amphibole and epidote. These minerals
are commonly described as skarn and are genetically and spatially associated with a wide range of metals
Carbonate replacement deposit: A style of silver lead zinc mineralization in limestones.
Chert: A very fine grained siliceous rock. Many limestones contain nodules and thin lenses of chert.
Chip sample: A sample composed of discontinuous chips taken along a surface across a given line.
5
Claim: That portion of public mineral lands, which a party has staked or marked out in accordance with
provincial or state mining laws, to acquire the right to explore for the minerals under the surface.
Clastic: Consisting of rock material that has been mechanically derived, transported, and deposited. Such
material is also called detrital.
Cleavage: The tendency of a crystal to split, or break, along planes of structural weakness.
Columnar Jointing: A pattern of jointing that breaks rock into rough, six-sided columns. Such jointing is
characteristic of basaltic flows and sills and is believed to result from shrinkage during cooling.
Concordant Bodies: Intrusive igneous bodies whose contacts are parallel to the bedding of the intruded rock.
Conglomerate: Rock composed of mostly rounded fragments which are of gravel size or larger in a finer
grained matrix.
Craton: A central stable region common to nearly all continents and composed chiefly of highly metamorphosed
Precambrian rocks.
Cretaceous: Geological time period between 136 and 64 million years ago.
Crystalline: Means the specimen is made up of one or more groups of crystals.
Cut-off grade: The minimum grade of mineralization used to establish quantitative and qualitative estimates of
total mineralization.
Dacite: A fine grained acid volcanic rock, similar to rhyolite in which the feldspar is predominantly
plagioclase.
Degradation: The ongoing process of erosion in a stream.
Diabase: Igneous hypabyssal rocks. The name is applied differently in different parts of the world leading to
considerable confusion.
Diagenesis: The changes that occur in a sediment during and after lithification. These changes include compaction,
cementation, replacement, and recrystallization.
Diamond drill: A type of rotary drill in which the cutting is done by abrasion using diamonds embedded in a
matrix rather than by percussion. The drill cuts a core of rock which is recovered in long cylindrical sections.
Dilution: Results from the mixing in of unwanted gangue or waste rock with the ore during mining.
Dip: Geological measurement of the angle of maximum slope of planar elements in rocks. Can be applied to
beddings, jointing, fault planes, etc.
Discordant Bodies: Intrusive igneous bodies whose contacts cut across the bedding, or other pre-existing
structures, to the intruded rock.
Disseminated deposit: Deposit in which the mineralization is scattered through a large volume of host rock,
sometimes as separate mineral grains, or sometimes along joint or fault surfaces.
Dolomite: A magnesium bearing limestone usually containing at least 15% magnesium carbonate.
Dunite: An intrusive, monomineralic, ultramafic rock composed almost completely of magnesian olivine.
Dyke: A tabular, discordant, intrusive igneous body.
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Earn in: The right to acquire an interest in a property pursuant to an Option Agreement.
Ejecta: Pyroclastic material thrown out or ejected by a volcano. It includes ash, volcanic bombs, and lapilli.
Epithermal: Epithermal deposits are a class of ore deposits that form generally less than 1 km from surface.
These deposits, which can host economic quantities of gold, silver, copper, lead and zinc are formed as a result
of the precipitation of ore minerals from up-welling hydrothermal fluids. There are several classes of epithermal
deposits that are defined on the basis of fluid chemistry and resulting alteration and ore mineralogy. Fluid
chemistry is largely controlled by the proximity to igneous intrusive rocks and as a result igneous fluid content.
Extrusive Rock: Igneous rock that has solidified on the earth’s surface from volcanic action.
Fault: A fracture in a rock where there had been displacement of the two sides.
Faults: Breaks in rocks with noticeable movement or displacement of the rocks on either side of the break.
Feldspar: A group of aluminum silicate minerals closely related in chemical composition and physical properties.
There are two major chemical varieties of feldspar: the potassium aluminum, or potash, feldspars and the sodium-
calcium-aluminum, or plagioclase, feldspars. The feldspars possess a tetrahedral framework of silicon and oxygen,
with the partial substitution of aluminum for the silicon. They make up about 60 percent of the earth’s crust.
Felsic: Light colored silicate minerals, mainly quartz and feldspar, or an igneous rock comprised largely of
felsic minerals (granite, rhyolite).
Fluid inclusion: A cavity, with or without negative crystal faces, containing one or two fluid phases, and possibly
one or more minute crystals, in a host crystal. If two fluid phases are present, the vapor phase (bubble) may show
Brownian motion.
Folds: Are flexures in bedded or layered rocks. They are formed when forces are applied gradually to rocks
over a long period of time.
Fracture: Breaks in a rock, usually due to intensive folding or faulting.
Gabbro: A group of dark-coloured, basic intrusive igneous rocks composed principally of basic plagioclase
(commonly labradorite or bytownite) and clinopyroxene (augite), with or without olivine and orthopyroxene; also,
any member of that group. It is the approximate intrusive equivalent of basalt. Apatite and magnetite or ilmenite
are common accessory minerals.
Gambusino: Small miners working without machinery.
Gangue: Term used to describe worthless minerals or rock waste mixed in with the valuable minerals.
Geochemical Anomaly: An area of elevated values of a particular element in soil or rock samples collected during
the preliminary reconnaissance search for locating favourable metal concentrations that could indicate the presence
of surface or drill targets.
Geochemistry: The study of the chemistry of rocks, minerals, and mineral deposits.
Geophysics: The study of the physical properties of rocks, minerals, and mineral deposits.
Gneiss: A coarse grained metamorphic rock characterized by alternating bands of unlike minerals, commonly light
bands of quartz and feldspar and dark bands of mica and hornblende.
Gossan: The leached and oxidized near surface part of a sulphide mineral deposit, usually consisting largely of
hydrated iron oxides left after copper and other minerals have been removed by downward leaching.
Gouge: The finely ground rock that results from the abrasion along a fault surface.
7
Grade: The concentration of each ore metal in a rock sample, usually given as weight percent. Where
extremely low concentrations are involved, the concentration may be given in grams per tonne (g/t) or ounces
per tonne (oz/t). The grade of an ore deposit is calculated, often using sophisticated statistical procedures, as an
average of the grades of a very large number of samples collected from throughout the deposit.
Granite: A coarse grained, plutonic igneous rock that is normally pale pink, pale pink-brown, or pale grey, and
composed of quartz, alkali feldspar, micas and accessory minerals.
Granodiorite: A course grained, plutonic igneous rock that is normally pale grey, and composed of quartz, calc-
alkali feldspar, micas and accessory minerals.
Gravity survey: A geophysical survey which measures the variations of the earth’s gravitational field in order to
differentiate between rocks of contrasting specific gravities.
Grid: A network composed of two sets of uniformly spaced parallel lines, usually intersecting at right angles and
forming squares, superimposed on a map, chart, or aerial photograph, to permit identification of ground locations by
means of a system or coordinates and to facilitate computation of direction and distance and size of geologic,
geochemical or geophysical features.
Hanging wall and Footwall: Terms used in reference to faults where when mining along a fault, your feet
would be in the footwall side of the fault and the other side would be “hanging” over your head.
Hectare: A square of 100 meters on each side.
Host rock: The rock within which the ore deposit occurs.
Hydrothermal: Of or pertaining to hot water, to the action of hot water, or to the products of this action, such
as a mineral deposit precipitated from a hot aqueous solution; also, said of the solution itself. “Hydrothermal”
is generally used for any hot water, but has been restricted by some to water of magmatic origin.
Igneous: Means a rock formed by the cooling of molten silicate material.
Ignimbrite: The rock formed by the widespread deposition and consolidation of ash flows and nues ardentes. The
term includes welded tuff and non-welded but recrystallized ash flows.
Induced polarization (I.P.) method: The method used to measure various electrical responses to the passage
of alternating currents of different frequencies through near-surface rocks or to the passage of pulses of
electricity.
Intermediate: An igneous rock made up of both felsic and mafic minerals (diorite).
Intrusion: General term for a body of igneous rock formed below the surface.
Intrusive Rock: Any igneous rock solidified from magma beneath the earth’s surface.
Joint venture agreement: An agreement where the parties agree to the terms on which a property will be
jointly explored, developed, and mined. (See also “Option agreement” and “Earn in”).
Jurassic: Geological time period between 195 and 136 million years ago.
Kimberlite: A kimberlite is a pipe-like volcano sourced from deep within the earth under extreme temperatures
and pressures. It is the host rock for diamonds and diamond indicator minerals such as kimberlitic ilmenites and
garnets.
8
Kriging: (a) A statistical technique employed in calculating grade and tonnage of ore reserves from sampling data.
The data are handled by computer. (b) A technique for interpolating which honors data points exactly. An output
point is calculated as a linear combination of known data points. Kriging attempts to produce the best linear
unbiased estimate. Used to interpolate between drill holes.
K-silicate: Potassium-bearing silicates. Potassium silicates are very common rock-forming minerals, however
they are also formed by the interaction of hyrothermal fluids derived from the cooling intrusive rocks that are
genetically and spatially associated with porphyry and epithermal deposits. Potassium feldspar (orthoclase) and
potassium mica (biotite) are both commonly closely associated with copper-molybdenum ore in porphyry
copper deposits.
K-spar: Potassium feldspar.
Lamprophyre: A group of dike rocks in which dark minerals occur both as phenocrysts and in the groundmass and
light minerals occur in the groundmass. Essential constituents are biotite, hornblende, pyroxene, and feldspar or
feldspathoids. Most lamprophyres are highly altered. They are commonly associated with carbonatites.
Lava: Means an igneous rock formed by the cooling of molten silicate material which escapes to the earth’s
surface or pours out onto the sea floor.
Limestone: Sedimentary rock that is composed mostly of carbonates, the two most common of which are
calcium and magnesium carbonates.
Lithosphere: The crust and upper mantle, located above the asthenosphere and composing the rigid plates.
Mafic: A general term used to describe ferromagnesian minerals. Rocks composed mainly of ferromagnesian
minerals are correctly termed melanocratic.
Magma: Naturally occurring molten rock material, generated within the earth and capable of intrusion and
extrusion, from which igneous rocks have been derived through solidification and related processes. It may or may
not contain suspended solids (such as crystals and rock fragments) and/or gas phases.
Massive: Implies large mass. Applied in the context of hand specimens of, for example, sulphide ores, it
usually means the specimen is composed essentially of sulphides with few, if any, other constituents.
Metamorphic: Means any rock which is altered within the earth’s crust by the effects of heat and/or pressure
and/or chemical reactions. Pertains to the process of metamorphism or to its results.
Metasediment: A sediment or sedimentary rock that shows evidence of having been subjected to metamorphism.
Metavolcanic: An informal term for volcanic rocks that show evidence of having been subject to metamorphism.
Mineral claim: A legal entitlement to minerals in a certain defined area of ground.
Mineral Deposit or Mineralized Material: A mineralized underground body which has been intersected by
sufficient closely spaced drill holes and or underground sampling to support sufficient tonnage and average grade of
metal(s) to warrant further exploration-development work. This deposit does not qualify as a commercially
mineable ore body (Reserves), as prescribed under Commission standards, until a final and comprehensive
economic, technical, and legal feasibility study based upon the test results is concluded
Mineral: A naturally occurring, inorganic, solid element or compound that possesses an orderly internal
arrangement of atoms and a unique set of physical and chemical properties.
Mineralization: Usually implies minerals of value occurring in rocks.
Monocline: A structure in which a bed exhibits local steepening of otherwise uniform dip.
9
National Instrument 43-101 or NI 43-101: A rule developed by the Canadian Securities Administrators and
administered by the provincial securities commissions that govern how issuers disclose scientific and technical
information about their mineral projects to the public. It covers oral statements as well as written documents
and websites. It requires that all disclosure be based on advice by a “qualified person” and in some
circumstances that the person be independent of the issuer and the property.
Net profits interest: A contractual granted right to some portion of the profits after deduction of expenses
sometimes expressed as a form of royalty.
Net smelter returns: Means the amount actually paid to the mine or mill owner from the sale of ore, minerals
and other materials or concentrates mined and removed from mineral properties. A royalty based on net smelter
returns usually provides cash flow that is free of any operating or capital costs and environmental liabilities.
Option agreement: An agreement where the optionee can exercise certain options to acquire or increase an
interest in a property by making periodic payments or share issuances or both to the optionor or by exploring,
developing or producing from the optionor’s property or both. Usually upon the acquisition of such interest, all
operations thereafter are on a joint venture basis.
Ordinary kriging: The basic technique of kriging and uses a weighted average of neighboring samples to
estimate the 'unknown' value at a given location. Weights are optimized using the semi-variogram model, the
location of the samples and all the relevant inter-relationships between known and unknown values. The
technique also provides a "standard error" which may be used to quantify confidence levels.
Ore: A natural aggregate of one or more minerals which may be mined and sold at a profit, or from which
some part may be profitably separated.
Ore reserve: The measured quantity and grade of all or part of a mineralized body in a mine or undeveloped
mineral deposit for which the mineralization is sufficiently defined and measured on three sides to form the
basis of at least a preliminary mine production plan for economically viable mining.
Orogeny: The process of forming mountains by folding and thrusting.
Outcrop: An in situ exposure of bedrock.
Overburden: A general term for any material covering or obscuring rocks from view.
oz/t or opt: Ounces per tonne.
Paleozoic: An era of geologic time, from the end of the Precambrian to the beginning of the Mesozoic, or from
about 570 to about 225 million years ago.
Panel Sample: A large volume/weight continuous rock chip sample collected over a definite area (e.g. 0.25m X
0.50m), and to a uniform depth (e.g. 2.5cm or 1 inch), on a mineral zone. Panel sampling is generally employed in a
trenching program to obtain more representative grades particularly of a narrow mineralized structure such as a vein.
Peridotite: A coarse grained ultramafic rock commonly consisting of olivine and pyroxenes.
Phenocrysts: An unusually large crystal in a relatively finer grained matrix.
Phonolite: Any extrusive rock composed of alkali feldspar, mafic minerals and any feldspathoid, such as nepheline,
leucite, or sodalite.
Pluton: Term for an igneous intrusion, usually formed from magma.
Porphyry: An igneous rock composed of larger crystals set within a finer ground mass.
10
Pyroclastic rock: A rock of volcanic origin consisting of highly variable mixture of rock fragments, cinders
and ashes and bits of crystals and glass.
Pyroxenites: Ultramafic plutonic rock chiefly composed of pyroxene, with accessory hornblende, biotite, or
olivine.
Quartz monzonite: A course grained, plutonic igneous rock that is normally pale pink, and composed of quartz,
alkali feldspar, micas and accessory minerals.
Rare Earth: A group of rare metallic chemical elements with consecutive atomic numbers of 57 to 71.
Reclamation bond: A bond usually required by governmental mining regulations when mechanized work on a
property is contemplated. Proceeds of the bond are used to reclaim any workings or put right any damage if
reclamation undertaken does not satisfy the requirements of the regulations.
Reserve: That part of a mineral deposit which could be economically extracted or produced at the time of the
reserve determination.
Reserves: A natural aggregate of one or more minerals which, at a specified time and place, may be mined and
sold at a profit, or from which some part may be profitably separated.
Reverse circulation drill: A rotary percussion drill in which the drilling mud and cuttings return to the
surface through the drill pipe.
Rhyolite: The fine grained equivalent of granite.
Royalty interest: A royalty, the calculation and payment of which is tied to some production unit such as ton
of concentrate or ounce of gold or silver produced. A common form of royalty interest is based on the net
smelter return.
Sample: Small amount of material that is supposed to be absolutely typical or representative of the object
being sampled.
Sandstone: Composed of sand-sized fragments cemented together. As a rule the fragments contain a high
percentage of quartz.
Schist: A strongly foliated crystalline rock, formed by dynamic metamorphism, that has well-developed parallelism
of more than 50% of the minerals present, particularly those of lamellar or elongate prismatic habit, e.g. mica and
hornblende.
Sedimentary: A rock formed from cemented or compacted sediments.
Sediments: Are composed of the debris resulting from the weathering and breakup of other rocks that have
been deposited by or carried to the oceans by rivers, or left over from glacial erosion or sometimes from wind
action.
Selvage: A marginal zone, as in a dyke or vein, having some distinctive feature of fabric or composition.
Sericite: A fine-grained variety of mica occurring in small scales, especially in schists.
Shale: An argillaceous rock consisting of silt or clay-sized particles cemented together. Most shales are quite
soft, because they contain large amounts of clay minerals.
Shear zone: Where a fault affects a width of rock rather than being a single clean break, the width of affected
rock is referred to as the shear zone. The term implies movement, i.e. shearing.
11
Silicate: Most rocks are made up of a small number of silicate minerals ranging from quartz (SiO2) to more
complex
hornblende
as
(Ca2Na(Mg,Fe)4(Al,Fe,Ti)Si8)22(OH)2).
(KAlSi3O8)
orthoclase
minerals
feldspar
such
or
Sill: Tabular intrusion which is sandwiched between layers in the host rock.
Skarn: A thermally altered impure limestone in which material has been added to the original rock. Skarns are
generally characterized by the presence of calcium and silica rich minerals. Many skarns contain sulphide minerals
which in some cases can be of economic value.
Sonic drill: A drill used to penetrate soft sediments where the drill advance by means of slow rotations and
sonic vibrations. Samples of very soft material can be collected with this system.
Stock: An igneous intrusive body of unknown depth with a surface exposure of less than 104 square kilometres.
The sides, or contacts, of a stock, like those of a batholith, are usually steep and broaden with depth.
Stockwork: A mineral deposit consisting of a three-dimensional network of closely spaced planar or irregular
veinlets.
Strike: The bearing, or magnetic compass direction, of an imaginary line formed by the intersection of a horizontal
plane with any planar surface, most commonly with bedding planes or foliation planes in rocks.
Sulphide minerals: A mineral compound characterized by the linkage of sulfur with a metal or semimetal; e.g.,
galena.
Syncline: A fold in which the bed has been forced down in the middle or up on the sides to form a trough.
Tailings: Material rejected from a mill after recoverable valuable minerals have been extracted.
Tailings pond: A pond where tailings are disposed of.
Till: An unsorted sediment made up of clay, sand and boulders left in the wake of a glaciation.
Tonne: Metric ton – 1,000 kilograms – equivalent to 1.1023 tons.
Tourmaline: A group of minerals of general formula (Na,Ca)(Mg,Fe+2,Fe+3,Al,Li)3Al6(BO3)3Si6O18(OH)4; it
sometimes contains fluorine in small amounts. Also, any mineral of the tourmaline group. Tourmaline occurs in 3-,
6-, or 9-sided prisms, usually vertically striated, or in compact or columnar masses; it is commonly found as an
accessory mineral in granitic pegmatites, and is widely distributed in acid igneous rocks and in metamorphic rocks.
It can indicative of alteration associated with porphyry style mineralization.
Tremolite: A white to dark-gray monoclinic mineral of the amphibole group: Ca2Mg5Si8O22(OH)2. It occurs in
long blade-shaped or short stout prismatic crystals, and also in columnar or fibrous masses, esp. in metamorphic
rocks such as crystalline dolomitic limestone and talc schist. It is a constituent of much commercial talc. alteration
— usually referring to chemical reactions in a rock mass resulting from the passage of hydrothermal fluids.
Triassic: Geological time period between 225 and 195 million years ago.
Tuff : A finer grained pyroclastic rock made up mostly of ash and other fine grained volcanic material.
Veins: The mineral deposits that are found filling openings in rocks created by faults or replacing rocks on
either side of faults.
Vuggy silica: In a high sulphidation epithermal environment, the highly acidic waters have dissolved
everything but silica resulting in a highly porous and pox marker rock which is a good host for gold deposition.
It is an indicator mineralization typical of epithermal rocks.
12
Waste: Rock which is not ore. Usually referred to that rock which has to be removed during the normal course
of mining in order to get at the ore.
Glossary of Abbreviations
Ag: Silver
Ag gm/t: Silver grade measured in grams per metric ton
Converts to ounces per ton by dividing by 34.286
Au: Gold
Au gm/t: Gold grade measured in grams per metric ton
Converts to ounces per ton by dividing by 34.286
Ba: Barium
Co: Cobalt
CRD: Carbonate replacement deposit
Cu: Copper
EIS: Environmental Impact Statement
Fe: Iron
gpm: gallons per minute
gpt: grams per tonne
g/t: grams per tonne
IP: Induced Polarization geophysical survey
masl: meters above sea level
Ni: Nickel
NSR: net smelter return royalty
opt: ounces per ton
Oz: Troy ounce
Pb: Lead
Pd: Palladium
PGM: Platinum group minerals
Pt: Platinum
QA/QC: Quality Assurance/Quality Control
S: Sulphur
tpd: Tonnes per day
ton: Short ton (2,000 pounds)
tonne: Metric ton (1000 kilograms - 2204.62 pounds)
VLF: Very low frequency electromagnetic geophysical survey
VMS: Volcanogenic massive sulphide
13
NOTES CONCERNING TERMINOLOGY RELATED TO RESOURCES AND RESERVES
Please see “CAUTIONARY NOTE TO U.S. INVESTORS REGARDING MINERAL RESOURCE AND
MINERAL RESERVE ESTIMATES,” below.
The terms "mineral resource", "measured mineral resource", "indicated mineral resource", "inferred mineral
resource", “mineral reserve”, “probable mineral reserve” and “proven mineral reserve” used in this Annual
Report are Canadian mining terms as defined in accordance with National Instrument 43-101, Standards of
Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and
Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council.
On November 14, 2004 and November 27, 2010, CIM Council adopted an update to the CIM Definition
Standards to reflect the more detailed guidance available and effect certain editorial changes required to
maintain consistency with current regulations. This version of the CIM Definition Standards includes further
editorial changes required to maintain compatibility with the new version of National Instrument 43-101 which
became Canadian law in 2011. The CIM Definition Standards can be viewed on the CIM website at
www.cim.org. In accordance with Industry Guide 7, Description of Property by Issuers Engaged or to be
Engaged in Significant Mining Operations, issued by the U. S. Securities and Exchange Commission (“SEC”), a
reserve is termed a “mineral deposit”.
Definitions
Qualified Person
Mineral Resource and Mineral Reserve estimates and resulting technical reports under NI 43-101 must be
prepared by or under the direction of, and dated and signed by, a Qualified Person. A “Qualified Person” means
an individual who is an engineer or geoscientist with a university degree, or equivalent accreditation, with at
least five years of experience in mineral exploration, mine development or operation or mineral project
assessment, or any combination of these; has experience relevant to the subject matter of the mineral project and
the technical report; and is a member or licensee in good standing of a professional association. The Qualified
Person(s) should be clearly satisfied that they could face their peers and demonstrate competence and relevant
experience in the commodity, type of deposit and situation under consideration. If doubt exists, the person must
either seek or obtain opinions from other colleagues or demonstrate that he or she has obtained assistance from
experts in areas where he or she lacked the necessary expertise. Determination of what constitutes relevant
experience can be a difficult area and common sense has to be exercised. For example, in estimating Mineral
Resources for vein gold mineralization, experience in a high-nugget, vein-type mineralization such as tin,
uranium etc. should be relevant whereas experience in massive base metal deposits may not be. As a second
example, for a person to qualify as a Qualified Person in the estimation of Mineral Reserves for alluvial gold
deposits, he or she would need to have relevant experience in the evaluation and extraction of such deposits.
Experience with placer deposits containing minerals other than gold, may not necessarily provide appropriate
relevant experience for gold. In addition to experience in the style of mineralization, a Qualified Person
preparing or taking responsibility for Mineral Resource estimates must have sufficient experience in the
sampling, assaying, or other property testing techniques that are relevant to the deposit under consideration in
order to be aware of problems that could affect the reliability of the data. Some appreciation of extraction and
processing techniques applicable to that deposit type might also be important.
Estimation of Mineral Resources is often a team effort, for example, involving one person or team collecting the
data and another person or team preparing the Mineral Resource estimate. Within this team, geologists usually
occupy the pivotal role. Estimation of Mineral Reserves is almost always a team effort involving a number of
technical disciplines, and within this team mining engineers have an important role. Documentation for a
Mineral Resource and Mineral Reserve estimate must be compiled by, or under the supervision of, a Qualified
Person(s), whether a geologist, mining engineer or member of another discipline. It is recommended that, where
there is a clear division of responsibilities within a team, each Qualified Person should accept responsibility for
his or her particular contribution. For example, one Qualified Person could accept responsibility for the
collection of Mineral Resource data, another for the Mineral Reserve estimation process, another for the mining
study, and the project leader could accept responsibility for the overall document. It is important that the
Qualified Person accepting overall responsibility for a Mineral Resource and/or Mineral Reserve estimate and
supporting documentation, which has been prepared in whole or in part by others, is satisfied that the other
14
contributors are Qualified Persons with respect to the work for which they are taking responsibility and that
such persons are provided adequate documentation.
Preliminary Economic Assessment (PEA)
A study, other than a Pre-Feasibility or Feasibility Study, that includes an economic analysis of the potential
viability of mineral resources.
Preliminary Feasibility Study (Pre-Feasibility Study)
The CIM Definition Standards requires the completion of a Preliminary Feasibility Study as the minimum
prerequisite for the conversion of Mineral Resources to Mineral Reserves.
A Preliminary Feasibility Study is a comprehensive study of a range of options for the technical and economic
viability of a mineral project that has advanced to a stage where a preferred mining method, in the case of
underground mining, or the pit configuration, in the case of an open pit, is established and an effective method
of mineral processing is determined. It includes a financial analysis based on reasonable assumptions on
mining, processing, metallurgical, economic, marketing, legal, environmental, social and governmental
considerations and the evaluation of any other relevant factors which are sufficient for a Qualified Person,
acting reasonably, to determine if all or part of the Mineral Resource may be classified as a Mineral Reserve.
Feasibility Study
A Feasibility Study is a comprehensive technical and economic study of the selected development option for a
mineral project that includes appropriately detailed assessments of realistically assumed mining, processing,
metallurgical, economic, marketing, legal, environmental, social and governmental considerations together with
any other relevant operational factors and detailed financial analysis, that are necessary to demonstrate at the
time of reporting that extraction is reasonably justified (economically mineable). The results of the study may
reasonably serve as the basis for a final decision by a proponent or financial institution to proceed with, or
finance, the development of the project. The confidence level of the study will be higher than that of a Pre-
Feasibility Study.
Exploration Information
Exploration information means geological, geophysical, geochemical, sampling, drilling, trenching, analytical
testing, assaying, mineralogical, metallurgical and other similar information concerning a particular property
that is derived from activities undertaken to locate, investigate, define or delineate a mineral prospect or mineral
deposit. It is recognized that in the review and compilation of data on a project or property, previous or
historical estimates of tonnage and grade, not meeting the minimum requirement for classification as Mineral
Resource, may be encountered. If a Qualified Person reports Exploration Information in the form of tonnage
and grade, it must be clearly stated that these estimates are conceptual or order of magnitude and that they do
not meet the criteria of a Mineral Resource.
Mineral Resource
Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and
Measured categories. An Inferred Mineral Resource has a lower level of confidence than that applied to an
Indicated Mineral Resource. An Indicated Mineral Resource has a higher level of confidence than an Inferred
Mineral Resource but has a lower level of confidence than a Measured Mineral Resource. A Mineral Resource
is a concentration or occurrence of diamonds, natural solid inorganic material, or natural solid fossilized organic
material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form
and quantity and of such a grade or quality that it has reasonable prospects for economic extraction. The
location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated
or interpreted from specific geological evidence and knowledge. The term Mineral Resource covers
mineralization and natural material of intrinsic economic interest which has been identified and estimated
through exploration and sampling and within which Mineral Reserves may subsequently be defined by the
consideration and application of technical, economic, legal, environmental, socio-economic and governmental
factors. The phrase “reasonable prospects for economic extraction” implies a judgment by the Qualified Person
in respect of the technical and economic factors likely to influence the prospect of economic extraction. A
Mineral Resource is an inventory of mineralization that under realistically assumed and justifiable technical and
economic conditions might become economically extractable. These assumptions must be presented explicitly
in both public and technical reports.
15
Inferred Mineral Resource
An “Inferred Mineral Resource” is that part of a Mineral Resource for which quantity and grade or quality can
be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified,
geological and grade continuity. The estimate is based on limited information and sampling gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. Due to the
uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an
Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of
continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of
technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure.
Inferred Mineral Resources must be excluded from estimates forming the basis of feasibility or other economic
studies.
Indicated Mineral Resource
An “Indicated Mineral Resource” is that part of a Mineral Resource for which quantity, grade or quality,
densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the
appropriate application of technical and economic parameters, to support mine planning and evaluation of the
economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing
information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings
and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
Mineralization may be classified as an Indicated Mineral Resource by the Qualified Person when the nature,
quality, quantity and distribution of data are such as to allow confident interpretation of the geological
framework and to reasonably assume the continuity of mineralization. The Qualified Person must recognize the
importance of the Indicated Mineral Resource category to the advancement of the feasibility of the project. An
Indicated Mineral Resource estimate is of sufficient quality to support a Preliminary Feasibility Study which
can serve as the basis for major development decisions.
Measured Mineral Resource
A “Measured Mineral Resource” is that part of a Mineral Resource for which quantity, grade or quality,
densities, shape, and physical characteristics are so well established that they can be estimated with confidence
sufficient to allow the appropriate application of technical and economic parameters, to support production
planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable
exploration, sampling and testing information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and
grade continuity. Mineralization or other natural material of economic interest may be classified as a Measured
Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data are such
that the tonnage and grade of the mineralization can be estimated to within close limits and that variation from
the estimate would not significantly affect potential economic viability. This category requires a high level of
confidence in, and understanding of, the geology and controls of the mineral deposit.
Mineral Reserve
Mineral Reserves are sub-divided in order of increasing confidence into Probable Mineral Reserves and Proven
Mineral Reserves. A Probable Mineral Reserve has a lower level of confidence than a Proven Mineral Reserve.
A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource
demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on
mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of
reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and
allowances for losses that may occur when the material is mined. Mineral Reserves are those parts of Mineral
Resources which, after the application of all mining factors, result in an estimated tonnage and grade which, in
the opinion of the Qualified Person(s) making the estimates, is the basis of an economically viable project after
taking account of all relevant processing, metallurgical, economic, marketing, legal, environment, socio-
economic and government factors. Mineral Reserves are inclusive of diluting material that will be mined in
conjunction with the Mineral Reserves and delivered to the treatment plant or equivalent facility. The term
“Mineral Reserve” need not necessarily signify that extraction facilities are in place or operative or that all
governmental approvals have been received. It does signify that there are reasonable expectations of such
approvals.
16
Probable Mineral Reserve
A “Probable Mineral Reserve” is the economically mineable part of an Indicated and, in some circumstances, a
Measured Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include
adequate information on mining, processing, metallurgical, economic, and other relevant factors that
demonstrate, at the time of reporting, that economic extraction can be justified.
Proven Mineral Reserve
A “Proven Mineral Reserve” is the economically mineable part of a Measured Mineral Resource demonstrated
by at least a Preliminary Feasibility Study. This Study must include adequate information on mining,
processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that
economic extraction is justified. Application of the Proven Mineral Reserve category implies that the Qualified
Person has the highest degree of confidence in the estimate with the consequent expectation in the minds of the
readers of the report. The term should be restricted to that part of the deposit where production planning is
taking place and for which any variation in the estimate would not significantly affect potential economic
viability.
CAUTIONARY NOTE TO U.S. INVESTORS REGARDING MINERAL RESOURCE AND MINERAL
RESERVE ESTIMATES
As used in this Annual Report on Form 20-F, the terms “Mineral Reserve,” “Proven Mineral Reserve” and
“Probable Mineral Reserve” are Canadian mining terms defined in accordance with NI 43-101 and the CIM
Standards. These definitions differ from the definitions in SEC Industry Guide 7 under the U.S. Securities Act.
Under SEC Industry Guide 7, a reserve is defined as that part of a mineral deposit which could be economically
and legally extracted or produced at the time the reserve determination is made. The terms “Mineral Resource,”
“Measured Mineral Resource,” “Indicated Mineral Resource” and “Inferred Mineral Resource” are defined in
and required to be used by NI 43-101. However, these terms are not defined terms under SEC Industry Guide 7
and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors
are cautioned not to assume that all, or any part, of a mineral deposit in these categories will ever be converted
into reserves. “Indicated Mineral Resource” and “Inferred Mineral Resource” have a great amount of
uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be
assumed that all, or any part, of an Indicated Mineral Resource or an Inferred Mineral Resource will ever be
upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the
basis of Feasibility or Preliminary Feasibility studies, except in rare cases. Investors are cautioned not to assume
that all, or any part, of an Inferred Mineral Resource exists or is economically or legally mineable. Disclosure of
“contained ounces” in a resource is permitted disclosure under Canadian regulations. However, the SEC
normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in
place tonnage and grade without reference to unit measures. Accordingly, information contained in this Annual
Report on Form 20-F and the exhibits filed herewith or incorporated by reference herein contain descriptions of
mineral deposits that may not be comparable to similar information made public by U.S. companies subject to
the reporting and disclosure requirements under U.S. federal securities laws and the rules and regulations
promulgated thereunder. Further, the term “mineralized material” as used in this Annual Report on Form 20-F
does not indicate “reserves” by SEC standards. We cannot be certain that mineralized material will ever be
confirmed or converted into SEC Industry Guide 7 compliant "reserves". Investors are cautioned not to assume
that mineralized material will ever be confirmed or converted into reserves or that mineralized material can be
economically or legally extracted.
Conversion Table
Metric / Imperial
1.0 millimeter (mm) = 0.039 inches (in)
1.0 meter (m) = 3.28 feet (ft)
1.0 kilometer (km) = 0.621 miles (mi)
1.0 hectare (ha) = 2.471 acres (ac)
1.0 gram (g) = 0.032 troy ounces (oz)
1.0 metric tonne (t) = 1.102 short tons (ton)
1.0 g/t = 0.029 oz/ton
Unless otherwise indicated, all dollar ($) amounts referred to herein are in Canadian dollars.
17
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 20-F and the exhibits attached hereto contain “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern
our anticipated results and developments in our operations in future periods, planned exploration and
development of our properties, plans related to our business and other matters that may occur in the future.
These statements relate to analyses and other information that are based on forecasts of future results, estimates
of amounts not yet determinable and assumptions of management. Statements concerning Mineral Reserve and
Mineral Resource estimates may also be deemed to constitute forward-looking statements to the extent that they
involve estimates of the mineralization that will be encountered if a property is developed, and in the case of
Mineral Reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit
can be economically exploited. Any statements that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not
always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not
anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”,
“would”, “might” or “will” (or the negative and grammatical variations of any of these terms and similar
expressions) be taken, occur or be achieved) are not statements of historical fact and may be forward-looking
statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and
other factors which could cause actual events or results to differ from those expressed or implied by the
forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking
statements are described further in the sections entitled “ITEM 3. KEY INFORMATION - Risk Factors”,
“ITEM 4. INFORMATION ON THE COMPANY - Business Overview”, “ITEM 4. INFORMATION ON THE
COMPANY – Principal Property Interests” and “ITEM 5. OPERATING AND FINANCIAL REVIEW AND
PROSPECTS” and in the exhibits attached to this Annual Report on Form 20-F. Should one or more of these
risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary
materially from those described in the Company’s forward-looking statements. The Company’s forward-
looking statements are based on beliefs, expectations and opinions of the Company’s management on the date
the statements are made and the Company does not assume any obligation to update forward-looking statements
if circumstances or management’s beliefs, expectations or opinions change, except as required by law. For the
reasons set forth above, investors should not place undue reliance on forward-looking statements.
Please consult the Company’s public filings at www.sec.gov for further, more detailed information concerning
these matters.
PART I
Item 1. Identity of Directors, Senior Management and Advisors
Not applicable
Item 2. Offer Statistics and Expected Timetable
Not applicable
Item 3. Key Information
The following selected financial data of the Company for Fiscal 2014, Fiscal 2013 and Fiscal 2012 ended
December 31st was derived from the consolidated financial statements of the Company included elsewhere in
this 20-F Annual Report. The selected financial data set forth for Fiscal 2011 and Fiscal 2010 ended December
31st are derived from the Company's audited consolidated financial statements, not included herein. The
selected financial data should be read in conjunction with the consolidated financial statements and other
information included immediately following the text of this Annual Report.
The consolidated financial statements of the Company have been prepared in accordance and compliance with
International Financial Reporting Standards as issued by the International Accounting Standards Board
(“IFRS”).
The basis of preparation is described in Note 2 of the consolidated financial statements.
18
Table No. 1
Selected Financial Data
International Financial Reporting Standards (“IFRS”)
(expressed in thousands of Canadian dollars, except share and per share data)
Year
Ended
12/31/2014
Year
Ended
12/31/2013
Year
Ended
12/31/2012
Year
Ended
12/31/2011
Year
Ended
12/31/2010
Revenues
Net (loss) income
Basic net (loss) income per common share
Diluted net (loss) income per common share
Weighted average shares (000)
Working capital
Exploration and evaluation assets
Net assets
Total assets
Capital stock
Dividends declared per share
$254
(14,983)
(0.23)
(0.23)
66,331
9,172
28,645
39,637
42,019
87,084
-
$220
(6,357)
(0.10)
(0.10)
62,055
12,676
24,447
47,891
48,988
81,151
-
$299
(10,238)
(0.17)
(0.17)
59,350
19,475
16,609
48,071
49,132
75,238
-
$249
7,295
0.13
0.12
57,269
30,513
10,470
53,340
53,905
73,354
-
$234
(3,465)
(0.07)
(0.07)
51,188
29,187
4,439
35,694
36,343
62,854
-
Canadian/U.S. Dollar Exchange Rates
In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian dollars (CDN$).
Table No. 2 sets forth the exchange rate for the Canadian dollars at the end of the five most recent fiscal periods
ended at December 31st, the average rates for the period, the range of high and low rates and the close for the
period. Table No. 3 sets forth the range of high and low rates for each month during the previous six months.
For purposes of this table, the rate of exchange means the noon buying rate in New York City for cable transfers
in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York. The table
sets forth the number of Canadian Dollars required under that formula to buy one U.S. Dollar. The average rate
means the average of the exchange rates on the last day of each month during the period.
Table No. 2
Canadian Dollar/U.S. Dollar Exchange Rates for Five Most Recent Financial Years
Fiscal Year Ended 12/31/2014
Fiscal Year Ended 12/31/2013
Fiscal Year Ended 12/31/2012
Fiscal Year Ended 12/31/2011
Fiscal Year Ended 12/31/2010
Average
$1.10
$1.03
1.00
0.99
1.03
High
$1.16
$1.07
1.04
1.06
1.08
Low
$1.06
$0.98
0.97
0.94
1.00
Close
$1.16
$1.06
1.00
1.02
1.00
Table No. 3
Canadian Dollar/U.S. Dollar Exchange Rates for Previous Six Months
High
Low
September
2014
$1.12
1.09
October
2014
$1.13
1.11
November
2014
$1.14
1.12
December
2014
$1.16
1.14
January
2015
$1.27
1.16
February
2015
$1.27
1.24
The exchange rate was $1.26 on March 27, 2015.
19
Risk Factors
General Risk Factors Attendant to Resource Exploration and Development
Resource exploration and development is a speculative business, characterized by a number of significant risks
including, among other things, unprofitable efforts resulting not only from the failure to discover mineral
deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to
return a profit from production. The marketability of minerals acquired or discovered by the Company may be
affected by numerous factors which are beyond the control of the Company and which cannot be accurately
predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and
processing equipment, and such other factors as government regulations, including regulations relating to
royalties, allowable production, importing and exporting of minerals, and environment protection, the
combination of which factors may result in the Company not receiving an adequate return on investment
capital.
Presently, the Company is in the exploration stage and there is no assurance that a commercially viable ore
deposit (a reserve) exists in any of its properties or prospects until further work is done and a comprehensive
economic evaluation based upon that work is concluded. The Company has financed its operations principally
through the sale of equity securities, entering into joint venture arrangements and the sale of its inventory of
gold. The recoverability of mineral properties is dependent on the establishment of economically recoverable
reserves, the ability of the Company to obtain the necessary financing to complete development and ultimately
upon future profitable production or the realization of proceeds from the disposition of the properties.
Uncertainty in Discovering Commercially Mineable Ore Deposits
There is no certainty that the expenditures to be made by the Company in the exploration of its properties and
prospects as described herein will result in discoveries of mineralized material in commercial quantities. Most
exploration projects do not result in the discovery of commercially mineable ore deposits and no assurance can
be given that any particular level of recovery of ore reserves will in fact be realized or that any identified
mineral deposit will ever qualify as a commercially mineable (or viable) ore body which can be legally and
economically exploited. Estimates of reserves, mineral deposits and production costs can also be affected by
such factors as environmental permitting regulations and requirements, weather, environmental factors,
unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. In
addition, the grade of ore ultimately mined may differ from that indicated by drilling results. Short term factors
relating to ore reserves, such as the need for orderly development of ore bodies or the processing of new or
different grades, may also have an adverse effect on mining operations and on the results of operations. There
can be no assurance that minerals recovered in small-scale tests will be duplicated in large-scale tests under on-
site conditions or in production scale. Material changes in ore reserves, grades, stripping ratios or recovery
rates may affect the economic viability of any project.
History of Net Losses, Lack of Cash Flow and Assurance of Profitability
The Company had net losses in a number of years since its date of incorporation. Due to the nature of the
Company’s business, there can be no assurance that the Company will be profitable. The Company had net
losses of $14,982,667 in Fiscal 2014, $6,356,609 in Fiscal 2013, and $10,238,377 in Fiscal 2012.
The Company currently has no revenues from operations as all of its properties and prospects are in the
exploration stage. There is no assurance that the Company will receive revenues from operations at any time in
the near future. During Fiscal 2014, revenue consisted of interest income and other income from office rental
and contract drilling programs provided to third parties. During Fiscal 2013 and Fiscal 2012, revenue consisted
of interest and other income from office rental, a royalty payment from Gold Mountain from the Elk property
and contract exploration services provided to third parties.
The Company has not paid dividends on its shares since incorporation and the Company does not anticipate
doing so in the foreseeable future.
Uncertainty of Obtaining Additional Funding Requirements
If the Company’s exploration programs are successful, additional capital will be required for the development
of an economic ore body and to place it in commercial production. The only sources of future funds presently
available to the Company are the sale of its inventory of gold, the sale of its equity capital, the incurring of debt,
the sale of the equity positions it holds in other publicly traded companies, or the offering by the Company of an
interest in its properties and prospects to be earned by another party or parties carrying out further development
thereof.
20
Failure to obtain additional financing on a timely basis could cause the Company to forfeit its interest in such
properties, dilute its interests in the properties and/or reduce or terminate its operations.
Possible Dilution to Present and Prospective Shareholders
The Company’s plan of operation, in part, contemplates the financing of the conduct of its business by the
issuance, for cash, of equity securities of the Company or incurring debt, or a combination of the two. Any
transaction involving the issuance of previously authorized but unissued shares of common stock, or securities
convertible into common stock, would result in dilution, possibly substantial, to present and prospective holders
of common stock. The Company sometimes seeks joint venture partners to fund in whole or in part exploration
projects. This dilutes the Company’s interest in properties it has acquired.
Mineral Prices May Not Support Corporate Profit
The mining industry in general is intensely competitive and there is no assurance that, even if commercial
quantities of mineral resources are developed, a profitable market will exist for the sale of same. Factors
beyond the control of the Company may affect the marketability of any substances discovered. The price of
minerals is volatile over short periods of time, and is affected by numerous factors beyond the control of the
Company, including international economic and political trends, expectations of inflation, currency exchange
fluctuations, interest rates and global or regional consumption patterns, speculative activities and increased
production due to improved mining techniques. Material changes in mineral prices may affect the economic
viability of any project.
Environmental Regulations
The current and anticipated future operations of the Company, including development activities and
commencement of production on its properties, require permits from various federal, territorial and local
governmental authorities and such operations are and will be governed by laws and regulations governing
prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste
disposal, toxic substances, land use, environmental protection, mine safety and other matters. Companies
engaged in the development and operation of mines and related facilities generally experience increased costs,
and delays in production and other schedules as a result of the need to comply with applicable laws, regulations
and permits. Such operations and exploration activities are also subject to substantial regulation under these
laws by governmental agencies and may require that the Company obtain permits from various governmental
agencies. The Company believes it is in substantial compliance with all material laws and regulations which
currently apply to its activities. There can be no assurance, however, that all permits which the Company may
require for construction of mining facilities and conduct of mining operations will be obtainable on reasonable
terms or that such laws and regulations, or that new legislation or modifications to existing legislation, would
not have an adverse effect on any exploration or mining project which the Company might undertake.
Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement
actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be
curtailed, and may include corrective measures requiring capital expenditures, installation of additional
equipment or remedial actions. Parties engaged in exploration and mining operations may be required to
compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal
fines or penalties imposed for violation of applicable laws or regulations.
The enactment of new laws or amendments to current laws, regulations and permits governing operations and
activities of mining companies, or more stringent implementation thereof, could have a material adverse impact
on the Company and cause increases in capital expenditures or production costs or reduction in levels of
production at producing properties or require abandonment or delays in development of new mining properties.
As a requirement for performing certain exploration activities, the Company has $34,548 on deposit as
reclamation bonds for exploration work and site disturbance on prospects in Canada and the U.S. These
allocated funds have been deposited for the benefit of the Province of British Columbia and the State of Nevada
until released upon approval from the Province and State after all necessary reclamation work on the properties
has been performed. If the reclamation is more prolonged and requires funds in addition to those already
allocated, the Company could be forced to pay for the extra work and it could have a significant negative impact
upon the Company’s financial position and operations.
21
No Guarantee of Title to Mineral Properties
While the Company has investigated title to all of its mineral properties and prospects, and, to the best of its
knowledge, title to all of its properties and prospects in which it has the right to acquire or earn an interest are in
good standing as of the date of this Annual Report, this should not be construed as a guarantee of title. The
properties and prospects may be subject to prior unregistered agreements or transfers unknown to the Company
and title may be affected by undetected defects, e.g. defects in staking or acquisition process.
As there are unresolved native land claim issues in British Columbia and the Yukon Territory, the Company’s
properties and prospects in these jurisdictions may be affected in the future.
If title is disputed, the Company will have to defend its ownership through the courts, which would likely be an
expensive and protracted process and have a negative effect on the Company’s operations and financial
condition. In the event of an adverse judgment, the Company could lose its property rights.
Volatility of Share Price
Market prices for shares of early stage companies are often volatile. Factors such as announcements of mineral
discoveries, exploration and financial results, and other factors could have a significant effect on the price of the
Company’s shares.
Material Risk of Dilution Presented by Large Number of Outstanding Share Purchase Options and Warrants
As of March 30, 2015 there were share purchase options outstanding allowing the holders of these options to
purchase 6,245,000 shares of common stock and warrants allowing the holders of these warrants to purchase
8,869,000 shares of common stock. Directors and officers of the Company hold 5,110,000 of these share
purchase options and 208,650 of these warrants. An additional 1,135,000 share purchase options are held by
employees and consultants of the Company. Given the fact that as of March 30, 2015 there were 73,148,321
shares of common stock outstanding, the exercise of all of the existing share purchase options and warrants
would result in dilution to the existing shareholders and could depress the price of the Company’s shares. The
exercise of all outstanding share purchase options and warrants would cause the number of issued and
outstanding common shares to rise 20.7%.
No Proven Reserves
The properties and prospects in which the Company has an interest or the properties in which the Company has
the right to earn an interest are in the exploratory stage only, are without a known body of economically viable
ore and are not in commercial production. If the Company does not ultimately find a body of economically
recoverable ore, it would either have to acquire additional exploration projects, or terminate is operations.
Uncertainty of Reserves and Mineralization Estimates
There are numerous uncertainties inherent in estimating proven and probable reserves and mineralization,
including many factors beyond the control of the Company. The estimation of reserves and mineralization is a
subjective process and the accuracy of any such estimates is a function of the quality of available data and of
engineering and geological interpretation and judgment. Results of drilling, metallurgical testing and
production and the evaluation of mine plans subsequent to the date of any estimate may justify revision of such
estimates. No assurances can be given that the volume and grade of reserves recovered and rates of production
will not be less than anticipated. Assumptions about prices are subject to greater uncertainty and metals prices
have fluctuated widely in the past. Declines in the market price of base or precious metals also may render
reserves or mineralization containing relatively lower grades of ore uneconomic to exploit. Changes in
operating and capital costs and other factors including, but not limited to, short-term operating factors such as
the need for sequential development of ore bodies and the processing of new or different ore grades, may
materially and adversely affect reserves.
Changes to Mexican Mining Taxes
In October 2013, the Mexican Congress approved a package of tax reforms which included significant changes
to the country’s mining royalties and tax structure. These new laws had an effective date of January 1, 2014.
The changes include a 7.5% special mining royalty on earnings before interest, taxes, depreciation and
amortization (“EBITDA”) and an additional 0.5% royalty on gross revenues from precious metal production.
The new law also increases annual taxes on certain inactive exploration concessions by 50 to 100%. These
changes may result in increased holding costs to the Company for its existing mineral concessions. The new
taxes and royalties may also materially and adversely affect the potential to define economic reserves on any
22
Mexican properties and result in the Company’s Mexican properties being less attractive to potential optionees
or joint-venture partners.
Foreign Incorporation and Civil Liabilities
The Company was created under amalgamation under the laws of the Province of British Columbia, Canada.
All of the Company’s directors and officers are residents of Canada and substantially all of the Company’s
assets and its subsidiaries are located outside the U.S. Consequently, it may be difficult for U.S. investors to
affect service of process in the U.S. upon those directors and officers who are not residents of the U.S., or to
realize in the U.S. upon judgments of U.S. courts predicated upon civil liabilities under applicable U.S. laws.
Conflict of Interest
Some of the Company’s directors and officers are directors and officers of other natural resource or mining-
related companies. Duane Poliquin and Morgan Poliquin also serve as directors of Gold Mountain Mining
Corporation. Joseph Montgomery also serves as a director of Infrastructure Materials Corp. Gerald Carlson
also serves a director and as the President and CEO of Pacific Ridge Exploration Ltd. Barry Smee also serves
as a director of Platinum Group Metals Ltd. Mark Brown also serves as a director and as the CFO of Tarsis
Resources Ltd. and Galileo Petroleum Ltd, and as the President, CEO and a director of Big Sky Petroleum
Corporation. He also serves as a director of Avrupa Minerals Ltd., Estrella Gold Corporation, Strategem
Capital Corp. and Sutter Gold Mining Ltd. These associations may give rise from time to time to conflicts of
interest, as a result of which, the Company may miss the opportunity to participate in certain transactions.
Foreign Operations
The Company currently has exploration projects located in Mexico and the U.S. The Company’s foreign
activities are subject to the risk normally associated with conducting business in foreign countries, including
exchange controls and currency fluctuations, foreign taxation, laws or policies of particular countries, labor
practices and disputes, and uncertain political and economic environments, as well as risks of war and civil
disturbances, or other risk that could cause exploration or development difficulties or stoppages, restrict the
movement of funds or result in the deprivation or loss of contract rights or the taking of property by
nationalization or expropriation without fair compensation. Foreign operations could also be adversely
impacted by laws and policies of the U.S. affecting foreign trade, investment and taxation.
Foreign Currency Fluctuations
At the present time, some of the Company’s activities are carried on outside of Canada. Accordingly, it is
subject to risks associated with fluctuations of the rate of exchange between the Canadian dollar and foreign
currencies.
The Company is currently not engaged in currency hedging to offset any risk of exchange rate fluctuation and
currently has no plans to engage in currency hedging.
Operating Hazards and Risks Associated with the Mining Industry
Mining operations generally involve a high degree of risk, which even a combination of experience, knowledge
and careful evaluation may not be able to overcome. Hazards such as unusual or unexpected geological
formations and other conditions are involved. Operations in which the Company has a direct or indirect interest
will be subject to all the hazards and risks normally incidental to exploration, development and production of
minerals, any of which could result in work stoppages, damage to or destruction of mines and other producing
facilities, damage to or loss of life and property, environmental damage and possible legal liability for any or all
damage or loss. The Company may become subject to liability for cave-ins and other hazards for which it
cannot insure or against which it may elect not to insure where premium costs are disproportionate to the
Company’s perception of the relevant risks. The payment of such insurance premiums and the incurring of such
liabilities would reduce the funds available for exploration activities.
The Ability to Manage Growth
Should the Company be successful in its efforts to develop its mineral properties or to raise capital for such
development or for the development of other mining ventures it will experience significant growth in
operations. If this occurs management anticipates that additional expansion will be required in order to continue
development. Any expansion of the Company’s business would place further demands on its management,
operational capacity and financial resources. The Company anticipates that it will need to recruit qualified
personnel in all areas of its operations. There can be no assurance that the Company will be effective in
23
retaining its current personnel or attracting and retaining additional qualified personnel, expanding its
operational capacity or otherwise managing growth. The failure to manage growth effectively could have a
material adverse effect on the Company's business, financial condition and results of operations.
Lack of a Dividend Policy
The Company does not intend to pay cash dividends in the foreseeable future, as any earnings are expected to
be retained for use in developing and expanding its business. However, the actual amount of dividends which
the Company may pay will remain subject to the discretion of the Company’s Board of Directors and will
depend on results of operations, cash requirements and future prospects of the Company and other factors.
Competition
There is competition from other mining exploration companies with operations similar to those of the
Company's. Many of the mining companies with which the Company competes have operations and financial
strength many times greater than that of the Company. Such competitors could outbid the Company for such
projects, equipment or personnel, or produce minerals at a lower cost which would have a negative effect on the
Company’s operations and financial condition.
Dependence on Key Personnel
The Company depends highly on the business and technical expertise of its management and key personnel, in
particular, Duane Poliquin and Morgan Poliquin. There is little possibility that this dependence will decrease in
the near term. As the Company’s operations expand, additional general management resources will be required,
especially since the Company encounters risks that are inherent in doing business in several countries. The
Company maintains no “Key Man” insurance coverage, and the loss or unavailability of any of its key
personnel could have a negative effect on the Company’s ability to operate effectively.
Item 4. Information on the Company
History and Development of the Company
The head office of the Company is located at 750 West Pender Street, Suite 1103, Vancouver, British
Columbia, Canada, V6C 2T8. The registered and records office of the Company is 1177 West Hastings Street,
Suite 1710, Vancouver, British Columbia, Canada, V6E 2L3.
The contact persons are Duane Poliquin, Chairman and Morgan Poliquin, President. The telephone number is
(604) 689-7644. The fax number is (604) 689-7645. The email address is info@almadenminerals.com. The
web-site address is www.almadenminerals.com.
The Company was formed by amalgamation under the laws of the Province of British Columbia of its
predecessor companies, Almaden Resources Corporation and Fairfield Minerals Ltd. on February 1, 2002. The
Company operates under the laws of the Business Corporations Act (British Columbia).
The Company’s common shares began trading on The Toronto Stock Exchange (“TSX”) under the symbol
“AMM” on February 11, 2002 and on the NYSE MKT, under the symbol “AAU” on December 19, 2005.
Almaden Resources Corporation’s initial public offering on the Vancouver Stock Exchange was pursuant to a
prospectus dated October 10, 1986. The shares of Fairfield Minerals Ltd. began trading on the Vancouver
Stock Exchange on July 18, 1986 and on The Toronto Stock Exchange on May 21, 1990.
There have been no public takeover offers by third parties in respect of the Company’s shares and the Company
has made no public takeover offers in respect of any other company’s shares.
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Organizational Structure
The Company currently has ten wholly-owned subsidiaries that were formed to hold properties in their respective
jurisdictions. These subsidiaries are:
Subsidiaries
Almaden America Inc.
Republic Resources Ltd.
Puebla Holdings Inc.
Ixtaca Precious Metals Inc.
Pangeon Holdings Ltd.
Almaden de Mexico, S.A. de C.V.
Minera Gavilan, S.A. de C.V.
Compania Minera Zapata, S.A. de C.V.
Minera Gorrion, S.A. de C.V.
Minera Alondra, S.A. de C.V.
Jurisdiction
USA
Canada
Canada
Canada
Canada
Mexico
Mexico
Mexico
Mexico
Mexico
Nature of operations
exploration company
service company
holding company
holding company
holding company
exploration company
exploration company
exploration company
exploration company
holding company
At December 31, 2014, the Company owned a 50% share interest in ATW Resources Ltd. ("ATW"), a company
incorporated in the Northwest Territories, Canada on January 6, 1993 and a 38.8% share interest in Gold
Mountain Mining Corporation, a company incorporated in British Columbia, Canada on June 12, 2008
(formerly Beanstalk Capital Inc. and Set For Growth Developments Ltd.).
Business of the Company
The Company is engaged in the business of the acquisition, exploration and when warranted, development of
mineral properties. The Company has property interests in Canada, U.S. and Mexico. None of the Company's
property interests are beyond exploration stage. Presently there is no assurance that any of the Company's
mining properties or prospects contains a commercially viable ore body (reserve) until further work is done and
at a minimum, a pre-feasibility study based upon such work is concluded. The Company is in the exploration
stage and has not generated any revenues from operations.
Proposed Corporate Reorganization
In October 2014, the Company announced that it intends to seek shareholder approval to spin-out certain of the
Company’s assets into a newly incorporated company (“Spinco”). Under the proposed spin-out, the Company’s
early stage exploration projects, royalty interests and other non-core assets will be transferred to Spinco. The
Company’s current shareholders will receive shares of Spinco by way of a share exchange, pursuant to which
each existing share of Almaden is exchanged for one “new” share of Almaden and 0.6 of a share of Spinco.
Under the proposed spin-out, the following key assets will be transferred from Almaden to Spinco:
•
•
•
•
•
•
•
a 100% interest in the El Cobre copper-gold porphyry exploration project in Mexico and the Willow
copper-gold porphyry exploration project in Nevada, in addition to a portfolio of 20 other exploration
projects, many of which are located in eastern Mexico in geological environments similar to the recent
Ixtaca and Caballo Blanco discoveries;
a 2% Net Smelter Return (“NSR”) royalty on the Company’s Tuligtic property in Mexico, which hosts
the Company’s Ixtaca gold-silver development project;
a 1.5% NSR on the Caballo Blanco gold deposit in Mexico, a development project operated by
Goldgroup Mining Inc.;
a 2% NSR on the Elk gold deposit in Canada, an advanced exploration project operated by Gold
Mountain Mining Corp.;
a portfolio of 21 additional NSR royalties on exploration projects in Mexico, Canada and the United
States identified through the Company’s past prospect generator activities;
equity holdings in several publicly-listed companies; and
sufficient working capital to satisfy applicable stock exchange requirements.
Almaden will retain the Ixtaca gold/silver project if the proposed spin-off is completed.
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The spin-out will be effected by way of a plan of arrangement under the Business Corporations Act (British
Columbia), and must be approved by the Supreme Court of British Columbia and by the affirmative vote of 66
2/3% of Almaden’s shareholders in attendance personally or by proxy at a shareholder’s meeting. The Company
intends to apply for a listing of the shares of Spinco on the TSX Venture Exchange ("TSX-V"). Any such listing
will be subject to Spinco fulfilling all of the requirements of the TSX-V.
The spin-out also remains conditional on the approval of final documentation by the Board of Directors of
Almaden and approval of the spin-out by the TSX-V. Additional details of the spin-out transaction will be
included in an information circular to be mailed to shareholders of Almaden on or about May 2015 in
connection with the Company's Annual General Meeting which is anticipated to be held in June 2015. There is
no guarantee the spin-out will be completed as proposed, if at all.
Business Overview
Maintaining properties
The following is a general statement about government requirements for holding mineral properties in the
jurisdictions where the Company works.
In Canada, mining law is a provincial or territorial matter. Maintaining a mineral property requires annual
assessment work or cash in lieu of work. Prior to starting a work program, an application describing the
program is submitted to the government authorities and this is then distributed for comment to various
departments for review, such as fisheries or forestry that may discern impact from the proposed work. The
government has an obligation to consult with First Nation groups in the area that may have a land claim over the
mineral claims, but this consultation is often delegated to the Company to handle. A memorandum of
understanding may have to be negotiated with the First Nation before the government will issue a permit to
work. If there is to be any environmental impact, an appropriate reclamation amount is determined and a bond is
posted by the Company for this amount before the permit is issued.
In the U.S., federal mining laws govern mining claims on federal land, including land administered by the
Bureau of Land Management (“BLM”). A payment of US$140 per claim is payable to the BLM by September 1
of each year per twenty acre mining claim. This is filed in advance for the upcoming assessment year. Prior to
any exploration activity, an Exploration Plan is submitted to the BLM that outlines the work program and
describes any proposed land disturbance. Reclamation plans are also submitted and an appropriate bond to
ensure such reclamation is done may have to be provided before the permit is issued.
In Mexico, mining law is a federal matter. The government requires annual assessment work and expenditures
per hectare which increase with the size and age of the claim. Under the tax reforms effective January 1, 2014,
if a concession holder has not conducted exploration or exploitation activities during a two-year period, the
concession holder would have to pay an additional 50% of the taxes payable per hectare if within the last 11
years, and an additional 100% of the taxes payable if after year 12. Land taxes per hectare also have to be paid
by January 31 and July 31 each year. Both amounts are subject to inflation accounting and the inflation
adjustment number for each fiscal period is published in the official gazette. Under the Mexican Constitution
and the mining and environmental laws of Mexico, all mining projects are subject to Federal legal control. This
control is exercised from the exploration phase through the closure phase of a mining project. Prior to the
initiation of exploration activities, concession owners are required to file a notice of commencement of
exploration activities in conformity with Mexican Official Norm 120 (NOM-120); prior to initiation of
construction activities (and also in some more intrusive exploration activities), mining projects are required to
apply for and obtain an environmental impact authorization and a land use permit from the Mexican Federal
environmental agency SEMARNAT (Secretaria de Medio Ambiente y Recursos Naturales). This requires the
presentation of an environmental impact manifest and a technical study which deals with the impacts, the
environmental mitigation, and habitat compensation to the satisfaction of the authorities having environmental
jurisdiction.
Competition
The mineral property exploration and development business, in general, is intensively competitive and there is
not any assurance that even if commercial quantities of ore are discovered, a ready market will exist for sale of
same. Numerous factors beyond our control may affect the marketability of any substances discovered. These
factors include market fluctuations; the proximity and capacity of natural resource markets and processing
26
equipment; and government regulations, including regulations relating to prices, taxes, royalties, land tenure,
land use, importing and exporting of mineral and environmental protection. The exact effect of these factors
cannot be accurately predicted, but the combination of these factors may make it difficult for us to receive an
adequate return on investment.
We compete with many companies possessing greater financial resources and technical facilities for the
acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and
retention of qualified employees.
Seasonality
The Company’s projects are spread from northern Canada to south/central Mexico and span several climate
zones. In northern Canada, winter is often the best time to work because frozen lakes and swamps allow the
movement of drills and other equipment. In western U.S., dry to desert conditions prevail and year round work
is possible. In Mexico, the climate in the project areas is marked by dry, cold winters and a distinct rainy
season. The rainy season typically begins in May or June and continues until late September to October. In most
years roads remain passable and exploration can be done throughout the rainy season. Seasonal changes do not
have a material impact on our exploration expenditures.
Exploration Program Protocols
General Sample Handing and Quality Control Program for Exploration Programs
The Company employs a strict quality control program for samples taken during its exploration programs. For
drilling programs a quality control program is in place which includes the insertion of blanks, field duplicates
and certified standards into the sample stream.
Chain of Custody
Samples of rock and drill core and cuttings are sealed by the sampler and kept under control of a qualified
person until they are shipped to a laboratory.
Sample Handling
Sample handling for drilling programs is described more fully below. Soil and stream sediment samplers have
been trained to industry standard levels of sampling methodology. In general, the Company sieves stream
sediment samples to -20 mesh in the field during preparation. Samplers are required to not wear any jewellery
or clothing or use equipment which may contaminate the sample. All sample locations are geographically
located at the time of sampling using the Global Positioning System. The Company has prepared standardized
sample information cards for samplers to record information concerning the sample location, type and medium.
Outcrop, float and dump rock samples are collected by geologists who record similarly ordered geologic
information relating to the sample taken.
Blanks
Blank material, a sample of crushed and pulverized rock, known to contain very low or non-detectable
concentration of gold, is inserted as a pulp into the sample stream on an interval of every 20 samples. Blanks are
intended to detect possible contamination.
Duplicates
During drill programs the company routinely includes a field duplicate into the sample stream, spaced at 20
sample intervals. Field duplicate samples are splits of drill core or reverse circulation cuttings from the sample
interval. The resulting two field duplicate samples are submitted with separate sample numbers “blind” to the
assay lab and separately treated as normal samples. The samples are taken randomly with no regard to rock
type, geographic position or degree of alteration or mineralization. These field duplicates are then used to detect
the cumulative uncertainties associated with the entire sampling and analytical process.
Standards
During drill programs the company routinely includes a field duplicate into the sample stream, spaced at 20
sample intervals. Certified standards are purchased from CDN Resource Labs of Vancouver and are prepared by
this professional third party lab according to industry standard and accepted methodologies. Standards are
utilized to monitor the accuracy of the laboratory work.
27
Sample Handling for Drill Programs
Core Box Preparation
Plastic core boxes are used for the storage of core. Each box is labelled by the drillers at the rig with the drill-
hole number, a box number and an arrow to mark the start of the tray and the down-hole direction. Wooden
core blocks, with the meterage in black marker pen, are inserted by the drillers at the end of each core run
(usually 3 m or less). These core run intervals are checked and recorded by the geologist during mark up (see
below). When filled with core the boxes are sealed with a plastic lid by the drillers and transported to the core
logging facility.
Sample and Corebox Markup
Once at the core logging facility, the core boxes are marked up with the starting and ending meterage, written at
the ends of the trays with a marker. An aluminum tag with the hole number, box number and meterage is then
stapled to the front of each tray. The core blocks are then covered with an aluminum permi-tag with the depth
inscribed and written over in black marker pen for clarity in core tray photographs. The start and end of each
selected sample interval is marked with a red wax pencil mark across the core and sample numbers are written
on the edge of the core box channels at the start and end of each sample interval. Intervals denoting the position
in the sample tag sequence of field duplicate, blank and analytical standards are also marked on the core box.
Different colored tape was stapled to the boxes to indicate the position and type of duplicate sample. A
permanent aluminum tag with the sample number inscribed on them was stapled to the inside of the core box
channel at the start of each sample interval. A cut line was marked on the core as a guide for sawing of half-
core samples for assay. The cut line position is marked by fitting the ends of the core together, to align them as
they came out of the hole, and using a ruler to draw a line down the core axis with a red wax pencil. This mark-
up is done after the trays are photographed. Cut line positions are selected by the logging geologist to produce
two halves with equal proportions of mineralization. Typically this is done by marking the cut line down the
long axis of the ellipses described by the intersection of the veins with the core circumference. Each tray is
digitally photographed before core cutting and sampling.
Core Logging
Before cutting and sampling the core, the following tables of data are recorded on paper and then entered into
the Almaden drill hole database system:
Geotechnical Logging
1. Core box record sheet: Beginning and end from/to intervals for each core box.
2. For each core run (from and to) a record of the core size, meters of core recovered for the interval, RQD (the
total length of pieces of core in the interval that are twice the width of the core divided by the length of the
interval, times 100) and hardness (on a scale from 1 to 5, from softest to hardest).
3. A drilling daily control sheet showing the progress of the rig for each shift.
Geological Logging
1. Geology Log: Intervals selected by the geologist recording a detailed description of the lithology, texture,
alteration, mineral assemblage and intensity and level of oxidation/weathering. Structural measurements (i.e.
the angle of structures to the core axis) are also recorded. The cover sheet includes details such as surveyed
collar co-ordinates, downhole survey data, core size depths, drilling dates and sample number series. A graphic
log column with a sketch of the geology is also included.
2. Veining and Mineralization: (Intervals on this form are the same as the sample intervals). Estimates of the
percent veining and the percentage of different minerals represented in either vein, breccia or disseminated
form, i.e. quartz, carbonates, pyrite etc. (sometimes completed after sampling).
3. Sample Sheet: A record of the sample intervals, sample numbers and duplicate, blank and analytical standard
numbers as well as magnetic susceptibility measurements taken on each sample (using a handheld magnetic
susceptibility meter pushed against the core).
4. Hole Summary: An abbreviated hole log that summarizes the important features of a drill hole. A summary
drill hole trace giving the geologist the opportunity to summarize the hole and sketch in structural orientations
28
in a form easily transferred to sections. All logs are saved on the server along with the core photos and other
data from each hole.
Sample Interval Selection
All strongly altered or mineralized intervals of core were sampled. Sampling always began at least 5 samples
above the start of mineralization. Sample intervals were selected using the following criteria.
-Maximum sample length of 2 m in unmineralized lithologies
-Maximum sample length of 1 m in mineralized lithologies
-Minimum sample length of 50 cm. Geological changes in the core such as major mineralization/alteration
intensity and lithology changes were used as sample breaks.
-Core size changes and any zones of core loss were used as sample breaks.
-Large discrete veins that might possibly be modeled or mined as separate structures were sampled separately.
The begin/end marks were placed so that the entire vein ended up in the sample(s) and the vein is not smeared
into samples on either side.
Sampling Procedure
All samples were originally cut in half using custom-made, gasoline engine-powered diamond core saws. All
were recently changed to electric powered saws. Each saw has sliding trays and customized “core cradles”
sized for each core diameter in order to ensure a straight cut down the cut line and to minimize the loss of
friable core during cutting. Areas of very soft rock (e.g. fault gouge), are cut with a machete, using the side of
the core channel to ensure a straight cut. Areas of very broken core (pieces <1 cm) were sampled using spoons.
The following standard sampling procedures were employed:
The right hand side of the core (looking down the hole) was always sampled. After cutting, half the core was
placed in a new plastic sample bag and half was placed back in the core box. Between each sample, the core
saw and sampling table areas were washed to ensure no contamination between samples. Field duplicate, blank
and analytical standards were added into the sample sequence as they were being cut. After cutting of samples
containing visible gold, a piece of abrasive quartz sandstone was cut to clean the diamond blade. This was done
to prevent contamination of the following sample with gold that may have become smeared onto the blade.
Sample numbers were written on the outside of the sample bags twice and the tag from the sample book was
placed inside the bag with the half core. The bags were sealed using single-use plastic cable ties.
Sample numbers on the bags were checked against the numbers on the core box and the sample book.
The core cutting area is within the core logging shed and the logging geologists regularly checked the precision
of the core cutting and sampling. The sealed plastic sample bags were placed in large plastic twine (rice) sacks
(usually between 8 and 10 samples per sack) and sealed using single-use plastic cable ties. The sacks were
weighed and the sack number, sample numbers, sack weight and date written on the outside of the sacks.
Company’s Principal Properties
The Company has two principal property interests, both in Mexico: (1) the Tuligtic prospect (100% interest)
which includes the Ixtaca zone, and (2) the El Cobre copper-gold prospect (100% interest).
The Company does not deem its other exploration projects to be material properties. The Company plans to
conduct preliminary exploration on the projects however there are no current plans to conduct advanced
exploration on these projects.
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PRINCIPAL PROPERTY INTERESTS
The Tuligtic Prospect – Mexico
Location and Access
The Ixtaca deposit, the epithermal gold-silver target within the Tuligtic Property, is located 8 km northwest of
the town of San Francisco Ixtacamaxtitlán, the county seat of the municipality of Ixtacamaxtitlán, Puebla State.
The project is accessible by driving 40 km east along Highway 119 from Apizaco, an industrial center located
approximately 50 km north of Puebla City by two-lane Highway, and then north approximately 2 km along a
paved road to the town of Santa Maria. The trip from Apizaco to site can be driven in approximately 1.5 hours.
There is also access to the Property using gravel roads from the northeast via Tezhuitan and Cuyoaco, from the
south via Libres and from the northwest via Chignahuapan. The Xicohtencatl Industrial complex lies 30 km
southwest by paved road from the Tuligtic Project, and houses agricultural, chemical, biomedical and industrial
manufacturing facilities and is serviced by rail. Puebla, the fourth largest city in Mexico has a population in
excess of 4 million people, and includes one of the largest Volkswagen automotive plants outside Germany.
The Topography on the Tuligtic Project is generally moderate to steep hills with incised stream drainages.
Elevation ranges from 2,300 meters (m) above sea level in the south to 2,800 m in the north. Vegetation is
dominantly cactus and pines and the general area is also somewhat cultivated with subsistence vegetables, bean
and corn crops. The Ixtaca Zone exploration area has been previously cleared and logged. The region has a
temperate climate with average temperatures ranging from 19°C in June to 10°C in December. The area
experiences about 600 mm of precipitation annually with the majority falling during the rainy season, between
June and September. Exploration can be conducted year round within the Property. Electricity is available on
the Property as the national electricity grid services nearby towns such as Santa Maria and Zacatepec. Water
for exploration is available from year-round natural springs located at higher elevations above and upstream of
the Ixtaca deposit. The surface rights locally are privately owned and where Almaden is exploring the
Company has negotiated surface land use agreements with surface rights landowners.
30
31
Claims and Title
The Tuligtic property consists of three claims held 100% by Minera Gorrion S.A. de C.V., a subsidiary of
Almaden Minerals Ltd. through the holding company, Puebla Holdings Inc. The claims, tabularized below,
cover an area of over 20,000 hectares and were staked. Almaden acquired the Cerro Grande claims of the
Tuligtic Project in 2001 and the Caldera 3-a claim in 2010, following the identification of surficial clay deposits
that were interpreted to represent high-level epithermal alteration. Official title documents have been issued for
all claims, the details of which are summarized below.
Claim Name Claim Number Valid Until Date Area (hectares)
Cerro Grande
Cerro Grande 2
Caldera 3-a
Total
219469
233434
241003
March 5, 2059
February 23, 2059
November 20, 2062
11,201.55
3,028.00
5,984.41
20,213.96
Location
Tetela de Ocampo
Ixtacamaxtitlan Aquixtla, Pue.
Zautla, Puebla
Ixtacamaxtitlan, Puebla
Geological Setting of the Tuligtic Project and Ixtaca Zone
Within the Tuligtic Project, argillaceous limestone of the Late Jurassic to Early Cretaceous Upper Tamaulipas
formation is underlain by transitional calcareous clastic rocks including siltstone, grainstone, mudstone, and
calcareous shale. During the Laramide orogeny the carbonate package was intensely deformed into a series of
thrust-related east verging anticlines. Calcareous shale units appear to occupy the cores of the anticlines while
the thick bedded limestone/mudstone units occupy the cores of major synclines at the Ixtaca Zone. These
carbonate basement units are crosscut by intensely altered intermediate composition dykes in the Tertiary. The
deformed Mesozoic sedimentary sequence is discordantly overlain by epithermal altered Cenozoic bedded
crystal tuff of the upper Coyoltepec subunit. The Coyoltepec volcanics are locally oxidized and weathered near
surface and along structures.
Two styles of alteration and mineralization have been identified in the area: (1) copper-molybdenum porphyry
style alteration and mineralization hosted by diorite and quartz-diorite intrusions; (2) silver-gold low-
sulphidation epithermal quartz-bladed calcite veins hosted primarily by carbonate rocks and spatially associated
with overlying volcanic hosted texturally destructive clay alteration and replacement silicification.
Outcropping porphyry-style alteration and mineralization is observed in the bottoms of several drainages where
the altered intrusive complex is exposed in erosional windows beneath post mineral unconsolidated ash
deposits. Multiple late and post mineral intrusive phases have been identified crossing an early intensely altered
and quartz-veined medium-grained feldspar phyric diorite named the Principal Porphyry. Other intrusive types
include late and post mineral mafic dykes and an inter-mineral feldspar-quartz phyric diorite. Late mineral
mafic dykes are fine grained and altered to chlorite with accessory pyrite. Calc-silicate (garnet-clinopyroxene)
altered limestone occurs in proximity to the intrusive contacts and is crosscut by late quartz-pyrite veins. Early
biotite alteration of the principal porphyry consists of biotite-orthoclase flooding of the groundmass. Quartz
veins associated with early alteration have irregular boundaries and are interpreted to be representative of A-
style porphyry veins. These are followed by molybdenite veins which are associated with the same wall rock
alteration. Chalcopyrite appears late in the early alteration sequence. Late alteration is characterized by intense
zones of muscovite-illite-pyrite overprinting earlier quartz-K-feldspar-pyrite ± chalcopyrite veining and
replacing earlier hydrothermal orthoclase and biotite. Stockwork quartz-pyrite crosscuts the A-style veins and
is associated with muscovite-illite alteration of biotite. The quartz-sericite alteration can be texturally
destructive resulting in white friable quartz veined and pyrite rich rock. Pyrite is observed replacing
chalcopyrite and in some instances chalcopyrite remains only as inclusions within late stage pyrite grains.
Epithermal mineralization on the Tuligtic property is considered to have no genetic relationship to the porphyry
alteration and mineralization described above. The epithermal system is unoxidised and well preserved, and
there is evidence of a paleosurface as steam heated kaolinite and replacement silica alteration occur at higher
elevations where the upper part of the Coyoltepec pyroclastic deposit is preserved. The veining of Ixtaca
epithermal system displays characteristics representative of intermediate and low sulphidation deposits. These
include typical ore and gangue mineralogy (electrum, sphalerite, galena, adularia, carbonates), mineralization
dominantly in open space veins (colloform banding, cavity filling).
32
Mineralized hydrothermal breccias showing multiphase development are commonly encountered within the
main veins. Hydrothermal silicic/carbonate breccia zones occur within the limestone and dip steeply. These
breccias are dominantly controlled by the main faults.
The Upper Tamaulipas formation, the dykes that crosscut it and the upper Coyoltepec volcanic subunit are the
main host rocks to the epithermal vein system at Ixtaca. In the Main and Ixtaca North zones veining strikes
dominantly ENE-WNW (060 degrees) parallel to a major dyke trend and at a very high angle to the N to NNW
bedding and fold structures within the limestones. The veins of the Chemalaco Zone are hosted by the shaley
carbonate units and strike to the NNW, dipping to the SSW. In the footwall to Chemalaco Zone a parallel dyke
has been identified which is altered and mineralized. The Chemalaco Zone and the dyke are interpreted to
strike parallel to bedding and to core an antiform comprised of calcareous shale.
Studies of mineral assemblages in hand specimen, transmitted and reflected light microscopy and SEM analyses
were carried out in order to construct a paragenetic sequence of mineral formation. This work revealed that
veining occurred in three main stages. The first stage is barren calcite veining. This is followed by buff brown
and pink colloform carbonate and silicate veins containing abundant silver minerals and lower gold. The third
stage of veining contains both gold and silver mineralization. The dominant gold-bearing mineral is electrum,
with varying Au:Ag ratios. The majority of grains contain 40-60 wt (weight) % gold but a few have down to 20
wt% (Staffurth, 2012). Gold content occasionally varies within electrum grains, and some larger grains seem to
be composed of aggregates of several smaller grains of differing composition (Staffurth, 2012). Electrum often
appears to have been deposited with late galena-clausthalite both of which are found as inclusions or in
fractures in pyrite. It is also closely associated with silver minerals such as uytenbogaardtite (Ag3AuS2). This
mineral is associated with electrum, chalcopyrite, galena, alabandite, silver minerals and quartz in stage three
mineralization. Apart from electrum, the dominant silver bearing minerals are polybasite (-pearceite) and
argentian tetrahedrite plus minor acanthite-naumannite, pyrargyrite and stephanite. They are associated with
sulphides or are isolated in gangue minerals.
The vein-related mineralization at Ixtaca does not have hard geologic boundaries. The mineralized zones are
essentially vein zones, the outer boundaries of which are grade boundaries associated with decreased vein
density.
History of Past Work
To the Company’s knowledge, no modern exploration was carried out on the project prior to Almaden’s
acquisition of the property area by staking in 2001. Evidence of historic mining of clay (kaolinite) deposits
from surface is evident throughout the property area. Almaden acquired the Cerro Grande claims of the Tuligtic
Project in 2001 following the identification of surficial clay deposits that were interpreted to represent high-
level epithermal alteration. In 2010, the Company acquired the third Caldera 3-a claim. Subsequent geologic
mapping, rock, stream silt, soil sampling and induced polarization (IP) geophysical surveys identified porphyry
copper and epithermal gold targets within an approximately 5 x 5 km area of intensely altered rock.
On May 9, 2002 Almaden entered into a joint venture agreement with BHP Billiton World Exploration Inc.
(BHP) to undertake exploration in eastern Mexico. Initial helicopter-borne reconnaissance programs were
completed in May 2003 and March 2004 on select targets within the joint venture area of interest. The work
resulted in the acquisition of five (5) separate properties, in addition to the previously acquired Cerro Grande of
the present day Tuligtic Property. Following a review of the initial exploration data, effective January 20, 2005,
BHP relinquished its interest in the six properties to Almaden. The joint venture was terminated in 2006.
Later in 2006, the Tuligtic project was optioned to Pinnacle Mines Ltd. In 2007 this option agreement was
terminated. In 2009 the property was optioned to Antofagasta Minerals S.A. under terms whereby it could earn
a 75% interest in the property. In 2009 and 2010 Antofagasta Minerals S.A., under Almaden operation,
conducted a geophysical and exploration drilling program on the copper porphyry area of the project. The
program consisted of three lines of IP geophysics and 2,522 meters of diamond drilling in six holes. The IP
chargeability results, along with that of previous programs carried out by Almaden, defined a 2 by 2.5 kilometer
chargeability high the limits of which are currently only defined to the west and south. The drilling intersected
skarn and porphyry copper-molybdenum mineralization in an intrusive complex. Four of the six drill holes were
oriented within thirty degrees of north south and located within a 200 by 300 meter area roughly in the central
portion of the IP chargeability anomaly. These holes were selected based on intensely altered and quartz-veined
33
porphyry exposed in the drainages in the central portion of the chargeability anomaly. The drilling program
encountered sub economic porphyry mineralization. The mineralized intersections, despite being largely in
skarn and uneconomic, are considered by the Company to be encouraging for the greater porphyry potential of
the system. Antofagasta Minerals S.A. terminated its option on the project in March 2010.
In July 2010 Almaden initiated a diamond drilling program on the gold-silver epithermal vein target area of the
project located roughly 1 kilometer to the south of the porphyry prospect on the project. The first hole in this
program (results announced in August, 2010) intersected a zone of banded carbonate-quartz epithermal veining
with gold and silver values. This hole constitutes the discovery of the Ixtaca Zone of veining. The entire hole
cut through a vein zone of varying intensity of veining and intersected 302.41m of 1.01 g/t Au & 48 g/t Ag.
Within this broad zone of veining several higher grade veins were intersected including 44.35 meters of 2.77 g/t
Au and 117.7 g/t Ag. Immediately after this discovery the Company initiated a follow-up drill program.
Between 2010 and 2013, Almaden’s exploration at the Ixtaca Zone of the Tuligtic Property included geologic
mapping and prospecting, alteration mineralogic characterization, rock and soil geochemical sampling, ground
magnetics, IP and resistivity, Controlled Source Audio-frequency Magnetotelluric (CSAMT), and Controlled
Source Induced Polarization (CSIP) geophysical surveys resulting in the identification of several anomalous
zones. Since 2010, a total of 453 exploration diamond drill holes have been drilled at the Tuligtic Gold-Silver
Project, totaling 147,892 m.
Present Condition of Project and 2014 Exploration Program
Geology and Mineral Resources
The Ixtaca deposit is an epithermal gold-silver deposit, mostly hosted by veins in carbonate units (calcareous
clastic rocks) and crosscutting pre-mineral altered dykes (“basement rocks”) with a minor component of
disseminated mineralisation hosted in overlying volcanic rocks. Wireframes constraining mineralised domains
were constructed based on geologic boundaries defined by mineralisation intensity and host rock type. Higher
grade zones occur where there is a greater density of epithermal veining. These higher grade domains have good
continuity and are cohesive in nature.
On January 31, 2013, the Company announced a maiden resource on the Ixtaca Zone. Since that time drilling
has been focused on expanding and infilling the known resource base for this PEA which utilised the NI 43-101
Compliant Updated Mineral Resource Estimate released January 22, 2014, performed by Gary Giroux, P.Eng.,
qualified person under the meaning of NI 43-101, and summarised in Table 1 below. The data available for the
resource estimation consisted of 423 drill holes assayed for gold and silver. The estimate was constrained by
three dimensional solids representing different lithologic and mineralized domains. Of the total drill holes 400
intersected the mineralized solids and were used to make the resource estimate. Capping was completed to
reduce the effect of outliers within each domain. Uniform down hole 3 meter composites were produced for
each domain and used to produce semi-variograms for each variable. Grades were interpolated into blocks 10 x
10 x 5 meters in dimension by ordinary kriging. Specific gravities were determined for each domain from drill
core. Estimated blocks were classified as either Measured, Indicated or Inferred based on drill hole density and
grade continuity.
Cautionary Note to U.S. Investors concerning estimates of Measured and
Indicated Resources
This section uses the terms “measured resources” and “indicated resources”. We
advise U.S. investors that while these terms are recognized and required by Canadian
regulations, the U.S. Securities and Exchange Commission does not recognize them.
U.S. Investors are cautioned not to assume that any part or all of mineral deposits
in these categories will ever be converted into reserves.
Cautionary Note to U.S. Investors concerning estimates of Inferred
Resources
This section uses the term “inferred resources”. We advise U.S. investors that while
this term is recognized and required by Canadian regulations, the U.S. Securities and
Exchange Commission does not recognize it. “Inferred resources” have a great amount
of uncertainty as to their existence, and great uncertainty as to their economic and legal
34
feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource
will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred
Mineral Resources may not form the basis of feasibility or other economic studies.
U.S. investors are cautioned not to assume that part or all of an inferred resource
exists, or is economically or legally mineable.
MEASURED RESOURCE
AuEq Cut-off Tonnes > Cut-off
Grade>Cut-off
Contained Metal
(g/t)
0.3
0.5
0.7
1.0
2.0
(tonnes)
Au (g/t) Ag (g/t) AuEq (g/t) Au (ozs) Ag (ozs) AuEq (ozs)
44,590,000
30,440,000
22,320,000
15,620,000
6,000,000
0.48
0.61
0.73
0.88
1.33
30.27
39.44
48.00
58.66
86.51
1.07
1.38
1.67
2.03
3.01
682,000 43,400,000 1,528,000
599,000 38,600,000 1,351,000
525,000 34,450,000 1,196,000
444,000 29,460,000 1,018,000
256,000 16,690,000
581,000
INDICATED RESOURCE
AuEq Cut-off Tonnes > Cut-off
Grade>Cut-off
Contained Metal
(g/t)
0.3
0.5
0.7
1.0
2.0
(tonnes)
Au (g/t) Ag (g/t) AuEq (g/t) Au (ozs) Ag (ozs) AuEq (ozs)
109,150,000
62,610,000
39,520,000
23,850,000
5,910,000
0.38
0.52
0.65
0.81
1.39
20.76
28.88
37.09
47.06
72.81
0.79
1.08
1.37
1.73
2.81
1,344,000 72,850,000 2,762,000
1,049,000 58,140,000 2,182,000
828,000 47,130,000 1,746,000
624,000 36,090,000 1,327,000
265,000 13,830,000
534,000
INFERRED RESOURCE
AuEq Cut-off Tonnes > Cut-off
Grade>Cut-off
Contained Metal
(g/t)
0.3
0.5
0.7
1.0
2.0
(tonnes)
Au (g/t) Ag (g/t) AuEq (g/t) Au (ozs) Ag (ozs) AuEq (ozs)
43,410,000
22,700,000
13,630,000
7,700,000
1,200,000
0.36
0.50
0.63
0.79
1.18
17.52
24.99
31.56
39.81
73.69
0.70
0.98
1.25
1.57
2.61
498,000 24,450,000
974,000
362,000 18,240,000
717,000
277,000 13,830,000
546,000
197,000
9,860,000
389,000
45,000
2,840,000
101,000
Table 1: Ixtaca Zone NI 43-101 Measured, Indicated and Inferred Mineral Resource Statement w ith the Base Case 0.5 g/t AuEq Cut-Off
highlighted. Also show n are the 0.3, 0.7, 1.0 and 2.0 g/t AuEq cut-off results. AuEq calculation based on three year trailing av erage
prices of $1540/oz gold and $30/oz silv er.
Preliminary Economic Assessment
On April 16, 2014, the Company announced the positive results from the maiden National Instrument (NI) 43-
101 compliant Preliminary Economic Assessment (“PEA”) on its 100% owned Ixtaca Gold-Silver deposit,
Mexico. On September 3, 2014 the Company reported an updated National Instrument (NI) 43-101 compliant
PEA which significantly reduces initial capital. Initial capital is further reduced with an alternative “ramp-up”
case that starts with a smaller 7,000 tonnes per day mill and ramps up to a 30,000 tonnes per day by Year 6.
Both PEAs were prepared by Moose Mountain Technical Services (“MMTS”) and Knight Piésold Ltd. (“KP”).
The conclusions and recommendations of both PEAs are that the Ixtaca deposit may be economically viable and
the Company should proceed to a Pre-Feasibility Study ("PFS"). Highlights of the updated PEA are
summarised below (all values shown are in $US).
This PEA is preliminary in nature as it includes inferred mineral resources which are considered too
speculative geologically to have the economic considerations applied to them that would enable them to
be categorized as mineral reserves. There is no certainty that the PEA forecast will be realized or that
any of the resources will ever be upgraded to reserves. Mineral Resources that are not Mineral Reserves
do not have demonstrated economic viability.
35
The inputs and parameters for the PEA update includes base case metal prices (US $1320/oz gold and US
$21/oz silver). The ramp-up case uses higher processing costs for the lower throughput years. Highlights of the
PEA update are summarised below (all values shown are in US Dollars).
PEA UPDATE HIGHLIGHTS:
Base Case (US$1320/oz gold and US$21/oz silver):
Total mill feed of 125.3M tonnes and life of mine strip ratio of 1.7:1;
•
Pre-tax Net Present Value (“NPV”) of $842M at a 5% discount rate and internal rate of return of 37%;
• After-tax (including new Mexican Mining Duties) NPV(5%) of $515M and internal rate of return of 28%;
•
• Mine life of 12 years with an average processing rate of 30,000 tonnes per day;
• Average annual production of 130,000 ounces of gold and 7,788,000 ounces of silver;
•
Estimated pre-production capital of US$399M. Sustaining capital of US$110M;
• After-Tax Payback of initial capital of 2.5 years.
Ramp-Up Case (US$1320/oz gold and US$21/oz silver):
Total mill feed of 121M tonnes and life of mine strip ratio of 1.8:1;
•
Pre-tax Net Present Value (“NPV”) of $699M at a 5% discount rate and internal rate of return of 29%;
• After-tax (including new Mexican Mining Duties) NPV(5%) of $427M and internal rate of return of 23%;
•
• Mine life of 15 years;
• Average annual production of 103,000 ounces of gold and 6,148,000 ounces of silver;
•
Estimated pre-production capital of US$244M expansion capital of US$116M, and life-of mine sustaining
capital of US$111M;
• After-Tax Payback of initial capital of 4.5 years and after-tax payback of expansion capital in 0.4 years;
The PEA update is based on the NI 43-101 Compliant Updated Resource Estimate which was announced by the
Company on January 22, 2014.
Production and Processing
The Ixtaca gold-silver project is planned as an open pit mining operation using contractor mining. Contactor
mining operating costs are assumed to be higher than expected owner-operated mining costs. Major mining
equipment is comprised of 177-tonne capacity haul trucks with 27m3 shovels. The estimated mining inventory
is comprised of 218 million tonnes of rock and 125 million tonnes of mineralized material with an average mill
feed grade of 0.430 grams per tonne gold and 25.71 grams per tonne silver. A total of 1.56 million ounces of
gold and 93.5 million ounces of silver would be produced over the life of mine. The PEA Update base case
includes a 30,000 tonne per day process plant to produce gold and silver doré on site. The process plant
includes conventional crushing, grinding, gravity, flotation, concentrate leaching and Merrill-Crowe extraction
process. Average process recoveries for gold and silver are expected to be 90% based on test work carried out
at the Blue Coast Research Ltd laboratory in British Columbia, Canada under the supervision of MMTS. The
following table summarizes the production and processing parameters:
Base Case Projected Production and Processing Summary
Total Mill Feed Material
Processing Rate
Life of Mine (LOM) Strip Ratio
Average Mill Feed Grade
Average Process Recoveries
Average Annual Production LOM (ounces)
Total Production (ounces)
125.3 Million tonnes
30,000 tonnes per day
1.7 : 1
Gold
0.430 g/t
Silver
25.71 g/t
90%
90%
130,000
7,788,000
1,562,000
93,461,000
36
Capital and Operating Costs
The total estimated initial capital cost for the Ixtaca gold-silver project is $399 million and the estimated total
LOM operating costs are $14.48 per tonne mill feed. The following tables summarize the cost components:
Base Case Initial Capital Costs ($ Millions)
Site Infrastructure
TMF and Water Management
Pre-stripping
Mining Equipment
Process Plant, Doré Plant and Conveyor
Indirects, EPCM, Contingency and Owner’s Costs
Total
*Numbers may not add due to rounding
Base Case Projected Operating Costs ($)
Contractor mining
Contractor mining
Stockpile re-handling
Stockpile re-handling
Processing
Lower Throughput Processing
Life of Mine G&A and GME
Life of Mine TMF management and
reclamation
$20.4
$44.7
$64.5
$8.0
$194.5
$67.4
*$399.4
$1.81 $/tonne mined
$3.89 $/tonne milled
$1.00 $/tonne re-handled
$0.34 $/tonne milled
$9.00 $/tonne milled
$14.00 $/tonne milled
$0.97 $/tonne milled
$0.28 $/tonne milled
Economic Results and Sensitivities
A summary of financial outcomes comparing base case metal prices for both start-up scenarios to two
alternative metal price situations are presented below. The three metal price scenarios match the maiden PEA
scenarios. The maiden PEA base case prices were derived from a combination of spot prices in 2014 and
current common peer usage. The Alternate Case prices represented the lowest sustained prices of the metals
over the previous three years. The 3 year trailing average prices represented the upside potential should metal
prices regain their previous strength.
Base Case Summary of Ixtaca Gold-Silver Economic Results and Sensitivities ($ Million)
Gold Price ($/oz)
Silver Price ($/oz)
Net Cash Flow
NPV (5% discount rate)
NPV (8% discount rate)
Internal Rate of Return (%)
Payback (years)
Alternate Case*
Base Case
3 Year trailing
Average
Pre-Tax After-Tax Pre-Tax
After-Tax Pre-Tax
After-Tax
$1200
$18
$1320
$21
$1530
$29
$889
$538
$395
28.1%
2.7
$558
$315
$216
20.8%
3.0
$1,334
$842
$640
37.2%
2.3
$852
$515
$378
28.3%
2.5
$2,334
$1,514
$1,179
53.0%
1.7
$1,496
$950
$727
41.4%
2.0
*The lowest-grade stockpile material processed at the end of the mine life is below cut-off grade at the Alternate Case metal prices. In the
Alternate Case this material is not processed and is counted as waste. This in turn shortens the mine life to 9 years (from 12)
37
Ramp-Up Case Summary of Ixtaca Gold-Silver Economic Results* and Sensitivities ($ Million)
Alternate Case**
Base Case
Pre-Tax After-Tax Pre-Tax
After-
Tax
$1200
$18
$1320
$21
3 Year trailing
Average
Pre-Tax
After-Tax
$1530
$29
$792
$424
$284
21.5%
5.0
0.4
$494
$246
$151
16.7%
5.2
0.5
$1,231
$699
$497
28.9%
4.2
0.3
$779
$427
$294
23.2%
4.5
0.4
$2,218
$1,314
$972
42.5%
2.9
0.2
$1,415
$826
$603
34.8%
3.2
0.3
Gold Price ($/oz)
Silver Price ($/oz)
Net Cash Flow
NPV (5% discount rate)
NPV (8% discount rate)
Internal Rate of Return (%)
Initial Capital Payback
(years)*
Expansion Capital Payback
(years)
*Cash Flows, NPV and IRR numbers reflect the larger mill expansion capital being financed internally from production revenue. Payback is
calculated without including the mill expansion capital in order for a relative understanding of the timing of revenue streams.
** The lowest-grade stockpile material processed at the end of the mine life is below cut-off grade at the Alternate Case metal prices. In the
Alternate Case this material is not processed and is counted as waste. This in turn shortens the mine life to 13 years (from 15)
Rock Management, Environment and Community
Almaden recognises the paramount importance of protecting the environment and, to facilitate the development
of a sustainable project. Knight Piésold Ltd. (“KP”) have been retained to help the Company with long lead
item studies concerning environmental monitoring, assessment and permitting matters. Almaden established the
following environmental objectives for the Project:
• Protect surface and ground water quality;
•
• Minimize the project footprint.
Incorporate environmental enhancement opportunities into the mine and final reclamation plans;
In order to achieve these objectives Almaden and KP have instituted the following management strategies
towards the submission of a Mexican Environmental Impact Statement.
Water Management – Almaden with KP has developed a comprehensive 2014 water management strategy
including the commencement of a hydrometric and climate monitoring program, and the drilling of water
measurement wells. The latest modelling using regional weather patterns suggest that management of rainfall
and runoff from within the project area will provide sufficient water for continuous operations for the Ixtaca
mine plan. Currently local communities use existing water supplies that come from natural springs located at
higher elevations and upstream of the Ixtaca deposit. Stream flow upstream of the project will be either diverted
around or collected, potentially creating a new fresh water supply source for local use, or used for mining and
milling processes and before any would be discharged it would be treated to meet environmental guidelines.
Management of Rock – The limestone host rock, which constitutes approximately 1/3 of the total waste rock
has buffering capacity. Static geochemical testing is currently underway to characterize this further.
Environmental Monitoring – Groundwater monitoring to ensure compliance with all applicable best
management practice (BMP) technologies is a fundamental component of the Project. Flora and fauna studies
are also underway.
Community - The Ixtaca deposit and any potential mining operation will be located in an area previously logged
or cleared. Existing land use in the project area is minimal. The Company has employed up to 70 local people
in its drilling program who live locally to the Ixtaca deposit. Local employees make up virtually all the drilling
38
staff, who have been trained on the job to operate the Company’s wholly owned drills. The Company has
implemented a comprehensive scientifically based and objective community relations and education program
for employees and all local stakeholders to transparently explain the exploration program underway as well as
the potential impacts and benefits of any possible future mining operation at Ixtaca. The Company regards the
local communities to be major stakeholders in the Ixtaca deposit’s future, along with the Company’s
shareholders. Every effort is being made to create an open and clear dialogue with our stakeholders to ensure
that any possible development scenarios that could evolve from the anticipated future studies are properly
understood and communicated throughout the course of the Company’s exploration and development program.
The Company invites all interested parties to visit www.almadenminerals.com to find out more about our
community development, education and outreach programs.
Economic Impacts - The economic analysis set out in the PEA update also provides some possible indications
of the potential economic impact of the Ixtaca Project on the local, Puebla State and Mexican economies,
should the future work and permitting support development of a mining operation. Highlights include:
• Direct employment of more than 400 people during the construction phase and 430 people during the
subsequent approximately 12 year operating phase;
• Gross investment of approximately $80 million in capital equipment and equipment manufacturing
during the construction phase; and,
• Approximately $483 million in direct taxes to all levels of government, including payments to the local
Municipality ($60 million), Puebla State ($109 million) and Federal ($314 million) governments over
the approximately 12 year operating life of the project, but excluding payroll taxes, sales taxes and
income taxes paid by employees.
Metallurgical Gold and Silver Test Work
Almaden has previously reported preliminary metallurgical test results (for details consult Almaden’s news
release of January 31, 2013 and the 2013 Tuligtic Project NI 43-101 Technical Report filed on SEDAR). These
first test results showed that standard gravity and flotation techniques could result in non-optimised gold and
silver recoveries that are roughly equivalent for each geological domain. This preliminary test work indicates
that leaching the combined gravity/flotation concentrate can produce a gold and silver doré on site. All
geologic domains were tested using whole core composites selected to represent a range of grades.
Subsequent to the publication of the preliminary results in 2013, additional metallurgical work, on the original
and new whole core composites, focused on optimizing gravity and rougher flotation results over a broader
range of head grades. This work indicates overall Au and Ag recoveries from a combination of flotation and
gravity concentration and intensive leaching of this combined concentrate to average 90% for Au and Ag across
all geologic domains. Further PFS-level metallurgical test work focussing on process optimization is currently
underway on variability samples collected from fresh drill core. This program will focus on the optimisation of
the gravity/bulk flotation/concentrate and intensive leaching process. Offsite refining of the concentrate will
also be evaluated.
Next Engineering and Development Steps
The Company has initiated work towards a Pre-Feasibility Study. Apart from further metallurgical studies
(underway), the work initiated includes geo-mechanical (field work completed) and geotechnical (underway)
drilling, static geochemical test work (underway) to characterise rock chemistry and long lead time
environmental and water monitoring. Other work underway currently includes environmental baseline
monitoring such as flora and fauna studies, climate monitoring, water quality sampling and surface water
hydrology monitoring. A NI 43-101 technical report for the Ixtaca Deposit PEA Update was filed on SEDAR
(www.sedar.com) and Edgar (www.sec.gov) on October 17, 2014.
39
Qualified Persons, Quality Control and Assurance
The following companies have undertaken work in preparation of the PEA update:
• APEX Geoscience Ltd. (Exploration and Drill data QA/QC)
• Giroux Consultants Ltd. (Mineral Resource Estimation)
• Moose Mountain Technical Services (Overall Report Preparation, Mine Plan and Mineral Processing,
Infrastructure and Financial Model)
• Knight Piésold Engineering Ltd. (Geotechnical, Environmental, Rock and Tailings Management)
The independent qualified persons responsible for preparing the Ixtaca Preliminary Economic Assessment are;
Jesse Aarsen, P.Eng. and Tracey Meintjes, P.Eng. of MMTS, Ken Embree, P.Eng. of KP, 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
independent consultants to the Company, are Qualified Persons as defined by National Instrument 43-101 ("NI
43-101").
QA/QC
The analyses used in the preparation of the mineral resource statement were carried out at ALS Chemex
Laboratories of North Vancouver using industry standard analytical techniques. For gold, samples are first
analysed by fire assay and atomic absorption spectroscopy (“AAS”). Samples that return values greater than 10
g/t gold using this technique are then re-analysed by fire assay but with a gravimetric finish. Silver is first
analysed by four acid digestion and Inductively Coupled Plasma - Atomic Emission Spectroscopy (“ICP-AES”)
finish. Samples that return values greater than 100 g/t silver by ICP-AES are then re analysed by HF-HNO3-
HCLO4 digestion with HCL leach and ICP-AES finish. Of these samples those that return silver values greater
than 1,500 g/t are further analysed by fire assay with a gravimetric finish. Blanks, field duplicates and certified
standards were inserted into the sample stream as part of Almaden’s quality assurance and control program
which complies with National Instrument 43-101 requirements. In addition to the in-house QAQC measures
employed by Almaden, Kris Raffle, P.Geo., of APEX Geoscience Ltd., completed an independent review of
Almaden’s drill hole and QAQC databases. The review included an audit of approximately 10% of drill core
analyses used in the mineral resource estimate. A total of 10,885 database gold and silver analyses were
verified against original analytical certificates. Similarly, 10% of the original drill collar coordinates and down
hole orientation survey files were checked against those recorded in the database; and select drill sites were
verified in the field by Kris Raffle, P.Geo. The QAQC audit included independent review of blank, field
duplicate and certified standard analyses. All QAQC values falling outside the limits of expected variability
were flagged and followed through to ensure completion of appropriate reanalyses. No discrepancies were
noted within the drill hole database, and all QAQC failures were dealt with and handled with appropriate
reanalyses. The mineral resource estimate referenced in this press release was prepared by Gary Giroux, P.Eng.,
an independent Qualified Person as defined by NI 43-101. All drill sections and related assay data from the
2013 drilling program used in the resource estimate have been posted to the Company’s website.
Exploration Opportunities
The Ixtaca deposit is one of several exploration targets on the wholly owned Tuligtic property. The 14,000
hectare Tuligtic claim covers an area of high level epithermal clay alteration. The project area is partially
covered by volcanic ash deposits which mask underlying alteration, potential vein zones and associated soil
responses. In areas devoid of this covering ash, soil sampling has defined several distinct zones of elevated
gold and silver values and trace elements typically associated with epithermal vein systems. The Ixtaca zone is
one of the largest areas of gold/silver soil response but it is also one of the areas with the least ash cover on the
project. Management believes that the other altered and geochemically anomalous areas could represent
additional zones of underlying quartz-carbonate epithermal veining like the Ixtaca zone.
The potential quantity and grade of these exploration targets is conceptual in nature. There has been insufficient
exploration and/or study to define these exploration targets as a Mineral Resource. It is uncertain if additional
exploration will result in these exploration targets being delineated as a Mineral Resource. The potential
quantity and grade of these exploration targets has not been used in the PEA update.
40
Upcoming / Outlook
The Company plans to continue the on-going development activities at the 100% owned Tuligtic project and the
Ixtaca gold-silver deposit. Work currently underway includes advanced engineering and environmental
baseline studies to meet the requirements of a Pre-Feasibility Study (“PFS”) and the submittal of an
environmental permit application and risk assessment to the Mexican regulatory agency responsible for mine
permitting. To date Almaden has completed or initiated the following studies:
• Hydrologic studies including the drilling of water wells and installation of hydrologic equipment for
baseline monitoring of subsurface water flow and quality on the project site;
• Surface water quality and flow measurements;
• Geochemical characterization of rock materials;
• Condemnation drilling of areas where mine infrastructure is planned;
• Geotechnical drilling to confirm foundation, footing and subsurface material quality;
• Geomechanical drilling to confirm rock strength, hardness and pit slope parameters;
• PFS level metallurgical testwork;
• Flora and fauna studies;
•
Installation of a weather station.
All field work and testing programs are anticipated to be completed by middle of 2015, allowing for the
completion of a PFS and submittal of environmental permits in late 2015.
The El Cobre Prospect - Mexico
Location and Access
The El Cobre property is located in the state of Veracruz roughly 75 kilometers northwest of the City of
Veracruz. The property is accessible by road along the Pan American Highway (Federal Highway 180) north
from Veracruz. Various roads provide access to the center of the claim block. Logistically, it is extremely well
situated with the Pan-American Highway located 3 kilometers to the east of the property and ready access to
power (the Laguna Verde Nuclear Power Plant is located 15 kilometers north).
The topography on the property is rugged with elevations ranging from 10 m to 400 m. Trees and scrub growth
cover much of the hillsides, however, various trails and dirt roads provide good access to many parts of the
property.
A warehouse and core facility has been established in the town of Tinajitas providing a base with good access to
all parts of the property.
41
42
Claims and Title
Almaden Minerals Ltd., through its wholly owned Mexican subsidiary Minera Gavilan S.A. de C.V., owns a
100% interest in the El Cobre project subject to a 0.5% NSR payable to a third party, 50% of which may be
purchased for $US3.0 MM. The below table shows the title numbers and expiry dates for the list of current
titled claims.
Claim Name
CABALLO BLANCO III
CABALLO BLANCO V
CABALLO BLANCO VIII
(GPO) REYNA NEGRA FRACCIÓN 2
RED. REYNA NEGRA FRACCIÓN 4
C. B. X-b
C. B. X-a
Title Number
218457
218955
223360
221152
224416
237405
237440
File Number
5/1/0667
5/1/0674
108/72
5/1/716
05/02/2023
108/120
108/119
Area in Hectares
1145.00
450.00
965.81
65.97
25.15
2653.56
1721.00
Expiry Date
04/11/2052
27/01/2053
02/12/2054
02/12/2053
02/12/2053
08/12/2060
15/12/2060
Geological Setting of the El Cobre Project
Central Mexico is dominated by an east-west belt of Miocene to sub-recent calc-alkaline andesitic to dacitic
volcanic rocks and active volcanoes known as the Trans Mexican Volcanic Belt (TMVB). At the eastern end of
the TMVB, where the El Cobre Property is located, Quaternary basalts that are associated with the Eastern
Alkalic Province cover Oligocene andesitic to basaltic volcanic rocks of the TMVB. The property itself is
largely underlain by a sequence of andesitic to dacitic lithic tuffs, crystal tuffs and volcanic breccias. These
volcanic centers are bound by and possibly in fault contact with basalt flows and related clastic rocks. Large
arcuate faults are present and are interpreted to represent normal faults associated with caldera development.
Fine-grained, magnetic monzonite and diorite intrusions and dykes have been identified in several locations on
the property and these are interpreted to be the causative intrusions for the porphyry style mineralization
identified on the project.
History of Past Work
To the Company’s knowledge, except for some prospecting and geological reconnaissance work mostly on and
around the Caballo Blanco III concession, no modern exploration was carried out on the El Cobre project area
prior to Almaden’s acquisition of the property.
Early in 1997, Almaden Minerals Ltd., through its wholly owned subsidiary Minera Gavilan S.A. de C.V.,
signed an agreement whereby Almaden had the option to acquire a 100% interest in the claims subject only to
the royalty mentioned above. This option has been exercised.
From 1995 to 1998, Almaden Minerals Ltd completed exploration work mainly concentrated on porphyry Cu-
Au and Au-Ag vein targets in the El Cobre area. Surface work included extensive grid based soil sampling and
ground induced polarization (IP) and magnetics geophysics. This work also included 17 RC drill holes designed
to test soil geochemical and IP geophysical anomalies spatially associated with mineralized float and outcrop.
The 17-hole reverse circulation drill program totaled 2,390 meters and was completed in the spring of 1998.
Several zones of gold and silver mineralized quartz-barite veins were intersected including the zone in hole CB-
4 which cut 40 meters of 1.4g/t gold and 9.0 g/t silver. Shallow drill holes into an intrusive returned 107 meters
of 0.25g/t gold and 0.18% copper in one hole and 40 meters averaging 0.39g/t gold and 0.15% copper in
another. Drill testing of a third zone with two holes returned 20 meters of 0.45g/t gold and 0.11% copper and 15
meters of 0.23g/t gold and 0.16% copper. Based on this work, it was interpreted that these holes tested the top
of a porphyry system.
In 2001, Noranda optioned the Caballo Blanco property from Almaden and drilled 7 very widely spaced
diamond drill holes totaling 1,641 meters. No significant copper mineralization was intersected and despite
significant alteration and anomalous gold mineralization in several holes, Noranda terminated its option in the
fall of 2002.
In 2002 the project was optioned to Comaplex Minerals Corp. under terms whereby Comaplex could earn a
60% interest in the project which Comaplex exercised in 2006. In 2004 Comaplex drilled two diamond drill
43
holes on the El Cobre project for a total of 515.8 meters. This drilling confirmed the presence of significant
porphyry style copper–gold mineralization. DDH 04CB1 drilled in an area that had shown significant results in
the past returned 290 meters that averaged 0.39 g/t gold and 0.16% copper. The drill hole is associated with a
prominent magnetic feature and a large gold soil anomaly. In 2007 Almaden purchased Comaplex Mineral’s
60% interest in the project in its entirety for a cash payment of US$1.25 Million.
In 2007 prospecting conducted by Almaden resulted in the discovery of a new zone of porphyry mineralization
named Pedrero in the north part of the project.
Also in 2007 Almaden optioned the project to Canadian Gold Hunter Corp. under terms whereby Canadian
Gold Hunter could earn a 70% interest in the project from Almaden. In 2008 Canadian Gold Hunter drilled 10
diamond drill holes on the project for a total of 2,837.14 meters. At Pedrero drilling confirmed the presence of
porphyry mineralization. The final 41.15 meters of 08CBCN-019 graded 0.272% copper and 0.415 g/t gold
before the hole was lost in a fault. Significant sections with strong quartz stockwork were encountered in hole
09CBCN-042 and the final 137 meters returned 0.105% copper and 0.100 g/t gold.
In 2010 NGEX Resources Inc. (successor to Canadian Gold Hunter Corp.) sold its option to acquire a 70%
interest in the project to Goldgroup Mining at which point a 60 (Almaden) / 40 (Goldgroup Mining) joint
venture was initiated. In 2011 Almaden acquired a 100% interest in the project as part of the consideration of
the sale of Almaden’s interest in the adjacent Caballo Blanco project to Goldgroup Mining.
From late November 2011 to January 2012, a TITAN 24 deep induced polarization surface geophysical
program was conducted on the property.
In 2013, the Company drilled two holes on the property. This drilling was conducted on only one of the four
porphyry targets identified on the project. Results from these holes are considered by management to continue
to show the potential of the property to host an economic copper-porphyry deposit. Results are detailed in a
news release dated May 6, 2013. However, due to depressed market conditions and a steep decline in precious
metals prices, the Company reduced the level of planned drilling at El Cobre to focus its resources on the Ixtaca
zone of its Tuligtic project.
Present Condition of Project and 2014 Exploration Program
The property is without known reserves and the 2014 exploration program was minimal and exploratory in
nature. A small exploration drill program has been planned for 2015 and permitting is currently underway.
Under the Company’s proposed spin-out plan, Almaden’s interest in the El Cobre property would be transferred
to the newly incorporated company “Spinco”. If the plan is completed as proposed and is approved by the
Company’s shareholders at the Annual General Meeting scheduled for June 2015, Spinco would be responsible
for any future exploration on the property.
NON-PRINCIPAL PROPERTY INTERESTS
The Company has assembled a portfolio of mineral property interests, including the principal properties Tuligtic
and El Cobre, through its ongoing grass roots exploration efforts. The non-principal interests are either at early
stages of exploration or represent trailing interests in assets that are more advanced, such as the NSR royalties
on the Caballo Blanco and Elk projects. The interests at an early stage of exploration represent opportunities for
the discovery of gold, silver and copper deposits. Almaden’s business model is to find and acquire mineral
properties and develop them independently, or through partnerships with third party exploration and
development companies and retaining a carried interest.
Tuligtic is considered a principal project because the work completed has resulted in a National Instrument 43-
101 compliant resource estimate. The El Cobre project is also considered a principal property because past
drilling has confirmed the presence of significant mineralization that is widespread and demonstrates a
reasonable chance of discovering a copper-gold porphyry deposit. As yet, no resources have been defined on
the El Cobre project. Non principal projects have not yet had drilling results that indicate the presence of
significant mineralization, or represent carried interests in more advanced projects. Nevertheless the non-
principle interests are deemed worthy of preliminary exploration and drilling. Below is a list of non-principal
44
properties and their current status with respect to agreements with others. While most of the work in 2014
focused on the Tuligtic property, Almaden hopes to advance several non-principal projects in 2015 through
preliminary exploration programs as staff and budget constraints permit. The Company may also form new
agreements to explore these projects and, if negative exploration results are received, drop projects on this list.
Non-Principal Interests
Property Interests:
Merit
Munro Lake
Nicoamen River
Ponderosa
ATW
Logan
Skoonka Creek
Monte Cristo
Paradise Valley
Veta
Willow
Caldera
El Chato
El Encuentro
Lajas
San Carlos
Nueva Espana
Cenzontle
Chilcuautla
Cuautepec
Viky
Royalty Interests:
Cabin Lake
Caribou Creek
Meister River
Elk
MOR
Goz Creek
Tim
Prospector Mountain
Ram
Prospect Valley
BP
BlackJack Springs
Caballo Blanco
La Bufa
El Pulpo
Mezquites
Llano Grande
Yago
Erika
El Fuego
Cerro Colorado (El Chamizo)
San Pedro
Tropico
Location
Interest
Canada
Canada
Canada
Canada
Canada
Canada
Canada
USA
USA
USA
USA
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Location
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
USA
USA
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
Mexico
100% owned
100% owned
100% owned
100% owned
Joint Venture, 66.2% interest
Joint Venture, 40% interest
Joint Venture, 34.14% interest
100% owned
100% owned
100% owned
100% owned
100% owned
100% owned
100% owned
100% owned
100% owned
100% owned
100% owned
100% owned
100% owned
100% owned
Interest
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
1.5% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
2% NSR Royalty
0.8% NSR Royalty
45
Under the Company’s proposed spin-out plan, Almaden’s interest in non-principal properties, along with El
Cobre and a 2% NSR royalty on Tuligtic, would be transferred to the newly incorporated company “Spinco”. If
the plan is completed as proposed and is approved by the Company’s shareholders at the 2015 Annual General
Meeting, Spinco would be responsible for any future exploration programs on the properties.
Item 5. Operating and Financial Review and Prospects
Operating Results
The following discussion and analysis of the results of operations and the Company’s financial position should
be read in conjunction with the consolidated financial statements and related notes for the years ended
December 31, 2014, 2013, and 2012 appearing under Item 18 – Financial Statements and listed under Item 19 –
Exhibits.
The Company’s consolidated financial statements are stated in Canadian Dollars and have been prepared in
accordance and compliance with International Financial Reporting Standards as issued by the International
Accounting Standards Board (“IFRS”).
The Company is in the business of acquiring and exploring mineral properties and prospects in Canada, the U.S.
and Mexico with the aim of developing them to a stage where they can be exploited at a profit or to arrange
joint ventures whereby other companies provide, in whole or in part, funding for development and exploitation.
At that stage, the Company’s operations would, to some extent, be dependent on the world market prices of any
minerals mined. The Company does not have producing properties and operations on its properties and
prospects are exploratory searches for mineable deposits.
Fiscal 2014 compared to Fiscal 2013
For the year ended December 31, 2014 (“Fiscal 2014”), the Company recorded a net loss of $14,982,667 or
$0.23 per share compared to a net loss of $6,356,609 or $0.10 per share for the year ended December 31, 2013
(“Fiscal 2013”). The increase in net loss was primarily a result of an impairment charged against its investment
in associate of $6,637,288, impairment of exploration and evaluation assets of $2,199,626, and deferred income
tax expense of $1,839,482. This was offset by a decrease in impairment of marketable securities of $868,840
and loss on investment in associate of $683,680 compared from fiscal year ended 2014 to 2013.
The Company has no revenue from mining operations as it only conducts exploration and development work.
The revenue of $253,991 during Fiscal 2014 consisted of interest income and other income from office rental,
and a contract drilling program provided to third parties compared to total revenue of $220,432 during Fiscal
2013 consisting of interest income and other income from office rental, and a royalty payment from Gold
Mountain from the Elk property.
During Fiscal 2014, there was a gain on exploration and evaluation assets of $55,111 as a result of a reduction
of the December 2013 accrual to reverse previous years’ exploration costs from a Canada Revenue Agency
review of Almaden’s 2010 and 2011 British Columbia Mining Exploration Tax Credit (“BCMETC”) from
various grassroots projects in B.C. During Fiscal 2013, there was a loss on exploration and evaluation assets of
$716,006 as a result of selling nine properties resulting in a total loss of $102,942, the Company paying
$469,045 in the form of cash and shares as part of the consideration payable to obtain a reduction in a royalty
with respect to the Caballo Blanco property from a 2011 royalty agreement that was subsequently amended
pursuant to an Amended Royalty Agreement, and a reversal of an accrual from a previous years’ exploration
costs that resulted in a loss on exploration and evaluation assets of $144,019.
General and administrative expenses were $2,489,108 for Fiscal 2014 (Fiscal 2013 - $2,154,278). The primary
increase in general and administrative expenses resulted from higher professional fees paid for capital market
advisory services and different levels of investor relations activities. Directors fees totalling $48,000 were paid
during Fiscal 2014 compared to $48,000 during Fiscal 2013.
General exploration expenses of $592,105 were incurred in Fiscal 2014 compared to $707,542 for Fiscal 2013.
These expenditures vary according to management decisions on work to be done on any property. Given the
current market conditions less exploration work was completed to conserve capital and allow the Company to
focus on the Tuligtic project.
46
Significant non-cash items in Fiscal 2014 compared to Fiscal 2013 included impairment of investment in
associate, impairment of exploration and evaluation assets, deferred income tax expense, impairment of
marketable securities, share based payments and loss on investment in associate. During Fiscal 2014, an
impairment of investment in associate of $6,637,288 was recognized (Fiscal 2013 - $Nil). Previously, the
Company valued its investment in Gold Mountain utilizing the value-in-use methodology, but in 2014 it was
determined that the decline in value in Gold Mountain’s shares was considered to be significant and prolonged,
as a result, the Company wrote-down its investment to fair value. Impairment of exploration and evaluation
assets of $2,570,664 (Fiscal 2013 - $371,038) fluctuates period to period based on management’s evaluation of
the carrying value of each exploration and evaluation asset held at that time. The deferred income tax expense
of $1,839,482 (Fiscal 2013 - $Nil) relates to the Mexican income tax and Special Mining Duty (“SMD”)
associated with the Ixtaca project. Impairment of marketable securities of $405,903 in Fiscal 2014 (Fiscal 2013
- $1,274,743) relate to significant or prolonged losses of equity securities held by the Company based on the
market value of shares at December 31, 2014. Share based payments of $565,800 in Fiscal 2014 (Fiscal 2013 -
$381,950) are recognized on the grant of stock options in any period. During Fiscal 2014 loss on investment in
associate of $135,209 (Fiscal 2013 - $818,889) was the recognition of the equity losses in Gold Mountain. The
equity pick up can vary period to period based on the performance of Gold Mountain.
Fiscal 2013 compared to Fiscal 2012
For the year ended December 31, 2013 (“Fiscal 2013”), the Company recorded a net loss of $6,356,609 or
$0.10 per share compared to a net loss of $10,238,377 or $0.17 per share for the year ended December 31, 2012
(“Fiscal 2012”). The decrease of $3,881,768 in net loss was primarily the result of a decrease in impairment of
marketable securities of $2,582,076, share-based payments of $1,334,300 and impairment of exploration and
evaluation assets of $897,818 offset by an increase in loss on exploration and evaluation assets of $763,506 and
investment in associate of $905,852.
The Company has no revenue from mining operations as it only conducts exploration and development work.
The revenue of $220,432 during Fiscal 2013 consisted of interest income and other income from office rental,
and a royalty payment from Gold Mountain from the Elk property compared to total revenue of $299,167
during Fiscal 2012 consisting of interest income and other income from office rental and contract exploration
services provided to third parties.
During Fiscal 2013, there was a loss on exploration and evaluation assets of $716,006 as a result of selling nine
properties resulting in a total loss of $102,942, of the Company paying $469,045 in the form of cash and shares
as part of the consideration payable to obtain a reduction in a royalty with respect to a property interest in
Caballo Blanco property, the result of a 2011 royalty agreement that has been subsequently amended pursuant
to an Amended Royalty Agreement, and an accrued reversal from a previous years’ recovery of exploration
costs that resulted in a loss on exploration and evaluation assets of $144,019. The accrual relates to a Canada
Revenue Agency review of Almaden’s 2010 and 2011 British Columbia Mining Exploration Tax Credit
(“BCMETC”) from various grassroots mineral projects in B.C. During Fiscal 2012 there was income on
exploration and evaluation assets as a result of the sale of one property and the recovery of exploration costs of
$47,500.
General and administrative expenses were $2,154,278 for Fiscal 2013 (Fiscal 2012 - $2,330,965). The primary
decrease in general and administrative expenses resulted from lower professional fees from accounting and
consulting fees and lower travel and promotion costs. Director’s fees totalling $48,000 were paid during Fiscal
2013 compared to $39,000 during Fiscal 2012.
General exploration expenses of $707,542 were incurred in Fiscal 2013 compared to $969,470 for Fiscal 2012.
These expenditures vary according to management decisions on work to be done on any property. Given the
current market conditions less exploration work was completed to conserve capital and allow the Company to
focus on the Tuligtic project.
Significant non-cash items in Fiscal 2013 compared to Fiscal 2012 included investment in associate,
impairment of marketable securities, impairment of exploration and evaluation assets, loss on exploration and
evaluation assets, share-based payments and fair-value of contingent share receivable. During Fiscal 2013, the
loss on investment in associate of $818,889 (Fiscal 2012 – income of $86,963) was the recognition of the equity
loss/income in Gold Mountain. . The gain or loss on investment in associate can vary period to period based on
the stock price performance of Gold Mountain. Impairment of marketable securities of $1,274,743 in Fiscal
47
2013 (Fiscal 2012 - $3,856,819) relates to significant or prolonged losses of equity securities held by the
Company. Impairment of exploration and evaluation assets of $371,038 in Fiscal 2013 (Fiscal 2012 -
$1,268,856) fluctuate period to period based on management’s evaluation of the carrying value of each
exploration and evaluation asset held at that time. The loss on exploration and evaluation assets during Fiscal
2013 of $716,006 (Fiscal 2012 – income of $47,500) relates to the loss on the sales of nine properties, obtaining
a reduction in a royalty and the accrual of a reversal from a previous years’ recovery of exploration costs.
Share-based payments of $381,950 in Fiscal 2013 (Fiscal 2012 - $1,716,250) are recognized on the grant of
stock options in any period. The fair-value of contingent share receivable of $44,700 decreased compared to the
same period in 2012 ($238,200) due to the decline in the fair value of the common shares of Gold Mountain and
Goldgroup.
Liquidity and Capital Resources
As at December 31, 2014, the Company’s working capital position was $9,171,791. Management estimates that
the current cash position and expected future cash flows from the exercise of outstanding stock options and
warrants and equity financing will be sufficient for the Company to carry out its anticipated exploration and
operating plans for fiscal 2015 that includes further development of the Ixtaca property. Under the proposed
corporate reorganization, the Company will spin-out the majority of its assets and a portion of its working
capital to a newly incorporated company (“Spinco”). The reorganized Almaden will retain the Ixtaca
gold/silver project and a majority of the working capital which will be used to continue exploration on the
Ixtaca project, including the work required for a Pre-Feasibility Study. The spin-out is conditional upon certain
conditions, including the approval of 66 2/3% of the Company’s shareholders present in person or represented
by proxy at the next Annual General Meeting of the Company expected to be held in June 2015 and approval by
the Supreme Court of British Columbia. There is no guarantee the spin-out will be completed as proposed, if at
all.
Fiscal 2014
At the end of Fiscal 2014, the Company had a working capital of $9,171,791 including cash and cash
equivalents of $8,172,598 compared to working capital of $12,676,166 including cash and cash equivalents of
$11,994,773 at the end of Fiscal 2013. The decline in working capital of $3,504,375 is mainly due to
capitalized exploration expenses incurred in Ixtaca of $ 6,293,904. During Fiscal 2014, the Company closed a
non-brokered private placement for gross proceeds of $6,000,000 to continue the Ixtaca exploration and
development program.
In addition, the market value of the Company’s inventory of gold bullion (1.597 ounces) at the end of Fiscal
2014 was $2,200,086 or $1,925,318 above book value as presented in the financial statements.
Management believes that the Company’s cash resources are sufficient to meet its working capital and mineral
exploration requirements for its next fiscal year. Management has a proven track record to be able to raise
money even in a very challenging financial marketplace as evident in the private placement during 2014.
Cash used in operations during Fiscal 2014 was $3,088,700 (Fiscal 2013 - $1,628,440) after adjusting for non-
cash activities.
Cash used in investing activities during Fiscal 2014 was $6,614,225 (Fiscal 2013 - $8,199,490). Significant
items include expenditures on mineral property interests of $6,768,273 (Fiscal 2013 - $8,253,489) primarily on
land acquisition of $1,137,914 (Fiscal 2013 - $1,001,706) and drilling costs on the Tuligtic property of
$5,155,990 (Fiscal 2013 - $6,800,208).
During Fiscal 2014, the Company closed a non-brokered private placement by the issuance of 4,000,000 units at
a price of $1.50 per unit for gross proceeds to the Company of $6,000,000 less share issue costs of $256,111.
Each unit consisted of one common share and one-half of one non-transferrable common share purchase
warrant. Each whole warrant allows the holder to purchase one common share at a price of $2.00 per common
share until August 1, 2015. A finder’s fee of $107,400 in cash and finder’s warrants to purchase up to 48,000
common shares at a price of $1.50 per common share until August 1, 2015 was paid on a portion of the
placement. The fair value of the finder’s warrants of $15,361 was estimated using the Black-Scholes option
pricing model with the following assumptions: Risk-free interest rate – 1.0%; Expected life – 1 year; Expected
volatility – 49.30%; and Expected dividend yield – 0%. In connection with the private placement, the Company
also incurred $133,350 in share issue costs. The Company also received $121,500 (Fiscal 2013 - $223,550) on
48
the exercise of 150,000 (Fiscal 2013 – 220,000) stock options during 2014.
Management estimates that the current cash position and expected future cash flows from stock options and
warrants and the participation of equity financing will be sufficient for the Company to carry out its anticipated
exploration and operating plans for the foreseeable future. There may be circumstances where, for sound
business reasons, a reallocation of funds may be necessary in order for the Company to achieve its stated
business objectives.
Fiscal 2013
At the end of Fiscal 2013, the Company had working capital of $12,676,166 including cash and cash
equivalents of $11,994,773 compared to working capital of $19,474,784 including cash and cash equivalents of
$16,487,408 at the end of Fiscal 2012. The decline in working capital of $6,798,618 is mainly due to capitalized
exploration expenses incurred at Ixtaca of $7,801,914. During Fiscal 2013, the Company closed a non-brokered
private placement for gross proceeds of $5,470,000 to continue the Ixtaca exploration and development
program.
In addition, the market value of the Company’s inventory of gold bullion (1,597 ounces) at the end of Fiscal
2013 was $2,005,251 or $1,730,483 above book value as presented in the financial statements. The Company
has no long-term debt.
Management believes that the Company’s cash resources are sufficient to meet its working capital and mineral
exploration requirements for its next fiscal year. Management has a proven track record to be able to raise
money even in a very challenging financial marketplace as evident in the private placement during 2013.
Cash used in operations during Fiscal 2013 was $1,628,440 (Fiscal 2012 - $2,723,237) after adjusting for non-
cash activities.
Cash used in investing activities during Fiscal 2013 was $8,199,490 (Fiscal 2012 - $3,233,514). Significant
items include expenditures on mineral property interests of $8,253,489 (Fiscal 2012 - $7,407,896) primarily on
land acquisition of $1,001,706 (Fiscal 2012 - $Nil) and drilling costs on the Tuligtic property of $6,800,208
(Fiscal 2012 - $6,318,731).
During Fiscal 2013, the Company received gross proceeds of $5,470,000 on closing a private placement by the
issuance of 4,376,000 units at a price of $1.25 per unit. Each unit consists of one common share and one non-
transferable common share purchase warrant. Each warrant allows the holder to purchase one common share at
a price of $1.50 per common share until January 17, 2015 and, thereafter, at a price of $1.80 per common share
until July 17, 2016. A finder’s fee of $232,500 in cash and finder’s warrants to purchase up to 186,000
common shares at a price of $1.50 per common share until July 17, 2016 was paid on a portion of the
placement. The Company also received $223,550 (Fiscal 2012 - $1,260,000) on the exercise of 220,000 (Fiscal
2012 – 600,000) stock options during Fiscal 2013.
Fiscal 2012
At the end of Fiscal 2012, the Company had working capital of $19,474,784 including cash and cash
equivalents of $16,487,408 compared to working capital of $30,513,403 including cash and cash equivalents of
$21,184,159 at the end of Fiscal 2011. In addition, the market value of the Company’s inventory of gold bullion
(1,597 ounces) at December 31, 2012 was $2,666,437 or $2,391,669 above book value as presented in the
financial statements.
Cash used in operations in Fiscal 2012 was $2,723,237 (2011 - $3,568,646) after adjusting for non-cash
activities. Significant changes in non-cash items in the current year are mainly due to impairment on
marketable securities. Significant changes in non-cash items in the comparable year include income on mineral
property options and share-based payments.
Cash used in investing activities in Fiscal 2012 was $3,233,514 (2011 – cash from of $1,402,531). Significant
items in the current year include expenditures on mineral property interests of $7,407,896 (2011 - $6,197,667).
Significant items in the comparable year also include proceeds from mineral properties of $5,871,380 and the
maturing of a short-term investment of $2,000,000. In Fiscal 2012, significant investments made in mineral
49
property interests included drilling on the Tuligtic property in Mexico of $6,318,731 (Fiscal 2011 - $4,630,431)
and the completion of geophysical surveys undertaken and preparation for drilling on the El Cobre property in
Mexico $365,102 (Fiscal 2011 - $605,448). Significant investments made in mineral property interests in the
comparable year also included, exploration on the ATW project in the Northwest Territories of $326,446 and
the Willow project in Nevada of $260,575.
The Company also received a total of $1,260,000 (Fiscal 2011 - $4,922,900) on the exercise of 600,000 (Fiscal
2011 – 2,030,000) stock options during Fiscal 2012 and $Nil (Fiscal 2011 - $740,658) on the exercise of
warrants during the year. During Fiscal 2011, the Company received a total of $7,262,442 net of share issue
costs on closing a private placement financing of 100,000 common flow-through shares at a price of $4.00 per
share, on the exercise of 2,030,000 stock options and on the exercise of 1,481,499 warrants.
Research and Development, Patents and Licenses
The Company conducts no Research and Development activities, nor is it dependent upon any patents or
licenses.
Trend information
During 2014, prices of precious metals dropped, although they made recoveries from those lows towards the
end of the year and into early 2015. For base metals, lower prices seem to be related to concerns over economic
conditions in the large developing nations that are building infrastructure and the size of the above ground metal
inventory or stockpiles. In addition, there remains uncertainty as to how long prices will remain depressed,
whether competition for resources will decrease or intensify, and how any change might further affect metal
prices. In previous years, significant selling on Comex and redemptions from gold and silver funds contributed
to the steep reduction in metal prices. These lower prices have resulted in large producers selling non-core or
high cost assets, suspending or shelving new mine construction, and initiating severe cost control measures.
The large write-downs of assets and recent acquisitions by many companies have been well publicized, and
have resulted in significant reductions to mineable reserves worldwide. Lower prices also result in miners
selectively mining higher grade portions of a deposit, which may effectively sterilize lower grade portions from
ever being mined even with higher prices at a later date. Reserves are also declining due to mining operations,
yet these depleted reserves are not being replaced because of reduced exploration efforts.
One of the easiest areas to cut costs is by cutting or eliminating exploration and acquisition activity. Many large
miners have reduced exploration to cut costs and most junior exploration companies are having difficulty
raising exploration capital. What capital is being raised is through equity sales at significantly reduced prices,
which results in significant dilution to shareholders. There is also uncertainty in currency exchange rates due to
economic conditions around the world and how these might affect both costs and profits. Companies at the
feasibility study stage or raising capital for production startup are finding that mining costs are increasing.
These factors require frequent review of plans and budgets against a backdrop of fewer quality exploration and
development projects along with the long term shortage of skilled exploration personnel.
Merger and acquisition activity involving large organizations has slowed, at least in part because there are fewer
large companies remaining; there are fewer that are vulnerable to takeover. As mentioned above, write-downs
on acquisitions have resulted in more caution by potential merger and acquisition candidates because of
difficulties in valuations for assets in relation to often depressed stock market prices. While reduced market
capitalizations make acquisitions seem inexpensive in relation to prior valuations, the lower share prices of
companies seeking to acquire resources this way means larger dilution to their shareholders as well.
The price of both exploration and production companies focused on precious metals have underperformed when
compared to the price of gold. This has been attributed to various reasons such as the rise of funds that invest in
precious metals which are capturing much of the investment interest in gold and silver. When the gold price
dropped in 2013, there was large disinvestment from such funds and the prices of exploration companies
dropped as well. There is no certainty that this will change. Many in the investment and economic
communities dispute the likelihood of inflationary or deflationary conditions and the effect of either on precious
metal prices. Any rise in interest rates might lower investment demand for gold and silver.
The uncertain times have led to some cash strapped governments to seek or threaten higher tax and royalty
policies while others consider lowering them to attract investment. Globalization of trade and markets has been
more important to the mineral industry than many other industries, and because of current conditions these
50
concepts are under question by many vested interest groups. At the same time, environmental groups have
successfully lobbied for more wilderness areas and parks where exploration and mining activities are
prohibited. Native groups are actively pursuing land claims and there is a rise of militant national and religious
groups in many parts of the world. Pressure from such groups can lead to increased regulation and this must be
monitored closely to recognize a point where it becomes excessive. Many governments are pursuing
regulations and taxes on emissions of so called “greenhouse gases” that could raise costs for many industries
including metal mining. As more and more stakeholders become interested in mining ventures there is an
increasing need to maintain cooperation with valid concerned groups, particularly among the local community
where the project is located. Some of these issues tend to restrict the areas where mineral exploration and
development of new mines can occur. This should make areas permissive to exploration more attractive and a
previously discerned need for new, quality exploration projects based on sound geological work continues.
The world may be slow to recover from current economic conditions and a further deterioration of these
conditions remains a serious threat. If such deterioration occurs, lower economic activity would probably also
lower the demand for base metals but management believes that precious metals will continue to be in demand
as a store of value.
Off-balance Sheet Arrangements
The Company has no off-balance sheet arrangements other than the lease related to its office premises as
disclosed below.
Contractual Obligations
The Company is obligated under an operating lease for its office premises with the following aggregate
minimum lease payments to the expiration of the lease on January 31, 2016. The Company does have
government requirements in work and/or taxes to maintain other claims held. The decision to keep or abandon
such claims is not contractual but at the discretion of the Company. All other property option payments on the
Company’s projects have been assumed by third parties who are earning their interests in the projects. On
January 29, 2013, the Company entered into contracts with its Chairman and President for an annual
remuneration of $240,000 and $265,000 respectively effective January 1, 2013, for two years, renewable for
two additional successive terms of 24 months. Table No. 4 lists the total contractual obligations as at December
31, 2013 for each period.
Table No. 4
Contractual Obligations of the Company
Payments due by period
Operating lease
Executive contracts
Total
$ 87,700
$ 2,020,000
Less than
1 year
$ 81,000
$ 505,000
1 – 3
years
$ 6,700
$ 1,515,000
3 – 5
years
More than
5 years
-
-
-
Contractual obligations of the Company in the above table exclude future option payments required to maintain
the Company’s interest in certain mineral properties.
Significant accounting judgments and estimates
Significant assumptions about the future and other sources of judgments and estimates that management has
made at the statement of financial position date, that could result in a material adjustment to the carrying
amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are
not limited to, the following:
Critical Judgments
o The assessment that the Company has significant influence over the investment in Gold Mountain
Mining Corporation (“Gold Mountain”) (See Note 7 to the consolidated financial statements) which
results in the use of the equity accounting method for accounting for this investment. In making their
judgment, management considered the composition of the Board of Directors of its equity investment
51
in Gold Mountain, the common directors and management between Gold Mountain and the Company
and the intercompany transactions and relationship with Gold Mountain and concluded that significant
influence exists.
o The analysis of the functional currency for each entity of the Company. In concluding that the
Canadian dollar is the functional currency of the parent and its subsidiary companies, management
considered the currency that mainly influences the cost of providing goods and services in each
jurisdiction in which the Company operates. As no single currency was clearly dominant, the
Company also considered secondary indicators including the currency in which funds from financing
activities are denominated and the currency in which funds are retained.
The determination that the carrying amount of the Tuligtic Project will be recovered through use rather
than sale (Note 16). In making this determination, management considered the likelihood of
completing the Company’s planned spin out transaction (Note 22) taking into account all legal,
regulatory and business requirements to affect the planned spin-out transaction.
o
Estimates
o The recoverability of amounts receivable which are included in the consolidated statements of financial
position;
The carrying value of the marketable securities and the recoverability of the carrying value which are
included in the consolidated statements of financial position;
The carrying value of investments, and the estimated annual gains or losses recorded on investments
from income and dilution, and the recoverability of the carrying value which are included in the
consolidated statements of financial position;
The estimated useful lives of property, plant and equipment which are included in the consolidated
statements of financial position and the related depreciation included in the consolidated statements of
comprehensive loss;
o The estimated value of the exploration and development costs which is recorded in the statements of
financial position;
o The inputs used in accounting for share purchase option expense in the consolidated statements of
comprehensive (loss) income;
The provision for income taxes which is included in the consolidation statements of comprehensive
(loss) income and composition of deferred income tax assets and liabilities included in the consolidated
statements of financial position at December 31, 2014;
The inputs used in determining the various commitments and contingencies accrued in the
consolidated statements of financial position;
o The assessment of indications of impairment of each exploration and evaluation asset and related
determination of the net realizable value and write-down of those assets where applicable;
The estimated fair value of contingent share payments receivable in the event that Gold Mountain
achieves some or all of the specified resource and production levels described in Note 8(a) of the
consolidated financial statements; and
The estimated fair value of contingent share payments receivable in the event that Goldgroup Mining
Inc. achieves some or all of the specified resource and production levels described in Note 8(b) of the
consolidated financial statements.
o
o
o
o
o
o
o
Item 6. Directors, Senior Management and Employees
Table No. 5 lists the directors and senior management of the Company. The directors have served in their
respective capacities since their election and/or appointment and will serve until the next annual general
meeting of the Company or until a successor is duly elected, unless the office is vacated in accordance with the
Articles of the Company. All directors are residents and citizens of Canada.
52
Table No. 5
Directors of the Company
Name
James Duane Poliquin
John D. McCleary(2)(3)
Joseph Montgomery(1)(2)(3)
Morgan Poliquin
Gerald G. Carlson(1)(2)(3)
Barry W. Smee (5)
Mark T. Brown (1)(3)
William J. Worrall
(1) M ember of Audit Committee
(2) M ember of Nominating and Corporate Governance Committee
(3) M ember of Compensation Committee
(4) Date of issue of the Certificate of Amalgamation
(5) Barry Smee resigned as a Director of the Company effective January 31, 2015
Age
74
74
87
43
69
69
46
82
Date First Elected or Appointed
February 1, 2002(4)
February 1, 2002(4)
February 1, 2002(4)
February 1, 2002(4)
February 1, 2002(4)
July 6, 2006
May 30, 2011
May 7, 2013
Duane Poliquin was a director of Almaden Resources Corporation since September 1980, Jack McCleary since
June 1991 and Morgan Poliquin since June 1999.
Duane Poliquin was a director of Fairfield Minerals Ltd. since June 1996, Joseph Montgomery since July 2000
and Gerald G. Carlson since July 1998.
Table No.6 lists the Executive Officers of the Company. The Executive Officers serve at the pleasure of the
Board of Directors, subject to the terms of executive compensation agreements hereinafter described. All
Executive Officers are residents and citizens of Canada.
Table No. 6
Executive Officers of the Company
Name
James Duane Poliquin
Morgan Poliquin
Korm Trieu
Dione Bitzer
Douglas McDonald
(4) Date of issue of the Certificate of Amalgamation
Position
Chairman of the Board
President and Chief Executive Officer
Chief Financial Officer
Controller
Vice-President, Corporate Development
Age
74
43
49
54
46
Date First Appointed
February 1, 2002 (4)
March 1, 2007
May 30, 2011
February 1, 2002 (4)
September 22, 2014
Duane Poliquin was appointed an Officer of Almaden Resources Corporation in September 1980 and of
Fairfield Minerals Ltd. in June 1996. Dione Bitzer was appointed an Officer of Fairfield Minerals Ltd. in
March 2001.
Duane Poliquin is a registered professional geological engineer with over 50 years of experience in mineral
exploration and he is the founding shareholder of Almaden Resources Corporation. He gained international
experience working with major mining companies where he participated in the discovery of several important
mineral deposits. Mr. Poliquin has held executive positions and directorships with several junior resource
companies over his career. He was founder and President of Westley Mines Ltd. when that company
discovered the Santa Fe gold deposit in Nevada. Mr. Poliquin spends virtually all of his time on the affairs of
the Company. He also serves as a director of Gold Mountain Mining Corporation.
John D. (Jack) McCleary is a registered professional geologist with 40 years’ experience in petroleum and
mineral exploration. He has held executive positions with several junior resource companies over his career and
for several years was a Vice President of Dominion Securities Ltd. He served as a director and President of
Canadian Hydro Developers Inc. until December 1995 at which time he retired and as a director and President
of Troymin Resources Ltd. until April 2003 at which time Troymin amalgamated with Santoy Resources Ltd.
where he served as a director for 5 years. Mr. McCleary spends less than 5% of his time on the affairs of the
Company.
53
Joseph Montgomery is a professional engineer registered with the Association of Professional Engineers and
Geoscientists of B.C. He has over 40 years’ experience in the mineral industry primarily as a consultant in base
and precious metals, industrial metals and gemstones. He is President of Montgomery Consultants Ltd. and is
on the Advisory Board of the Canadian Institute of Gemology. He spends less than 10% of his time on the
affairs of the Company. Mr. Montgomery also serves as a director of Infrastructure Materials Corp, an industrial
materials company listed on the US OTCBB.
Morgan Poliquin is a registered professional geological engineer with 21 years’ experience in mineral
exploration since graduating with a B.A.Sc. degree in geological engineering from the University of British
Columbia (1994). In 1996 he earned a M.Sc. in geology from the University of Auckland, New Zealand
studying geothermal and epithermal deposits in the South Pacific including the Emperor Gold Deposit, Fiji. In
2010, Dr. Poliquin earned his Ph.D. in Geology from the Camborne School of Mines, University of Exeter. He
is President and CEO of the Company and oversees corporate matters as well as directing the Company’s
exploration program. Dr. Poliquin spends virtually all of his time on the affairs of the Company directing its
exploration programs. He also serves as a director of Gold Mountain Mining Corporation.
Gerald G. Carlson has been involved in mineral exploration and junior exploration company management for
over 40 years. Mr. Carlson has a B.A.Sc. from the University of Toronto, a M.Sc. from Michigan
Technological University and Ph.D. from Dartmouth College. He is a past President of AME BC (formerly the
B.C. and Yukon Chamber of Mines), President of the Society of Economic Geologists Canada Foundation, a
Fellow of the Society of Economic Geologists, a member of the Professional Engineers and Geoscientists of
British Columbia, the Professional Engineers of the Yukon Territory and the Canadian Institute of Mining,
Metallurgy & Petroleum. Mr. Carlson spends less than 5% of his time on the affairs of the Company. He also
serves as President and CEO of Pacific Ridge Exploration Ltd., a gold and copper exploration company listed
on the TSX-V.
Barry W. Smee is a consulting geochemist based in British Columbia. He obtained a B.Sc. in chemistry and
geology from the University of Alberta, and a Ph.D. in geochemistry from the University of New Brunswick.
He has designed and managed commercial analytical laboratories and worked in academia, government and
industry for over 40 years. He has authored or co-authored over 50 scientific papers on geochemical and
quality control topics. Dr. Smee formed Smee and Associates Consulting Ltd., a privately owned geochemical
consulting company in 1990 through which he has actively promoted the use of Quality Control protocols in
mineral exploration, comprehensive due diligence procedures, and the intelligent use of modern geochemical
methods. Dr. Smee spent less than 5% of his time on the affairs of the Company and, effective January 31,
2015 he resigned as Director of the Company. He also serves as a director of Platinum Group Metals Ltd., a
platinum exploration company listed on the TSX and NYSE MKT.
Mark T. Brown is a Chartered Accountant and earned a Bachelor’s Degree in Commerce from the University
of British Columbia in 1990. Mr. Brown received his Chartered Accountant’s designation in 1993 while
working at Price Waterhouse, Chartered Accountants. From 1994 to 1997, he was the controller of two TSE
300 mining companies, one after the other, each of which produced in excess of 100,000 ounces of gold
annually. At the end of 1997, Mr. Brown joined Pacific Opportunity Capital Ltd. which was set up to provide
business financial support, both administratively and for transactions and negotiations, to public and private
emerging companies. Mr. Brown spends approximately 5% of his time on the affairs of the Company. He also
serves as a director and President and CEO of Big Sky Petroleum Corporation, an oil and gas exploration
company listed on the TSX-V as well as director and CFO of Tarsis Resources Ltd., a mineral exploration
company listed on the TSX-V. Mr. Brown also serves as a director of the following companies:
a. Avrupa Minerals Ltd., a gold and base metals exploration company listed on the TSX-V.
b. Estrella Gold Corporation, a gold exploration company listed on the TSX-V.
c. Galileo Petroleum Ltd., an oil and gas exploration company listed on the TSX-V.
d. Strategem Capital Corp., an investment issuer listed on the TSX-V.
e. Sutter Gold Mining Ltd., a gold exploration company listed on the TSX-V.
William J. Worrall is a retired lawyer with over 55 years practice primarily in the areas of securities, national
and transnational corporate and commercial transactions, including mergers and acquisitions, with emphasis on
junior resource companies engaged in mining and oil and gas exploration and development. Mr. Worrall spends
less than 5% of his time on the affairs of the Company.
54
Korm Trieu is a Chartered Accountant and holds a Bachelor of Science degree from the University of British
Columbia and has spent over 15 years in corporate finance, administration and tax services, primarily in the
natural resource, financial service and real estate sectors. From 2008-2011, he served as Vice President Finance
for Sprott Resource Lending Corp. where he oversaw the Finance and Administration departments of a natural
resource lending company. Mr. Trieu spends all of his business time on the affairs of the Company.
Dione Bitzer is a Certified Management Accountant with over 20 years accounting experience with junior
exploration companies. She has held executive positions with several junior resource companies. Ms. Bitzer
spends all of her business time on the affairs of the Company.
Douglas McDonald holds a Bachelor of Commerce degree and an M.A. Sc. specializing in mineral economics
from the University of British Columbia and has over 18 years of experience in the resource, foreign trade and
resource policy arenas. Prior to joining Almaden, he worked with an investment dealer where he advised
numerous mineral resource companies regarding M&A opportunities, and assisted them in accessing capital
markets. He also spent 5 years as a Foreign Service officer with the Canadian government, where he focused
on international trade issues, primarily concerning their impact on the resources industry. Mr. McDonald
spends all of his business time on the affairs of the Company.
There are no arrangements or understandings with any two or more directors or executive officers pursuant to
which any such person was selected as a director or executive officer. Duane Poliquin, Chairman of the Board
and Director, is the father of Morgan Poliquin, President, Chief Executive Officer and Director.
During Fiscal 2012, the Compensation Committee conducted an Executive and Directors Compensation Review
which resulted in the recommendations that remuneration of the Chairman and Chief Executive Officer be
increased to annual remuneration of $240,000 and $265,000 respectively effective January 1, 2013, for two
years (the “Term”), renewable for two additional successive terms of 24 months (the “Extended Term”). All
Directors are to be compensated $7,000 yearly and the Chairs of the Audit Committee and Compensation,
Nominating and Corporate Governance Committee be compensated $3,000 yearly, effective January 1, 2013.
The Compensation Committee also recommended that, with respect to Director stock options, up to 250,000
options be granted to each non-management Director. Directors are entitled to reimbursement for reasonable
travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the Board of
Directors. The Board of Directors may award special remuneration to any director undertaking any special
services on behalf of the Company other than services ordinarily required of a director. Other than indicated
below no director received any compensation for his services as a director, including committee participation
and/or special assignments.
Total compensation paid by the Company directly and/or indirectly to all directors and executive officers during
Fiscal 2014 was $873,625.
55
Table No. 7
Summary Compensation Table
Long-Term Compensation
Annual Compensation
Name and
Principle Position
Fiscal
Year
Salary
Bonus
Other Annual
Compensation
Awards
Restricted
Stock
Awards
Duane Poliquin
Chairman of the Board &
Director
M organ Poliquin
President, Chief Executive
Officer & Director
Jack M cCleary
Director
Joseph M ontgomery
Director
Gerald G. Carlson
Director
Barry W. Smee
Director(9)
M ark T. Brown
Director, former Chief Financial
Officer
William J. Worrall
Director
James E. M cInnes
Former Director
Donald M . Lorimer
Former Director
Korm Trieu
Chief Financial Officer
Dione Bitzer
Controller
Douglas M cDonald
Vice President, Corporate
Development
2014
2013
2012
2014
2013
2012
2014
2013
2012
2014
2013
2012
2014
2013
2012
2014
2013
2012
2014
2013
2012
2014
2013
2012
2014
2013
2012
2014
2013
2012
2014
2013
2012
2014
2013
2012
2014
2013
2012
Nil
Nil
Nil
$265,000
$265,000
$225,000
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
N/A
Nil
Nil
Nil
N/A
N/A
N/A
$185,000
$185,000
$165,000
$87,500
$100,000
$96,875
$48,125(8)
N/A
N/A
Nil
Nil
Nil
Nil
Nil
$90,000
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
N/A
Nil
Nil
Nil
N/A
N/A
N/A
Nil
Nil
$33,000
Nil
$7,500
$10,000
Nil
N/A
N/A
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
N/A
Nil
Nil
Nil
N/A
N/A
N/A
Nil
Nil
Nil
Nil
Nil
Nil
Nil
N/A
N/A
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
N/A
Nil
Nil
Nil
N/A
N/A
N/A
Nil
Nil
Nil
Nil
Nil
Nil
Nil
N/A
N/A
Options/
SARS
Granted
(#)
Nil
Nil
100,000
150,000
Nil
500,000
Nil
Nil
25,000
Nil
Nil
25,000
50,000
Nil
25,000
Nil
Nil
25,000
25,000
Nil
125,000
Nil
250,000
N/A
Nil
Nil
25,000
N/A
N/A
N/A
50,000
75,000
75,000
Nil
Nil
Nil
150,000
N/A
N/A
LTIP
Payouts
All Other
Compensation
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
N/A
Nil
Nil
Nil
N/A
N/A
N/A
Nil
Nil
Nil
Nil
Nil
Nil
Nil
N/A
N/A
$240,000(1)
$246,300(1)
$327,000(1)
Nil
Nil
Nil
$10,000(2)(4)
$10,000(2)(4)
$6,000(2)
$10,000(2)(3)
$7,000(2)
$6,000(2)
$7,000(2)
$7,000(2)
$6,000(2)
$7,000(2)
$8,500(2)(5)
$6,000(2)
$7,000(2)
$7,700(2)(6)
$3,488(2)(6)
$4,550(2)
Nil
N/A
$2,450(2)
$10,000(2)(3)
$7,500(2)(3)
Nil
Nil
$4,500(2)(3)
Nil
Nil
Nil
Nil
Nil
Nil
Nil
N/A
N/A
(1) For geological services provided to the Company and general and administrative services provided by Hawk M ountain Resources Ltd., a
private company of which Duane Poliquin is a shareholder.
(2) Director’s fees.
(3) Audit Committee Chairman’s fees.
(4) Compensation Committee Chairman’s fees.
(5) For consulting services provided by Smee & Associates Consulting Ltd., a company owned by Barry Smee and his wife.
(6) For financial and administrative services provided by Pacific Opportunity Capital Ltd., a company controlled by M ark T. Brown and his
family.
(7) For technical services provided to the Company.
(8)
Commenced employment on September 22, 2014.
(9) Barry Smee resigned as a Director of the Company effective January 31, 2015
56
Remuneration for Termination
The Company has the following termination clauses within its executive compensation contracts.
The Executive Compensation Contract dated January 29, 2013 (the “HMR Agreement”) between the Company
and Hawk Mountain Resources Ltd. (“Management Company”), a private company of which Duane Poliquin
(the “Executive” under the HMR Agreement) is a shareholder, will terminate or may be terminated for any one
of the following reasons:
(a)
voluntary, upon at least three (3) months prior written notice of termination by the Management
Company to the Company; or
(b) without Cause, upon at least three (3) months prior written notice of termination by the Company to the
Management Company; or
by the Company for Cause; or
upon the death or disability of the Executive; or
upon retirement by the Executive.
(c)
(d)
(e)
Termination by the Management Company Voluntarily or by the Company for Cause
If the Management Company shall voluntarily terminate the provision of the services of the Executive under the
HMR Agreement or if the engagement of the Management Company thereunder is terminated by the Company
for Cause, then all compensation and benefits as theretofore provided shall terminate immediately upon the
effective date of termination and no special termination compensation will be paid.
Cause to terminate the Management Company’s engagement under the HMR Agreement shall mean:
(a)
(b)
(c)
(d)
the repeated and demonstrated failure by the Executive or the Management Company to perform the
Executive or the Management Company’s material duties under the HMR Agreement, after demand
for substantial performance is delivered by the Company to the Management Company and the
Executive that specifically identifies the manner in which the Company believes the Executive or the
Management Company has not substantially performed the Executive or the Management Company’s
duties under the HMR Agreement; or
the willful engagement by the Executive or the Management Company in misconduct which is
materially injurious to the Company, monetarily or otherwise; or
any other willful violation by the Executive or the Management Company of the provisions of the
HMR Agreement; or
the Executive or the Management Company is convicted of a criminal offence involving fraud or
dishonesty.
Termination by the Company Without Cause
If the Company shall terminate the Management Company’s engagement under the HMR Agreement for any
reason except for Cause then, upon the effective date of termination, the Company shall pay the Management
Company in one lump sum an amount equal to two (2) times the Management Company’s then current Base
Fee. All the benefits theretofore provided to the Executive or the Management Company shall be continued as
if the Executive was still an executive of the Company for a period of twelve (12) months from the date of
termination.
57
Termination by Death or Disability
If the Executive dies or becomes disabled before the Management Company’s services are otherwise
terminated, the Company shall pay the Management Company, an amount of compensation equal to six (6)
months of the Management Company’s then current Base Fee and all the benefits theretofore provided to the
Executive or the Management Company shall be continued, for a period of six (6) months from the date of
Death or Disability as if the Executive were still an executive officer of the Company. If such termination is due
to the Executive’s Death, payment shall be made in one lump sum to the Management Company. If such
termination is due to the Executive’s Disability, payment shall be made in one lump sum to the Management
Company within sixty (60) days of the Executive’s Disability. The compensation provided under this paragraph
shall be in addition to that payable from any insurance coverage providing compensation upon Death or
Disability.
Termination Following Change in Control
For purposes of the HMR Agreement, a Change in Control shall be deemed to have occurred if:
(i) any person or any person and such person’s associates or affiliates, as such terms are defined in the
Securities Act (British Columbia) (the “Act”), makes a tender, take-over or exchange offer,
circulates a proxy to shareholders or takes other steps to effect a takeover of the control of the
Company, whether by way of a reverse take-over, formal bid, causing the election or appointment
of a majority of directors of the Company or otherwise in any manner whatsoever; or
(ii) during any period of eighteen (18) consecutive months (not including any period prior to the
Effective Date), individuals who at the beginning of such period constituted the Board of Directors
and any new directors, whose appointment by the Board of Directors or nomination for election by
the Company’s shareholders was approved by a vote of at least three quarters (3/4) of the Board of
Directors then still in office who either were directors at the beginning of the period or whose
appointment or nomination for election was previously so approved, cease for any reason to
constitute a majority of the Board of Directors; or
(iii) the acquisition by any person or by any person and such person’s affiliates or associates, as such
terms are defined in the Act, and whether directly or indirectly, of common shares of the Company
at the time held by such person and such person’s affiliates and associates, totals for the first time,
twenty percent (20%) or more of the outstanding common shares of the Company.
Notwithstanding any other provisions in the HMR Agreement regarding termination, if any of the events
described above constituting a Change in Control shall have occurred during the Term or an Extended Term,
upon the termination of the Management Company’s services (unless such termination is because of the
Executive’s Death or Disability, by the Company for Cause or by the Management Company other than for
“Good Reason”, as defined below) the Management Company shall be entitled to and will receive no later than
the fifteenth (15th) day following the date of termination a lump sum payment equal to three (3) times the
Management Company’s then current Base Fee. In addition, all benefits then applicable to the Executive or the
Management Company shall be continued for a period of eighteen (18) months after the date of termination.
For purposes of the HMR Agreement, “Good Reason” shall mean, without the Management Company’s express
written consent, any of the following:
(i)
(ii)
(iii)
the assignment to the Executive of any duties inconsistent with the status or authority of the
Executive’s office, or the Executive’s removal from such position, or a substantial alteration in the
nature or status of the Executive’s authorities or responsibilities from those in effect immediately
prior to the Change in Control;
a reduction by the Company of the Management Company’s Base Fee as in effect on the date of the
HMR Agreement or as the same may have been increased from time to time, or a failure by the
Company to increase the Management Company’s Base Fee as provided for in the HMR
Agreement or at a rate commensurate with that of other key executives of the Company;
the relocation of the office of the Company where the Executive is employed at the time of the
Change in Control (the “CIC Location”) to a location more than fifty (50) miles away from the CIC
Location, or the Company’s requiring the Executive to be based more than fifty (50) miles away
58
from the CIC Location (except for requiring travel on the Company’s business to an extent
substantially consistent with the Executive’s business travel obligations prior to the Change in
Control);
(iv) the failure by the Company to continue to provide the Executive or the Management Company with
benefits at least as favourable as those enjoyed by the Executive or the Management Company prior
to the Change in Control, the taking of any action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive the Executive or the Management
Company of any material fringe benefit enjoyed by the Executive or the Management Company at
the time of the Change in Control, or the increase by the Company of the number of weeks of the
Executive’s services required to be provided to the Company by the Management Company; or
the failure of the Company to obtain a satisfactory agreement from any successor to assume and
agree to perform the HMR Agreement or, if the business of the Company for which the Executive’s
services are principally performed is sold within two (2) years after a Change in Control, the
purchaser of such business shall fail to agree to provide the Management Company with the same
or a comparable position, duties, remuneration and benefits for the Executive and the Management
Company as provided immediately prior to the Change in Control.
(v)
Following a Change in Control during the Term, or an Extended Term, the Management Company shall be
entitled to stop providing the Executive’s services for Good Reason.
In the event the Management Company is entitled to a termination payment under the HMR Agreement, then in
addition to such termination payment, the Management Company shall be entitled to employment search
assistance to secure other comparable employment for the Executive for a period not to exceed one (1) year or
until such comparable employment is found, whichever is the sooner, with fees for such assistance to be paid by
the Company.
The Management Company’s right to receive the aforementioned payment and benefits is expressly contingent
upon the signing of a waiver and release satisfactory to the Company which releases the Company and its
affiliates from all claims and liabilities arising out of the Management Company’s provision of the Executive’s
services and termination thereof and including confidentiality provisions, which waiver and release is
satisfactory to the Company with the respect to form, substance and timeliness.
The Executive Employment Contract dated January 29, 2013 (the “MP Agreement”) between the Company and
Morgan Poliquin (the “Executive” under the “MP Agreement”) will terminate or may be terminated for any one
of the following reasons:
(a) voluntary, upon at least three (3) months prior written notice of termination by the Executive to the
Company; or
(b) without Cause, upon at least three (3) months prior written notice of termination by the Company to the
Executive; or
(c) by the Company for Cause; or
(d) upon the death or disability of the Executive; or
(e) upon retirement by the Executive.
Termination by the Executive Voluntarily or by the Company for Cause
If the Executive shall voluntarily terminate employment under the MP Agreement or if the employment of the
Executive is terminated by the Company for Cause, then all compensation and benefits as theretofore provided
shall terminate immediately upon the effective date of termination and no special severance compensation will
be paid.
Cause to terminate the Executive’s employment shall mean:
(a)
the repeated and demonstrated failure by the Executive to perform the Executive’s material duties under
the MP Agreement, after demand for substantial performance is delivered by the Company to the
Executive that specifically identifies the manner in which the Company believes the Executive has not
substantially performed the Executive’s duties under the MP Agreement; or
59
(b)
the willful engagement by the Executive in misconduct which is materially injurious to the Company,
monetarily or otherwise; or
(c) any other willful violation by the Executive of the provisions of the MP Agreement; or
(d) the Executive is convicted of a criminal offence involving fraud or dishonesty.
Termination by the Company Without Cause
If the Company shall terminate the Executive’s employment under the MP Agreement for any reason except for
Cause then, upon the effective date of termination, the Company shall pay the Executive in one lump sum an
amount equal to two (2) times the Executive’s then current Base Salary, less all statutory withholdings and
deductions. All the benefits theretofore provided to the Executive shall be continued as if the Executive was
still an employee of the Company for a period of twelve (12) months from the date of termination or until equal
or better benefits are provided by a new employer, whichever shall first occur.
Termination by Death or Disability
If the Executive dies or becomes disabled before the Executive’s employment is otherwise terminated, the
Company shall pay the Executive or the Executive’s estate, an amount of compensation equal to six (6) months
of the Executive’s then current Base Salary and all the benefits theretofore provided to the Executive shall be
continued, for a period of six (6) months from the date of Death or Disability as if the Executive were still an
employee of the Company. If such termination is due to the Executive’s Death, payment shall be made in one
lump sum to the Executive’s Designate. If no Executive’s Designate survives the Executive, the entire amount
shall be paid to the Executive’s estate within sixty (60) days of the Executive’s death. If such termination is due
to the Executive’s Disability, payment shall be made in one lump sum to the Executive within sixty (60) days of
the Executive’s Disability. The compensation provided under this paragraph shall be in addition to that payable
from any insurance coverage providing compensation upon Death or Disability.
Termination Following Change in Control
For purposes of the MP Agreement, a Change in Control shall be deemed to have occurred if:
(i)
any person or any person and such person’s associates or affiliates, as such terms are defined in the
Securities Act (British Columbia) (the “Act”), makes a tender, take-over or exchange offer, circulates
a proxy to shareholders or takes other steps to effect a takeover of the control of the Company,
whether by way of a reverse take-over, formal bid, causing the election or appointment of a majority
of directors of the Company or otherwise in any manner whatsoever; or
(ii) during any period of eighteen (18) consecutive months (not including any period prior to the
Effective Date), individuals who at the beginning of such period constituted the Board of Directors
and any new directors, whose appointment by the Board of Directors or nomination for election by
the Company’s shareholders was approved by a vote of at least three quarters (3/4) of the Board of
Directors then still in office who either were directors at the beginning of the period or whose
appointment or nomination for election was previously so approved, cease for any reason to
constitute a majority of the Board of Directors; or
(iii) the acquisition by any person or by any person and such person’s affiliates or associates, as such
terms are defined in the Act, and whether directly or indirectly, of common shares of the Company at
the time held by such person and such person’s affiliates and associates, totals for the first time,
twenty percent (20%) or more of the outstanding common shares of the Company.
Notwithstanding any other provisions in the MP Agreement regarding termination, if any of the events
described above constituting a Change in Control shall have occurred during the Term or an Extended Term,
upon the termination of the Executive’s employment (unless such termination is because of the Executive’s
Death or Disability, by the Company for Cause or by the Executive other than for “Good Reason”, as defined
below) the Executive shall be entitled to and will receive no later than the fifteenth (15th) day following the date
of termination a lump sum severance payment equal to three (3) times the Executive’s then current Base Salary.
In addition, all benefits then applicable to the Executive shall be continued for a period of eighteen (18) months
after the date of termination.
60
For purposes of the MP Agreement, “Good Reason” shall mean, without the Executive’s express written
consent, any of the following:
(i)
the assignment to the Executive of any duties inconsistent with the status or authority of the
Executive’s office, or the Executive’s removal from such position, or a substantial alteration in the
nature or status of the Executive’s authorities or responsibilities from those in effect immediately
prior to the Change in Control;
(ii) a reduction by the Company in the Executive’s Base Salary as in effect on the date of the MP
Agreement or as the same may have been increased from time to time, or a failure by the Company to
increase the Executive’s Base Salary as provided for in the MP Agreement or at a rate commensurate
with that of other key executives of the Company;
(iii) the relocation of the office of the Company where the Executive is employed at the time of the
Change in Control (the “CIC Location”) to a location more than fifty (50) miles away from the CIC
Location, or the Company’s requiring the Executive to be based more than fifty (50) miles away from
the CIC Location (except for requiring travel on the Company’s business to an extent substantially
consistent with the Executive’s business travel obligations prior to the Change in Control);
(iv) the failure by the Company to continue to provide the Executive with benefits at least as favourable
as those enjoyed by the Executive prior to the Change in Control, the taking of any action by the
Company which would directly or indirectly materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed by the Executive at the time of the Change in
Control, or the failure by the Company to provide the Executive with the number of entitled vacation
days to which the Executive has earned on the basis of years of service with the Company; or
the failure of the Company to obtain a satisfactory agreement from any successor to assume and
agree to perform the MP Agreement or, if the business of the Company for which the Executive’s
services are principally performed is sold within two (2) years after a Change in Control, the
purchaser of such business shall fail to agree to provide the Executive with the same or a comparable
position, duties, salary and benefits as provided to the Executive by the Company immediately prior
to the Change in Control.
(v)
Following a Change in Control during the Term, or an Extended Term, the Executive shall be entitled to
terminate the Executive’s employment for Good Reason.
In the event the Executive is entitled to a severance payment under the MP Agreement, then in addition to such
severance payment, the Executive shall be entitled to employment search assistance to secure other comparable
employment for a period not to exceed one (1) year or until such comparable employment is found, whichever
is the sooner, with fees for such assistance to be paid by the Company.
The Executive’s right to receive the aforementioned payment and benefits is expressly contingent upon the
signing of a waiver and release satisfactory to the Company which releases the Company and its affiliates from
liabilities arising out of the Executive’s employment and termination and including
all claims and
confidentiality provisions, which waiver and release is satisfactory to the Company with the respect to form,
substance and timeliness.
Stock options
Incentive stock options to purchase securities from the Company are granted to directors, executive officers,
employees and consultants of the Company on terms and conditions acceptable to the regulatory authorities in
Canada, notably the Toronto Stock Exchange, and in accordance with the requirements of the applicable Canadian
securities commissions’ requirements and regulations.
The Company has a formal written stock option plan (“Plan”) which permits the issuance of up to 10% of the
Company’s issued share capital from time to time during the term of the Plan and may be granted from time to
time provided that incentive stock options in favor of any consultant or person providing investor relations
services cannot exceed 2% in any 12 month period. No incentive stock option granted under the Plan is
transferable by the optionee other than by will or the laws of descent and distribution, and each incentive stock
option is exercisable during the lifetime of the optionee only by such optionee and by the optionee’s personal
representatives in the event of death for a period ending on the earlier of the expiry date of the option and twelve
months after the date of death.
61
The exercise price of all incentive stock options granted under the Plan is determined in accordance with Toronto
Stock Exchange guidelines and cannot be less than the Market Price on the date of the grant. Market Price is the
volume weighted average trading price of the shares for the five trading days immediately preceding the date of the
grant. The maximum term of each incentive stock option is five years. Options granted to consultants or persons
providing Investor Relations Activities (as defined in the Plan) shall vest in stages with no more than ¼ of such
options being exercisable in any three month period. All options granted during Fiscal 2014, Fiscal 2013 and Fiscal
2012 vested on the date granted. Under the requirements of the Toronto Stock Exchange, all unallocated options
under the Plan must be approved by the Board of Directors, including a majority of the unrelated directors and by
the shareholders every three years after the institution of the Plan. Insiders and affiliates of insiders entitled to
receive a benefit under the Plan are not entitled to vote for such approval.
The names and titles of the directors and executive officers of the Company to whom outstanding stock options
have been granted and the number of common shares subject to such options as of March 30, 2015 are set forth in
Table No. 8, as well as the number of options granted to directors, executive officers, employees and contractors as
a group.
62
Name
Duane Poliquin,
Chairman of the Board & Director
Table No. 8
Stock Options Outstanding
Number of Options
Outstanding
140,000
100,000
500,000
50,000
100,000
220,000
Exercise Price
CDN$
$1.00
2.22
3.29
2.93
2.18
1.12
Morgan Poliquin
President, Director &
Chief Executive Officer
Jack McCleary
Director
Gerald G. Carlson
Director
Joseph Montgomery
Director
Mark T. Brown
Director
William J. Worrall
Director
Korm Trieu
Chief Financial Officer
Dione Bitzer
Controller
Douglas McDonald
Vice President, Corporate Development
100,000
100,000
650,000
350,000
500,000
250,000
150,000
100,000
50,000
50,000
50,000
25,000
25,000
50,000
50,000
25,000
50,000
50,000
225,000
25,000
25,000
25,000
100,000
75,000
25,000
250,000
150,000
75,000
75,000
50,000
125,000
150,000
0.92
2.67
3.29
1.12
2.63
1.19
1.50
0.92
2.73
3.29
2.93
2.18
2.73
3.29
2.93
2.18
1.12
1.19
3.29
2.18
3.29
2.18
2.53
1.12
1.19
1.66
3.29
2.25
1.98
1.19
3.29
1.40
Expiry Date
06/21/2015
08/27/2015
06/08/2016
08/15/2016
05/04/2017
01/02/2017
07/16/2015
09/20/2015
06/08/2016
01/02/2017
09/11/2017
01/02/2019
07/19/2019
07/16/2015
11/22/2015
06/08/2016
08/15/2016
05/04/2017
11/22/2015
07/08/2016
08/15/2016
05/04/2017
01/02/2017
01/02/2019
06/08/2016
05/04/2017
06/08/2016
05/04/2017
11/22/2017
01/02/2017
01/02/2019
06/18/2018
06/08/2016
06/08/2017
04/04/2018
01/02/2019
06/08/2016
10/10/2016
Total Directors/Officers (11 persons)(1)
Total Employees/Consultants (9 persons)
Total Directors/Officers/Employees/Consultants
(1) Dr. Smee resigned from the Company’s Board of Directors effective January 31, 2015. Upon resignation as Director, all of Dr. Smee’s
options were cancelled on M arch 2, 2015.
5,110,000
1,135,000
6,245,000
63
No funds were set aside or accrued by the Company during Fiscal 2014 to provide pension, retirement or similar benefits for
directors or executive officers.
General
The Toronto Stock Exchange (“TSX”) and the applicable Canadian securities law and regulation require that the
Company comply with National Instrument 58-101 (Disclosure of Corporate Governance Practices) or any
replacement of that instrument. The Company is also, under applicable Canadian securities law and regulation,
required to comply with National Policy 58-201 (Corporate Governance Guidelines). National Instrument 58-101
and National Policy 58-201 (for convenience referred to in the aggregate as the “guidelines”) deal with matters such
as the constitution and independence of corporate boards, their functions, the effectiveness and education of the
board members and other matters. The Company’s statement as to compliance with the guidelines and its approach
to corporate governance is set forth below.
Corporate Governance
The Company’s Board and management are committed to the highest standards of corporate governance. The
Company’s corporate governance practices are in accordance with the guidelines. The Company is also
cognizant of and compliant with various corporate governance requirements in Canada and is in compliance
with applicable U.S. requirements.
The Company’s prime objective in directing and managing its business and affairs is to enhance shareholder
value. The Company views effective corporate governance as a means of improving corporate performance and
accordingly of benefit to the Company and all shareholders.
The Company also believes that director and management honesty and integrity are essential factors in ensuring
good and effective corporate governance. To that end the Company’s directors have adopted various codes and
policies for the Company, its directors, officers, employees and consultants. The codes and policies adopted to
date are as follows: Audit Committee Charter, Nominating and Corporate Governance Committee-
Responsibilities and Duties, Compensation Committee-Responsibilities and Duties, Code of Business Ethics,
Code of Business Conduct and Ethics for Directors, Communications Policy, Securities Trading Policy,
Whistleblowers Policy and Privacy Policy (the “Codes”). The Codes may be viewed on the Company’s website
at www.almadenminerals.com. The Codes may also be viewed as filed on EDGAR as an exhibit to the 2005
20-F Annual Report filed with the Commission on March 30, 2006. Any amendments to the Codes or waivers
of the provision of any Codes will be posted on the Company’s website within 5 business days of such
amendment or waiver.
Executive Officer Position Descriptions
Chairman of the Board (‘Chairman’)
Responsibilities:
-Leads the Board of Directors of the Company and also takes a hands-on role in the Company’s day-to-day
management.
-Helps the CEO to oversee all the operational aspects involved in running the Company, including project
selection and planning.
-Takes overall responsibility for the Company’s direction and growth, seeking to generate significant
financial gains for the shareholders.
-Oversees relationships with the communities and stakeholders in the areas where the Company operates,
with the intent of ensuring the Company’s activities are of benefit to all.
64
Chief Executive Officer (‘CEO’)
Reports to:
The Board of Directors of the Company (the “Board”)
Function:
Provides overall leadership and vision in developing, in concert with the Board, the strategic direction of the
Company and in developing the tactics and business plans necessary to increase shareholder value.
Manages the overall business to ensure strategic and business plans are effectively implemented, the results are
monitored and reported to the Board and financial and operational objectives are attained.
Authorities, Duties and Responsibilities:
(a) General Functions:
1.
2.
Provides effective leadership to the management and the employees of the Company and establishes
an effective means of control and co-ordination for all operations and activities.
Fosters a corporate culture that promotes ethical practices, integrity and a positive work climate
enabling the Company to attract, retain and motivate a diverse group of quality employees.
3. Keeps the Board fully informed on the Company`s operational and financial affairs.
4. Develops and maintains a sound, effective organization structure and plans for capable management
succession, progressive employee training and development programs and reports to the Board on
these matters.
5. Ensures that effective communications and appropriate relationships are maintained with the
shareholders of the Company and other stakeholders.
6. Develops capital expenditure plans for approval by the Board.
7. Turns any strategic plan as may be developed by the Board into a detailed operating plan.
(b) Strategy and Risks
1. Develops and recommends to the Board strategic plans to ensure the Company`s profitable growth
and overall success. This includes updating and making changes as required and involving the Board
in the early stages of developing strategy.
Identifies in conjunction with the other senior officers and appropriate directors of the Company the
key risks with respect to the Company and its businesses and reviews such risks and strategies for
managing them with the Board.
2.
3. Ensures that the assets of the Company are adequately safeguarded and maintained.
(c) Exploration and Development
Responsible for managing the day to day activities and operating management of the Company and as
such shall be responsible for the design, operation and improvement of the systems that create the
Company`s exploration and development opportunities. The CEO accordingly shall have the primary
responsibility:
-
To direct and oversee all operational activities of the Company including exploration, development,
mining and other such functions.
To initiate solutions to the key business challenges of the Company.
To participate in sourcing and negotiating financial arrangements for the further expansion and
development of the Company including joint ventures, mergers, acquisitions, debt and equity
financing.
Represent and speak for the Company with shareholders, potential investors and other members of
the industry.
-
-
-
65
(d) Financial Reporting
Oversees the quality and timeliness of financial reporting. Reports to the Board in conjunction with the
CFO on the fairness and adequacy of the financial reporting of the Company to its shareholders.
Chief Financial Officer (‘CFO’)
Reports to:
The CEO of the Company
Responsibilities:
- Developing, analyzing and reviewing financial data.
- Reporting on financial performance.
- Monitoring expenditures and costs.
- Assisting the CEO in preparing budgets and in the communicating to the analyst and shareholder,
community and securities regulators, the financial performance of the Company.
- Fulfilling the reporting requirements of the securities regulators, stock exchanges and shareholders.
- Monitoring filing of tax returns and payment of taxes.
The CFO shall assist the CEO in establishing effective means of control and co-ordination of the operations and
activities of the Company and identifying, in conjunction with the CEO, the key risks with respect to the
Company and its business and reviewing with the CEO the strategies for managing such risks and ensuring that
the assets of the Company are adequately safeguarded and maintained.
The CFO, in conjunction with the CEO, shall design or supervise the design of and implement, maintain and
periodically evaluate the effectiveness of internal controls to provide reasonable assurances that the financial
statements of the Company are fairly presented in accordance with generally accepted financial standards and
principles and that disclosure controls are in place to provide reasonable assurance that material information
relating to the financial performance of the Company and any deficiencies are made known to the Audit
Committee.
Controller
Reports to:
The CEO and CFO of the Company
Responsibilities:
The Controller is responsible for:
- assisting in developing, analyzing and reviewing financial data;
- assisting in the reporting on financial performance;
- assisting in the monitoring expenditures and costs;
- assisting the CEO and CFO in preparing budgets; and
- assisting in fulfilling the reporting requirements of the securities regulators, stock exchanges and
shareholders.
The Controller shall assist the CEO and CFO in establishing effective means of control and co-ordination of the
operations and activities of the Company and identifying, in conjunction with the CEO and CFO, the key risks
with respect to the Company and its business and reviewing with the CEO and CFO the strategies for managing
such risks and ensuring that the assets of the Company are adequately safeguarded and maintained
The Controller in conjunction with the CEO and CFO shall assist in design or supervise the design of and
implement, maintain and periodically evaluate the effectiveness of internal controls to provide reasonable
assurances that the financial statements of the Company are fairly presented in accordance with generally
accepted accounting standards and principles and that disclosure controls are in place to provide reasonable
assurance that material information relating to the financial performance of the Company is made known to the
CEO and CFO and that any deficiencies are made known to the Audit Committee.
66
Vice President, Corporate Development
Reports to:
The CEO of the Company
Responsibilities:
The Vice President, Corporate Development is responsible for:
- Developing and managing relationships with current and prospective business partners, investment
bankers, financial analysts and the media;
- Preparing and presenting comprehensive reviews and analysis of business opportunities to senior
management and to the Board;
- Managing and developing relationships with new and existing institutional investors;
- Assisting the CEO in preparing and presenting to investors, the executive team and the Board;
- Conducting technical and financial analysis to determine the impact of growth opportunities on various
metrics and to establish an execution plan as needed.
The Vice President, Corporate Development shall assist the CEO in establishing and managing relationships
with key stakeholders, identifying and analysing new growth and investment opportunities, as well as the
development, communication and implementation of corporate strategies related to executing the business plans
of the Company.
The Vice President, Corporate Development in conjunction with the CEO shall represent the Company at
industry functions to investors, both potential and existing, as well as ensure the Company is protected through
due diligence activities and provide reasonable assurance as to impact of emerging business opportunities for
the Company and interested parties through the use of technical and financial analyses.
Mandate of the Board
The mandate of the Board is to supervise the management of the business and affairs of the Company and to act
with a view to the best interests of the Company. In fulfilling its mandate, the Board, among other matters, is
responsible for:
(a) adopting a strategic planning process and approving, on at least an annual basis, a strategic plan, taking into
(b)
account the risk and opportunities of the Company’s business;
identifying the principal risks of the Company’s business and implementing appropriate systems to manage
such risks;
(c) satisfying itself, to the extent reasonably feasible, of the integrity of the CEO and other executive officers (if
any) and ensuring that all such officers create a culture of integrity throughout the Company and developing
programs of succession planning (including appointing, training and monitoring senior management);
(d) creating the Company’s internal control and management information systems and creating appropriate
policies for matters including communications, securities trading, privacy, audit, whistleblowing and codes of
ethical conduct;
(e) managing its affairs including selecting its Chair, nomination of candidates for election to the Board,
constituting committees of the Board and determining director compensation; and
(f) engaging any necessary internal and/or external advisors.
In the Fiscal year ended December 31, 2014 there were five (5) meetings of the Board. The frequency of meetings
as well as the nature of agenda items change, depending upon the state of the Company’s affairs and in light of
opportunities or risks which the Company is subject to. Table No. 9 indicates the number of meetings attended by
each director.
67
Table No. 9
Meetings Attended
Director
Duane Poliquin
Morgan Poliquin
Jack McCleary
Joseph Montgomery
Gerald G. Carlson
Barry W. Smee(1)
Mark T. Brown
William J. Worrall
Number
5
5
5
4
5
5
5
3
(1) Dr. Smee resigned from the Company’s Board of Directors effective January 31, 2015
The Chairman is the chair of meetings of the Board of directors and is not an independent director. Meetings of
the independent members of the Board may be held periodically as convened by the independent Board members.
In Fiscal 2014, five (5) meetings of the independent Board members were convened.
In carrying out its mandate, the Board and each committee of the Board, relies primarily on management and its
employees to provide it with regular detailed reports on the operations of the Company and its financial position.
Certain members of management are also on the Board and provide the Board with direct access to information
concerning their areas of responsibility. Management personnel are also regularly asked to attend Board meetings
to provide information, answer questions and receive the direction of the Board. The reports and information
provided to the Board enable them to monitor and manage the risks associated with the Company’s operations and
its compliance with legal and safety requirements, environmental issues and the financial position and liquidity of
the Company.
The Board discharges its responsibilities directly and through committees. At regularly scheduled meetings,
members of the Board and management discuss the broad range of matters and issues relevant to the
Company’s business interests and the Board is responsible for the approval of the Company’s Strategic Plan. In
addition, the Board receives reports from management on the Company’s operational and financial
performance. Between scheduled meetings, matters requiring Board authorization is effected by means of
signed Consent Resolutions.
Board Assessment
The Nomination and Corporate Governance Committee reports to the Board periodically on the evaluation of
the Board’s performance and that of the individual directors. The Performance of the Chief Executive Officer is
evaluated by the Compensation Committee.
Composition of the Board
The guidelines recommend that a board of directors be constituted with a majority of individuals who qualify as
independent directors.
In deciding whether a particular director is independent, the Board examined the factual circumstances of each
director and considered them in the context of many factors, including the definitions in the guidelines and the
requirements and policies of NYSE MKT Company Guide Rules. The current Board is composed of seven
members. The Board believes that 5 directors would be considered independent - Jack McCleary, Joseph
Montgomery, Gerald Carlson, William J. Worrall, and Mark T. Brown. The basis for determination of
independence is under Canadian securities instrument NI 52-110 and NYSE MKT Exchange Company Guide
Rules.
68
The Company does not have a controlling or significant shareholder. The Board believes that the membership of
the Board fairly reflects the investment in the Company by minority shareholders.
The Board considers its size and composition to be appropriate and effective for carrying out its responsibilities.
However, the Board may consider adding an additional director if a suitable candidate can be found who may
bring additional experience or knowledge to the Board.
Board Committees
The Board currently has three committees: the Audit Committee, the Nomination and Corporate Governance
Committee and the Compensation Committee. Each member of each committee is an independent director. Each
committee is responsible for determining its own rules of procedure and may, from time to time, develop written
descriptions for the responsibilities of the chair of such committee. No written descriptions have yet been
developed.
Mandates of each of the committees and the Codes undergo review periodically (in some cases mandated as
annually) to bring them into line with changing Canadian and U.S. securities and corporate governance
requirements and to reflect amendments that may be considered appropriate to make them more effective. Any
the Company’s website at
revisions
www.almadenminerals.com.
and Codes will be
the mandates
available on
to
Audit Committee
The members of the Audit Committee are Messrs. Joseph Montgomery, Gerald Carlson and Mark T. Brown. The
Audit Committee has met four (4) times during Fiscal 2014. The full text of the initial Audit Committee Charter
was filed as an exhibit to the 2003 20-F Annual Report with the Commission on May 11, 2004. After review, the
charter was altered to more properly define the functions of the Audit Committee. The revised charter was filed as
an exhibit to the 2005 20-F Annual Report with the Commission on March 30, 2006.
Nominating and Corporate Governance Committee
The members of the Nominating and Corporate Governance Committee are Jack McCleary, Joseph Montgomery
and Gerald Carlson. The Nominating and Corporate Governance Committee has met five (5) times during Fiscal
2013. The full text of the initial Corporate Governance Charter was filed as an exhibit to the 2003 20-F Annual
Report with the Commission on May 11, 2004. After review, the Responsibilities and Duties of the Nominating and
Corporate Governance Committee were altered to more properly define the functions of the Nominating and
Corporate Committee. The revised Responsibilities and Duties are filed as an exhibit to the 2005 20-F Annual
Report with the Commission on March 30, 2006.
Compensation Committee
The members of the Compensation Committee are Jack McCleary, Joseph Montgomery, Mark T. Brown and
Gerald Carlson. The Compensation Committee has met five (5) times during Fiscal 2014 with Jack McCleary and
Gerald Carlson attending all five (5) meetings and with Joseph Montgomery attending four (4) of the five (5)
meetings and Mark T. Brown attending three (3) of the five (5) meetings. The Responsibilities and Duties of the
Compensation Committee were filed as an exhibit to the 2005 20-F Annual Report with the Commission on March
30, 2006.
Decisions Requiring Board Approval
In addition to those matters which must by law be approved by the Board, management is also required to seek
Board approval for any major acquisition, disposition or expenditure. Management is also required to consult with
the Board before entering into any venture which is outside of the Company’s existing line of business.
Changes in officers are to be approved by the Board including changes in officers of the Company’s principal
operating subsidiaries.
In certain circumstances it may be appropriate for an individual director to engage an outside advisor at the
expense of the Company. The engagement of the outside advisor would be subject to the approval of the
Nomination and Corporate Governance Committee.
69
Communications and Investor Relations
The Company has adopted a Communications Policy, the purpose and aim of which is as follows:
(a) Controls the communications between the Company and its external stakeholders;
(b) Complies with its continuous and timely disclosure obligations;
(c) Avoids selective disclosure of Company information;
(d) Protects and prevents the improper use or disclosure of material information and confidential information;
(e) Educates the Company’s personnel on the appropriate use and disclosure of material information and
confidential information;
(f) Fosters and facilitates compliance with applicable laws; and
(g) Creates formal Disclosure Officers to help achieve the above objectives.
In accordance with the Communications Policy of the Company, designated Disclosure Officers receive and
respond to shareholder enquiries. Shareholder enquiries and concerns are dealt with promptly by Disclosure
Officers of the Company.
Ethical Business Conduct
The Company has adopted a Code of Business Conduct and Ethics for Directors (“Code”), a Code of Business
Ethics (“COBE”), a Securities Trading Policy and a Privacy Policy. Employees and consultants are required as a
term of employment to undertake to abide by the COBE. Directors are by law bound to observe the Code adopted
by the Board.
All Directors, Officers and Employees (“Individuals”) sign an Annual Certification (“Certification”) stating they
have read the Code of Business Ethics policy (“Policy”) of the Company and have complied with such Policy in all
respects. The Certification further acknowledges that all members of the Individual’s family, all other persons who
live with the Individual and all holding companies and other related entities of the Individual and all such persons or
companies acting on behalf of or at the request of any of the foregoing also complied with such Policy. The
Certification also states that any violation of such Policy may constitute grounds for immediate suspension or
dismissal.
Each director is expected and required by statute to act honestly and in good faith with a view to the best
interests of the Company and to exercise the care, diligence and skill that a reasonably prudent individual would
exercise in comparable circumstances and in accordance with the Business Corporations Act (British Columbia)
and the Company’s Articles.
Employees
As of December 31, 2014, the Company operated with eight persons in Canada, of which five are administrative
personnel and three are exploration personnel, some of which are retained on a contractual basis. There are no
full time employees in the U.S. or Mexico. None of the Company’s employees are covered by a collective
bargaining agreement.
Share Ownership
Table No. 10 lists, as of March 30, 2015, directors and executive officers who beneficially own the Company's
voting securities and the amount of the Company’s voting securities owned by the directors and executive
officers as a group.
70
Title of
Class
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
(1)
(2)
(3)
Table No. 10
Shareholdings of Directors and Executive Officers
Name of Beneficial Owner
Duane Poliquin
Morgan Poliquin
Jack McCleary
Gerald G. Carlson
Joseph Montgomery
Barry Smee
Mark T. Brown
William J. Worrall
Korm Trieu
Dione Bitzer
Doug McDonald
Total Directors/Officers
Amounts and Nature of
Beneficial Ownership
4,162,686(1)11)
3,218,647(2)(11)
587,550(3)
330,000(4)
400,000(5)
65,000(6)
339,050(7)
262,500(8)
357,500(9)
162,200(10)
164,500(12)
10,076,663
Percent of
Class*
5.57%
4.28%
0.80%
0.45%
0.54%
0.09%
0.46%
0.36%
0.49%
0.22%
0.22%
13.49%
Of these shares 1,110,000 represent currently exercisable stock options, 410,650 represent currently exercisable warrants
and 69,300 of these shares are held indirectly by Hawk M ountain Resources Ltd., a private company of which Duane
Poliquin is a shareholder.
Of these shares 2,100,000 represent currently exercisable stock options. 83,600 of these shares are held indirectly through
Kohima Pacific Gold Corp., a company owned by M r. Poliquin.
Of these shares 275,000 represent currently exercisable stock options. 38,500 of these shares are held indirectly by
Connemara Resource Ventures Ltd., a company owned by M r. M cCleary.
(4) Of these shares 250,000 represent currently exercisable stock options and 16,000 represent currently exercisable warrants.
Of these shares 250,000 represent currently exercisable stock options and 50,000 represent currently exercisable warrants.
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
Of these shares 5,000 represent currently exercisable warrants. Dr. Smee resigned from the Board of Directors effective January
31, 2015.
Of these shares 250,000 represent currently exercisable stock options. 20,000 of these shares are held indirectly by Pacific
Opportunity Capital Ltd. (“POC”), a company controlled by M r. Brown and his family which also holds 20,000 currently
exercisable warrants represented in these shares.
Of these shares 250,000 represent currently exercisable stock options.
Of these shares 350,000 represent currently exercisable stock options. 7,500 of these shares are held indirectly by M r. Trieu’s
wife.
Of these shares 125,000 represent currently exercisable stock options.
Pursuant to a Voting Trust Agreement (Exhibit 3 to this 20-F Annual Report), Duane Poliquin and M organ Poliquin jointly hold
voting power over 7,028,009 of the Company’s common shares otherwise legally and beneficially owned by M r. Ernesto
Echavarria, as well as over any common shares issued to M r. Echavarria upon the exercise of his warrants to acquire an
additional 2,800,000 of the Company’s common shares.
Of these shares, 150,000 represent currently exercisable stock options. 7,500 of those shares are held indirectly by Shari
Investments, an entity controlled by M r. M cDonald.
*Based on 73,148,321 shares outstanding as of M arch 30, 2015 and stock options and warrants held by each beneficial owner.
Item 7. Major Shareholders and Related Party Transactions
The Company is a publicly owned Canadian company, the shares of which are owned by residents of the U.S.,
residents of Canada and other foreign residents. To the extent known by the directors and executive officers of
the Company, the Company is not directly or indirectly owned or controlled by another company. Table No. 11
lists, as of March 30, 2015, the only persons or companies beneficially owning more than 5% of the Company’s
voting securities.
71
Table No. 11
Shareholdings of Beneficial Owners
Title of
Class
Common
Common
(1)
(2)
(3)
Amounts and Nature of
Beneficial Ownership
4,162,686(1)(3)
Name of Beneficial Owner
Duane Poliquin
Ernesto Echavarria
Percent of
Class*
5.57%
14.78%
Of these shares 1,110,000 represent currently exercisable stock options, 410,650 represent currently exercisable warrants
and 69,300 of these shares are held indirectly by Hawk M ountain Resources Ltd., a private company of which Duane
Poliquin is a shareholder.
Of these shares 3,127,000 represent currently exercisable warrants.
Pursuant to a Voting Trust Agreement (Exhibit 3 to this 20-F Annual Report), Duane Poliquin and M organ Poliquin jointly hold
voting power over 7,028,009 of the Company’s common shares otherwise legally and beneficially owned by M r. Ernesto
Echavarria, as well as over any common shares issued to M r. Echavarria upon the exercise of his warrants to acquire an
additional 2,800,000 of the Company’s common shares.
10,809,009
*Based on 73,148,321 shares outstanding as of M arch 30, 2015 and stock options and warrants held by each beneficial owner.
Related party transactions
Certain geological, technical, professional and general and administrative services were provided to the
Company by the Chairman and/or a company controlled by him. Duane Poliquin operates through Hawk
Mountain Resources Ltd., a private company of which Duane Poliquin is a shareholder.
The costs of such services for Fiscal 2014 ended December 31, 2014 were $240,000, Fiscal 2013 ended
December 31, 2013 were $245,500, and Fiscal 2012 ended December 31, 2012 were $327,488.
Certain officers and directors of the Company are also officers or directors of companies with which the
Company has agreements and may not be considered at arm's-length to such agreements. However, any
agreement or any to be negotiated between the Company and such other companies has been or will be
approved by directors of the Company, in accordance with the common law and the provisions of the Business
Corporations Act (British Columbia).
(a) Compensation of key management personnel
Key management includes members of the Board, the Chairman, the President and Chief Executive Officer, the
Chief Financial Officer and the Vice President, Corporate Development (effective September 22, 2014). The
aggregate compensation paid or payable to key management for services is as follows:
Salaries, fees and benefits
Share based compensation
Directors’ fees
February 28,
2015
$130,167(i)
260,625(ii)
48,000
$438,792
December 31,
2014
$ 738,125(iii)
469,500(iv)
48,000
$1,255,625
December 31,
2013
$ 690,700(v)
340,250(vi)
48,000
$1,078,950
December 31,
2012
$ 828,488(vii)
1,468,500(viii)
39,000
$2,335,988
(i) Hawk Mountain Resources Ltd. (“Hawk Mountain”), a private company of which Duane Poliquin is a
shareholder, was paid $26,000 for geological services provided to the Company and is recorded in general
exploration expenses.
(ii) Comprised of 695,000 options granted pursuant to the Company’s stock option plan during the period, all
of which vested on the grant date. The value is based on the fair value of the awards ($0.38) calculated
using the Black – Scholes model at the January 6, 2015 grant date.
(iii) During 2014, Hawk Mountain Resources Ltd. (“Hawk Mountain”), a private company of which the
Chairman of the Company is a shareholder, was paid $240,000 (2013 - $240,000; 2012 – $315,000) for
geological services provided to the Company and is recorded in general exploration expenses.
(iv) Comprised of 675,000 options granted pursuant to the Company’s stock option plan during 2014, all of
which vested on the grant date. The value of 375,000 option-based awards is based on the fair value of
the awards ($0.76) calculated using the Black-Scholes model at the January 2, 2014 grant date. The value
of 150,000 option-based awards is based on the fair value of the awards ($1.50) calculated using the
72
Black-Scholes model at the July 2, 2014 grant date. The value of 150,000 option based awards is based on
the fair value of the awards ($1.40) calculated using the Black-Scholes model at the October 10, 2014
grant date.
(v) Hawk Mountain Resources Ltd. (“Hawk Mountain”), a private company of which Duane Poliquin is a
shareholder, was paid $40,000 for geological services provided to the Company and is recorded in general
exploration expenses.
(vi) Comprised of 375,000 options granted pursuant to the Company’s stock option plan during the period, all
of which vested on the grant date. The value is based on the fair value of the awards ($0.76) calculated
using the Black-Scholes model at the January 2, 2014 grant date.
(vii) Hawk Mountain was paid $240,000 for geological services provided to the Company and is recorded in
general exploration expenses.
(viii) Comprised of 325,000 options granted pursuant to the Company’s stock option plan during the year, all of
which vested on the grant date. The value of 75,000 option-based awards is based on the fair value of the
awards ($1.17) calculated using the Black-Scholes model at the April 3, 2013 grant date. The value of
250,000 option-based awards is based on the fair value of the awards ($1.01) calculated using the Black-
Scholes model at the June 18, 2013 grant date.
(b) Other related party transactions
(a) During the year ended December 31, 2014, the Company paid a company owned by Barry Smee $Nil
(Fiscal 2013 - $1,500, Fiscal 2012 - $Nil) for consulting services provided to the Company.
(b) During the year ended December 31, 2014, the Company paid a company controlled by Mark T. Brown
and his family $Nil (Fiscal 2013 - $700 and Fiscal 2012 - $488) for accounting services provided to the
Company.
(c) During the year ended December 31, 2014, no payments were made to Hawk for marketing and general
administration services provided by the spouse of the Chairman. (Fiscal 2013 - $6,300 and Fiscal 2012 -
$12,000).
(d) During the year ended December 31, 2014, the Company employed the Chairman’s daughter for a salary
of $34,050 less statutory deductions (Fiscal 2013 - $34,000 and 2012 - $62,216) for marketing and
administrative services provided to the Company.
Other than as disclosed above, there have been no transactions or proposed transactions, which have materially
affected or will materially affect the Registrant in which any director, executive officer, or beneficial holder of
more than 10% of the outstanding common stock, or any of their respective relatives, spouses, associates or
affiliates has had or will have any direct or material indirect interest. As stated above, management believes the
transactions referenced above were on terms at least as favorable to the Company as the Company could have
obtained from unaffiliated parties.
Item 8. Financial Information
The financial statements as required under Item 8 are attached hereto and found immediately following the text
of this Annual Report.
Legal Proceedings
The Company knows of no material, active or pending legal proceedings against it; nor is the Company
involved as a plaintiff in any material proceeding or pending litigation.
Dividends
The Company has not declared any dividends since inception and does not anticipate that it will do so in the
foreseeable future. The present policy of the Company is to retain future earnings for use in its operations and the
expansion of its business.
Significant Changes
There have been no significant changes of financial condition since the most recent audited financial statements
included within this Annual Report on Form 20-F.
73
Item 9. Offer and Listing of Securities
The Company's common shares trade on The Toronto Stock Exchange ("TSX") in Toronto, Ontario, Canada having
the symbol "AMM” and on the NYSE MKT (formerly the American Stock Exchange) in New York, New York,
U.S.A. having the symbol “AAU” and CUSIP #020283107.
The Company’s common shares commenced trading on February 11, 2002 on TSX and December 19, 2005 on the
American Stock Exchange, now the NYSE MKT.
Table No. 12 lists the high and low prices for the shares of Almaden Minerals Ltd. common stock on NYSE
MKT for the preceding five years. Table No. 13 lists the high and low prices for shares of Almaden Minerals
Ltd. common stock on TSX for the preceding five years.
Table No. 12
Almaden Minerals Ltd.
Stock Trading Activity
NYSE MKT
(expressed in US$)
High
$1.94
3.25
3.33
5.35
5.03
Table No. 13
Almaden Minerals Ltd.
Stock Trading Activity
The Toronto Stock Exchange
(expressed in C$)
High
$2.11
3.19
3.31
5.17
5.15
Year Ended
12/31/2014
12/31/2013
12/31/2012
12/31/2011
12/31/2010
Year Ended
12/31/2014
12/31/2013
12/31/2012
12/31/2011
12/31/2010
Low
$0.86
1.03
1.55
2.00
0.86
Low
$1.02
1.08
1.56
2.08
0.88
Table No. 14 lists the quarterly high and low prices for shares of Almaden Minerals Ltd. common stock on
NYSE MKT for the two most recent full financial years. Table No. 15 lists the quarterly high and low prices for
shares of Almaden Minerals Ltd. common stock on TSX for the two most recent full financial years.
74
Table No. 14
Almaden Minerals Ltd.
Stock Trading Activity
NYSE MKT
(expressed in US$)
High
$1.35
1.64
1.52
1.94
1.44
2.08
2.01
3.25
3.30
3.06
2.70
3.33
Table No. 15
Almaden Minerals Ltd.
Stock Trading Activity
The Toronto Stock Exchange
(expressed in C$)
High
$1.48
1.80
1.64
2.11
1.49
2.14
2.05
3.19
3.25
2.99
2.67
3.31
Quarter Ended
12/31/2014
09/30/2014
06/30/2014
03/31/2014
12/31/2013
09/30/2013
06/30/2013
03/31/2013
12/31/2012
09/30/2012
06/30/2012
03/31/2012
Quarter Ended
12/31/2014
09/30/2014
06/30/2014
03/31/2014
12/31/2013
09/30/2013
06/30/2013
03/31/2013
12/31/2012
09/30/2012
06/30/2012
03/31/2012
Low
$0.86
1.27
1.27
1.17
1.03
1.32
1.18
1.85
2.45
1.55
1.69
2.33
Low
$1.02
1.38
1.37
1.25
1.08
1.37
1.22
1.91
2.35
1.56
1.76
2.37
Table No.16 lists the high and low prices for shares of Almaden Minerals Ltd. common stock on
NYSE MKT for the most recent six months. Table No. 17 lists the high and low prices for shares of
Almaden Minerals Ltd. common stock on TSX for the most recent six months.
75
Table No. 16
Almaden Minerals Ltd.
Stock Trading Activity
NYSE MKT
(expressed in US$)
High
$1.20
1.27
1.08
1.18
1.35
1.64
Table No. 17
Almaden Minerals Ltd.
Stock Trading Activity
The Toronto Stock Exchange
(expressed in C$)
High
$1.52
1.57
1.22
1.17
1.48
1.80
Month Ended
02/28/2015
01/31/2015
12/31/2014
11/30/2014
10/31/2014
09/30/2014
Month Ended
02/28/2015
01/31/2015
12/31/2014
11/30/2014
10/31/2014
09/30/2014
Low
$1.07
0.94
0.86
0.97
1.10
1.30
Low
$1.33
1.09
1.02
1.10
1.24
1.43
The closing price of the Company’s common stock was $1.11 (US$) on the NYSE MKT and $1.34 (C$) on TSX on
February 28, 2015.
In recent years, securities markets in Canada and the U.S. have experienced a high level of price and volume
volatility, and the market price of many resource companies, particularly those considered speculative exploration
companies, have experienced wide fluctuations in price which have not necessarily been related to operating
performance or underlying asset values on prospects of such companies. Exploration for gold and other minerals is
considered high risk and highly speculative in the resource industry and the trading market for precious and base
metal exploration companies is characteristically volatile, with wide fluctuations of price and volume only in part
related to progress of exploration. There can be no assurance that continual fluctuations in the Company’s share
price and volume will not occur.
The Company's common stock is issued in registered form and the following information is from the Company’s
registrar and transfer agent, Computershare Investor Services Inc. located in Vancouver, British Columbia and
Toronto, Ontario, Canada.
On February 28, 2015, the shareholders' list for the Company’s common shares showed 250 registered shareholders
and 73,148,331 shares outstanding. 196 of these registered shareholders are U.S. residents, owning 17,431,732
shares representing 24% of the issued and outstanding shares of common stock. 45 of these registered shareholders
are Canadian residents, owning 55,211,553 shares representing 75.5% of the issued and outstanding shares of
common stock. 9 of these registered shareholders are of other countries, owning 505,046 shares representing 0.5%
of the issued and outstanding shares of common stock.
Table No. 18 lists changes, if any, in issued shares to March 30, 2015:
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Table No. 18
Shares Issued to March 30, 2015
Balance, December 31, 2014
Balance, March 30, 2015
Item 10. Additional Information
Number
68,728,321
73,148,321
Flow-Through Shares
The Company’s common shares are not normally flow-through shares but the Company has issued flow-
through shares pursuant to private placements of the Company’s common shares. There were no flow-through
shares issued in Fiscal 2014 and Fiscal 2013. In Fiscal 2011, the Company issued 100,000 flow-through shares.
Flow-through shares differ from other common shares in one aspect only, namely the tax benefits connected
with the expenditures associated with the funds raised through the sale of flow through shares flow through to
the shareholder rather than the Company; all other rights of the shareholder remain unchanged. Companies must
specifically identify the expenditures associated with the funds raised through the sale of flow-through shares.
Companies raising capital through flow-through shares must expend the funds on qualifying natural resources
exploration in Canada. These tax benefits are available only to shareholders residing in Canada. Shareholders
residing in the U.S. and other non-Canadian shareholders, receive no tax benefits through the purchase of flow-
through shares.
Memorandum and Articles
At the Annual and Special General meeting of the Company held on May 18, 2005, shareholders passed
appropriate resolutions to complete the transition procedures in accordance with the Business Corporations Act
(British Columbia), (the “BCBCA”), to increase the number of common shares which the Company is
authorized to issue to an unlimited number of common shares and to cancel the Company’s Articles and adopt
new Articles to take advantage of provisions of the BCBCA. The BCBCA was adopted in British Columbia on
March 29, 2004 replacing the Company Act (the “Former Act”). The BCBCA requires the provisions formerly
required in the Memorandum to be in the Articles. The BCBCA eliminates the requirement for a Memorandum.
The revised Articles were filed as an exhibit to the 2005 20-F Annual Report with the Commission on March 30,
2006.
The Articles replace the Memorandum and Articles as filed with the Commission on May 17, 2002.
Articles
The Company was formed through the amalgamation of Fairfield Minerals Ltd. and Almaden Resources
Corporation effective December 31, 2001 under the Company Act of British Columbia (the “Company Act”).
On March 29, 2004, British Columbia adopted the Business Corporations Act (British Columbia) (the
“BCBCA”) to replace the Company Act. Companies registered under the Company Act are required to
transition to the BCBCA. At the Annual and Special General meeting of the Company held on May 18, 2005,
shareholders passed appropriate resolutions to complete the transition procedures to cancel the Company’s
Articles and adopt new Articles, which includes an increase of the number of common shares which the
Company is authorized to issue to an unlimited number of common shares. The Company’s new Articles
became effective in June 2005 (the “Articles”).
The Articles contain no restrictions on the business the Company may carry on.
Under the Articles, if a director has a disclosable interest in a contract or transaction, such director is liable to
account to the Company for any profits that accrue to the director as a result of the contract or transaction unless
disclosure is made thereof and the contract or transaction is approved in accordance with the provisions of the
BCBCA and a director is not entitled to vote on any director’s resolution to approve that contract or transaction
unless all of the directors have a disclosable interest in that contract or transaction, in which case all of those
directors may vote on such resolution.
A director may hold any office or place of profit with the Company in conjunction with the office of director,
and no director shall be disqualified by his office from contracting with the Company. A director or his firm
may act in a professional capacity for the Company and he or his firm shall be entitled to remuneration for
77
professional services. A director may become a director or other officer or employee of, or otherwise interested
in, any company or firm in which the Company may be interested as a shareholder or otherwise. The director
shall not be accountable to the Company for any remuneration or other benefits received by him from such
other company or firm unless the Company in general meeting directs otherwise.
Under the Articles the directors must manage or supervise the management of the business and affairs of the
Company and have the authority to exercise all such powers which are not required to be exercised by the
shareholders, or as governed by the BCBCA. Under the Articles the directors may, by resolution, create and
appoint one or more committees consisting of such member or members of their body as they think fit and may
delegate to any such committee such powers of the Board as the Board may designate or prescribe.
The Articles provide that the quorum necessary for the transaction of the business of the directors may be fixed
by the directors and if not so fixed shall be a majority of the directors. The continuing directors may,
notwithstanding any vacancy in their body, but if and so long as their number is reduced below the number
fixed pursuant to the Articles as the necessary quorum of directors, act only for the purpose of increasing the
number of directors to that number, or of summoning a general meeting of the Company, but for no other
purpose.
The Articles provide that the directors may, on behalf of the Company:
• Borrow money in a manner and amount, on any security, from any source and upon any terms
•
and conditions;
Issue bonds, debentures, and other debt obligations either outright or as security for any
liability or obligation of the Company or any other person;
• Guarantee the repayment of money by any other person or the performance of any obligation
of any other person; and
• Mortgage, charge, or give other security, on the whole or any part of the property or assets of
the Company, both present and future.
There are no age limit requirements pertaining to the retirement or non-retirement of directors.
A director need not be a shareholder of the Company.
The Articles provide for the mandatory indemnification of Directors, Officers, former officers and directors,
alternate directors, as well as their respective heirs and personal or other legal representatives, or any other
person, to the greatest extent permitted by the BCBCA. The indemnification includes the mandatory payment of
expenses and, in furtherance thereof, the Company is party to indemnification agreements with such
individuals. The directors may cause the Company to purchase and maintain insurance for the benefit of eligible
parties.
The rights, preferences and restrictions attaching to each class of the Company’s shares are as follows:
Common Shares
The authorized share structure of the Company consists of an unlimited number of common shares without par
value. All the shares of common stock of the Company are of the same class and, once issued, rank equally as to
dividends, voting powers, and participation in assets. Holders of common stock are entitled to one vote for each
share held of record on all matters to be acted upon by the shareholders. Holders of common stock are entitled
to receive such dividends as may be declared from time to time by the Board of Directors, in its discretion, out
of funds legally available therefore.
Upon liquidation, dissolution or winding up of the Company, holders of common stock are entitled to receive pro
rata the assets of the Company, if any, remaining after payments of all debts and liabilities. No shares have been
issued subject to call or assessment. There are no pre-emptive or conversion rights and no provisions for
redemption or purchase for cancellation, surrender, or sinking or purchase funds.
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The Directors may by resolution make any changes in the authorized share structure as may be permitted under
Section 54 of the BCBCA, and may by resolution of the Directors make or authorize the making of any alterations
to the Articles and the Notice of Articles as may be required by such changes.
The Company may by ordinary resolution, create or vary special rights and restrictions as provided in Section 58 of
the BCBCA. No alteration will be valid as to any part of the issued shares of any class unless the holders of all the
issued shares of that class consent to the alteration in writing or consent by special separate resolution.
An annual general meeting shall be held once every calendar year at such time (not being more than 15 months after
holding the last preceding annual meeting) and place as may be determined by the Directors. The Directors may, as
they see fit, convene an extraordinary general meeting. An extraordinary general meeting, if requisitioned in
accordance with the BCBCA, shall be convened by the Directors or, if not convened by the Directors, may be
convened by the requisitionists as provided in the BCBCA.
There are no limitations upon the rights to own securities.
There are no provisions in the Articles that would have the effect of delaying, deferring, or preventing a change in
control of the Company.
There is no special ownership threshold above which an ownership position must be disclosed. However, any
ownership level above 10% must be disclosed by news release and notices filed in accordance with Canadian
Securities Laws and by notices to the Toronto Stock Exchange.
A copy of the Company’s new articles was filed as an exhibit to the 2005 Form 20-F Annual Report with the
Commission on March 30, 2006.
Shareholder Rights Plan
On April 13, 2011, the Company’s Board of Directors adopted a Shareholder Rights Plan Agreement (the “Rights
Plan”) between the Company and Computershare Investor Services Inc. (“Computershare”) as Rights Agent. The
Rights Plan was subsequently approved by the shareholders of the Company at the Annual General and Special
Meeting held June 28, 2011 and reconfirmed by the shareholders of the Company at the 2014 Annual General
Meeting. The primary objective of the Rights Plan is to ensure, to the extent possible, that all shareholders of the
Company are treated fairly in connection with any take-over bid for the Company by (a) providing shareholders
with adequate time to properly assess a take-over bid without undue pressure and (b) providing the Board with more
time to fully consider an unsolicited take-over bid, and, if applicable, to explore other alternatives to maximize
shareholder value.
The full text of the Rights Plan was filed under cover of Form 6-K with the Commission on April 15, 2011 and
is also available on SEDAR and the Company’s website.
Advance Notice Policy
On January 28, 2013 the Company’s Board of Directors approved and adopted an Advance Notice Policy (the
“Policy”) which, among other things, includes a provision that requires advance notice to the Company in
circumstances where nominations of persons for election to the Board, of Directors are made by shareholders of
the Company other than pursuant to: (i) a requisition of a meeting made pursuant to the provisions of the
Business Corporations Act (British Columbia) (the “Act”): or (ii) a shareholder proposal made pursuant to the
provisions of the Act.
The Policy, among other things, fixes a deadline by which holders of record of common shares of the Company
must submit director nominations to the Company prior to any annual or special meeting of shareholders and set
forth the information that a shareholder must include in the notice to the Company for the notice to be in proper
written form.
In the case of an annual meeting of shareholders, notice to the Company must be made not less than 30 nor
more than 65 days prior to the date of the annual meeting; provided, however, that in the event the annual
meeting is to be held on a date that is less than 50 days after the date on which the first public announcement of
the date of the annual meeting was made, notice may be made not later than the close of business on the 10th
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day following such public announcement.
In the case of a special meeting of shareholders (which is not also an annual meeting), notice to the Company
must be made not later than the close of business on the 15th day following the day on which the first public
announcement of the date of the special meeting was made.
The full text of the Advance Notice Policy is filed as an exhibit to the 2012 20F Annual Report with the
Commission on March 28, 2013.
Multiple Voting Policy for Uncontested Elections of Directors
The Board believes that each of its members should carry the confidence and support of the Company’s
shareholders and, accordingly, has adopted a Majority Voting Policy for the election of directors for non-
contested meetings. The Majority Voting Policy provides that, in a non-contested election of directors, voting
will be by ballot and, if the number of shares “withheld” for any nominee exceeds the number of shares voted
“for” the nominee, then, notwithstanding that such director is duly elected as a matter of corporate law, he or
she shall, within five days following the date of the final scrutineer’s report on the ballot, tender his or her
written resignation to the Chairman of the Board. A “non-contested election” means an election where the
number of nominees for director is not greater than the number of directors to be elected. Under the Majority
Voting Policy, the Nomination and Corporate Governance Committee will consider such offer of resignation
and will make a recommendation to the Board concerning the acceptance or rejection of the resignation. The
Board will take formal action on the Nomination and Corporate Governance Committee’s recommendation no
later than 90 days following the date of the applicable shareholders’ meeting and will announce its decision via
press release. If the Board declines to accept the resignation, it will include in the press release the reason or
reasons for its decision. No director who is required to tender his or her resignation shall participate in the
Nomination and Corporate Governance Committee’s deliberations or recommendations or in the Board’s
deliberations or determination. If a resignation is accepted by the Board, and subject to any corporate law
restrictions, the Board may leave any resulting vacancy unfilled until the Company’s next annual general
meeting, or may appoint a new director to fill the vacancy who the Board considers to merit the confidence of
the shareholders, or may call a special meeting of shareholders at which there will be presented a management
nominee or nominees to fill the vacant position or positions. At the 2013 Annual General Meeting, the
shareholders approved the Majority Voting Policy.
Material Contracts
The following is a summary of each material contract, other than contracts entered into in the ordinary course of
business, to which we or any member of the group is a party, for the two years preceding the date of this
document.
1. Advance Notice Policy dated January 28, 2013 whereby the Policy, among other things, includes a provision
that requires advance notice to the Company in circumstances where nominations of persons for election to the
Board of Directors are made by shareholders of the Company. The full text of the Policy is filed as an exhibit
to the 2012 20F Annual Report with the Commission on March 28, 2013.
2. Executive Compensation Contract dated effective as of January 29, 2013 between the Company and Hawk
Mountain Resources Ltd. (“Hawk”) whereby Hawk agrees to provide the services of Duane Poliquin as
Executive Chairman for a term of 2 years renewable for two additional successive terms of 24 months for
remuneration of $240,000 per annum. The full text of the Executive Compensation Contract is filed as an
exhibit to the 2012 20F Annual Report with the Commission on March 28, 2013.
3. Executive Compensation Contract dated effective as of January 29, 2013 between the Company and Morgan
Poliquin (“Poliquin”) whereby Poliquin agrees to provide the services of President and Chief Executive Officer
for a term of 2 years renewable for two additional successive terms of 24 months for remuneration of $265,000
per annum. The full text of the Executive Compensation Contract is filed as an exhibit to the 2012 20F Annual
Report with the Commission on March 28, 2013.
4. Assignment of Rights Agreement dated March 11, 2013 between the Company’s wholly-owned subsidiary,
Compania Minera Zapata, S.A. de C.V., and Don David Gold Mexico, S.A. de C.V. (“Don David”) whereby
Don David purchased the Company’s 100% interest in the San Pedro and Fuego prospects by paying
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US$100,000 plus Added Value Tax plus US$16,555 being Don David’s pro-rata share of the mineral taxes paid
on January 31, 2013 together with a 2% NSR. The full text of the Assignment of Rights Agreement is filed as
an exhibit to the 2013 20F Annual Report with the Commission on March 25, 2014.
5. Sale and Purchase Agreement dated June 20, 2013 between the Company and its wholly-owned subsidiaries,
Minera Gavilan, S.A. de C.V. and Almaden America Inc., and Tarsis Resources Ltd. (“Tarsis”) whereby Tarsis
purchased the Company’s 100% interests in the Yago, Mezquites, Cofradia, Llano Grande, BP and Black Jack
Springs prospects issuing 4,000,000 shares of Tarsis to the Company together with a 2% NSR. The full text of
the Sale and Purchase Agreement was furnished to the Commission under cover of Form 6-K on June 20, 2013.
6. Amendment Agreement dated November 26, 2013 between the Company’s wholly-owned subsidiary,
Minera Gavilan, S.A. de C.V., Candymin, S.A. de C.V. (“Candymin”) and Mr. Charlie Edward Warren
(“Warren”) whereby the Company and Candymin obtained a reduction in a royalty with respect to the Caballo
Blanco prospect for total payment to Warren of US$750,000 (the Company US$350,000/Candymin
US$400,000) and the Company issuing Warren 20,000 shares of the Company. The full text of the Amendment
of Rights Agreement is filed as an exhibit to the 2013 20F Annual Report with the Commission on March 25,
2014.
Exchange controls
Except as discussed above, the Company is not aware of any Canadian federal or provincial laws, decrees or
regulations that restrict the export or import of capital, including foreign exchange controls, or that affect the
remittance of interest, dividends or other payments to non-Canadian holders of the common shares. There are
no limitations on the right of non-Canadian owners to hold or vote the common shares imposed by Canadian
federal or provincial law or by the charter or other constituent documents of the Company.
The Investment Canada Act (the "IC Act") governs acquisitions of Canadian business by a non-Canadian person
or entity. The IC Act requires a non-Canadian (as defined in the IC Act) making an investment to acquire control
of a Canadian business, the gross assets of which exceed certain defined threshold levels, to file an application
for review with the Investment Review Division of Industry Canada. The IC Act provides, among other things,
for a review of an investment in the event of acquisition of "control" in certain Canadian businesses in the
following circumstances:
1. If the investor is a non-Canadian and is a national of a country belonging to the North American Free Trade
Agreement ("NAFTA") and/or the World Trade Organization ("WTO") ("NAFTA or WTO National"), any
direct acquisition having an asset value exceeding $179,000,000 is reviewable. This amount is subject to an
annual adjustment on the basis of a prescribed formula in the IC Act to reflect inflation and real growth within
Canada. This threshold level does not apply in certain sections of Canadian industry, such as uranium, financial
services (except insurance), transportation services and cultural services (i.e. the publication, distribution or sale
of books, magazines, periodicals (other than printing or typesetting businesses), music in print or machine
readable form, radio, television, cable and satellite services; the publication, distribution, sale or exhibition of
film or video recordings on audio or video music recordings), to which lower thresholds as prescribed in the IC
Act are applicable.
2. If the investor is a non-Canadian and is not a NAFTA or WTO National, any direct acquisition having an
asset value exceeding $5,000,000 and any indirect acquisition having an asset value exceeding $50,000,000 is
reviewable.
3. If the investor is a non-Canadian and is a NAFTA or WTO National, an indirect acquisition of control is
reviewable if the value of the assets of the business located in Canada represents more than 50% of the asset
value of the transaction or the business is involved in uranium, financial services, transportation services or
cultural services (as set forth above).
Finally, certain transactions prescribed in the IC Act are exempted from review altogether.
In the context of the Company, in essence, three methods of acquiring control of a Canadian business are
regulated by the IC Act: (i) the acquisition of all or substantially all of the assets used in carrying on business in
Canada; (ii) the acquisition, directly or indirectly, of voting shares of a Canadian company carrying on business
in Canada; or (iii) the acquisition of voting shares of an entity which controls, directly or indirectly, another
entity carrying on business in Canada.
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An acquisition of a majority of the voting shares of a Canadian entity, including a company, is deemed to be an
acquisition of control under the IC Act. However, under the IC Act, there is a rebuttable presumption that
control is acquired if one-third of the voting shares of a Canadian company or an equivalent undivided interest
in the voting shares of such company are held by a non-Canadian person or entity. An acquisition of less than
one-third of the voting shares of a Canadian company is deemed not to be an acquisition of control. An
acquisition of less than a majority, but one-third or more, of the voting shares of a Canadian company is
presumed to be an acquisition of control unless it can be established that, on the acquisition, the Canadian
company is not, in fact, controlled by the acquirer through the ownership of voting shares. For partnerships,
trusts, joint ventures or other unincorporated Canadian entities, an acquisition of less than a majority of the
voting interests is deemed not to be an acquisition of control.
In addition, if a Canadian company is controlled by a non-Canadian, the acquisition of control of any other
Canadian company by such company may be subject to the prior approval of the Investment Review Division,
unless it can be established that the Canadian company is not in fact controlled by the acquirer through the
ownership of voting shares.
Where an investment is reviewable under the IC Act, the investment may not be implemented unless it is likely
to be of net benefit to Canada. If an applicant is unable to satisfy the Minister responsible for Industry Canada
that the investment is likely to be of net benefit to Canada, the applicant may not proceed with the investment.
Alternatively, an acquirer may be required to divest control of the Canadian business that is the subject of the
investment.
In addition to the foregoing, the IC Act provides for formal notification under the IC Act of all other acquisitions
of control of Canadian businesses by non-Canadian investors.
The notification process consists of filing a notification within 30 days following the implementation of an
investment, which notification is for information, as opposed to review, purposes.
Taxation
The following summary of the material Canadian federal income tax consequences generally applicable in
respect of the common stock reflects the Company’s opinion. The tax consequences to any particular holder of
common stock will vary according to the status of that holder as an individual, trust, company or member of a
partnership, the jurisdiction in which that holder is subject to taxation, the place where that holder is resident
and, generally, according to that holder’s particular circumstances. This summary is applicable only to holders
who are resident in the U.S., have never been resident in Canada, deal at arm’s length with the Company, hold
their common stock as capital property and who will not use or hold the common stock in carrying on business
in Canada. Special rules, which are not discussed in this summary, may apply to a U.S. holder that is an issuer
that carries on business in Canada and elsewhere.
This summary is based upon the provisions of the Income Tax Act of Canada and the regulations thereunder
(collectively, the "Tax Act" or “ITA”)and the Canada-United States Tax Convention (the “Tax Convention”) as
at the date of the Registration Statement and the current administrative practices of Canada Revenue Agency.
This summary does not take into account Provincial income tax consequences.
Each holder should consult his own tax advisor with respect to the income tax consequences applicable to him
in his own particular circumstances.
Certain Canadian Federal Income Tax Consequences
The discussion under this heading summarizes the principal Canadian federal income tax consequences of
acquiring, holding and disposing of shares of common stock of the Company for a shareholder of the Company
who is not a resident of Canada but is a resident of the U.S. and who will acquire and hold shares of common
stock of the Company as capital property for the purposes of the Income Tax Act (Canada) (the “Canadian Tax
Act”). This summary does not apply to a shareholder who carries on business in Canada through a “permanent
establishment” situated in Canada or performs independent personal services in Canada through a fixed base in
Canada if the shareholder’s holding in the Company is effectively connected with such permanent establishment
or fixed base. This summary is based on the provisions of the Canadian Tax Act and the regulations thereunder
and on an understanding of the administrative practices of Canada Revenue Agency, and takes into account all
specific proposals to amend the Canadian Tax Act or regulations made by the Minister of Finance of Canada as
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of the date hereof. It has been assumed that there will be no other relevant amendment of any governing law
although no assurance can be given in this respect. This discussion is general only and is not a substitute for
independent advice from a shareholder’s own Canadian and U.S. tax advisors.
The provisions of the Canadian Tax Act are subject to income tax treaties to which Canada is a party, including
the Canada-United States Income Tax Convention (1980), as amended (the “Convention”).
Dividends on Common Shares and Other Income
Under the Canadian Tax Act, a non-resident of Canada is generally subject to Canadian withholding tax at the
rate of 25 percent on dividends paid or deemed to have been paid to him or her by a company resident in
Canada. The Company is responsible for withholding of tax at the source. The Convention limits the rate to 15
percent if the shareholder is a resident of the U.S. and the dividends are beneficially owned by and paid to such
shareholder, and to 5 percent if the shareholder is also a company that beneficially owns at least 10 percent of
the voting stock of the payor company.
The amount of a stock dividend (for tax purposes) would generally be equal to the amount by which the paid up
or stated capital of the Company had increased by reason of the payment of such dividend. The Company will
furnish additional tax information to shareholders in the event of such a dividend. Interest paid or deemed to be
paid on the Company’s debt securities held by non-Canadian residents may also be subject to Canadian
withholding tax, depending upon the terms and provisions of such securities and any applicable tax treaty.
The Convention generally exempts from Canadian income tax dividends paid to a religious, scientific, literary,
educational or charitable organization or to an organization constituted and operated exclusively to administer a
pension, retirement or employee benefit fund or plan, if the organization is a resident of the U.S. and is exempt
from income tax under the laws of the U.S.
Dispositions of Common Shares
Under the Canadian Tax Act, a taxpayer’s capital gain or capital loss from a disposition of a share of common
stock of the Company is the amount, if any, by which his or her proceeds of disposition exceed (or are exceeded
by, respectively) the aggregate of his or her adjusted cost base of the share and reasonable expenses of
disposition. The capital gain or loss must be computed in Canadian currency using a weighted average adjusted
cost base for identical properties. There are special transitional rules to apply capital losses against capital gains
that arose in different periods. The amount by which a shareholder’s capital loss exceeds the capital gain in a
year may be deducted from a capital gain realized by the shareholder in the three previous years or any
subsequent year, subject to certain restrictions in the case of a corporate shareholder.
Under the Canadian Tax Act, a non-resident of Canada is subject to Canadian tax on taxable capital gains, and
may deduct allowable capital losses, realized on a disposition of "taxable Canadian property." Shares of
common stock of the Company will constitute taxable Canadian property of a shareholder at a particular time if
the shareholder used the shares in carrying on business in Canada, or if at any time in the five years
immediately preceding the disposition 25% or more of the issued shares of any class or series in the capital
stock of the Company belonged to one or more persons in a group comprising the shareholder and persons with
whom the shareholder and persons with whom the shareholder did not deal at arm’s length and in certain other
circumstances.
The Convention relieves U.S. residents from liability for Canadian tax on capital gains derived on a disposition
of shares unless
(a) the value of the shares is derived principally from “real property” in Canada, including the right to explore
for or exploit natural resources and rights to amounts computed by reference to production,
(b) the shareholder was resident in Canada for 120 months during any period of 20 consecutive years preceding,
and at any time during the 10 years immediately preceding, the disposition and the shares were owned by him
when he or she ceased to be resident in Canada, or
(c) the shares formed part of the business property of a “permanent establishment” that the holder has or had in
Canada within the 12 months preceding the disposition.
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The Convention relieves U.S. residents from liability for Canadian tax on capital gains derived on a disposition
of shares unless
(a) the value of the shares is derived principally from “real property” in Canada, including the right to explore
for or exploit natural resources and rights to amounts computed by reference to production,
(b) the shareholder was resident in Canada for 120 months during any period of 20 consecutive years preceding,
and at any time during the 10 years immediately preceding, the disposition and the shares were owned by him
when he or she ceased to be resident in Canada, or
(c) the shares formed part of the business property of a “permanent establishment” that the holder has or had in
Canada within the 12 months preceding the disposition.
Certain U.S. Federal Income Tax Consequences
The following is a discussion of material U.S. federal income tax consequences generally applicable to a U.S.
Holder (as defined below) of common shares of the Company. This discussion does not cover any state, local or
foreign tax consequences.
The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended (“the
Code”), Treasury Regulations, published Internal Revenue Service (“IRS”) rulings, published administrative
positions of the IRS and court decisions that are currently applicable, any or all of which could be materially
and adversely changed, possible on a retroactive basis, at any time. In addition, the discussion does not
consider the potential effects, both adverse and beneficial, or recently proposed legislation which, if enacted,
could be applied, possibly on a retroactive basis, at any time. The following discussion is for general
information only and it is not intended to be, nor should it be construed to be, legal or tax advice to any Holder
or prospective holder and not an opinion or representation with respect to the U.S. Federal income tax
consequences to any such Holder or prospective holder is made. The following summary was not written and is
not intended to be used, and cannot be used, by any person for the avoidance of any penalties with respect to
taxes that may be imposed on such person. Holders and prospective holders of common shares of the Company
are urged to consult their own tax advisors about the federal, state, local, and foreign tax consequences of
purchasing, owning and disposing of common shares of the Company.
U.S. Holders
As used herein, a U.S. Holder includes a holder of common shares of the Company who is a citizen or resident
of the U.S., a company (or an entity which has elected to be treated as a company under Treasury Regulation
Sections 301.7701-3) created or organized in or under the laws of the U.S. or of any political subdivision
thereof, any estate other than a foreign estate (as defined in Section 7701(a)(31)(A) of the Code or, a trust
subject to the primary supervision of a court within the U.S. and control of a U.S. fiduciary as described in
Section 7701(a)(30)(E) of the Code). This summary does not address the tax consequences to, and U.S. Holder
does not include, persons subject to special provisions of Federal income tax law, such as tax-exempt
organizations, qualified retirement plans, financial institutions, insurance companies, real estate investment
trusts, regulated investment companies, broker-dealers, non-resident alien individuals, persons or entities that
have a “functional currency” other than the U.S. dollar, shareholders who hold common shares as part of a
straddle, hedging or conversion transaction, and shareholders who acquired their common shares through the
exercise of employee stock options or otherwise as compensation for services. This summary is limited to U.S.
Holders who own common shares as capital assets. This summary does not address the consequences to a
person or entity holding an interest in a shareholder of the Company or the consequences to a person of the
ownership, exercise or disposition of any options, warrants or other rights to acquire common shares of the
Company.
Distribution on Common Shares of the Company
U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares
of the Company are required to include in gross income for U.S. federal income tax purposes the gross amount
of such distributions equal to the U.S. dollar value of such distributions on the date of receipt (based on the
exchange rate on such date), to the extent that the Company has current or accumulated earnings and profits,
without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld
may be credited, subject to certain limitations, against the U.S. Holder’s U.S. federal income tax liability or,
alternatively, may be deducted in computing the U.S. Holder’s U.S. federal taxable income. (See more detailed
discussion at “Foreign Tax Credit” below). To the extent that distributions exceed current or accumulated
earnings and profits of the Company, they will be treated first as a return of capital up to the U.S. Holder’s
84
adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares.
Dividend income will be taxed at marginal tax rates applicable to ordinary income while preferential tax rates
for long-term capital gains are applicable to a U.S. Holder which is an individual, estate or trust. There are
currently no preferential tax rates for long-term capital gains for a U.S. Holder which is a company.
In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on
the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on
the date of receipt. Gain or loss may be recognized upon a subsequent sale of other disposition of the foreign
currency, including the exchange for U.S. dollars.
Dividends paid on the common shares of the Company will not generally be eligible for the dividends received
deduction provided to companies receiving dividends from certain U.S. companies. A U.S. Holder which is a
company may, under certain circumstances, be entitled to a 70% deduction of the U.S. source portion of
dividends received from the Company (unless the Company qualifies as a “foreign personal holding company”
or a “passive foreign investment company”, as defined below) if such U.S. Holder owns shares representing at
least 10% of the voting power and value of the Company. The availability of this deduction is subject to several
complex limitations which are beyond the scope of this discussion.
Foreign Tax Credit
A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the
ownership of common shares of the Company may be entitled, at the option of the U.S. Holder, to either a
deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim
a credit because a credit reduces U.S. Federal income taxes on a dollar-for-dollar basis, while a deduction
merely reduces the taxpayer’s income subject to tax. This election is made on a year-by-year basis and applies
to all foreign income taxes (or taxes in lieu of income tax) paid by (or withheld from) the U.S. Holder during
the year. There are significant and complex limitations which apply to the credit, among which is the general
limitation that the credit cannot exceed the proportionate share of the U.S. Holder’s U.S. income tax liability
that the U.S. Holder’s foreign source income bears to his/her or its worldwide taxable income. The various
items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this
classification process. In addition, this limitation is calculated separately with respect to specific classes of
income such as “passive income”, “high withholding tax interest”, “financial services income”, “shipping
income”, and certain other classifications of income. Dividends distributed by the Company will generally
constitute “passive income” or, in the case of certain U.S. Holders, “financial services income” for these
purposes. The availability of the foreign tax credit and the application of the limitations on the credit are fact
specific and holders and prospective holders of common shares of the Company should consult their own tax
advisors regarding their individual circumstances.
For individuals whose entire income from sources outside the U.S. consists of qualified passive income and
whose total amount of creditable foreign taxes paid or accrued during the taxable year does not exceed $300
($600 in the case of a joint return) and for whom an election is made under section 904(j), the general limitation
on the foreign tax credit under section 904(a) does not apply.
Disposition of Common Shares of the Company
A U.S. Holder will recognize gain or loss upon the sale of common shares of the Company equal to the
difference, if any, between (I) the amount of cash plus the fair market value of any property received, and (ii)
the shareholder’s tax basis in the common shares of the Company. Preferential tax rates apply to long-term
capital gains of U.S. Holders which are individuals, estates or trusts. This gain or loss will be capital gain or loss
if the common shares are capital assets in the hands of the U.S. Holder, which will be a short-term or long-term
capital gain or loss depending upon the holding period of the U.S. Holder. Gains and losses are netted and
combined according to special rules in arriving at the overall capital gain or loss for a particular tax year.
Deductions for net capital losses are subject to significant limitations. For U.S. Holders which are not
companies, any unused portion of such net capital loss may be carried over to be used in later tax years until
such net capital loss is thereby exhausted, but individuals may not carry back capital losses. For U.S. Holders
which are companies (other than companies subject to Subchapter S of the Code), an unused net capital loss
may be carried back three years from the loss year and carried forward five years from the loss year to be offset
against capital gains until such net capital loss is thereby exhausted.
Other Considerations
In the following circumstances, the above sections of the discussion may not describe the U.S. federal income
tax consequences resulting from the holding and disposition of common shares of the Company.
85
Passive Foreign Investment Company
As a foreign company with U.S. Holders, the Company could potentially be treated as a passive foreign
investment company (“PFIC”), as defined in Section 1297 of the Code. Section 1297 of the Code defines a
PFIC as a company that is not formed in the U.S. and, for any taxable year, either (i) 75% or more of its gross
income is “passive income”, which includes among other types of income, interest, dividends and certain rents
and royalties or (ii) the average percentage, by fair market value (or, if the company is a controlled foreign
company or makes an election, by adjusted tax basis), of its assets that produce or are held for the production of
“passive income” is 50% or more.
The rule governing PFICs can have significant tax effects on U.S. shareholders of foreign companies who are
subject to U.S. Federal income taxation under one of three alternative methods at the election of each such U.S.
shareholder. As a PFIC, each U.S. shareholder’s income or gain, with respect to a disposition or deemed
disposition of the PFIC’s shares or a distribution payable on such shares will generally be subject to tax at the
highest marginal rates applicable to ordinary income and certain interest charges as discussed below, unless the
U.S. shareholder has timely made a “qualified electing fund” election or a “mark-to-market” election for those
shares.
Under one method, a U.S. shareholder who elects in a timely manner to treat the PFIC as a Qualified Electing
Fund ("QEF"), as defined in the Code, (an "Electing U.S. Holder") will be required to currently include in his
income for any taxable year in which the company qualifies as a PFIC his pro-rata share of the company's (i)
"net capital gain" (the excess of net long-term capital gain over net short-term capital loss), which will be taxed
as long-term capital gain to the Electing U.S. Holder, and (ii) "ordinary earnings" (the excess of earnings and
profits over net capital gain), which will be taxed as ordinary income to the Electing U.S. Holder, in each case,
for the U.S. Holder's taxable year in which (or with which) the Company’s taxable year ends, regardless of
whether such amounts are actually distributed. A QEF election also allows the Electing U.S. Holder to (i)
generally treat any gain realized on the disposition of his common shares (or deemed to be realized on the
pledge of his common shares) as capital gain; (ii) treat his share of the company's net capital gain, if any, as
long-term capital gain instead of ordinary income, and (iii) either avoid interest charges resulting from PFIC
status altogether (see discussion of interest charge below), or make an annual election, subject to certain
limitations, to defer payment of current taxes on his share of the company's annual realized net capital gain and
ordinary earnings which will then be subject, however, to an interest charge.
The procedure a U.S. Holder must comply with in making a timely QEF election will depend on whether the
year of the election is the first year in the U.S. Holder's holding period in which the Company is a PFIC. If the
U.S. shareholder makes a QEF election in such first year, (sometimes referred to as a "Pedigreed QEF
Election"), then the U.S. shareholder may make the QEF election by simply filing the appropriate documents at
the time the U.S. Holder files its tax return for such first year. If, however, the company qualified as a PFIC in a
prior year during the U.S. shareholder’s holding period, then the U.S. shareholder may make a retroactive QEF
election, provided he has preserved his right to do so under the protective statement regime or he obtains IRS
permission.
If a U.S. shareholder has not made a QEF Election at any time (a "Non-electing U.S. Holder"), then special
taxation rules under Section 1291 of the Code will apply to (i) gains realized on the disposition (or deemed to be
realized by reason of a pledge) of his common shares and (ii) certain "excess distributions" by the company. An
excess distribution is a current year distribution received by the U.S. shareholder on PFIC stock to the extent
that the distribution exceeds its ratable portion of 125% of the average amount received by the U.S. shareholder
during the preceding three years.
A Non-electing U.S. shareholder generally would be required to pro-rate all gains realized on the disposition of
his common shares and all excess distributions over the entire holding period for the common shares. All gains
or excess distributions allocated to prior years of the U.S. shareholder (other than years prior to the first taxable
year of the Company during such U.S. Holder's holding period and beginning after January 1, 1987 for which it
was a PFIC) would be taxed at the highest marginal tax rate for each such prior year applicable to ordinary
income. The Non-electing U.S. shareholder also would be liable for interest on the foregoing tax liability for
each such prior year calculated as if such liability had been due with respect to each such prior year. A Non-
electing non-corporate U.S. shareholder must treat this interest charge as "personal interest" which is wholly
non-deductible. The balance of the gain or the excess distribution will be treated as ordinary income in the year
of the disposition or distribution, and no interest charge will be incurred with respect to such balance.
86
If a company is a PFIC for any taxable year during which a Non-electing U.S. shareholder holds common
shares, then the company will continue to be treated as a PFIC with respect to such common shares, even if it is
no longer by definition a PFIC. A Non-electing U.S. shareholder may terminate this deemed PFIC status by
electing to recognize gain (which will be taxed under the rules discussed above for Non-Electing U.S. Holders)
as if such common shares had been sold on the last day of the last taxable year for which it was a PFIC. If the
company no longer qualifies as a PFIC in a subsequent year, then normal Code rules and not the PFIC rules will
apply with respect to a U.S. shareholder who has made a Pedigreed QEF election.
If a U.S. shareholder makes a QEF Election that is not a Pedigreed Election (i.e., it is made after the first year
during which the company is a PFIC and the U.S. shareholder holds shares of the company) (a "Non-Pedigreed
Election"), the QEF rules apply prospectively but do not apply to years prior to the year in which the QEF first
becomes effective. U.S. Holders are encouraged to consult their tax advisors regarding the specific
consequences of making or not making a QEF Election.
Under an alternative method, U.S. Holders who hold (actually or constructively) marketable stock of a PFIC
may elect to mark such stock to the market annually (a “mark-to-market election”). If such an election is made,
such U.S. Holder will generally not be subject to the special taxation rules of Section 1291 discussed above.
However, if the mark-to-market election is made by a Non-Electing U.S. Holder after the beginning of the
holding period for the PFIC stock, then the Section 1291 rules will apply to certain dispositions of, distributions
on and other amounts taxable with respect to the Company common shares. A U.S. Holder who makes the
mark-to-market election will include in income for each taxable year for which the election is in effect an
amount equal to the excess, if any, of the fair market value of the common shares of the Company as of the
close of such tax year over such U.S. Holder’s adjusted basis in such common shares. In addition, the U.S.
Holder is allowed a deduction for the lesser of (i) the excess, if any, of such U.S. Holder’s adjusted tax basis in
the common shares over the fair market value of such shares as of the close of the tax year, or (ii) the excess, if
any, of (a) the mark-to-market gains for the common shares in the Company included by such U.S. Holder for
prior tax years, including any amount which would have been treated as a mark-to-market gain for any prior tax
year but for the Section 1291 rules discussed above with respect to Non-Electing U.S. Holders, over (b) the
mark-to-market losses for shares that were allowed as deductions for prior tax years. A U.S. Holder’s adjusted
tax basis in the common shares of the Company will be adjusted to reflect the amount included in or deducted
from income as a result of a mark-to-market election. A mark-to-market election applies to the taxable year in
which the election is made and to each subsequent taxable year, unless the Company’s common shares cease to
be marketable, as specifically defined, or the IRS consents to revocation of the election. U.S. Holders should
consult their tax advisors regarding the manner of making such an election.
Controlled Foreign Company
If more than 50% of the total combined voting power of all classes of stock entitled to vote or more than 50% of
the total value of the stock of the Company is owned, directly, indirectly or constructively, by U.S. Holders,
each of whom own actually or constructively 10% or more of the total combined voting power of all classes of
stock of the Company, the Company would be treated as a “controlled foreign company” or “CFC” under
Subpart F of the Code. This classification would effect many complex results, one of which requires such 10%
U.S. Holders (a U.S. Holder for CFC purposes) to include in their income their pro rata shares of the Subpart F
income of the CFC and the CFC’s earnings invested in U.S. property. The foreign tax credit described above
may reduce the U.S. tax on these amounts. In addition, under Section 1248 of the Code, gain from the sale or
exchange of shares by a U.S. Holder of common shares of the Company which is or was a U.S. Shareholder at
any time during the five-year period ending with the sale or exchange will be treated as dividend income to the
extent of earnings and profits of the Company (accumulated only while the shares were held by the U.S.
Shareholder and while the Company was a CFC attributable to the shares sold or exchanged. If a foreign
company is both a PFIC and a CFC, the foreign company generally will not be treated as a PFIC with respect to
certain 10% U.S. Shareholders of the CFC. This rule generally will be effective for taxable years of U.S.
Shareholders beginning after 1997 and for taxable years of foreign company’s ending with or within such
taxable years of U.S. Shareholders. The PFIC provisions continue to apply in the case of a PFIC that is also a
CFC with respect to the U.S. Holders that are less than 10% shareholders. Because of the complexity of Subpart
F, a more detailed review of these rules is outside of the scope of this discussion.
Information Reporting and Backup Withholding
In general, unless a U.S. Holder belongs to a category of certain exempt recipients (such as corporations),
87
information reporting requirements will apply to distributions as well as proceeds of sales from the sale of
shares of the Company that are effected through the U.S. office of a broker or the non-U.S. office of a broker
that has certain connections with the United States. Backup withholding may apply to these payments if a U.S.
Holder fails to provide a correct taxpayer identification number or certification of exempt status, fails to report
in full dividend and interest income or, in certain circumstances, fails to comply with applicable certification
requirements. Any amounts withheld under the backup withholding rules will be allowed as a refund or credit
against a U.S. Holder’s U.S. federal income tax, provided the U.S. Holder furnishes the required information to
the IRS in a timely manner. Other filing requirements may also apply. U.S. Holders should consult with their
own tax advisors concerning their particular reporting requirements.
Documents on Display
Any of the documents referred to above can be viewed at the registered office of the Company located at 1177
West Hastings Street, Suite 1710, Vancouver, British Columbia, Canada, V6E 2L3.
This Annual Report and the Company’s recent 6-K filings can be viewed on the U.S. Securities and Exchange
EDGAR web-site at www.sec.gov.
Item 11. Quantitative and Qualitative Disclosures about Market Risk
Some of the Company’s mineral exploration properties are located outside of Canada. As a Canadian company,
Almaden’s cash balances are kept primarily in Canadian funds, while many exploration and property expenses
are denominated in U.S. dollars or the Mexican peso. Therefore, the Company is exposed to some exchange rate
risk. The Company considers the amount of risk to be manageable and does not currently, nor is likely in the
foreseeable future to, conduct hedging to reduce its exchange rate risk. A 10% change in the U.S. dollar
exchange rate relative to the Canadian dollar would change the Company’s net income by $53,000. A 10%
change in the Mexican peso exchange rate relative to the Canadian dollar would change the Company’s net
income by $17,000.
Item 12. Description of Securities Other than Equity Securities
Not Applicable
Item 13. Defaults, Dividend Arrearages and Delinquencies
Not Applicable
PART II
Item 14. Material Modifications to the Rights of Securities Holders and Use of Proceeds
Not Applicable
Item 15. Controls and Procedures
Disclosure Controls and Procedures
We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended, or
“Exchange Act”) as of December 31, 2014. This evaluation was conducted under the supervision and with the
participation of management, including our Chief Executive Officer and Chief Financial Officer. Based upon
this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of December
31, 2014, our disclosure controls and procedures were effective to provide reasonable assurance that
information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified by the rules and forms. We also
concluded that our disclosure controls and procedures are effective to provide reasonable assurance that
information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated
and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to
allow timely decisions regarding required disclosure.
88
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting for the Company. Internal control over financial reporting is a process designed by, or under the
supervision of, the Company’s principal executive and principal financial officers and effected by the
Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with IFRS as issued by IASB.
Because of the inherent limitations of internal control over financial reporting, including the possibility of
collusion or improper management override of controls, material misstatements due to error or fraud may not be
prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal
control over financial reporting to future periods are subject to the risk that the controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
The Company’s management’s assessed the effectiveness of the Company’s internal control over financial
reporting as of December 31, 2014. In making this assessment, the Company’s management used criteria set
forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-
Integrated Framework published in 1992. Based on its assessment, management concluded that, as of
December 31, 2014, the Company’s internal control over financial reporting was effective.
There were no changes in the Company’s internal control over financial reporting that occurred during the year
ended December 31, 2014 that has materially affected, or that is reasonably likely to materially affect, the
Company’s internal control over financial reporting.
Item 16A. Audit Committee Financial Expert
The Company’s Board of Directors has determined that Mr. Mark T. Brown is the Company's audit committee
financial expert. Mr. Brown has extensive business and financial experience. He has served as a director of a
number of other publicly traded companies over the past 15 years, and currently serves as a director of six other
publicly traded mineral exploration companies. Mr. Brown is independent as defined by Section 803(B) of the
NYSE MKT Listing Standards.
Item 16B. Code of Ethics
The Company adopted several codes of conduct, including a Code of Business Ethics, a Code of Business
Conduct Ethics for Directors, a Communications Policy and an Audit Committee Charter. These initial codes
were filed with the 20-F Annual Report for the fiscal year ended December 31, 2003 as filed with the U.S.
Securities and Exchange Commission on May 11, 2004. After review, the Company has adopted revised and
new codes as follow: Audit Committee Charter, Nominating and Corporate Governance Committee-
Responsibilities and Duties, Compensation Committee-Responsibilities and Duties, Code of Business Ethics,
Code of Business Conduct and Ethics for Directors, Communications Policy, Securities Trading Policy,
Whistleblowers Policy and a Privacy Policy (the “Codes”). The Codes may be viewed on the Company’s
website at www.almadenminerals.com. The Codes may also be viewed as filed on EDGAR as an exhibit to the
2005 20-F Annual Report filed with the Commission on March 30, 2006. Any amendments to the Codes or
waivers of the provision of any Codes will be posted on the Company’s website within 5 business days of such
amendment or waiver.
The Company has adopted a Code of Business Conduct and Ethics for Directors (“Code”), a Code of Business
Ethics (“COBE”), a Securities Trading Policy and a Privacy Policy. Employees and consultants are required as a
term of employment to undertake to abide by the COBE. Directors are by law bound to observe the Code adopted
by the Board.
All Directors, Officers and Employees (“Individuals”) sign an Annual Certification (“Certification”) stating they
have read the Code of Business Ethics policy (“Policy”) of the Company and have complied with such Policy in all
respects. The Certification further acknowledges that all members of the Individual’s family, all other persons who
live with the Individual and all holding companies and other related entities of the Individual and all such persons or
companies acting on behalf of or at the request of any of the foregoing also complied with such Policy. The
89
Certification also states that any violation of such Policy may constitute grounds for immediate suspension or
dismissal.
Each director is expected and required by statute to act honestly and in good faith with a view to the best
interests of the Company and to exercise the care, diligence and skill that a reasonably prudent individual would
exercise in comparable circumstances and in accordance with the Business Corporations Act (British Columbia)
and the Company’s Articles.
Item 16C. Principal Accountant Fees and Services
Audit Committee's pre-approval policies and procedures
The Audit Committee nominates and engages the independent auditors to audit the financial statements, and
approves all audit services, audit-related services, tax services and other services provided by Deloitte LLP.
Any services provided by Deloitte LLP that are not specifically included within the scope of the audit must be
preapproved by the Audit Committee prior to any engagement. The Audit Committee is permitted to approve
certain fees for audit-related services, tax services and other services before the completion of the engagement.
In Fiscal 2014 and 2013, tax services paid to Deloitte LLP were pre-approved by the Audit Committee.
Table No. 19 lists the aggregate fees billed or estimated for each of the last two fiscal years for professional
services rendered by the principal accountant for the audit of the Company’s annual financial statements or
services that are normally provided by the accountant in connection with statutory and regulatory filings or
engagements for those fiscal years.
Table No. 19
Principal Accountant Fees
December 31,
2014
$53,500
43,715
68,438
-
December 31,
2013
$141,775
10,625
51,314
-
Audit fees
Audit-related fees
Tax fees
Other fees
Fiscal 2014 and Fiscal 2013 audit fees relate to the annual audit of the Company’s consolidated financial
statements, effectiveness of the Company’s internal control over financial reporting and review of the Form 20-
F. Audit-related fees relate to accounting advisory services. Tax fees relate to the completion of income tax
returns and tax consulting services. Other fees relate to services other than audit fees, audit-related fees, and tax
fees described above.
Item 16D. Exemptions from the Listing Standards for Audit Committees
Not applicable.
Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Not applicable.
Item 16F. Change in Registrant’s Certifying Accountant
Not applicable.
Item 16G. Corporate Governance
The Company’s class of common shares is listed on the NYSE MKT and the Toronto Stock Exchange. Under
the rules of the NYSE MKT, listed companies are generally required to have a majority of their Board of
Directors be “independent” as defined by the NYSE MKT Company Guide Rules. Currently, as permitted under
applicable Canadian regulations, the Company’s Board consists of 7 directors, of which 5 are considered to be
“independent.”
Other than in the composition of the Board of Directors as described above, in the opinion of management the
Company’s corporate governance practices do not differ in any significant way from those required of U.S.
domestic companies listed on the NYSE MKT.
90
Item 16H. Mine Safety Disclosure
Not applicable.
Item 17. Financial Statements
PART III
The Company has provided financial statements pursuant to Item 18 of this Form 20-F.
Item 18. Financial Statements
The Company’s consolidated financial statements and notes thereto are stated in Canadian Dollars (CDN$) and
are prepared in accordance and compliance with International Financial Reporting Standards as issued by the
International Accounting Standards Board (“IFRS”).
Item 19. Exhibits
A. The financial statements and notes thereto as required under Item 18 are attached hereto and found
immediately following the text of this Annual Report.
Audited Financial Statements
Independent registered Public Accounting Firm report on the consolidated financial statements, dated March 30,
2015
Consolidated statements of financial position at December 31, 2014 and 2013
Consolidated statements of comprehensive loss for the years ended December 31, 2014, 2013 and 2012
Consolidated statements of changes in equity for the years ended December 31, 2014, 2013 and 2012
Consolidated statements of cash flows for the years ended December 31, 2014, 2013 and 2012
Summary of significant accounting policies and other explanatory information
B. Index to Exhibits
1.
1.1
2.
3.
4.
4.1
4.2
4.3
Certificate of Amalgamation
Amalgamation Agreement
--Incorporated by reference to the Company’s Form 20-F Annual Report for the year ended December 31,
2001, as filed with the Commission on May 17, 2002--
Articles
--Incorporated by reference to the Company’s Form 20-F Annual Report for the year ended December 31,
2005, as filed with the Commission on March 30, 2006--
as filed with the Commission on March 30, 2006--
Instruments defining the rights of holders of equity or debt securities being registered
--Refer to Exhibit No. 1--
Voting trust agreements. The Voting Trust Agreement dated December 17, 2009 between Ernesto Echavarria,
as grantor, and Messrs Duane and Morgan Poliquin, as voting trustees.
Incorporated by reference to the Company’s Form 20-F for the year ended December 31, 2013 furnished with
the Commission on March 31, 2014--
Executive Compensation Contract dated January 29, 2013 with Hawk Mountain Resources Ltd.
--Incorporated by reference to the Company’s Form 20-F for the year ended December 31, 2012 furnished with
the Commission on March 28, 2013--
Executive Compensation Contract dated January 29, 2013 with Morgan Poliquin
--Incorporated by reference to the Company’s Form 20-F for the year ended December 31, 2012 furnished with
the Commission on March 28, 2013--
Assignment of Rights Agreement dated March 11, 2013 with Don David Gold Mexico, S.A. de C.V.
Incorporated by reference to the Company’s Form 20-F for the year ended December 31, 2013 furnished with
the Commission on March 31, 2014--
Sale and Purchase Agreement dated June 20, 2013 with Tarsis Resources Ltd.
--Incorporated by reference to the Form 6-K furnished with the Commission on June 20, 2013--
91
4.4
Amendment Agreement dated November 26, 2013 with Candymin, S.A. de C.V. and Mr. Charlie Warren
Incorporated by reference to the Company’s Form 20-F for the year ended December 31, 2013 furnished with
the Commission on March 31, 2014--
5.
6.
7.
8.
9.
List of foreign patents – N/A
Calculation of earnings per share – N/A
Explanation of calculation of ratios – N/A
List of subsidiaries
Statement pursuant to the instruction to Item 8.A.4, regarding the financial statement filed in registration
Statements for initial public offerings of securities – N/A
10.
Any notice required by Rule 104 of Regulation BTR – N/A
11
Audit Committee Charter
Nominating and Corporate Governance Committee-Duties and Responsibility
Compensation Committee-Responsibilities and Duties
Code of Business Ethics
Code of Business Conduct and Ethics for Directors
Communications Policy
Securities Trading Policy
Whistleblower Policy
Privacy Policy
--Incorporated by reference to the Company’s Form 20-F Annual Report for the year ended December 31,
2005, as filed with the Commission on March 30, 2006
Shareholder Rights Plan dated April 13, 2011
--Incorporated by reference to the Form 6-K furnished with the Commission on April 15, 2011--
Advance Notice Policy dated January 28, 2013
--Incorporated by reference to the Company’s Form 20-F for the year ended December 31, 2012 furnished with
the Commission on March 28, 2013--
Multiple Voting Policy – adopted by the Board of Directors on May 7, 2013.
12.1 Certification of CEO Pursuant to Securities Exchange Act, Rules 13a-14 and 15d-14 as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
12.2 Certification of CFO Pursuant to Securities Exchange Act, Rules 13a-14 and 15d-14 as Adopted Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
13.1 Certification of CEO Pursuant to the Sarbanes-Oxley Act, 18 U.S.C. Section 1350, As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
13.2 Certification of CFO Pursuant to the Sarbanes-Oxley Act, 18 U.S.C. Section 1350, As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
92
Consolidated financial statements of
Almaden Minerals Ltd.
For the year ended December 31, 2014 and 2013
Almaden Minerals Ltd.
December 31, 2014 and 2013
Table of contents
Report of Independent Registered Public Accounting Firm.........................................................1-2
Consolidated statements of financial position.................................................................................3
Consolidated statements of comprehensive loss…………..............................................................4
Consolidated statements of cash flows...........................................................................................5
Consolidated statements of changes in equity................................................................................6
Notes to the consolidated financial statements..........................................................................7-40
Deloitte LLP
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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Almaden Minerals Ltd.
We have audited the accompanying consolidated financial statements of Almaden Minerals Ltd., and
subsidiaries (the “Company”), which comprise the consolidated statements of financial position as at
December 31, 2014 and December 31, 2013, and consolidated statements of comprehensive loss,
changes in equity, and cash flows for each of the years in the three-year period ended December 31,
2014, and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with International Financial Reporting Standards as issued by the International
Accounting Standards Board, and for such internal control as management determines is necessary to
enable the preparation of consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audits. We conducted our audits in accordance with Canadian generally accepted auditing standards and
the standards of the Public Company Accounting Oversight Board (United States). Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the consolidated financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity's preparation and fair presentation of the consolidated financial statements in order
to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide
a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial
position of Almaden Minerals Ltd. and subsidiaries as at December 31, 2014 and December 31, 2013,
and their financial performance and their cash flows for each of the years in the three-year period ended
December 31, 2014 in accordance with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
Chartered Accountants
Vancouver, Canada
March 30, 2015
Almaden Minerals Ltd.
Consolidated statements of financial position
(Expressed in Canadian dollars)
ASSETS
Current assets
Cash and cash equivalents (Note 15)
Accounts receivable and prepaid expenses (Note 4)
Marketable securities (Note 5)
Inventory (Note 6)
Non-current assets
Investment in associate (Note 7)
Exploration and evaluation assets deposit (Note 10(e)(vi))
Reclamation deposit (Note 3(m))
Contingent shares receivable (Note 8)
Property, plant and equipment (Note 9)
Exploration and evaluation assets (Note 10)
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Non-current liabilities
Deferred income tax liability (Note 16)
Total Liabilities
EQUITY
Share capital (Note 11)
Reserves (Note 11)
Deficit
Total Equity
TOTAL EQUITY AND LIABILITIES
Commitments (Note 17)
December 31,
2014
December 31,
2013
$
$
8,172,598
413,880
853,123
274,768
9,714,369
2,675,000
-
34,548
69,600
880,371
28,644,758
32,304,277
42,018,646
11,994,773
445,122
1,058,661
274,768
13,773,324
9,447,497
138,929
33,264
44,700
1,103,070
24,447,149
35,214,609
48,987,933
542,578
1,097,158
1,839,482
2,382,060
-
1,097,158
87,083,931
11,005,757
(58,453,102)
39,636,586
42,018,646
81,151,042
10,210,168
(43,470,435)
47,890,775
48,987,933
The accompanying notes are an integral part of these financial statements.
These consolidated financial statements are authorized for issue by the Board of Directors on March 30, 2015.
They are signed on the Company's behalf by:
/s/Duane Poliquin
Director
/s/Mark T. Brown
Director
Almaden Minerals Ltd.
Consolidated statements of comprehensive loss
(Expressed in Canadian dollars)
Revenue
Interest income
Other income
Expenses (income)
Impairment of exploration and evaluation assets
General and administrative expenses (Note 21)
(Income) loss on exploration and evaluation assets (Note 13)
General exploration expenses
Share-based payments
Operating loss
Other (loss) income
(Loss) income from investment in associate (Note 7)
Impairment of marketable securities (Note 5)
Impairment of investment in associate (Note 7)
Gain (loss) on fair-value of contingent share receivable (Note 8)
(Loss) gain on sale of marketable securities
Gain on sale of property, plant and equipment
Foreign exchange (loss) gain
Loss before income taxes
Deferred income tax expense (Note 16)
2014
$
175,955
78,036
253,991
2,570,664
2,489,108
(55,111)
592,105
565,800
6,162,566
(5,908,575)
(135,209)
(405,903)
(6,637,288)
24,900
(42,220)
-
(38,890)
(13,143,185)
(1,839,482)
Years Ended December 31,
2012
2013
$
$
165,474
54,958
220,432
173,302
125,865
299,167
371,038
2,154,278
716,006
707,542
381,950
4,330,814
(4,110,382)
(818,889)
(1,274,743)
-
(193,500)
19,509
-
21,396
(6,356,609)
-
1,268,856
2,330,965
(47,500)
969,470
1,716,250
6,238,041
(5,938,874)
86,963
(3,856,819)
-
(424,500)
12,275
3,051
(120,473)
(10,238,377)
-
Net loss for the year
(14,982,667)
(6,356,609)
(10,238,377)
Other comprehensive income (loss)
Items that may be reclassified subsequently to profit
or loss
Net change in fair value of available for sale financial
assets, net of tax of nil
Reclassification adjustment relating to available for sale
financial assets included in net income (loss),
net of tax of nil
Other comprehensive income (loss) for the year
239,515
(84,585)
(2,341,238)
42,413
281,928
(5,763)
(90,348)
4,334,680
1,993,442
Total comprehensive loss for the year
(14,700,739)
(6,446,957)
(8,244,935)
Basic and diluted net loss per share (Note 14)
(0.23)
(0.10)
(0.17)
The accompanying notes are an integral part of these financial statements.
Almaden Minerals Ltd.
Consolidated statements of cash flows
(Expressed in Canadian dollars)
Operating activities
Net loss for the year
Items not affecting cash
Deferred income tax expense
Loss (gain) on investment in associate
Depreciation
Loss (gain) on sale of marketable securities
(Gain) loss on fair value of contingent shares receivable
Impairment of marketable securities
Loss (income) on exploration and evaluation assets
Impairment of exploration and evaluation assets
Impairment of investment in associate
Share-based payments
Gain on sale of property, plant and equipment
Changes in non-cash working capital components
Accounts receivable and prepaid expenses
Trade and other payables
Net cashed used in operating activities
Investing activities
Exploration and evaluation assets deposit
Reclamation deposit
Net proceeds from sale of marketable securities
Property, plant and equipment
Purchases
Proceeds
Mineral properties
Costs
Proceeds on disposal
Net cash used in investing activities
Financing activity
Issuance of shares, net of share issue costs
Net cash from financing activity
Net cash outflows
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supplemental cash and cash equivalents information - Note 15
The accompanying notes are an integral part of these financial statements.
2014
$
Years ended December 31,
2012
2013
$
$
(14,982,667)
(6,356,609)
(10,238,377)
1,839,482
135,209
245,639
42,220
(24,900)
405,903
-
2,570,664
6,637,288
565,800
-
-
818,889
303,390
(19,509)
193,500
1,274,743
716,006
371,038
-
381,950
-
-
(86,963)
325,995
(12,275)
424,500
3,856,819
(47,500)
1,268,856
-
1,716,250
(3,051)
31,242
(554,580)
(3,088,700)
651,833
36,329
(1,628,440)
(423,223)
495,732
(2,723,237)
138,929
(1,284)
39,343
(22,940)
-
-
-
22,565
-
96,500
4,435,757
(95,986)
-
(395,018)
7,143
(6,768,273)
-
(6,614,225)
(8,253,489)
127,420
(8,199,490)
(7,407,896)
30,000
(3,233,514)
5,880,750
5,880,750
5,335,295
5,335,295
1,260,000
1,260,000
(3,822,175)
11,994,773
8,172,598
(4,492,635)
16,487,408
11,994,773
(4,696,751)
21,184,159
16,487,408
Almaden Minerals Ltd.
Consolidated statements of changes in equity
(Expressed in Canadian dollars)
Balance, January 1, 2012
Shares issued for cash on exercise of stock options
Fair value of share options transferred to share capital
on exercise of options
Share-based payments
Total comprehensive loss for the year
Balance, December 31, 2012
Shares issued for cash on exercise of stock options
Fair value of share options transferred to share capital
on exercise of options
Share-based payments
Private placements and other
Finder's warrant issued pursuant to private placement
Shares issued pursuant to property acquisition agreement
Total comprehensive loss for the year
Balance, December 31, 2013
Shares issued for cash on exercise of stock options
Fair value of share options transferred to share capital
on exercise of options
Shares issued pursuant to private placement
Finder's warrant issued pursuant to private placement
Share-based payments
Total comprehensive loss for the year
Balance, December 31, 2014
Share capital
Reserves
Number of
shares
59,122,321
600,000
Equity settled
employee
Amount
$
73,353,977
1,260,000
compensation Warrants
$
8,536,473
-
176,741
-
-
-
-
59,722,321
220,000
624,000
-
-
75,237,977
223,550
-
-
4,386,000
-
250,000
-
64,578,321
150,000
136,650
-
5,015,365
-
537,500
-
81,151,042
121,500
(624,000)
1,716,250
-
9,628,723
-
(136,650)
381,950
-
-
-
-
9,874,023
-
-
4,000,000
-
-
-
68,728,321
67,500
5,743,889
-
-
-
87,083,931
(67,500)
-
-
565,800
-
10,372,323
-
-
-
176,741
-
-
-
-
107,880
-
-
284,621
-
-
-
15,361
-
-
299,982
Available-for-
sale financial
assets
$
(1,851,570)
-
Total
reserves
6,861,644
-
-
-
1,993,442
141,872
-
(624,000)
1,716,250
1,993,442
9,947,336
-
(136,650)
-
381,950
-
-
-
107,880
-
-
-
(90,348)
(90,348)
51,524 10,210,168
-
-
(67,500)
-
-
-
15,361
-
565,800
-
281,928
281,928
333,452 11,005,757
Deficit
$
(26,875,449)
-
-
-
(10,238,377)
(37,113,826)
-
-
-
-
-
-
(6,356,609)
(43,470,435)
-
-
-
-
-
(14,982,667)
(58,453,102)
Total
$
53,340,172
1,260,000
-
1,716,250
(8,244,935)
48,071,487
223,550
-
381,950
5,015,365
107,880
537,500
(6,446,957)
47,890,775
121,500
-
5,743,889
15,361
565,800
(14,700,739)
39,636,586
The accompanying notes are an integral part of these financial statements.
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
1.
Nature of Operations
Almaden Minerals Ltd. (the “Company” or “Almaden”) was formed by amalgamation under the laws of
the Province of British Columbia, Canada on February 1, 2002. The Company is an exploration stage
public company that is engaged directly in the exploration and development of exploration and
evaluation properties in Canada, US and Mexico. The address of the Company’s registered office is
Suite 1710 –1177 West Hastings Street, Vancouver, BC, Canada V6E 2L3.
The Company is in the business of exploring and developing new mineral projects and has not yet
determined whether these projects contain economically recoverable mineral reserves. The
recoverability of amounts shown for mineral properties is dependent upon the establishment of a
sufficient quantity of economically recoverable reserves, the ability of the Company to obtain the
necessary financing or participation of joint venture partners to complete development of the
properties and upon future profitable production or proceeds from the disposition of exploration and
evaluation assets.
2.
Basis of Presentation
(a) Statement of Compliance with International Financial Reporting Standards
These consolidated financial statements have been prepared in accordance and compliance with
International Financial Reporting Standards as issued by the International Accounting Standards
Board (“IFRS”).
(b) Basis of preparation
These consolidated financial statements have been prepared on a historical cost basis except for
financial instruments classified as available-for-sale that have been measured at fair value.
These consolidated financial statements, including comparatives, have been prepared on the basis of
IFRS standards that are effective as at December 31, 2014.
(c) Functional currency
The functional and reporting currency of the Company and its subsidiaries is the Canadian dollar.
(d) Significant accounting judgments and estimates
The preparation of these consolidated financial statements requires management to make
judgements and estimates that affect the reported amounts of assets and liabilities at the date of the
financial statements and reported amounts of expenses during the reporting period. Actual outcomes
could differ from these judgements and estimates. The consolidated financial statements include
judgements and estimates which, by their nature, are uncertain. The impacts of such judgements
and estimates are pervasive throughout the consolidated financial statements, and may require
accounting adjustments based on future occurrences. Revisions to accounting estimates are
recognized in the period in which the estimate is revised and the revision affects both current and
future periods.
7
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
2.
Basis of Presentation (Continued)
(d) Significant accounting judgments and estimates (continued)
Significant assumptions about the future and other sources of judgements and estimates that
management has made at the statement of financial position date, that could result in a material
adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from
assumptions made, relate to, but are not limited to, the following:
Critical Judgments
o The assessment that the Company has significant influence over the investment in Gold
Mountain Mining Corporation (“Gold Mountain”) (Note 7) which results in the use of the
equity accounting method for accounting for this investment. In making their judgement,
management considered its percentage ownership, the composition of the Board of
Directors of Gold Mountain, the common directors and management between Gold
Mountain and the Company and the intercompany transactions and relationship with
Gold Mountain and concluded that significant influence exists.
o The analysis of the functional currency for each entity of the Company. In concluding
that the Canadian dollar is the functional currency of the parent and its subsidiary
companies, management considered the currency that mainly influences the cost of
providing goods and services in each jurisdiction in which the Company operates. As no
single currency was clearly dominant, the Company also considered secondary
indicators including the currency in which funds from financing activities are
denominated and the currency in which funds are retained.
o The determination that the carrying amount of the Tuligtic Project will be recovered
through use rather than sale (Note 16). In making this determination, management
considered the likelihood of completing the Company’s planned spin out transaction
(Note 22) taking into account all legal, regulatory and business requirements to affect the
planned spin-out transaction.
Estimates
o The recoverability of accounts receivable which is included in the consolidated
statements of financial position;
o The carrying value of the marketable securities and the recoverability of the carrying
value which are included in the consolidated statements of financial position;
o The carrying value of investments, and the estimated annual gains or losses recorded on
investments from income and dilution, and the recoverability of the carrying value which
are included in the consolidated statements of financial position;
o The estimated useful lives of property, plant and equipment which are included in the
consolidated statements of financial position and the related depreciation included in the
consolidated statements of comprehensive loss;
o The value of the exploration and development costs which is recorded in the
consolidated statements of financial position;
o The inputs used in accounting for share option expense in the consolidated statements
of comprehensive loss;
o The provision for income taxes which is included in the consolidated statements of
comprehensive loss and composition of deferred income tax assets and liabilities
included in the consolidated statements of financial position at December 31, 2014;
8
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
2.
Basis of Presentation (Continued)
(d) Significant accounting judgments and estimates (continued)
o The inputs used in determining the various commitments and contingencies disclosed in
the consolidated statement of financial position;
o The assessment of indications of impairment of each exploration and evaluation asset
and related determination of the net realizable value and write-down of those assets
where applicable;
o The estimated fair value of contingent share payments receivable in the event that Gold
Mountain achieves some or all of the specified resource and production levels described
in Note 8(a);
o The estimated fair value of contingent share payments receivable in the event that
Goldgroup Mining Inc. achieves some or all of the specified resource and production
levels described in Note 8(b).
3.
Significant Accounting Policies
(a) Basis of consolidation
The consolidated financial statements include the accounts of the Company and its wholly-owned
subsidiaries as follows:
Jurisdiction
Nature of operations
USA
Almaden America Inc.
Canada
Republic Resources Ltd.
Canada
Puebla Holdings Inc.
Canada
Ixtaca Precious Metals Inc.
Canada
Pangeon Holdings Ltd.
Mexico
Almaden de Mexico, S.A. de C.V.
Minera Gavilan, S.A. de C.V.
Mexico
Compania Minera Zapata, S.A. de C.V. Mexico
Mexico
Minera Gorrion, S.A. de C.V.
Mexico
Minera Alondra, S.A. de C.V.
exploration company
service company
holding company
holding company
holding company
exploration company
exploration company
exploration company
exploration company
holding company
Investments where the Company has the ability to exercise significant influence are accounted for
using the equity method. Under this method, the Company’s share of the investee’s earnings or
losses is included in operations and its investments therein are adjusted by a like amount. Dividends
received from these investments are credited to the investment. The Company’s 38.8% interest in
Gold Mountain is accounted for using the equity method.
The Company accounts for its interest in the jointly controlled ATW project by recognizing its share of
the jointly controlled assets classified according to the nature of the assets.
Inter-company balances and transactions, including unrealised income and expenses arising from
inter-company transactions, are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity accounted investees are eliminated against the
investment to the extent of the Company’s interest in the investee. Unrealised losses are eliminated
in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
9
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
3.
Significant Accounting Policies (Continued)
(b) Foreign currencies
Transactions in currencies other than the functional currency are recorded at the rates of exchange
prevailing on dates of transactions. At each financial position reporting date, monetary assets and
liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date
of the statement of financial position. Non-monetary items that are measured in terms of historical
cost in a foreign currency are not retranslated.
(c) Financial instruments
Financial assets
The Company classifies its financial assets into one of the following categories, depending on the
purpose for which the asset was acquired. The Company's accounting policy for each category is as
follows:
Fair value through profit or loss - This category comprises derivatives including contingent shares
receivable, or assets acquired or incurred principally for the purpose of selling or repurchasing it in
the near term. They are carried in the statement of financial position at fair value with changes in fair
value recognized in net loss.
Loans and receivables - These assets are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They are carried at cost less any provision for
impairment. Individually significant receivables are considered for impairment when they are past
due or when other objective evidence is received that a specific counterparty will default. The
Company classifies its cash and cash equivalents and accounts receivable as “loans and
receivables”.
Held-to-maturity investments - These assets are non-derivative financial assets with fixed or
determinable payments and fixed maturities that the Company's management has the positive
intention and ability to hold to maturity. These assets are measured at amortized cost using the
effective interest method. If there is objective evidence that the investment is impaired, determined
by reference to external credit ratings and other relevant indicators, the financial asset is measured at
the present value of estimated future cash flows. Any changes to the carrying amount of the
investment, including impairment losses, are recognized in net loss.
Available for sale - Non-derivative financial assets not included in the above categories and which
include marketable securities are classified as available for sale. They are carried at fair value with
changes in fair value recognized directly in other comprehensive income and equity. Where a decline
in the fair value of an available for sale financial asset constitutes objective evidence of significant or
prolonged decline in value, the amount of the loss is removed from equity and recognized in net loss.
All financial assets except for those at fair value through profit or loss are subject to review for
impairment at least at each reporting date. Financial assets are impaired when there is any objective
evidence that a financial asset or a group of financial assets is impaired. Different criteria to
determine impairment are applied for each category of financial assets, which are described above.
10
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
3.
Significant Accounting Policies (Continued)
(c) Financial instruments (continued)
Financial liabilities
The Company classifies its financial liabilities into one of two categories, depending on the purpose
for which the asset was acquired. The Company's accounting policy for each category is as follows:
Fair value through profit or loss - This category comprises derivatives, or liabilities acquired or
incurred principally for the purpose of selling or repurchasing it in the near term. They are carried in
the statements of financial position at fair value with changes in fair value recognized in net income
(loss).
Other financial liabilities - This category includes promissory notes, amounts due to related parties
and trade and other payables, all of which are recognized at amortized cost.
(d) Cash, cash equivalents and short-term investments
Cash equivalents include money market instruments which are readily convertible into cash or have
maturities at the date of purchase of less than ninety days. Short-term investments include money
market instruments with terms to maturity exceeding ninety days.
(e)
Inventory
Inventory is valued at the lower of the average cost and estimated net realizable value.
(f) Property, plant and equipment
Property, plant and equipment are stated at cost and are depreciated annually on a declining-balance
basis at the following rates:
Automotive equipment
Furniture and fixtures
Computer hardware and software
Geological library
Field equipment
Leasehold improvements
Drill equipment
30%
20%
30%
20%
20%
Over the term of the lease
20%
(g) Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured. Revenue is measured at the fair value of the
consideration received, excluding discounts, rebates and other sales tax or duty. The following
specific recognition criteria must also be met before revenue is recognized:
11
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
3.
Significant Accounting Policies (Continued)
(g) Revenue recognition (continued)
Interest income
Revenue is recognized as interest accrues (using the effective interest rate, that is, the rate that
exactly discounts estimated future cash receipts through the expected life of the financial instrument
to the net carrying amount of the financial asset).
Other income
Revenue from other income consists of office rental and contract exploration services provided to
third parties and are recognized upon completion of the services for which the measurement of the
consideration can be reasonably assured and the ultimate collection is reasonably assured.
(h) Exploration and evaluation
The Company is in the exploration stage with respect to its investment in exploration and evaluation
assets and accordingly follows the practice of capitalizing all costs relating to the acquisition of,
exploration for and development of mineral claims to which the Company has rights and crediting all
proceeds received for farm-out arrangements or recovery of costs against the cost of the related
claims. Such costs include, but are not exclusive to, geological, geophysical studies, exploratory
drilling and sampling. At such time as commercial production commences, these costs will be
charged to operations on a unit-of-production method based on proven and probable reserves. The
aggregate costs related to abandoned mineral claims are charged to operations at the time of any
abandonment or when it has been determined that there is evidence of an impairment.
The Company considers the following facts and circumstances in determining if it should test
exploration and evaluation assets for impairment:
(i)
the period for which the Company has the right to explore in the specific area has expired
during the period or will expire in the near future, and is not expected to be renewed.
(ii) substantive expenditure on further exploration for and evaluation of mineral resources in the
specific area is neither budgeted nor planned.
(iii) exploration for and evaluation of mineral resources in the specific area have not led to the
discovery of commercially viable quantities of mineral resources and the entity has decided to
discontinue such activities in the specific area; and
(iv) sufficient data exists to indicate that, although a development in the specific area is likely to
proceed, the carrying amount of the exploration and evaluation assets is unlikely to be
recovered in full from successful development or by sale.
An impairment charge relating to a mineral property is subsequently reversed when new exploration
results or actual or potential proceeds on sale or farm-out of the property result in a revised estimate
of the recoverable amount but only to the extent that this does not exceed the original carrying value
of the property that would have resulted if no impairment had been recognized. General exploration
costs in areas of interest in which the Company has not secured rights are expensed as incurred.
12
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
3.
Significant Accounting Policies (Continued)
(h) Exploration and evaluation (continued)
The recoverability of amounts shown for exploration and evaluation assets is dependent upon the
discovery of economically recoverable reserves, the ability of the Company to obtain financing to
complete development of the properties, and on future production or proceeds of disposition.
The Company recognizes in income costs recovered on exploration and evaluation assets when
amounts received or receivable are in excess of the carrying amount.
Expenditures are transferred to mining properties and leases or assets under construction once the
technical feasibility and commercial viability of extracting a mineral resource are demonstrable and
the work completed to date supports the future development of the property.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area
of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are
first tested for impairment and then reclassified to mining property and development assets within
property, plant and equipment.
All capitalized exploration and evaluation expenditure is monitored for indications of impairment.
Where a potential impairment is indicated, assessments are performed for each area of interest. To
the extent that exploration expenditure is not expected to be recovered, it is charged to the results of
operations. Exploration areas where reserves have been discovered, but require major capital
expenditure before production can begin, are continually evaluated to ensure that commercial
quantities of reserves exist or to ensure that additional exploration work is underway as planned.
(i)
Impairment of property, plant and equipment and intangible assets
Property, plant and equipment and finite life intangible assets are reviewed for impairment if there is
any indication that the carrying amount may not be recoverable. If any such indication is present, the
recoverable amount of the asset is estimated in order to determine whether impairment exists. Where
the asset does not generate cash flows that are independent from other assets, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs. Any
intangible asset with an indefinite useful life is tested for impairment annually and whenever there is
an indication that the asset may be impaired.
An asset’s recoverable amount is the higher of fair value less costs of disposal and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value, using a
pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset for which estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset or cash generating unit is estimated to be less than its carrying
amount, the carrying amount is reduced to the recoverable amount. Impairment is recognized
immediately as additional depreciation. Where an impairment subsequently reverses, the carrying
amount is increased to the revised estimate of recoverable amount but only to the extent that this
does not exceed the carrying value that would have been determined if no impairment had previously
been recognized. A reversal is recognized as a reduction in the depreciation charge for the period.
13
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
3.
Significant Accounting Policies (Continued)
(j)
Income taxes
Deferred tax is recorded using the liability method, recognized on temporary differences between the
carrying amounts of assets and liabilities in the consolidated financial statements and the
corresponding tax bases used in the computation of taxable profit. Deferred tax assets are
recognized for all deductible temporary differences, unused tax losses and other income tax
deductions to the extent that it is probable that taxable profits will be available against which those
deductible temporary differences can be utilized. The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are not recognized if temporary differences arise from goodwill or
from the initial recognition (other than a business combination) of other assets and liabilities in a
transaction that affects neither taxable profit nor the accounting profit.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments
in subsidiaries and associates, and interest in joint ventures, except where the Company is able to
control the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the
period in which the liability is settled or the asset is realized, based on tax rates that have been
substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities
and assets reflect the tax consequences that would follow from the manner in which the Company
expects to recover or settle the carrying amount of its assets and liabilities at the end of the reporting
period.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes levied by the same
taxation authority and the Company intends to settle its current tax liabilities and assets on a net
basis.
Current and deferred income tax expense or recovery are recognized in net earnings except when
they arise as a result of items recognized in other comprehensive income or directly in equity in the
current or prior periods, in which case the related current and deferred income taxes are also
recognized in other comprehensive income or directly in equity, respectively.
Any premium paid for flow-through shares in excess of market value of those shares without the flow-
through feature is recorded as other liabilities at the time of issue and recognized as a component of
tax recovery at the time the qualifying expenditures are made.
(k) Share-based payments
The Company grants stock options to buy common shares of the Company to directors, officers,
employees and consultants. The board of directors grants such option for periods of up to five years,
with vesting periods determined at the sole discretion of the board and at prices equal to the volume
weighted average price for the five days immediately preceding the date the options were granted.
14
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
3.
Significant Accounting Policies (Continued)
(k) Share-based payments (continued)
The fair value of the options is measured at the date the options are granted, using the Black-Scholes
option pricing model, and is recognized over the period that the employees earn the options. The fair
value is recognized as an expense with a corresponding increase in equity settled employee
compensation reserve. The amount recognized as expense is adjusted to reflect the number of
share options expected to vest.
(l) Share capital
Proceeds from the exercise of stock options and warrants are recorded as share capital in the
amount for which the option or warrant enabled the holder to purchase a share in the Company, in
addition to the proportionate amount of reserves originally created at the issuance of the stock
options or warrants. Share capital issued for non-monetary consideration is valued at the closing
market price at the date of issuance. The proceeds from the issuance of units are allocated between
common shares and common share purchase warrants based on the residual value method. Under
this method, the proceeds are allocated to common shares based on the fair value of a common
share at the announcement date of the unit offering and any residual remaining is allocated to
common share purchase warrants.
(m) Reclamation and closure cost obligations
An obligation to incur restoration, rehabilitation and environmental costs arises when environmental
disturbance is caused by the exploration, development or ongoing production of exploration and
evaluation assets. Such costs arising for the decommissioning of plant and other site preparation
work, discounted to their net present value, are provided for and capitalized at the start of each
project to the carrying value of the asset, as soon as the obligation to incur such costs arises.
Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net
present value. These costs are charged against profit or loss over the economic life of the related
asset, through amortization using either the unit-of-production or the straight line method. The
related liability is adjusted for each period for the unwinding of the discount rate and for changes to
the current market-based discount rate, amount or timing of the underlying cash flows needed to
settle the obligation. Costs for restoration of subsequent site damage which is created on an ongoing
basis during production are provided for at their net present values and charged against profits as
extraction progresses.
The Company has $12,500 (2013 - $12,500) of reclamation deposits held with the Ministry of Mines
should any other reclamation and closure cost obligations arise from its obligations to undertake site
reclamation and remediation in connection with its operating activities in British Columbia and
$22,048 (2013 - $20,764) of reclamation deposits held with the State of Nevada should any asset
retirement obligation arise from its obligations to undertake site reclamation and remediation in
connection with its operating activities in Nevada.
When the Company enters into an option agreement on its exploration and evaluations assets, as
part of the option agreement, responsibility for any reclamation and remediation becomes the
responsibility of the optionee.
15
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
3.
Significant Accounting Policies (Continued)
(n) Net loss per share
The Company presents the basic and diluted net loss per share data for its common shares,
calculated by dividing the loss attributable to common shareholders of the Company by the weighted
average number of common shares outstanding during the period. Diluted net loss per share is
determined by adjusting the net loss attributable to common shareholders and the weighted average
number of common shares outstanding for the effects of all dilutive potential common shares.
(o) Application of new and revised accounting standards effective January 1, 2014
The Company has evaluated the following new and revised IFRS standards and has determined
there to be no material impact on the consolidated financial statements upon adoption:
• IFRIC 21 – Levies
• Amendments to IAS 32 - Financial Instruments: Presentation
• Amended standard IFRS 2 Share-based Payment - The amendment to IFRS 2 re-defines the
definition of “vesting condition.”
• Amended standard IFRS 3 Business Combinations - The amendment to IFRS 3 provides
further clarification on the accounting treatment for contingent consideration, and provides a
scope exception for joint ventures.
• Amended standard IFRS 8 Operating Segments - The amendments to IFRS 8 provides
further clarification on the disclosure required for the aggregation of segments and the
reconciliation of segment assets.
• Amended standard IFRS 13 Fair Value Measurement - The amendment to IFRS 13 provides
further details on the scope of the portfolio exception.
• Amended standard IAS 16 Property, Plant and Equipment - The amendment to IAS 16 deals
with the proportionate restatement of accumulated depreciation on revaluation.
• Amended standard IAS 24 Related Party Disclosures - The amendment to IAS 24 deals with the
disclosure required for management entities.
• Amended standard IAS 38 Intangible Assets - The amendment to IAS 38 deals with the
proportionate restatement of accumulated depreciation on revaluation.
(p) Future accounting standards
Certain pronouncements were issued by the IASB or the International Financial Reporting
Interpretations Committee (“IFRIC”) but not yet effective as at December 31, 2014. The Company
intends to adopt these standards and interpretations when they become effective. The Company
does not expect these standards to have an impact on its consolidated financial statements.
Pronouncements that are not applicable to the Company have been excluded from those described
below.
16
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
3.
Significant Accounting Policies (Continued)
(p) Future accounting standards (continued)
The following are the accounting standards issued but not yet effective, as of January 1, 2015.
(i) Effective for annual periods beginning on or after January 1, 2015:
Amended standard IFRS 7 Financial Instruments: Disclosures - The amendments to IFRS
7 outline the disclosures required when initially applying IFRS 9 Financial Instruments.
(ii) Effective for annual periods beginning on or after January 1, 2017:
New standard IFRS 15 Revenue from Contracts with Customers - IFRS 15 provides
guidance on how and when revenue from contracts with customers is to be recognized,
along with new disclosure requirements in order to provide financial statement users with
more informative and relevant information.
(iii) Effective for annual periods beginning on or after January 1, 2018:
New standard IFRS 9 Financial Instruments - Partial replacement of IAS 39 Financial
Instruments: Recognition and Measurement. The mandatory effective date has been
removed from the standard and will only be replaced when all sections of the standard have
been completed.
The Company has not early adopted these new and amended standards and is currently assessing
the impact that these standards will have on the consolidated financial statements.
4.
Accounts Receivable and Prepaid Expenses
Accounts receivable and prepaid expenses consist of the following:
Accounts receivable
Excise tax receivable
Allowance for doubtful accounts
Prepaid expenses
December 31, December 31,
2013
$ 346,492
39,538
(79,485)
138,577
$ 445,122
2014
$ 342,270
-
(79,485)
151,095
$ 413,880
At December 31, 2014, the Company has recorded value added taxes of $378,819 (2013 - $944,897)
in exploration and evaluation assets as the value added tax relates to certain projects and will be
recovered when the assets are sold.
5.
Marketable Securities
Marketable securities consist of equity securities over which the Company does not have control or
significant influence. Marketable securities are designated as available for sale and valued at fair
value. Unrealized gains and losses due to year end revaluation to fair value, other than those
determined to be other than significant or prolonged losses are recorded as other comprehensive
income or loss. During the year ended December 31, 2014, the Company determined that $405,903
(2013 - $1,274,743; 2012 - $3,856,819) of unrealized loss recorded in available for sale financial
assets was a result of significant or prolonged losses.
17
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
6.
Inventory
Inventory consists of 1,597 ounces of gold which is valued at the lower of average cost of mining and
estimated net realizable value. The market value of the gold at December 31, 2014 is $2,200,086
(2013 - $2,005,251).
7.
Investment in Associate
Gold Mountain Mining Corporation
On July 26, 2011, the Company closed an Asset Sale Agreement under which Gold Mountain
acquired 100% of the Elk gold deposit in Merritt, British Columbia and Almaden retains a 2% NSR
(“Net Smelter Return”) royalty in the project. Under the terms of the agreement, Almaden received 35
million common shares of Gold Mountain and recorded a gain on sale in the amount of $4,122,166
and management’s best estimate of the fair value of the contingently issuable shares of $144,000 as
described in Note 8(a). Concurrent with the transaction, Almaden sold 8.25 million common shares
of Gold Mountain to third parties at $0.355 per share for gross proceeds of $2,928,750 resulting in no
gain or loss on sale and now holds 26.75 million common shares of Gold Mountain representing a
38.8% interest. Upon completion of the transaction, Duane Poliquin (Chairman and Director of
Almaden) and Morgan Poliquin (CEO and Director of Almaden) became directors of Gold Mountain.
Almaden is accounting for this investment using the equity method as the Company has determined
that significant influence exists. Almaden has recorded its equity share of Gold Mountain’s loss
during the year ended December 31, 2014 in the amount of a loss of $135,209 (2013 - $818,889 loss;
2012 – $86,963 income). At year ended December 31, 2014, the Company wrote down its
investment in associates to its fair value and recorded impairment charges of $6,637,288 (2013 -
$Nil; 2012 - $Nil) as the decline in value was considered significant and prolonged as at December
31, 2014.
The continuity of the Company’s investment in associate for the years ended December 31, 2014,
2013 and 2012 is as follows:
Balance, beginning of year
Company’s share of net loss
Impairment
Balance, end of year
$
$
2014
9,447,497
(135,209)
(6,637,288)
2,675,000
$
$
2013
10,266,386
(818,889)
-
9,447,497
$
$
2012
10,179,423
86,963
-
10,266,386
During the year ended December 31, 2014, the Company charged Gold Mountain $Nil (2013 - $Nil;
2012 - $352,674) for expenditures relating to the Elk project and IP services undertaken on behalf of
Gold Mountain. These amounts were valued at the exchange amount agreed to by the parties. The
following table summarizes the financial information of Gold Mountain for its year ended December
31, 2014 and 2013:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Revenue
Loss
2014
3,085,070
27,661,031
40,827
1,664,608
9,953
379,047
$
$
$
$
$
$
2013
2,606,837
28,529,408
51,923
1,694,901
51,141
341,483
$
$
$
$
$
$
18
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
8.
Contingent Shares Receivable
(a) Gold Mountain Mining Corporation
As part of the Asset Sale Agreement with Gold Mountain, Almaden received an additional 2 million
common shares held in escrow subject to the following conditions:
i. 1,000,000 common shares upon the establishment of one million ounces of measured or
indicated reserves of gold on the property; and
ii. 1,000,000 common shares upon the establishment of an additional one million ounces of
measured and indicated reserves of gold on the property.
Any bonus shares not released from escrow within five years will be cancelled. The Company has
recorded a contingent share receivable of $15,000 (2013 - $13,500) based on management’s best
estimate of the fair value of the common shares as at December 31 , 2014 and a gain on fair value
adjustment of $1,500 (2013 - $76,500; 2012 - $54,000) in the statements of comprehensive loss
during the year ended December 31, 2014.
(b) Goldgroup Mining Inc.
On October 14, 2011, the Company completed the sale of its 30% interest in the Caballo Blanco
property to Goldgroup Mining Inc. (“Goldgroup”). The Company retains in its Mexican subsidiary an
undivided 1.5% NSR in Caballo Blanco. In consideration, Goldgroup paid to Almaden cash
consideration of US$2.5 million and issued 7 million of its common shares. An additional 7 million
common shares will be issued to Almaden under the following conditions:
i. 1,000,000 common shares upon commencement of commercial production on the Caballo
Blanco project,
ii. 2,000,000 common shares upon measured and indicated resources including cumulative
production reaching 2,000,000 ounces of gold,
iii. 2,000,000 common shares upon measured, indicated and inferred resources including
cumulative production reaching 5,000,000 ounces of gold, and
iv. 2,000,000 common shares upon measured, indicated and inferred resources including
cumulative production reaching 10,000,000 ounces of gold.
On December 24, 2014, Goldgroup sold Caballo Blanco to Timmins Gold Corp (“Timmins”). If
Timmins achieves the above conditions, management believes that the bonus common shares will
continue to be payable from Goldgroup.
The Company has recorded a contingent share receivable of $54,600 (2013 - $31,200) based on
management’s best estimate of the fair value of the common shares as at December 31, 2014 and a
gain on fair value adjustment in the statements of comprehensive loss during the year ended
December 31, 2014 of $23,400 (2013 - $117,000 loss; 2012 - $370,500 loss).
19
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
9.
Property, Plant and Equipment
Automotive
equipment
Furniture
and fixtures
Computer
hardware
Computer
software
Geological
library
Field
equipment
Leasehold
improvements
Drill
equipment
$
$
$
$
$
$
$
$
Total
$
Cost
December 31,
2013
Additions
Disposals
December 31,
2014
541,260
139,195
330,090
214,812
65,106
452,110
27,181
1,534,988
3,304,742
-
-
-
-
13,039
-
513
-
-
-
9,388
-
-
-
-
-
22,940
-
541,260
139,195
343,129
215,325
65,106
461,498
27,181
1,534,988
3,327,682
Accumulated depreciation
December 31,
2013
418,088
127,816
288,001
146,856
58,976
312,233
27,181
822,521
2,201,672
Disposals
-
-
-
-
-
-
36,951
2,276
14,582
20,464
1,226
27,647
-
-
-
-
142,493
245,639
Depreciation
December 31,
2014
Carrying
amounts
December 31,
2013
December 31,
2014
455,039
130,092
302,583
167,320
60,202
339,880
27,181
965,014
2,447,311
123,172
11,379
42,089
67,956
6,130
139,877
86,221
9,103
40,546
48,005
4,904
121,618
-
-
712,467
1,103,070
569,974
880,371
20
Disposals
December 31,
2013
Depreciation
December 31,
2013
Carrying
amounts
December 31,
2012
December 31,
2013
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
9.
Property, Plant and Equipment (Continued)
Automotive
equipment
Furniture
and fixtures
Computer
hardware
Computer
software
Geological
library
Field
equipment
Leasehold
improvements
Drill
equipment
$
$
$
$
$
$
$
$
Total
$
Cost
December 31,
2012
532,095
139,195
326,995
204,417
65,106
420,402
27,181
1,493,365
3,208,756
Additions
9,165
-
-
-
3,095
10,395
-
-
-
-
31,708
-
-
-
41,623
95,986
-
-
541,260
139,195
330,090
214,812
65,106
452,110
27,181
1,534,988
3,304,742
Accumulated depreciation
December 31,
2012
367,264
124,971
270,627
119,960
57,444
281,227
27,181
649,608
1,898,282
Disposals
-
-
-
-
-
-
50,824
2,845
17,374
26,896
1,532
31,006
-
-
-
-
172,913
303,390
418,088
127,816
288,001
146,856
58,976
312,233
27,181
822,521
2,201,672
164,831
14,224
56,368
84,457
7,662
139,175
123,172
11,379
42,089
67,956
6,130
139,877
-
-
843,757
1,310,474
712,467
1,103,070
21
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
10. Exploration and Evaluation Assets
Exploration and evaluation
assets
Acquisition costs
Opening balance
(December 31, 2013)
Additions
Impairment of deferred acquisition costs
Closing balance
(December 31, 2014)
Deferred exploration costs
Opening balance
(December 31, 2013)
Costs incurred during the year:
Drilling and related costs
Professional/technical fees
Claim maintenance/lease cost
Geochemical, metallurgy
Technical studies
Travel and accommodation
Geology, geophysics, exploration
Supplies and misc.
Reclamation, environmental
Water exploration
Value-added tax
Tuligtic
$
El
Cobre
$
ATW
Willow
Other
Properties
Total
$
$
$
$
1,232,765
47,261
46,451
148,254
13,045
1,487,776
1,137,914
-
-
-
-
-
(46,450)
(148,253)
1,015
(1,016)
1,138,929
(195,719)
2,370,679
47,261
1
1
13,044
2,430,986
19,131,734
1,315,226
1,423,530
700,688
388,195
22,959,373
1,448,003
267,219
248,142
387,705
1,112,037
377,900
812,043
14,236
129,108
4,155
355,442
-
43,628
58,321
735
-
6,260
27,272
5,285
-
-
-
-
-
23,712
-
-
-
19,186
25,956
117,640
1,448,003
330,033
473,771
407,496
19,056
-
1,112,037
7,255
89,054
6,545
-
-
391,415
928,369
26,138
129,108
4,155
23,377
378,819
-
-
-
-
72
-
-
-
-
-
-
-
-
-
-
-
Impairment of deferred exploration costs
-
5,155,990
-
141,501
(1,447,314)
(1,423,530)
(726,644)
(700,688)
(200,987)
81,126
(2,374,945)
3,254,399
Closing balance
(December 31, 2014)
Total exploration and
evaluation assets
24,287,724
1,456,727
26,658,403
1,503,988
-
1
-
1
469,321
26,213,772
482,365
28,644,758
22
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
10. Exploration and Evaluation Assets (Continued)
Exploration and evaluation
assets
Acquisition costs
Opening balance
(December 31, 2012)
Additions
Proceeds from options
Proceeds received from options on
exploration and evaluation assets in excess
(deficiency) of cost- reclassified to loss
Impairment of deferred acquisition costs
Closing balance
(December 31, 2013)
Deferred exploration costs
Opening balance
(December 31, 2012)
Costs incurred during the year:
Drilling and related costs
Professional/technical fees
Claim maintenance/lease costs
Geochemical, metallurgy
Travel and accommodation
Geology, exploration
Supplies and misc.
Geophysical, geosciences
Reclamation, environmental
Water exploration
Value added tax
Recoveries
Proceeds from options
Proceeds received from options on
exploration and evaluation assets in excess
(deficiency) of cost reclassified to loss
Impairment of deferred exploration costs
Closing balance
(December 31, 2013)
Total exploration and
evaluation assets
Tuligtic
$
El
Cobre
$
ATW
Willow
Other
Properties
Total
$
$
$
$
231,059
1,001,706
45,599
1,662
-
-
-
-
-
-
46,451
148,254
205,108
-
-
-
-
-
-
-
-
513,264
(317,420)
676,471
1,516,632
(317,420)
(387,896)
(11)
(387,896)
(11)
1,232,765
47,261
46,451
148,254
13,045
1,487,776
12,331,526
1,107,394
1,407,365
677,626
409,068
15,932,979
2,052,023
738,760
229,926
1,478,443
305,115
841,065
34,632
61,933
39,983
129,228
889,100
-
-
-
-
87,882
25,584
49,318
30,585
1,609
4,740
-
-
8,114
-
-
-
-
-
-
-
-
15,550
-
-
531
84
-
-
-
-
-
-
-
-
-
1,597
21,465
-
-
-
-
-
-
-
-
-
-
-
-
6,800,208
19,131,734
20,364,499
207,832
1,315,226
1,362,487
16,165
1,423,530
1,469,981
23,062
700,688
848,942
-
65,280
403,709
37,452
3,187
153,701
9,349
-
1,745
-
55,797
(16,956)
(35,000)
2,139,905
831,221
719,968
1,546,480
309,911
1,000,037
44,065
61,933
49,842
129,228
944,897
(16,956)
(35,000)
(328,110)
(328,110)
(371,027)
(327,027)
(20,873)
388,195
401,240
7,026,394
22,959,373
24,447,149
23
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
10. Exploration and Evaluation Assets (Continued)
The following is a description of the Company’s most significant property interest and related
spending commitments:
(a) Tuligtic
In 2001, the Company acquired by staking a 100% interest in the Tuligtic property in Puebla, Mexico.
The property contains the Ixtaca Zone.
(b) El Cobre
During 2011, the Company completed the sale of its 30% interest in the Caballo Blanco property
located in Veracruz, Mexico to Goldgroup. As part of the sale, Goldgroup transferred to Almaden its
40% interest in the El Cobre property. The Company owns a 100% interest in the El Cobre property.
(c) ATW
The Company has a net 66.2% interest in this diamond property in the Northwest Territories, Canada
through its 50% ownership of shares in ATW Resources Ltd. which holds the mineral claim. Given
that no further expenditures are planned, the company recorded a write-down in 2014 of $1,493,764
(2013 - $Nil; 2012: $Nil) to a carrying value of $1.
(d) Willow
In 2007, the Company acquired a 100% interest in the Willow property in Nevada, U.S.A. by staking.
Given that no further expenditures are planned, the Company recorded a write-down in 2014 of
$874,897 (2013 - $Nil; 2012 - $Nil) to a carrying value of $1.
(e) Other
(i) Nicoamen River
The Company staked and acquired a 100% interest in the Nicoamen River property located
in the southern interior region of British Columbia, Canada.
(ii) Skoonka Creek
The Company has a 34.14% interest in the Skoonka Creek gold property located northeast of
Lytton, British Columbia, Canada. The Company recorded a write-down in 2014 of $Nil
(2013 - $8,077; 2012 - $Nil).
(iii) Merit
The Company acquired by staking a 100% interest in the Merit property. During 2010, the
Company entered into an Option Agreement with Sunburst Explorations Inc. (“Sunburst”) to
earn a 60% interest subject to certain terms and conditions. Sunburst terminated the Option
Agreement in 2013. The Company recorded a write-down in 2014 of $109,734 (2013 –
$5,697; 2012 – income of $5,000).
24
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
10. Exploration and Evaluation Assets (Continued)
(e)
Other (Continued)
(iv) San Jose
The Company purchased a 100% interest in the San Jose claim. The Company recorded a
write-down in 2014 of $427 (2013 - $24,676; 2012 - $56,283).
(v) Yago & BP
In 2013, the Yago and BP properties were vended along with several others (Black Jack
Springs property in Nevada and the Mezquites, San Pedro and Llano Grande properties in
Mexico) to Tarsis Resources Ltd. (“Tarsis”) for 4 million shares of Tarsis and a 2% NSR
royalty. In addition, Tarsis must issue an additional 200,000 shares to the Company for each
new property acquired within the area of influence and a further 800,000 shares upon the first
time disclosure of a mineral resource on each and any of the new properties. In 2013, the
Company’s carrying value of the properties was $438,530 resulting in a loss of $218,532 as
reported in Note 13.
(vi) Matehuapil
During 2007, the Company was successful in its bid to acquire a 100% interest in the
Matehuapil claim. In 2008 the purchase price was paid outright. A bond in the amount of
$138,929 (“Mineral Property Deposit”) to pay for the purchase of an NSR royalty was required
to remain in place until the NSR was purchased. The company abandoned the claims in
2013 and the bond was released on June 3, 2014.
(vii) Caldera
The Company acquired a 100% interest in the Caldera property by staking. The Company
recorded a write-down in 2014 of $35,846 (2013 - $102,021; 2012 - $485,693).
(viii) Other write-downs of interest in exploration and evaluation assets
The Company wrote down its interest in other exploration and evaluation assets in aggregate
by $55,996 at year ended December 31, 2014 (2013 - $190,984; 2012 – $343,739).
11.
Share Capital and Reserves
(a) Authorized share capital
At December 31, 2014, the authorized share capital comprised an unlimited number of common
shares. The common shares do not have a par value. All issued shares are fully paid.
25
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
11. Share Capital and Reserves (Continued)
(b) Details of private placement and other issues of common shares in 2014 and 2013
On August 1, 2014, the Company closed a non-brokered private placement by the issuance of
4,000,000 units at a price of $1.50 per unit for gross proceeds to the Company of $6,000,000 less
share issue costs of $256,111. Each unit consists of one common share and one-half of one non-
transferrable common share purchase warrant. Each whole warrant allows the holder to purchase
one common share at a price of $2.00 per common share until August 1, 2015. A finder’s fee of
$107,400 in cash and finder’s warrants to purchase up to 48,000 common shares at a price of $1.50
per common share until August 1, 2015 was paid on a portion of the placement. The fair value of the
finder’s warrants of $15,361 was estimated using the Black-Scholes option pricing model with the
following assumptions: Risk-free interest rate – 1.0%; Expected life – 1 year; Expected volatility –
49.30%; and Expected dividend yield – 0%. In connection with the private placement, the company
also incurred $133,350 share issue costs. The proceeds of the private placement were allocated to
share capital and nil value to the warrants under the residual value method.
On November 28, 2013, the Company issued 10,000 common shares at a deemed value of $1.15 per
share as a payment to modify the Caballo Blanco royalty agreement.
On July 17, 2013 the Company completed a non-brokered private placement of 4,376,000 units at a
price of $1.25 per unit for gross proceeds of $5,470,000 less share issue costs of $458,996. Each
unit consists of one common share and one non-transferable common share purchase warrant.
Each warrant allows the holder to purchase one common share at a price of $1.50 per common share
until January 17, 2015 and, thereafter, at a price of $1.80 per common share until July 17, 2016. The
proceeds of the private placement were allocated to share capital and nil value to the warrants under
the residual value method.
A finder’s fee of $232,500 in cash and finder’s warrants to purchase up to 186,000 common shares at
a price of $1.50 per common share until July 17, 2016 was paid on a portion of the placement. The
fair value of the finder’s warrants of $107,880 was allocated to share capital and reserves for
warrants. The Company paid other share issue costs of $118,616.
On February 22, 2013, the Company issued 250,000 common shares at a deemed value of $2.15 per
share pursuant to a property acquisition agreement on the Tuligtic project.
26
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
11. Share Capital and Reserves (Continued)
(c) Warrants
The continuity of warrants for the years ended December 31, 2014, 2013 and 2012 are as follows:
Exercise
Price
$ 1.50
$ 1.50
$ 1.50
$ 2.00
Expiry date
July 17, 2016*
July 17, 2016
August 1, 2015
August 1, 2015
Weighted average
exercise price
December 31,
2013
4,376,000
186,000
Granted
Exercised
-
Expired/
cancelled
-
48,000
2,000,000
2,048,000
4,562,000
$ 1.50
$ 1.99
-
-
-
-
December 31,
2014
4,376,000
186,000
48,000
2,000,000
6,610,000
$1.65
* Exercise price is increased to $1.80 per share if the warrants are not exercised by January 17, 2015.
Since these warrants were not exercised by January 17, 2015, the exercise price has increased to
$1.80 per share.
Exercise
Price
$ 1.50
$ 1.50
December 31,
2012
-
-
Expiry date
July 17, 2016*
July 17, 2016
Weighted average
exercise price
Exercised
-
-
Granted
4,376,000
186,000
4,562,000
$ 1.50
Expired/
cancelled
-
-
-
December 31,
2013
4,376,000
186,000
4,562,000
-
$ 1.50
No warrants were granted nor exercised during the year ended December 31, 2012. There were no
warrants outstanding at December 31, 2012.
The weighted average fair value of warrants granted during the years ended December 31, 2014 and
2013 calculated using the Black-Scholes model at issue date, are as follows:
Number of
warrants
48,000
186,000
Date of issue
August 1, 2014
July 17, 2013
Weighted average assumptions used
Fair value
per share
Risk free
interest
rate
Expected
life
(in years)
Expected
volatility
Expected
dividends
$ 0.32
$ 0.58
1.00%
1.39%
1
3
49.30%
55.95%
$Nil
$Nil
27
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
11. Share Capital and Reserves (Continued)
(d) Share purchase option compensation plan
The Company’s stock option plan permits the issuance of options up to a maximum of 10% of the
Company’s issued share capital. Stock options issued to any consultant or person providing investor
relations services cannot exceed 2% of the issued and outstanding common shares in any twelve
month period. At December 31, 2014, the Company had reserved 587,832 stock options that may be
granted. The exercise price of any option cannot be less than the volume weighted average trading
price of the shares for the five trading days immediately preceding the date of the grant. The
maximum term of all options is five years. The Board of Directors determines the term of the option
(to a maximum of five years) and the time during which any option may vest. Options granted to
consultants or persons providing investor relations services shall vest in stages with no more than
25% of such option being exercisable in any three month period. All options granted during the years
ended December 31, 2014, 2013 and 2012 vested on the date granted. The continuity of stock
options for the years ended December 31, 2014, 2013 and 2012 are as follows:
Exercise
price
$2.18
$1.96
$2.53
$0.81
$1.14
$2.26
$1.67
$1.00
$0.92
$2.22
$2.67
$2.73
$1.51
$3.29
$1.56
$2.93
$1.40
$2.18
$2.25
$2.63
$2.53
$1.98
$1.66
$1.19
$1.50
Expiry date
May 4, 2014
July 13, 2014
November 22, 2014
November 25, 2014
January 4, 2015
February 22, 2015
April 25, 2015
June 21, 2015
July 16, 2015
August 27, 2015
September 20, 2015
November 22, 2015
May 6, 2016
June 8, 2016
July 14, 2016
August 15, 2016
October 10, 2016
May 4, 2017
June 8, 2017
September 11, 2017
November 22, 2017
April 4, 2018
June 18, 2018
January 2, 2019
July 2, 2019
Options outstanding
and exercisable
Weighted average
exercise price
December 31,
2013
65,000
170,000
60,000
150,000
970,000
20,000
25,000
140,000
200,000
205,000
100,000
75,000
-
2,270,000
-
150,000
-
225,000
75,000
500,000
100,000
90,000
250,000
-
-
Granted
-
-
-
-
-
-
-
-
-
-
-
-
65,000
-
150,000
-
150,000
-
-
-
-
-
-
375,000
150,000
Exercised
-
-
-
(150,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Expired /
cancelled
(65,000)
(170,000)
(60,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
December 31,
2014
-
-
-
-
970,000
20,000
25,000
140,000
200,000
205,000
100,000
75,000
65,000
2,270,000
150,000
150,000
150,000
225,000
75,000
500,000
100,000
90,000
250,000
375,000
150,000
5,840,000
890,000
(150,000)
(295,000)
6,285,000
$2.38
$1.36
$0.81
$2.12
$2.29
28
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
11. Share Capital and Reserves (Continued)
(d) Share purchase option compensation plan (continued)
Expiry date
March 17, 2013
April 12, 2013
December 29, 2013
May 4, 2014
July 13, 2014
November 22, 2014
November 25, 2014
January 4, 2015
February 22, 2015
April 25, 2015
June 21, 2015
July 16, 2015
August 27, 2015
September 20, 2015
November 22, 2015
June 8, 2016
August 15, 2016
May 4, 2017
June 8, 2017
September 11, 2017
November 22, 2017
April 4, 2018
June 18, 2018
Options outstanding
and exercisable
Weighted average
exercise price
Exercise
price
$2.35
$2.36
$0.68
$2.18
$1.96
$2.53
$0.81
$1.14
$2.26
$1.67
$1.00
$0.92
$2.22
$2.67
$2.73
$3.29
$2.93
$2.18
$2.25
$2.63
$2.53
$1.98
$1.66
December 31,
2012
40,000
25,000
125,000
65,000
170,000
60,000
150,000
1,040,000
-
-
140,000
200,000
205,000
100,000
125,000
2,320,000
200,000
250,000
75,000
500,000
100,000
-
-
Granted
-
-
-
-
-
-
-
-
20,000
25,000
-
-
-
-
-
-
-
-
-
-
-
90,000
250,000
Exercised
(25,000)
-
(125,000)
-
-
-
-
(70,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Expired /
cancelled
(15,000)
(25,000)
-
-
-
-
-
-
-
-
-
-
-
-
(50,000)
(50,000)
(50,000)
(25,000)
-
-
-
-
-
December 31,
2013
-
-
-
65,000
170,000
60,000
150,000
970,000
20,000
25,000
140,000
200,000
205,000
100,000
75,000
2,270,000
150,000
225,000
75,000
500,000
100,000
90,000
250,000
5,890,000 385,000
(220,000)
(215,000)
5,840,000
$2.39
$1.77
$1.02
$2.77
$2.38
29
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
11. Share Capital and Reserves (Continued)
(d) Share purchase option compensation plan (continued)
Exercise
price
$3.90
$2.32
$2.72
$2.68
$4.30
$2.35
$2.36
$0.68
$2.18
$1.96
$2.53
$0.81
$1.14
$1.00
$0.92
$2.22
$2.67
$2.73
$3.29
$2.93
$2.18
$2.25
$2.63
$2.53
Expiry date
March 25, 2012
September 10, 2012
November 1, 2012
November 15, 2012
December 13, 2012
March 17, 2013
April 12, 2013
December 29, 2013
May 4, 2014
July 13, 2014
November 22, 2014
November 25, 2014
January 4, 2015
June 21, 2015
July 16, 2015
August 27, 2015
September 20, 2015
November 22, 2015
June 8, 2016
August 15, 2016
May 4, 2017
June 8, 2017
September 11, 2017
November 22, 2017
Options outstanding
and exercisable
Weighted average
exercise price
December 31,
2011
45,000
500,000
60,000
100,000
25,000
40,000
-
125,000
-
-
-
150,000
1,040,000
240,000
200,000
205,000
100,000
125,000
2,320,000
200,000
-
-
-
-
Granted
-
-
-
-
-
-
25,000
-
65,000
170,000
60,000
-
-
-
-
-
-
-
-
-
250,000
75,000
500,000
100,000
Exercised
-
(500,000)
-
-
-
-
-
-
-
-
-
-
-
(100,000)
-
-
-
-
-
-
-
-
-
-
Expired /
cancelled
(45,000)
-
(60,000)
(100,000)
(25,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
December 31,
2012
-
-
-
-
-
40,000
25,000
125,000
65,000
170,000
60,000
150,000
1,040,000
140,000
200,000
205,000
100,000
125,000
2,320,000
200,000
250,000
75,000
500,000
100,000
5,475,000 1,245,000
(600,000)
(230,000)
5,890,000
$2.39
$2.38
$2.10
$3.11
$2.39
30
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
11.
Share Capital and Reserves (Continued)
(d) Share purchase option compensation plan (continued)
The weighted average fair value of options granted during the years ended December 31, 2014,
2013, and 2012, calculated using the Black-Scholes model at grant date, are as follows:
Weighted average assumptions used
Number
of
options Date of grant
150,000 October 10, 2014
150,000 July 14, 2014
150,000 July 2, 2014
65,000 May 6, 2014
375,000 January 2, 2014
250,000 June 18, 213
25,000 April 25, 2013
90,000 April 4, 2013
20,000 February 22, 2013
100,000 November 22, 2012
60,000 November 22, 2012
500,000 September 11, 2012
170,000 July 13, 2012
75,000 June 8, 2012
250,000 May 4, 2012
65,000 May 4, 2012
25,000 April 12, 2012
Fair
value per
share
$0.40
$0.46
$0.83
$0.42
$0.76
$1.01
$0.51
$1.17
$0.57
$1.58
$0.72
$1.76
$0.80
$1.63
$2.03
$1.05
$0.74
Risk free
interest
rate
0.99%
1.08%
1.47%
1.08%
1.43%
1.62%
1.19%
1.62%
0.99%
1.37%
1.17%
1.22%
1.07%
1.20%
1.20%
1.00%
1.00%
Expected
life
(in years)
2
2
5
2
5
5
2
5
2
5
2
5
2
5
5
1.5
1
Expected
volatility
51.09%
52.55%
66.05%
52.61%
68.01%
78.71%
48.19%
78.27%
50.12%
77.91%
50.80%
77.87%
76.42%
74.66%
75.79%
75.79%
76.46%
Expected
dividends
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
12. Related Party Transactions and Balances
(a) Compensation of key management personnel
Key management includes members of the Board, the President and Chief Executive Officer, the
Chief Financial Officer and the Vice President, Corporate Development (Effective September 22,
2014). The aggregate compensation paid or payable to key management for services is as follows:
December 31,
2014
December 31,
2013
December 31,
2012
Salaries, fees and benefits
Share based compensation
Director’s fees
(i)
(ii)
$ 738,125
469,500
48,000
$ 1,255,625
(i)
(iii)
$ 690,700
340,250
48,000
$ 1,078,950
(i)
(iv)
$ 828,488
1,468,500
39,000
$ 2,335,988
31
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
12. Related Party Transactions and Balances (Continued)
(a) Compensation of key management personnel (continued)
(i) During 2014, Hawk Mountain Resources Ltd. (“Hawk Mountain”), a private company of which the
Chairman of the Company is a shareholder, was paid $240,000 (2013 - $240,000; 2012 –
$315,000) for geological services provided to the Company and is recorded in general
exploration expenses.
(ii) Comprised of 675,000 options granted pursuant to the Company’s stock option plan during
2014, all of which vested on the grant date. The value of 375,000 option-based awards is based
on the fair value of the awards ($0.76) calculated using the Black-Scholes model at the January
2, 2014 grant date. The value of 150,000 option-based awards is based on the fair value of the
awards ($0.83) calculated using the Black-Scholes model at the July 2, 2014 grant date. The
value of 150,000 option based awards is based on the fair value of the awards ($0.40) calculated
using the Black-Scholes model at the October 10, 2014 grant date.
(iii) Comprised of 325,000 options granted pursuant to the Company’s stock option plan during the
year, all of which vested on the grant date. The value of 75,000 option-based awards is based on
the fair value of the awards ($1.17) calculated using the Black-Scholes model at the April 3, 2013
grant date. The value of 250,000 option-based awards is based on the fair value of the awards
($1.01) calculated using the Black-Scholes model at the June 18, 2013 grant date.
(iv) Comprised of 925,000 options granted pursuant to the Company’s stock option plan during the
year, all of which vested on the grant date. The value of 250,000 option-based awards is based
on the fair value of the awards ($1.32) calculated using the Black-Scholes model at the May 4,
2012 grant date. The value of 75,000 option-based awards is based on the fair value of the
awards ($1.34) calculated using the Black-Scholes model at the June 8, 2012 grant date. The
value of 500,000 option-based awards is based on the fair value of the awards ($1.76)
calculated using the Black-Scholes model at the September 11, 2012 grant date. The value of
100,000 option-based awards is based on the fair value of the awards ($1.58) calculated using
the Black-Scholes model at the November 22, 2012 grant date.
(b) Other related party transactions
i) ATW Resources Ltd. (“ATW”)
Almaden owns a 50% interest in this company which holds title in trust for a mineral property.
ii) Other
(a) During the year ended December 31, 2014, the Company paid a company controlled by a
Director of the Company $Nil (2013 - $1,500; 2012 - $Nil) for consulting services provided to the
Company.
32
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
12. Related Party Transactions and Balances (Continued)
ii) Other (continued)
(b) During the year ended December 31, 2014, the Company paid a company controlled by a
Director of the Company, $Nil (2013 - $700; 2012 - $488) for accounting services provided to the
Company.
(c) During the year ended December 31, 2014, no payments were paid to Hawk Mountain for
marketing and general administration services provided by the spouse of the Chairman (2013 -
$6,300; 2012 - $12,000).
(d) During the year ended December 31, 2014, the Company employed the Chairman’s daughter for
a salary of $34,050 less statutory deductions (2013 - $34,000; 2012 - $62,216) for marketing and
administrative services provided to the Company.
13.
Income (Loss) on Exploration and Evaluation Assets
Income (loss) on exploration and evaluation assets is comprised of the following:
Sale of Yago, Mezquites, Llano Grande,
San Pedo, BP and Black Jack Springs
properties
Sale of Caballo Blanco
Other
2014
Year ended December 31,
2012
2013
$ -
-
55,111
$ 55,111
$ (218,532)
(469,045)
(28,429)
$ (716,006)
$ -
-
47,500
$ 47,500
During the year ended December 31, 2014, recorded in Other is a reduction of the December 31,
2013 accrual reversing previous years’ exploration costs as a result of a Canada Revenue Agency
review of Almaden’s 2010 and 2011 British Columbia Mining Exploration Tax Credit (“BCMETC”) from
various grassroots mineral projects in British Columbia, Canada.
During year ended December 31, 2013, the Company paid $469,045 in the form of cash and shares
as part of the consideration payable to obtain a reduction in a royalty with respect to the Caballo
Blanco property. The payment and shares are the result of a 2011 royalty agreement that was
subsequently amended pursuant to an Amended Royalty Agreement.
33
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
14. Net Loss Per Share
Basic and diluted net loss per share
The calculation of basic net loss per share for the year ended December 31, 2014 was based on the
loss attributable to common shareholders of $14,982,667; (2013 - $6,356,609; 2012 - $10,238,377)
and a weighted average number of common shares outstanding of 66,331,061 (2013 – 62,054,987;
2012 –59,349,992).
The calculation of diluted net loss per share for the year ended December 31, 2014, 2013 and 2012
did not include the effect of stock options and warrants as they were anti-dilutive.
15. Supplemental Cash Flow Information
Supplemental information regarding non-cash transactions is as follows:
Investing and financing activities
Fair value of share options transferred to
share capital on exercise of options
Shares received on sale of Dill property
Shares received on sale of Yago,
Mezquites, Llano Grande, San Pedro
BP and Black Jack Springs properties
December 31,
2014
December 31,
2013
December 31,
2012
$ 67,500
$ 136,650
$ 624,000
-
-
5,000
17,500
220,000
-
Supplemental information regarding the split between cash and cash equivalents is as follows:
Cash
Term Deposits
December 31,
2014
December 31,
2013
$ 1,372,548
6,800,050
$ 8,172,598
$ 1,694,723
10,300,050
$ 11,994,773
34
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
16.
Income Taxes
(a) The provision for income taxes differs from the amounts computed by applying the Canadian
statutory rates to the net loss before income taxes due to the following:
Loss before income taxes
Statutory rate
Expected income tax
Effect of different tax rates in foreign jurisdictions
Non-deductible stock based compensation
Other permanent items
Change in deferred tax assets not recognized
Impact of change in tax rates
Impact of change in expected manner of recovery
Impact of deferred tax rates applied vs. current statutory rates
Share issuance costs
True-ups and Other
December 31,
2014
(13,143,185)
26.00%
$
December 31,
2013
(6,356,609)
25.75%
$
(3,417,228)
(79,333)
147,108
251,520
3,832,705
-
1,128,469
-
(99,089)
75,330
1,839,482
$
(1,636,827)
(98,395)
98,352
731,637
3,864,161
(449,174)
-
(5,211)
(119,339)
(2,385,204)
$
-
The applicable tax rate in Canada for the year ended December 31, 2014 was 26% which
reflects the legislated provincial tax rate increase from 10% to 11% on April 1, 2013.
(b) The Company’s deferred income tax expense and deferred income tax liability relates to the
Mexican income tax and Special Mining Duty (“SMD”) associated with the Tuligtic project. As a
consequence of management’s plan and intention to complete a spin-out of certain Company
assets and liabilities (Note 22 (b)), management has determined that the Company will most
likely recover the carrying amount of the Tuligtic property through use rather than through sale.
Before the spin-out was planned, it was management’s expectation that the carrying amount of
the Tuligtic property would be recovered through sale rather than through use. Given this
change in expected manner of recovery during the year, the Company has reflected the tax
impacts in the 2014 financial statements as follows:
Deferred tax assets
Non-capital losses
Property, plant and equipment
Deferred tax liabilities
Exploration and evaluation assets
Contingent shares receivable
December 31,
2014
December 31,
2013
$
3,807,495
(4,630)
3,802,865
$
3,916,383
149,169
4,065,552
(5,630,725)
(11,622)
(5,642,347)
(4,053,930)
(11,622)
(4,065,552)
Net deferred tax assets (liabilities)
$
(1,839,482)
$
-
35
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
16.
Income Taxes (Continued)
(c) Deductible temporary differences, unused tax losses and unused tax credits for which no
deferred tax assets have been recognized are attributable to the following:
December 31,
2014
December 31,
2013
Non-capital loss carryforwards
Exploration and evaluation assets
Share issue costs
Property, plant and equipment
Cumulative eligible capital deduction
Marketable securities
Donations
Investment tax credits
$
21,802,140
16,434,468
584,139
409,474
271,352
5,401,681
12,960
201,354
45,117,568
$
$
14,470,998
9,852,106
554,002
251,308
130,693
5,421,778
5,100
-
$
30,685,985
At December 31, 2014, the Company had operating loss carry forwards available for tax purposes in
Canada of $11,906,871 (2013 - $9,687,527) which expire between 2029 and 2034, in the United
States of $102,352 (2013 - $94,936) which expire between 2031 and 2034 and in Mexico of
$9,792,917 (2013 - $9,270,505) which expire between 2015 and 2024.
Taxable temporary differences in relation to investments in associates for which a deferred tax liability
has not been recognized is $nil (2013 - $5.6 million).
17. Commitments
The Company has entered into an operating lease for office premises through 2016. On January 29,
2013, the Company entered into contracts with its Chairman and President for an annual
remuneration of $240,000 and $265,000 respectively effective January 1, 2013, for two years,
renewable for two additional successive terms of 24 months.
As at December 31, 2014, the remaining payments for the executive contract and the operating lease
are due as follows:
2015
2016
2017
2018
2019
Total
Office lease
Executive contracts
$ 81,000 $ 6,700
505,000
$ 586,000 $ 511,700
505,000
18. Financial Instruments
$ -
505,000
$ - $ 87,700
2,020,000
$ 505,000 $ 505,000 $ - $ 2,107,700
$ -
505,000
-
The fair values of the Company’s cash and cash equivalent, accounts receivable and trade and other
payables approximate their carrying values because of the short-term nature of these instruments.
The Company’s financial instruments are exposed to certain financial risks, including currency risk,
credit risk, liquidity risk, interest risk and commodity price risk.
36
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
18. Financial Instruments (Continued)
(a) Currency risk
The Company’s property interests in Mexico make it subject to foreign currency fluctuations
and inflationary pressures which may adversely affect the Company’s financial position,
results of operations and cash flows. The Company is affected by changes in exchange
rates between the Canadian Dollar and foreign functional currencies. The Company does
not invest in foreign currency contracts to mitigate the risks.
As at December 31, 2014, the Company is exposed to foreign exchange risk through the
following assets and liabilities denominated in currencies other than the functional currency of
the applicable subsidiary:
All amounts in Canadian dollars
Cash and cash equivalents
Accounts receivable and prepaid expenses
Total assets
Trade and other payables
Total liabilities
Net assets
US dollar
$ 530,909
67,179
$ 598,088
Mexican peso
$ 174,262
7,797
$ 182,059
$ 59,608
$ 59,608
$ 19,078
$ 19,078
$ 538,480
$ 162,981
A 10% change in the US dollar exchange rate relative to the Canadian dollar would change
the Company’s net income by $53,000.
A 10% change in the Mexican peso relative to the Canadian dollar would change the
Company’s net income by $17,000.
(b) Credit risk
The Company’s cash and cash equivalents are held in large Canadian financial institutions.
These investments mature at various dates during the twelve months following the statement
of financial position date. The Company’s excise tax consists primarily of sales tax due from
the federal government of Canada. The Company is exposed to credit risks through its
accounts receivable.
To mitigate exposure to credit risk on cash and cash equivalents, the Company has
established policies to limit the concentration of credit risk with any given banking institution
where the funds are held, to ensure counterparties demonstrate minimum acceptable credit
risk worthiness and ensure liquidity of available funds.
As at December 31, 2014, the Company’s maximum exposure to credit risk is the carrying
value of its cash and cash equivalents and accounts receivable.
(c) Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as
they fall due. The Company manages liquidity risk through the management of its capital
structure.
Trade and other payables are due within twelve months of the statement of financial position
date.
37
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
18. Financial Instruments (Continued)
(d)
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates.
A 1% change in the interest rate would change the Company’s net income by $68,000.
(e) Commodity price risk
The ability of the Company to explore its exploration and evaluation assets and the future
profitability of the Company are directly related to the market price of gold and other precious
metals. The Company has not hedged any of its potential future gold sales. The Company
monitors gold prices to determine the appropriate course of action to be taken by the
Company.
A 1% change in the price of gold would affect the fair value of the Company’s gold inventory
by $22,000.
(f) Classification of Financial instruments
IFRS 7 establishes a fair value hierarchy that prioritizes the input to valuation techniques
used to measure fair value as follows:
Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset
or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
Level 3 – inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
The following table sets forth the Company’s financial assets measured at fair value by level
within the fair value hierarchy.
2014
Assets:
Marketable securities
2013
Assets:
Marketable securities
Level 1
Level 2
Level 3
Total
$ 853,123
$ -
$ -
$ 853,123
Level 1
Level 2
Level 3
Total
$ 1,058,661
$ -
$ -
$ 1,058,661
19. Management of Capital
The Company considers its capital to consist of common shares, stock options and warrants. The
Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a
going concern in order to pursue the exploration of its exploration and evaluation assets and to
maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.
The Company manages the capital structure and makes adjustments to it in light of changes in
economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the
capital structure, the Company may attempt to issue new shares and, acquire or dispose of assets.
38
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
19. Management of Capital (Continued)
In order to maximize ongoing exploration efforts, the Company does not pay out dividends. The
Company’s investment policy is to invest its short-term excess cash in highly liquid short-term
interest-bearing investments with short term maturities, selected with regards to the expected timing
of expenditures from continuing operations.
The Company expects its current capital resources will be sufficient to carry its exploration plans and
operations for the foreseeable future.
20. Segmented Information
The Company operates in one reportable operating segment, being the acquisition and exploration of
mineral resource properties.
The Company has exploration and evaluation assets and property, plant and equipment in the
following geographic locations:
Year ended December 31,
2013
2014
Canada
United States
Mexico
$
1,086,763
4
28,438,362
29,525,129
$
$
2,562,469
848,945
22,138,805
25,550,219
$
The Company’s revenues were all earned in Canada from interest income on corporate cash
reserves and investment income.
21. General and Administrative Expenses
Year ended December 31,
2014
2013
2012
Professional fees
Salaries and benefits
Travel and promotion
Depreciation
Office and license
Rent
Stock exchange fees
Insurance
Transfer agent fees
Directors fees
Bad debt expense
39
$
$
$
772,670
573,900
320,752
245,639
157,275
176,960
88,287
81,429
24,196
48,000
-
2,489,108
378,705
537,837
305,203
303,390
200,252
169,498
87,070
100,783
23,540
48,000
-
2,154,278
483,250
535,081
368,481
325,995
183,256
158,334
106,901
103,536
22,676
39,000
4,455
2,330,965
$
$
$
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2014 and 2013
Presented in Canadian dollars
22. Subsequent Events
(a) Private placement
On February 11, 2015, the Company closed a non-brokered private placement by the issuance of
4,420,000 units at a price of $1.25 per unit for gross proceeds to the company of $5,525,000. Each
unit consists of one common share and one-half of one non-transferable common share purchase
warrant. Each whole warrant allows the holder to purchase one common share of the Company at a
price of $2.00 per share until February 11, 2016. A fee of $212,626 in cash and warrants to purchase
up to 49,410 common shares at a price of $1.28 per common share until February 11, 2016 was paid
on a portion of the placement.
(b) Spin out
The Company announced that it will be deferring shareholder approval of the spin-out of its early
stage exploration projects, royalty interests and certain other non-core assets, to the Company’s 2015
annual general meeting (the “AGM”). The AGM is expected to be held in June 2015.
It is intended that, as part of the reorganization, Almaden's current shareholders will receive shares of
Spinco by way of a share exchange, pursuant to which each existing share of Almaden is exchanged
for one “new” share of Almaden and 0.6 of a share of Spinco. This exchange is intended to be taxed
in a manner similar to a return of capital on the shares of Almaden. Warrant holders of Almaden will
receive warrants of Spinco which are proportionate to, and reflective of the terms of, their existing
warrants. The reorganization will be effected by way of a plan of arrangement under the Business
Corporations Act (British Columbia), and must be approved by the Supreme Court of British Columbia
and by the affirmative vote of 66 2/3% of Almaden’s shareholders in attendance at a shareholders’
meeting. The Company intends to apply for a listing of the shares of Spinco on the TSX Venture
Exchange ("TSX-V"). Any such listing will be subject to Spinco fulfilling all of the requirements of the
TSX-V.
40
ALMADEN MINERALS LTD.
Corporate Organizational Chart
December 31, 2014
Almaden Minerals Ltd.
(“Almaden”)
Canada
TSX: AMM
NYSE MKT: AAU
Puebla Holdings
Inc.
(“Puebla”)
Canada
100%
Pangeon Holdings
Ltd.
(“Pangeon”)
Canada
100%
ATW Resources Ltd.
(“ATW”)
Canada
50%
Williams Creek 50%
Gold Mountain Mining Corp.
(“Gold Mountain”)
Canada
TSX-V: GUM
~39% (26.75MM) shares
ATW Joint Venture
66%
Williams Creek 30%
Harry Winston 4%
Minera Gorrión
SA de CV
(“Gorrión”)
Mexico
49,999 shares
99.9%
Minera Alondra
SA de CV
(“Alondra”)
Mexico
49,999 shares
99.9%
Compañía Minera
Zapata SA de CV
(“Zapata”)
Mexico
49,999 shares
99.9%
Almaden de
Mexico SA de CV
(“Almaden de
Mexico”)
Mexico
49,999 shares
99.9%
Minera Gavilán
SA de CV
(“Gavilán”)
Mexico
49,999 shares
99.9%
Ixtaca Precious
Metals Inc.
(“Ixtaca”)
Canada
100%
Republic
Resources Inc.
(“Republic”)
Canada
100%
Almaden America
Inc.
(“Almaden
America”)
USA
100%
ALMADEN MINERALS LTD.
MAJORITY VOTING POLICY
The Board of Directors (“Board”) of Almaden Minerals Ltd. (the “Company”) believes that
each of its members should carry the confidence and support of the Company’s
shareholders and is committed to upholding high standards in corporate governance.
Forms of proxy for the vote at a shareholders’ meeting where Directors are to be elected
will enable the shareholder to vote in favour of, or to withhold from voting for, each
nominee on an individual basis. At the meeting, the Chairman will call for a vote by ballot
and the scrutineers will record, with respect to each nominee, the number of shares in his
or her favour and the number of shares withheld from voting. Prior to receiving the
scrutineer’s report on the ballot, the Chairman may announce the vote result based on the
number of proxies received by the Company. At the conclusion of the meeting, the final
scrutineer’s report on the ballot must be filed on SEDAR.
If, in a non-contested election of Directors, the number of shares “withheld” for any
nominee exceeds the number of shares voted “for” the nominee, then, notwithstanding
that such Director was duly elected as a matter of corporate law, he or she shall, within
five days following the date of the final scrutineer’s report on the ballot, tender his or her
written resignation to the Chairman of the Board. A “non-contested election” means an
election where the number of nominees for Director is not greater than the number of
Directors to be elected. The Nomination and Corporate Governance Committee will
consider such offer of resignation and will make a recommendation to the Board
concerning the acceptance or rejection of the resignation. In its deliberations, the
Nomination and Corporate Governance Committee will consider all factors deemed
relevant including, without limitation, the stated reasons, if any, why certain shareholders
cast “withheld” votes for the Director, the qualifications of the Director and whether the
Director’s resignation from the Board would be in the best interests of the Company. The
Board will take formal action on the Nomination and Corporate Governance Committee’s
recommendation no later than 90 days following the date of the applicable shareholders’
meeting and will announce its decision via press release. If the Board declines to accept
the resignation, it should include in the press release the reason or reasons for its
decision.
No Director who is required to tender his or her resignation shall participate in the
Nomination and Corporate Governance Committee’s deliberations or recommendations or
in the Board’s deliberations or determination.
If a resignation is accepted by the Board, and subject to any corporate law restrictions, the
Board may leave any resulting vacancy unfilled until the next annual general meeting, or
may appoint a new Director to fill the vacancy who the Board considers to merit the
confidence of the shareholders, or may call a special meeting of shareholders at which
there will be presented a management nominee or nominees to fill the vacant position or
positions.
Adopted by the Board of Directors of Almaden Minerals Ltd. on May 7, 2013.
EXHIBIT 12.1
SECTION 302 OF THE SARBANES-OXLEY ACT
CEO CERTIFICATION
I, Morgan Poliquin, certify that:
1.
I have reviewed this annual report on Form 20-F of Almaden Minerals Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the Company as of, and for, the periods presented in this report;
4. The Company’s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-
15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the Company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material information relating
to the Company, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Company’s internal control over
financial reporting that occurred during the period covered by the annual report that has materially affected,
or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
5. The Company’s other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee
of the Company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect the Company’s
ability to record, process, summarize and report financial information; and
employees who have a significant role in the Company’s internal control over financial reporting.
(b) Any fraud, whether or not material, that involves management or other
Date: March 30, 2015
/s/Morgan Poliquin
Morgan Poliquin
Chief Executive Officer
EXHIBIT 12.2
SECTION 302 OF THE SARBANES-OXLEY ACT
CFO CERTIFICATION
I, Korm Trieu, certify that:
1.
I have reviewed this annual report on Form 20-F of Almaden Minerals Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the financial condition, results of operations
and cash flows of the Company as of, and for, the periods presented in this report;
4. The Company’s other certifying officer and I are responsible for establishing and
maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-
15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the Company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that material information relating
to the Company, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the Company’s internal control over
financial reporting that occurred during the period covered by the annual report that has materially affected,
or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and
5. The Company’s other certifying officer and I have disclosed, based on our most recent
evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee
of the Company’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect the Company’s
ability to record, process, summarize and report financial information; and
employees who have a significant role in the Company’s internal control over financial reporting.
(b) Any fraud, whether or not material, that involves management or other
Dated: March 30, 2015
/s/Korm Trieu
Korm Trieu
Chief Financial Officer
EXHIBIT 13.1
SECTION 906 OF THE SARBANES-OXLEY ACT
CEO CERTIFICATION
In connection with the annual report of Almaden Minerals Ltd. (the “Company”) on Form 20-F for the fiscal year
ending December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”),
I, Morgan Poliquin, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1.
Exchange Act of 1934, as amended; and
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities
2.
condition and results of operations of the Company.
The information contained in the Report fairly presents, in all material respects, the financial
/s/”Morgan Poliquin”
Name: Morgan Poliquin
Title: Chief Executive Officer
March 30, 2015
EXHIBIT 13.2
SECTION 906 OF THE SARBANES-OXLEY ACT
CFO CERTIFICATION
In connection with the annual report of Almaden Minerals Ltd. (the “Company”) on Form 20-F for the fiscal year
ending December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”),
I, Korm Trieu, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1.
Exchange Act of 1934, as amended; and
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities
2.
condition and results of operations of the Company.
The information contained in the Report fairly presents, in all material respects, the financial
/s/”Korm Trieu”
Name: Korm Trieu
Title: Chief Financial Officer
March 30, 2015
SIGNATURE
The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly
caused and authorized the undersigned to sign this Annual Report on its behalf.
Almaden Minerals Ltd.
Registrant
Dated: March 30, 2015
By /s/Morgan Poliquin
Morgan Poliquin, CEO
93