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, 2016
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)
1333 Johnston Street, #210, Vancouver, British Columbia V6H 3R9
(Address of principal executive offices)
Korm Trieu, ktrieu@almadenminerals.com, 1333 Johnston Street, #210, Vancouver, BC V6H 3R9
(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.
89,805,481
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 whether 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
Website, 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 not currently 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.
This requirement will apply to the Company for its first annual report for a fiscal period ending on or
after December 15, 2017.
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
(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
( ) Yes ( X ) 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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15
16
17
17
17
23
39
46
69
71
72
74
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86
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86
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89
89
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92
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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.
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
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.
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.
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Cleavage: The tendency of a crystal to split, or break, along planes of structural weakness.
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.
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.
Dyke: A tabular, discordant, intrusive igneous body.
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.
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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.
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.
Gouge: The finely ground rock that results from the abrasion along a fault surface.
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 ton (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.
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.
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.
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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.
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.
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
8
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.
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,
unless it is a 100% 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 ton.
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.
Phenocrysts: An unusually large crystal in a relatively finer grained matrix.
Pluton: Term for an igneous intrusion, usually formed from magma.
Porphyry: An igneous rock composed of larger crystals set within a finer ground mass.
9
Pyroclastic rock: A rock of volcanic origin consisting of highly variable mixture of rock fragments, cinders
and ashes and bits of crystals and glass.
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.
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.
Silicate: Most rocks are made up of a small number of silicate minerals ranging from quartz (SiO2) to more
complex
hornblende
(Ca2Na(Mg,Fe)4(Al,Fe,Ti)Si8)22(OH)2).
(KAlSi3O8)
orthoclase
minerals
feldspar
such
or
as
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.
10
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.
Tonne: Metric ton – 1,000 kilograms – equivalent to 1.1023 tons.
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.
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 g/t: Silver grade measured in grams per metric ton
Converts to ounces per ton by dividing by 34.286
Au: Gold
Au g/t: Gold grade measured in grams per metric ton
Converts to ounces per ton by dividing by 34.286
Cu: Copper
g/t: grams per tonne
IP: Induced Polarization geophysical survey
masl: meters above sea level
NSR: net smelter returns royalty
Oz: Troy ounce
QA/QC: Quality Assurance/Quality Control
tpd: Tonnes per day
ton: Short ton (2,000 pounds)
tonne: Metric ton (1000 kilograms - 2204.62 pounds)
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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, November 27, 2010 and May 10, 2014, 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, 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
12
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.
13
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.
14
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.
15
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements contained in this Annual Report on Form 20-F of the Registrant, Almaden Minerals Ltd.
(“Almaden” or the “Company”), and the exhibits attached hereto that are not historical facts are forward-
looking statements within the meaning of U.S. and Canadian securities legislation and the U.S. Private
Securities Litigation Reform Act of 1995 that involve risks and uncertainties. Such forward-looking statements
include, but are not limited to, statements with respect to anticipated results and developments in the
Company’s operations, planned exploration and development of the Company’s properties, plans related to the
Company’s 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 and forward-looking information are based, in part, on assumptions and factors that may
change and are subject to a variety of known and unknown risks, uncertainties and other factors which could
cause actual events or results, performance or achievements of the Company to differ materially from those
expressed or implied by the forward-looking statements and forward-looking information. Some of the
important risks, uncertainties and other factors that could affect forward-looking statements and forward-
looking information include, but are not limited to those 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, uncertainties and other factors materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from those described in the
Company’s forward-looking statements or forward-looking information. There can be no assurance that
forward-looking statements will prove to be accurate, as actual results and future events could differ materially
from those anticipated in such statements and information. The forward-looking statements and forward-
looking information are based on beliefs, expectations and opinions of the Company’s management on the date
of this Annual Report on Form 20-F and speak only as of the date hereof and the Company does not undertake
any obligation to publicly update forward-looking statements or forward-looking information contained herein
to reflect events or circumstances after the date hereof, except as required by law. For the reasons set forth
above, investors should not place undue reliance on forward-looking statements.
Forward-looking statements and other information contained herein concerning the mining industry and the
Company’s expectations concerning the mining industry are based on estimates prepared by the Company using
data from publicly available sources as well as from market research and industry analysis and on assumptions
based on data and knowledge of this industry which the Company believes to be reasonable. However, this data
is inherently imprecise, although generally indicative of relative market positions, market shares and
performance characteristics. While the Company is not aware of any misstatements regarding any mining
industry data presented herein, the industry involves risks and uncertainties and is subject to change based on
various factors.
Certain historical and forward-looking information contained in this Annual Report on Form 20-F has been
provided by, or derived from information provided by, certain persons other than the Company. Although the
Company does not have any knowledge that would indicate that any such information is untrue or incomplete,
the Company assumes no responsibility for the accuracy and completeness of such information or the failure by
such other persons to disclose events which may have occurred or may affect the completeness or accuracy of
such information but which is unknown to the Company.
16
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 2016, Fiscal 2015 and Fiscal 2014 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 2013 and Fiscal 2012 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.
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
12/31/2016
Year
Ended
12/31/2015
Year
Ended
12/31/2014
Year
Ended
12/31/2013
Year
Ended
12/31/2012
Revenues
Other Income (loss)
Net loss and comprehensive loss
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
$ -
444
(4,024)
(0.05)
(0.05)
82,323
9,293
36,962
45,221
47,514
95,290
-
$ -
2,711
(1,145)
(0.02)
(0.02)
73,249
5,808
30,538
35,983
38,215
83,758
-
$ -
(9,496)
(14,701)
(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
-
$299
-
(10,238)
(0.17)
(0.17)
59,350
19,475
16,609
48,071
49,132
75,238
-
Canadian/U.S. Dollar Exchange Rates
In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian dollars (CDN$).
17
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 12/31/2016
Fiscal Year Ended 12/31/2015
Fiscal Year Ended 12/31/2014
Fiscal Year Ended 12/31/2013
Fiscal Year Ended 12/31/2012
Average
$1.32
1.28
1.10
1.03
1.00
High
$1.46
1.40
1.16
1.07
1.04
Low
$1.25
1.17
1.06
0.98
0.97
Close
$1.34
1.38
1.16
1.06
1.00
Table No. 3
Canadian Dollar/U.S. Dollar Exchange Rates for Previous Six Months
High
Low
September
2016
$1.32
1.28
October
2016
$1.34
1.31
November
2016
$1.36
1.33
December
2016
$1.36
1.31
January
2017
$1.34
1.30
February
2017
$1.32
1.30
The exchange rate was $1.34 on March 28, 2017.
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 and development 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 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
18
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 $4,023,504 in Fiscal 2016, $1,144,525 in Fiscal 2015, and $14,982,667 in Fiscal 2014.
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 2016 and Fiscal 2015, the Company earned interest income and other income
from Administrative service fees charged to Almadex Minerals Limited (“Almadex”). During Fiscal 2014, the
Company earned interest and other income from office rental, a royalty payment from Gold Mountain Mining
Corporation (“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 and development programs are successful, additional capital will be required for
the further development of an economic ore body and to place it in commercial production. The only material
sources of future funds presently available to the Company are the sale of its equity capital, the incurring of
debt, 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.
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 could also seek joint venture partners or funding sources such as royalties or
streaming transactions. These approaches would dilute 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,
19
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.
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.
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 28, 2017 there were share purchase options outstanding allowing the holders of these options to
purchase 8,055,000 shares of common stock and warrants allowing the holders of these warrants to purchase
4,874,767 shares of common stock. Directors and officers of the Company hold 6,687,000 of these share
purchase options and 300,000 of these warrants. An additional 1,368,000 share purchase options are held by
employees and consultants of the Company. Given the fact that as of March 28, 2017 there were 89,805,481
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 14.4%.
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 exploration and development 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.
20
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
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 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, Morgan Poliquin, John McCleary, Mark Brown, William Worrall, Douglas
McDonald, and Korm Trieu also serve as directors and/or officers of Almadex Minerals Limited. Gerald
Carlson also serves a director and as the President and CEO of Pacific Ridge Exploration Ltd. Mark Brown
also serves as a director of Galileo Petroleum Ltd, and as the President, CEO and a director of Big Sky
Petroleum Corporation. He also serves as Executive Chairman of Alianza Minerals Ltd., and director and/or
officer of Avrupa Minerals Ltd., Strategem Capital Corp., Paget Minerals Corp, Sutter Gold Mining Ltd.,
Affinor Growers Ltd. and Adamera Minerals Corp. David Strang also serves as a director, CEO and President
of Ero Copper Corporation. 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. 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.
21
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
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 may be required.
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.
22
Item 4. Information on the Company
History and Development of the Company
The head office of the Registrant (sometimes referred to in this Annual Report on Form 20-F as “Almaden” or
the “Company”) is located at 1333 Johnston Street, Suite 210, Vancouver, British Columbia, Canada, V6H 3R9.
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 Business Corporations Act (British Columbia).
Effective July 31, 2015, the Company effected a corporate reorganization pursuant to a statutory plan of
arrangement (“Plan of Arrangement”) involving the Company’s then wholly owned subsidiary, Almadex
Minerals Limited (“Almadex”), as described below.
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.
Organizational Structure
The Company currently has two wholly-owned subsidiaries that were formed to hold properties in their respective
jurisdictions. These subsidiaries are:
Subsidiaries
Puebla Holdings Inc.
Minera Gorrion, S.A. de C.V.
Jurisdiction
Canada
Mexico
Nature of operations
holding company
exploration company
The Company formerly had an additional eight wholly-owned subsidiaries. However, during Fiscal 2015, these
subsidiaries were spun out to Almadex as part of the Plan of Arrangement as described below. The eight
formerly wholly-owned subsidiaries are:
Former Subsidiaries
Almaden America Inc.
Republic Resources Ltd.
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 Alondra, S.A. de C.V.
Jurisdiction
USA
Canada
Canada
Canada
Mexico
Mexico
Mexico
Mexico
Nature of operations
exploration company
service company
holding company
holding company
exploration company
exploration company
exploration company
holding company
Business of the Company
The Company is engaged in the business of the acquisition, exploration and when warranted, development of
mineral properties. The Company currently has material property interests in Mexico. The Company's property
interests are at the exploration and development 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 has not
generated any revenues from operations.
23
Corporate Reorganization
The Company entered into an Arrangement Agreement dated May 11, 2015 involving the spinout, pursuant to a
statutory Plan of Arrangement, of Almaden’s early stage exploration projects, royalty interests and other non-
core assets into a new public Company called Almadex, which trades on the TSX Venture Exchange under the
symbol “AMZ” and the OTCQB marketplace under the symbol “AXDDF”. Almadex would hold the following
key assets:
•
•
•
•
•
•
•
•
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
Company’s recent Ixtaca and Caballo Blanco discoveries;
a 2% NSR 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
Timmins Gold Corp.;
a 2% NSR on the Elk gold deposit in Canada, an advanced exploration project operated by JDL Gold
Corp. (formerly Gold Mountain Mining Corp.);
a portfolio of 21 additional NSRs 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;
1,597 ounces of gold bullion; and
approximately $3 million in cash.
On July 31, 2015, all conditions to the statutory Plan of Arrangement regarding the spinout were satisfied or
waived and the spinout was effective. Almaden’s shareholders approved the Plan of Arrangement and
exchanged their existing common shares of Almaden for one “new” Almaden common share and 0.6 common
share of Almadex.
The Company has also entered into an Administrative Services Agreement with Almadex dated May 15, 2015,
as amended by First Amending Agreement dated December 16, 2015 (the “Agreement”). Under the
Agreement, the Company is the sole and exclusive manager of Almadex, and provides Almadex with general
management services and day-to-day operation of Almadex. These services include:
• Office space;
• Executive personnel and human resources;
• Geological technical support; and
• Accounting and financial services.
Almadex compensates the Company 30% of the Company’s actual monthly cost of rent for any shared
facilities, and 30% of any shared personnel’s fees and/or wages. Almadex pays the Company any reasonable
fees or costs incurred on behalf of Almadex by the Company which were approved by Almadex.
The Agreement has an initial 5-year term, with subsequent automatic 1 year renewals unless terminated
pursuant to the terms permitted under the Agreement. The Agreement includes a Change of Control clause. If
either party is subject to a Change of Control during the term of the Agreement, the Agreement shall
automatically terminate within 48 hours of the Change of Control unless agreed to in writing by both parties.
The target of the Change of Control shall then pay the other party $2 million as compensation for the unplanned
termination of the Company’s engagement and significant disruption to the other party’s business. “Change of
Control” means the date upon which, without the written concurrence of the target of the Change of Control,
any person (as that term is defined in the Securities Act (British Columbia)) makes and does not withdraw a
take-over bid (as that term is defined in the Securities Act (British Columbia)) or acquires, directly or indirectly,
that number of common shares of the target which equals or exceeds twenty percent (20%) of the then issued
common shares of the target.
24
Business Overview
Maintaining properties
The following is a general statement about government requirements for holding mineral properties in the
jurisdictions where the Company currently holds material mineral property interests.
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
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 principal project is in central Mexico. In Mexico, the climate in the project area 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 Handling 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.
25
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.
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.
26
Core Logging
Before cutting and sampling the core, the following tables of data are recorded on paper and then entered into
the Company 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
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:
27
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 Tuligtic Project, which hosts the Company’s Ixtaca discovery, is the only project material to the Company.
The Tuligtic Project is located in Puebla State, Mexico.
PRINCIPAL PROPERTY INTERESTS
The Tuligtic Property/Project – 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.
28
29
Claims and Title
The Tuligtic property was staked by the Company in 2001, following the identification of surficial clay deposits
that were interpreted to represent high-level epithermal alteration. The property originally consisted of
approximately 14,000 hectares, but during 2015 Almaden filed an application to reduce the aggregate claim size
at Tuligtic to those areas still considered prospective. The property is held 100% by Minera Gorrion S.A. de
C.V., a subsidiary of Almaden Minerals Ltd. through the holding company, Puebla Holdings Inc. Claim details
are summarized below.
Claim Name
Cerro Grande R1
Cerro Grande R3
Cerro Grande R4
Cerro Grande R5
Cerro Grande R6
Cerro Grande 2 R2
Cerro Grande 2 R3
Total
Claim Number Area (hectares)
2,773.00
824.06
540.00
784.97
937.79
652.00
708.00
7,219.82
Pending
Pending
Pending
Pending
Pending
Pending
Pending
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
30
dominantly in open space veins (colloform banding, cavity filling).
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 initial claims of the Tuligtic Project
in 2001 following the identification of surficial clay deposits that were interpreted to represent high-level
epithermal alteration. 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
31
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
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
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 the 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.
32
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
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 with the Base Case 0.5 g/t AuEq Cut-Off
highlighted. Also shown are the 0.3, 0.7, 1.0 and 2.0 g/t AuEq cut-off results. AuEq calculation based on three year trailing average
prices of $1540/oz gold and $30/oz silver.
Amended Preliminary Economic Assessment
On January 22, 2016, Almaden filed a NI 43-101 Technical Report titled "Preliminary Economic Assessment of
the Ixtaca Project”, which provides further detail to its December 9, 2015 press release summarizing the results
of integrating the Rock Creek Mill and a smaller, higher grade, payback focused pit on potential mine
economics. Almaden subsequently filed an amended technical report on SEDAR on April 13, 2016 (the
33
“Amended PEA”), however the amendments were not material changes and the Report’s data, inputs,
interpretation, conclusions and results all remain unchanged.
The Amended PEA follows the historical PEAs released in 2014 and 2015 (“Historical PEAs”) which evaluated
larger throughput development alternatives. The primary reasons for providing an update to the Historical
PEAs were to show the impact of significantly reduced initial capital cost on project economics and, given the
significant decrease in precious metals prices, to demonstrate the viability of a mine plan which focuses on the
near surface high grade limestone hosted portions of the Ixtaca Zone deposit.
This mine plan is a smaller higher grade scenario than those described in Almaden’s Historical PEA studies. In
addition, the Amended PEA incorporates the optioned Rock Creek mill as well as results from various
engineering studies related to the project which had been conducted since the Historical PEAs were completed.
The Amended PEA incorporates:
• The same resource model as the Historical PEAs;
• The Rock Creek Mill, which was optioned by the Company in October, 2015, with average throughput
of 7,500 tonnes per day;
• A smaller, near surface and payback focussed pit;
• A mine production schedule which targets higher grades earlier;
• Optimised waste placement and tailings management facilities;
• A 2% NSR held by Almadex Minerals Limited.
This Amended 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 Amended PEA forecasts
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.
AMENDED PEA HIGHLIGHTS:
The inputs and parameters for the Amended PEA include base case metal prices (US $1150/oz gold and US
$16/oz silver). Highlights of the Amended PEA are summarised below (all values shown are in US Dollars).
Total mill feed of 35.5M tonnes and life of mine strip ratio of 5:1;
•
Pre-tax Net Present Value (“NPV”) of $266M at a 5% discount rate and internal rate of return of 39%;
• After-tax (including new Mexican Mining Duties) NPV(5%) of $166M and internal rate of return of 30%;
•
• Mine life of 13 years with an average processing rate of 7,500 tonnes per day;
• Average annual production of 55,660 ounces of gold and 3,754,000 ounces of silver;
•
Estimated pre-production capital of US$100M. Sustaining capital of US$24M;
• After-Tax Payback of initial capital of 2.6 years.
Production and Processing
The Ixtaca gold-silver project in the Amended PEA is planned as an open pit mining operation using contractor
mining. Estimated mining inventory is comprised of 179 million tonnes of rock and 36 million tonnes of mill
feed with an average mill feed grade of 0.76 grams per tonne gold and 47 grams per tonne silver. A total of 724
thousand ounces of gold and 48.8 million ounces of silver would be produced over the 13 year mine life. The
Amended PEA includes the Rock Creek process plant to produce gold and silver doré on site. The process plant
includes conventional crushing, grinding, gravity, flotation, and concentrate leaching. Process reagents will be
removed from process plant tailings prior to placement in a tailings management facility (“TMF”). The
following table summarizes the production and processing parameters:
34
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)
35.5 Million tonnes**
7,500 tonnes per day
5 : 1***
Gold
Silver
0.76 g/t
47.5 g/t
84%
90%
55,660
3,754,000
723,580
48,806,000
* The mill feed tonnes in the mine plan include Inferred Resources. The reader is
cautioned that Inferred Resources are considered too speculative geologically to have
economic considerations applied to them that would enable them to be categorized as
Mineral Reserves. There is no certainty that Inferred Resources will ever be upgraded to
Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability.
** The cut-off grade used to calculate the mill feed is NSR>=$20/t. NSR is calculated using
the following formula: NSR = [Au(g/t) * Au recovery (%) * 36.55] + [Ag(g/t) * Ag recovery
(%) * 0.46]
*** The strip ratio includes 13 million tonnes of stockpiled material not processed in this
Amended PEA that averages 0.31 g/t Au and 45 g/t Ag as waste. Should this material be
processed the ultimate strip ratio would be 3:1.
Capital and Operating Costs
The total estimated initial capital cost for the Ixtaca gold-silver project is US$100.2 million and sustaining
capital is $24 million over the mine life (“LOM”). The estimated LOM operating costs are US$26.99 per tonne
mill feed.
The following tables summarize the cost components:
Initial Capital Costs (US$ Millions)
Site Infrastructure
TMF and Water Management
Mining
Process Plant, Doré Plant and Conveyor
Indirects, EPCM, Contingency and Owner’s Costs
Total
$15.3
$9.6
$25.1
$28.0
$22.2
$100.2
Projected Operating Costs (US$)
Mining Costs
Mining Costs
Processing
G&A
Life of Mine TMF management
Total
$2.19 $/tonne mined
$11.63 $/tonne milled
$13.73 $/tonne milled
$1.54 $/tonne milled
$0.09 $/tonne milled
$26.99 $/tonne milled
Economic Results and Sensitivities
A summary of financial outcomes comparing base case metal prices to two alternative metal price situations is
35
presented below. The Amended PEA base case prices are derived from a combination of spot prices and
current common peer usage. The Alternate Case prices represent a discount to the lowest sustained metal prices
over the previous three years. The 3 year trailing average prices represent the upside potential should metal
prices regain their previous strength.
Summary of Ixtaca Gold-Silver Economic Results and Sensitivities (US$ Million)
Alternate Case
Base Case
Pre-Tax After-Tax
Pre-Tax After-Tax
3 Year trailing
Average
Pre-Tax After-Tax
Gold Price ($/oz)
Silver Price ($/oz)
Net Cash Flow
NPV (5% discount rate)
Internal Rate of Return (%)
Payback (years)
$1000
$14
$235
$132
24%
3.3
$149
$78
18%
3.9
$1150
$16
$1300
$20
$435
$266
39%
2.3
$280
$166
30%
2.6
$731
$464
57%
1.6
$470
$293
44%
2.0
The economic results are based on the mill feed tonnages in the selected ultimate pit. The mill feed tonnages
include Inferred Resources. The reader is cautioned that Inferred Resources 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 Inferred Resources will ever be upgraded to Reserves. Mineral
Resources that are not Mineral Reserves do not have demonstrated economic viability.
Rock Management, Environment and Community
Almaden recognises the paramount importance of protecting the environment to facilitate the development of a
sustainable project. Knight Piésold Ltd. (“KP”) has 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;
• Incorporate environmental enhancement opportunities into the mine and final reclamation plans;
• Minimize the project footprint.
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 water monitoring strategy including the commencement of a
hydrometric and climate monitoring program, and the drilling of water measurement wells. The latest
assessment of regional weather patterns suggest that management of rainfall and runoff from within the project
area will provide sufficient water for 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 a large portion of the total waste rock, has buffering capacity.
Geochemical characterization of site materials has confirmed that waste rock is not expected to be net acid
producing.
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 have been completed.
36
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 local to the Ixtaca deposit. Local employees have made up virtually all the drilling staff, and
have been trained on the job. The Company has implemented a comprehensive science 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
to visit
www.almadenminerals.com to find out more about our community development, education and outreach
programs.
interested parties
invites all
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, the 2013 Tuligtic Project NI 43-101 Technical Report filed on SEDAR and Edgar,
Almaden’s news releases of June 15th and September 14th, 2015, and the Amended PEA). These test results
show that standard gravity and flotation techniques could result in non-optimised gold and silver recoveries that
are roughly equivalent for the limestone domain. This preliminary test work indicates that leaching the
combined gravity/flotation concentrate can be used to produce a silver-gold 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 2014 and 2015, additional metallurgical work on
new whole core composites, carried out at McClelland Laboratories Inc. in Reno, Nevada under the supervision
of MMTS, focused on optimizing gravity, rougher flotation and leach results over a broader range of head
grades in the limestone unit. This test work continued to indicate overall process recoveries to average 90% for
gold and silver for limestone hosted mineralisation. Given the preliminary work to date on the minor volcanic
and blackshale units, the Amended PEA report assumes recoveries of 90% for silver and 50% for gold.
Qualified Persons, Quality Control and Assurance
The following companies have undertaken work in preparation of the PEA:
• 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 Ltd. (Geotechnical, Environmental, Rock and Tailings Management).
The independent qualified persons responsible for preparing the Ixtaca PEAs 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 reanalysed by fire assay but with a gravimetric finish. Silver is first
analysed by Inductively Coupled Plasma - Atomic Emission Spectroscopy (“ICP-AES”). Samples that return
values greater than 100 g/t silver by ICP-AES are then re analysed by HFHNO3-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
37
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.
Pre-Feasibility Study (“PFS”) Programs
During 2016, Almaden completed the geotechnical, geomechanical, and hydrologic field programs necessary
for completion of a PFS, and also optimized site layout through updated waste placement and facilities
locations. In addition, in October 2016 Almaden announced results from it PFS-level metallurgical program.
The results reported were on the limestone domain, which represents approximately 90% of the total metal
produced under the Amended PEA.
Key parameters and results of the 2016 limestone test work included the following:
• A limestone sample was collected using 131 meters (659 kilograms) of continuous whole drill core from
inside the planned open pit mine with an average sample grade of 0.76 g/t gold and 36 g/t silver. The
sample was collected from the planned start-up pit area and represents limestone mill feed grades
anticipated in the first 5 years of mining;
• Optimised gravity concentration conditions have resulted in gravity concentration gold recoveries of
approximately 50% and silver recoveries of approximately 30% at a grind size of 75 microns. This is a
significant improvement from previous gravity concentration tests. The gravity tests used a lab-scale
version of the Falcon gravity concentrators already included in the optioned Rock Creek processing
plant;
• Flotation mass pulls have been reduced (higher grade concentration) to less than 10% while maintaining
combined gravity/flotation gold and silver recoveries in excess of 90%;
• Leach tests on gravity and flotation concentrates are consistently achieving reduced leach reagent
consumptions with NaCN consumptions reduced to less than 1.0 kg per tonne of ore and lime
consumption reduced to less than 0.2 kg per tonne ore.
The results of the PFS metallurgical program continue to confirm the suitability of the Rock Creek
crushing/grinding/gravity/leach processing facilities as well as the assumptions and flowsheet design of the
2016 Amended PEA.
Other PFS-related work underway currently includes environmental baseline monitoring, climate monitoring,
water quality sampling and surface water hydrology monitoring.
2016 Exploration
In June, 2016, Almaden announced that it would initiate an exploration drilling program to test additional
targets at the Tuligtic property. From June 2016 to March 28, 2017, the Company completed 33 exploration
holes totaling approximately 10,500 metres. Much of this drilling was focused on new zones of mineralization
located within the Amended PEA pit, as well as mineralization located intimate to its boundaries. Summary drill
intercepts included the following:
38
Hole TU-16-479 SECTION 10+525 EAST Az. 330, Dip -70
8.50 meters @ 2.56 g/t Au and 357.0 g/t Ag
30.35 meters @ 1.92 g/t Au and 62.1 g/t Ag
13.60 meters @ 3.62 g/t Au and 83.2 g/t Ag
Ixtaca North Zone
Ixtaca North Zone?
Ixtaca North Zone?
Including 4.00 meters @ 10.24 g/t Au and 215.8 g/t Ag Ixtaca North Zone?
Hole TU-16-487 SECTION 10+600 EAST Az. 330, Dip -68
41.45 meters @ 1.52 g/t Au and 117.3 g/t Ag
Including 4.60 meters @ 6.68 g/t Au and 565.4 g/t Ag
And 9.50 meters @ 1.86 g/t Au and 137.8 g/t Ag
11.30 meters @ 1.56 g/t Au and 132.4 g/t Ag
Including 5.15 meters @ 3.16 g/t Au and 273.7 g/t Ag
32.55 meters @ 0.72 g/t Au and 17.4 g/t Ag
Ixtaca North Zone
Ixtaca North Zone
Ixtaca North Zone
Ixtaca North Zone
Ixtaca North Zone
Ixtaca North Zone
Hole TU-16-486 SECTION 10+725 EAST Az. 330, Dip -70
105.00 meters @ 1.20 g/t Au and 87.1 g/t Ag
Including 5.00 meters @ 1.89 g/t Au and 382.2 g/t Ag
And 10.50 meters @ 4.70 g/t Au and 132.3 g/t Ag
Ixtaca North Zone
Ixtaca North Zone
Ixtaca North Zone
This drilling demonstrates the continuing expansion of the newly discovered high grade veins in the Ixtaca
North Zone, and demonstrates additional resource potential both laterally and at depth. The Company intends to
continue its exploration drilling in 2017.
The Ixtaca deposit is one of several exploration targets on the wholly owned Tuligtic property. The 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.
Upcoming / Outlook
Almaden has sufficient cash on hand to conduct its development plans for the next fiscal year at Ixtaca.
Advanced engineering studies will continue to be the emphasis of this year’s work program, as well as
preparations necessary to advance permitting activities for the Ixtaca project. The Company will also continue
the exploration drill program to test for additional high grade vein structures immediately adjacent to known
mineralisation within and around the Amended PEA pit.
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, 2016, 2015, and 2014 appearing under Item 18 – Financial Statements and listed under Item 19 –
Exhibits.
39
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 exploring its principal mineral property in Mexico with the aim of
developing it to a stage where it can be exploited at a profit or to arrange joint ventures or other business
transactions 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.
The Company receives other income from an Administrative Services Agreement with Almadex Minerals
Limited. Under the Agreement, the Company is the sole and exclusive manager of Almadex. Almadex
compensates the Company 30% of the Company’s actual monthly cost of rent for any shared facilities, and 30%
of any shared personnel’s fees and/or wages. Almadex also pays the Company any reasonable fees or costs
incurred on behalf of Almadex by the Company which were approved by Almadex. The Administrative
Services Agreement has an initial 5-year term, with subsequent automatic 1 year renewals unless terminated
pursuant to the terms permitted under the Agreement. The Agreement includes a Change of Control clause. If
either party is subject to a Change of Control during the term of the Agreement, the Agreement shall
automatically terminate within 48 hours of the Change of Control unless agreed to in writing by both parties.
The target of the Change of Control shall then pay the other party $2 million as compensation for the unplanned
termination of the Company’s engagement and significant disruption to the other party’s business. “Change of
Control” means the date upon which, without the written concurrence of the target of the Change of Control,
any person (as that term is defined in the Securities Act (British Columbia)) makes and does not withdraw a
take-over bid (as that term is defined in the Securities Act (British Columbia)) or acquires, directly or indirectly,
that number of common shares of the target which equals or exceeds twenty percent (20%) of the then issued
common shares of the target.
Fiscal 2016 compared to Fiscal 2015
For the year ended December 31, 2016, the Company recorded a net loss and comprehensive loss of $4,023,504
or $0.05 per share compared to a net loss of $1,477,977 or $0.02 per share for the year ended December 31,
2015. The increase in net loss of $2,545,527 was primarily a result of the gain recognized in the transfer of
spin-out assets to Almadex of $3,115,422 offset by the other comprehensive loss of $333,452 in 2015.
The Company has no revenues from mining operations as it only conducted exploration and development work.
Other income (loss) of $443,504 (2015 – $2,710,588) during the year ended December 31, 2016 consisted
mainly of interest income and administrative service fees whereas in 2015, assets spun-out to Almadex
generated other sources of income. Interest income during the year ended December 31, 2016 increased by
$246,868 as a result of higher cash balances available for investment. The administrative service fees in 2016
also increased by $238,374 compared to 2015 as a result of a full year charge whereas in 2015, the Company
only earned 5 months of services fees from August 1, 2015 to December 31, 2015.
Operating expenses were $4,467,064 during the year ended December 31, 2016 (2015 - $4,259,713). The
increase operating expenses of $207,351 is mainly the result of higher salaries of $574,494 offset by decreases
in professional fees, stock exchange fees, and depreciation as a result of the corporate reorganization completed
in 2015. The increase in salaries was due to the Chairman and the CEO’s salaries recorded in salaries and
benefits to reflect their functions related to operating a public company rather than general exploration services
performed in 2015. The spin-out transactions in 2015 produced higher operating expenses in professional fees
and stock exchange fees.
Fiscal 2015 compared to Fiscal 2014
For the year ended December 31, 2015 (“Fiscal 2015”), the Company recorded a net loss and comprehensive
loss of $1,477,977 or $0.02 per share compared to a net loss and comprehensive loss of $14,700,739 or $0.23
per share for the year ended December 31, 2014 (“Fiscal 2014”). The decrease in net loss was primarily a result
of a gain on transfer of spin-out assets of $3,115,422 and increased expenses in Fiscal 2014 from impairment
charged against its investment in associate of $6,637,288, impairment of exploration and evaluation assets of
$2,570,664, and deferred income tax expense of $1,839,482 compared to Fiscal 2015.
40
The Company has no revenue from mining operations as it only conducts exploration and development work.
Other income (loss) of $2,710,588 during Fiscal 2015 consisted mainly of interest income, administrative
service fees collected from Almadex and gain on transfer of spin-out assets. During Fiscal 2014, the Company
recorded other loss of $9,496,172 largely due from impairment of exploration and evaluation assets and
impairment of investment in associate. Income sources in Fiscal 2014 came from interest income, office rental
fees and a contract drilling program provided to a third party.
During Fiscal 2015, there was income on exploration and evaluation assets of $32,920 as a result of a Canada
Revenue Agency refund through a British Columbia Mining Exploration Tax Credit (“BCMETC”) from the
Merit project in B.C., Canada that was spun out to Almadex. During Fiscal 2014, there was an income 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 CRA review of Almaden’s 2010 and 2011 BCMETC claim from
various grassroots projects in B.C., Canada.
Operating expenses were $4,259,713 for Fiscal 2015 (Fiscal 2014 - $3,647,013). The primary increase in
operating expenses resulted from higher professional fees paid for the reorganization, capital market advisory
services and different levels of investor relations activities. Directors fees totalling $48,000 were paid during
Fiscal 2015 compared to $48,000 during Fiscal 2014.
General exploration expenses of $432,764 were incurred in Fiscal 2015 compared to $592,105 for Fiscal 2014.
These expenditures vary according to management decisions on work to be done on any property. Given the
market conditions at that time, less exploration work was completed to conserve capital and allow the Company
to focus on the Tuligtic project.
Significant non-cash items in Fiscal 2015 compared to Fiscal 2014 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 2015, an
impairment of investment in associate of $470,700 was recognized (Fiscal 2014 - $6,637,288). In 2015 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 $97,044 (Fiscal 2014 - $2,570,664) 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 recovery
of $404,600 (Fiscal 2014 deferred income tax expense - $1,839,482) relates to the Mexican Special Mining
Duty (“SMD”) associated with the Ixtaca project. Impairment of marketable securities of $162,000 in Fiscal
2015 (Fiscal 2014 - $405,903) relate to significant or prolonged losses of equity securities held by the Company
based on the market value of shares at December 31, 2015. Share-based payments of $950,740 in Fiscal 2015
(Fiscal 2014 - $565,800) are recognized on the grant of stock options that vested in any period. During Fiscal
2015 loss on investment in associate of $95,892 (Fiscal 2014 - $135,209) 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.
Liquidity and Capital Resources
As at December 31, 2016, the Company’s working capital position was $9,293,081. 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 2017 that includes further development of the Ixtaca property.
Management has a proven track record to be able to raise money even in a very challenging financial
marketplace as demonstrated by raising $3.4 million in a non-brokered private placement on February 7, 2017.
Fiscal 2016
At the end of Fiscal 2016, the Company had working capital of $9,293,081 including cash and cash equivalents
of $9,770,006 compared to working capital of $5,808,473 including cash and cash equivalents of $6,222,778 at
the end of Fiscal 2015. The increase in working capital of $3,484,608 is mainly due to a non-brokered private
placement in May 2016 and the exercise of warrants in July 2016.
Management believes that the Company’s cash resources are sufficient to meet its working capital and mineral
exploration requirements for its next fiscal year. On May 25, 2016, the Company closed a non-brokered private
41
placement for gross proceeds of $4,359,260. Furthermore, the Company received $7,130,747 through the
exercise of 4,592,667 warrants during 2016.
Cash used in operations during Fiscal 2016 was $2,321,136 (Fiscal 2015 - $3,015,966) after adjusting for non-
cash activities.
Cash used in investing activities during Fiscal 2016 was $5,524,623 (Fiscal 2015 - $4,362,807). Significant
items include expenditures on mineral property interests of $5,177,485 (Fiscal 2015 - $3,668,974) primarily on
land acquisition of $1,578,436 (Fiscal 2015 - $831,455) and exploration costs on the Tuligtic property of
$3,868,910 (Fiscal 2015 - $3,048,151). The Company also invested $324,600 (Fiscal 2015 - $692,000)
pursuant to the terms of an Asset Purchase Option Agreement dated October 16, 2015 with Alaska Gold
Company, LLC and Bering Straits Native Corporation (the “Asset Purchase Option Agreement”) in respect of
an option on certain mining equipment referred to as the “Rock Creek mill”.
On May 25, 2016, the Company closed a non-brokered private placement by the issuance of 3,229,082 units at a
price of $1.35 per unit for gross proceeds to the Company of $4,359,260. 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 November 25, 2018.
Share issue costs included a finder’s fee of $147,925 in cash, and finders’ warrants to purchase up to 45,944
common shares at a price of $1.44 per common share until November 25, 2018. The fair value of the finders’
warrants was $17,918. In connection with the private placement, the Company also incurred $119,689 in share
issue costs. These amounts were recorded as reduction to share capital. The proceeds of the private placement
were allocated entirely to share capital.
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 2015
At the end of Fiscal 2015, the Company had a working capital of $5,808,473 including cash and cash
equivalents of $6,222,778 compared to working capital of $9,171,791 including cash and cash equivalents of
$8,172,598 at the end of Fiscal 2014. The decline in working capital of $3,363,318 is mainly due to current
assets spun out to Almadex including Marketable Securities and Gold Inventory. During Fiscal 2015, the
Company closed two non-brokered private placements for gross proceeds of $8,905,000 to continue the Ixtaca
exploration and development program.
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 2015.
Cash used in operations during Fiscal 2015 was $3,015,966 (Fiscal 2014 - $2,910,414) after adjusting for non-
cash activities.
Cash used in investing activities during Fiscal 2015 was $4,362,807 (Fiscal 2014 - $6,792,511). Significant
items include expenditures on mineral property interests of $3,668,974 (Fiscal 2014 - $6,946,559) primarily on
land acquisition of $831,455 (Fiscal 2014 - $1,137,914) and exploration costs on the Tuligtic property of
$3,048,151 (Fiscal 2014 - $5,155,990). The Company also invested $692,000 (Fiscal 2014 - $Nil) pursuant to
the terms of an Asset Purchase Option Agreement dated October 16, 2015 with Alaska Gold Company, LLC
and Bering Straits Native Corporation (the “Asset Purchase Option Agreement”) in respect of an option on
certain mining equipment referred to as the “Rock Creek mill”.
On February 11, 2015, the Company closed on 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 less share issue costs of
$372,763. 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 February 11, 2016. A finder’s fee of $212,626 in cash and finder’s 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. The fair value of the finder’s warrants of $13,341 was estimated using the Black-Scholes
42
option pricing model.
On November 17, 2015, the Company closed on a non-brokered private placement by the issuance of 4,506,666
units at a price of $0.75 per unit for gross proceeds to the Company of $3,380,000 less share issue costs of
$122,609. 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 $1.00 per
common share until November 17, 2017. A finder’s fee of $73,550 in cash and finder’s warrants to purchase up
to 35,200 common shares at a price of $0.77 per common share until November 17, 2017 was paid on a portion
of the placement. The fair value of the finder’s warrants of $5,984 was estimated using the Black-Scholes
option pricing model.
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 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.
Cash used in operations during Fiscal 2014 was $2,910,414 (Fiscal 2013 - $1,522,956) after adjusting for non-
cash activities.
Cash used in investing activities during Fiscal 2014 was $6,792,511 (Fiscal 2013 - $8,304,974). Significant
items include expenditures on mineral property interests of $6,946,559 (Fiscal 2013 - $8,231,553) primarily on
land acquisition of $1,137,914 (Fiscal 2013 - $1,001,706) and exploration 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. The Company also received $121,500 (Fiscal 2013 - $223,550) on the exercise of 150,000
(Fiscal 2013 – 220,000) stock options during 2014.
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 2016, prices of precious metals were volatile, with the gold price trading at a low of about
US$1,060/ounce in January 2016 and a high of over US$1,360/ounce in July, before finishing the year at
US$1,152/ounce. The price of silver followed a similar volatile trajectory, trading at a low of about US$13.80
in January 2016 and a high of over US$20.60 in August, before finishing the year at about US$15.90/ounce.
While the volatility of the gold and silver prices contributed to an uncertain environment for mine planning and
design, it was a welcome departure from the prolonged period of declining prices witnessed in the prior 3 years
and created more favourable financing opportunities for mining and mineral exploration companies.
However, it remains unclear how long the significant volatility in metals prices will continue. In prior years,
43
significant selling on Comex and redemptions from gold and silver funds contributed to the steep reduction in
metal prices. These lower prices in turn resulted in large producers selling non-core or high cost assets,
suspending or shelving new mine construction, and initiating severe cost control measures, including sharply
reducing exploration expenditures. The lower price environment also led to large write-downs of assets and
recent acquisitions by many companies, and 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 generally speaking these depleted reserves are not being replaced
because of reduced exploration efforts over the past several years.
One of the easiest areas to cut costs is by cutting or eliminating exploration and acquisition activity. With the
recovery in the precious metals markets and related improved financing climate, in 2016 we saw many large
miners return to exploration after a prolonged reduction in activity. However, in the wake of the difficult
operating environment up until mid-2016, most of these companies are still quite risk-averse and as a result,
what exploration is taking place is focused near their own mine operations in an attempt to replace the depleted
reserves, and very little early-stage, regional exploration is being supported by them. For the same reason,
M&A activity has been muted as a number of miners are still working through acquisitions which were
predicated on higher metal prices, while others are fully occupied optimizing their existing mine plans in a
highly volatile environment.
Much of the volatility in precious metals prices is caused by uncertainties regarding economic growth of the
major economies and the policy response of central bankers to the economic environment. Geopolitical
uncertainty has also increased recently with new leadership in the United States questioning the utility of long-
established international political and economic unions. Currency markets are responding with increased
volatility, as witnessed by the 17% decrease in the Mexican peso versus the United States dollar in 2016. Given
that varying proportions of the costs of production in mining operations are valued in the local currencies,
whereas the metals themselves are generally sold in U.S. dollars, currency exchange rates can have a significant
impact on operating conditions.
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
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 find direction within the current climate, and a further deterioration of these
conditions remains a serious threat. If such deterioration occurs, and depending on the policy response of
domestic governments, lower industrial activity may be the result and this could lower the demand for base
metals, although management believes that precious metals will continue to be in demand as a store of value.
The Company plans to continue its work programs on the Ixtaca project with the aim of it developing into one
of the more attractive advanced projects in the world in the expectation that the markets for gold and silver
projects will improve.
Off-balance Sheet Arrangements
The Company has no off-balance sheet arrangements other than the lease related to its office premises as
disclosed below.
44
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 August 30, 2017. On January 2017, the Company
signed a new office lease effective April 1, 2017 through to March 31, 2022. 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 each. Effective December 31, 2015, the Chairman’s contract was
mutually terminated and effective January 1, 2016, the Company and the Chairman entered into a new contract
for an annual remuneration of $240,000 for two years, renewable for two additional successive terms of 24
months each. The Chairman’s contract and the President’s contract were amended April 1, 2016. Effective
May 24, 2011, as amended April 1, 2016, the Company and the Chief Financial Officer (“CFO”) entered into an
Employment Agreement for an indefinite term and, effective September 22, 2014, as amended April 1, 2016,
the Company and the Vice President, Corporate Development (“VP”) entered into an Employment Agreement
for an indefinite term. Effective January 1, 2016, the Chairman’s and President’s base salaries (“Base Salary”)
were $240,000 and $265,000, respectively, and the CFO’s and VP’s Base Salaries were $185,000 and $175,000,
respectively. Table No. 4 lists the total contractual obligations as at December 31, 2016 for each period. Under
an Administrative Services Agreement between the Company and Almadex Minerals Limited, the Company
provides management services to Almadex. Almadex compensates the Company 30% of any shared personnel
remuneration and office overhead expenses. Therefore, Almaden currently recovers 30% of the contractual
compensation amounts for the Chairman, Chief Executive Officer, Chief Financial Officer and Vice President,
Corporate Development.
Table No. 4
Contractual Obligations of the Company
Payments due by period
Operating lease
Executive contracts(1)
Total
$ 830,124
$1,810,000
Less than
1 year
$182,890
$545,000
1 – 3
years
$299,294
$785,000
3 – 5
years
$309,188
$480,000
More than
5 years
$38,752
-
(1) Pursuant to the terms of the Administrative Services Agreement between the Company and Almadex Minerals Limited, the Company
currently recovers 30% of the contractual compensation amounts for the Chairman and Chief Executive Officer, as the executive contracts
for the CFO and VP are not considered long term contractual obligations of the Company.
Contractual obligations of the Company in the above table exclude future option payments required to maintain
the Company’s interest in certain mineral properties and option payments under the Asset Purchase Option
Agreement in respect to the Rock Creek mill.
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 analysis of the functional currency for each entity of the Company determined by conducting an
analysis of the consideration factors identified in IAS 21, “The Effect of Changes in Foreign Exchange
Rates”. 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
45
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.
Estimates
o
o
o
o
o
o
o
The recoverability of amounts receivable which are included in the consolidated statements of financial
position;
The carrying value of investment in associate, and the estimated annual gains or losses from income
and dilution, and the recoverability of the carrying value which is 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 profit or loss;
The value of the exploration and evaluation assets which is recorded in the consolidated statements of
financial position;
The Company uses the Black-Scholes option pricing model to determine the fair value of options and
warrants in order to calculate share-based payments expense and the fair value of finders’ warrants and
stock options. Certain inputs into the model are estimates that involve considerable judgment and are
or could be affected by significant factors that are out of the Company’s control;
The provision for income taxes which is included in the profit or loss and the composition of deferred
income tax assets and liabilities included in the consolidated statement of financial position.
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;
Item 6. Directors, Senior Management and Employees
Table No. 5 lists the directors and senior management of the Company as of March 28, 2017. 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.
Table No. 5
Directors of the Company
Date First Elected or Appointed
Age
Name
James Duane Poliquin
John D. McCleary(2)(3)
Morgan Poliquin
Gerald G. Carlson(1)(2)(3)
Mark T. Brown (1)(3)
William J. Worrall(1)(2)(3)
David Strang(5)
(1) Member of Audit Committee
(2) Member of Nominating and Corporate Governance Committee
(3) Member of Compensation Committee
(4) Date of issue of the Certificate of Amalgamation
(5) David Strang was appointed a Director of the Company on August 8, 2016 following the resignation of Joseph Montgomery
February 1, 2002(4)
February 1, 2002(4)
February 1, 2002(4)
February 1, 2002(4)
May 30, 2011
May 7, 2013
August 8, 2016
76
76
45
71
48
84
48
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 as of March 28, 2017. 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.
46
Table No. 6
Executive Officers of the Company
Name
James Duane Poliquin
Morgan Poliquin
Korm Trieu
Douglas McDonald
(4) Date of issue of the Certificate of Amalgamation
Position
Chairman of the Board
President and Chief Executive Officer
Chief Financial Officer
Vice-President, Corporate Development
Age
76
45
51
48
Date First Appointed
February 1, 2002 (4)
March 1, 2007
May 30, 2011
September 22, 2014
Duane Poliquin was appointed an Officer of Almaden Resources Corporation in September 1980 and of
Fairfield Minerals Ltd. in June 1996.
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 and Almadex Minerals Limited of which he also serves as Chairman of the Board and a director.
John D. (Jack) McCleary is a registered professional geologist with over 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 is also a director of Almadex Minerals
Limited and spends less than 5% of his time on the affairs of the Company.
Morgan Poliquin is a registered professional geological engineer with over 20 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 directing the exploration programs and the
affairs of the Company in Almaden and Almadex Minerals Limited of which he also serves as President, CEO
and a director.
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 a Ph.D. from Dartmouth College. He is President, CEO and a director of Pacific
Ridge Exploration Ltd., a gold and zinc exploration company listed on the TSX-V. 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.
47
Mark T. Brown is a Chartered Professional Accountant (CPA, CA) 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 (now TSX) 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 executive chairman of Alianza Minerals Ltd. and
Avrupa Minerals Ltd., both mineral exploration companies listed on the TSX-V. Mr. Brown also serves as a
director and/or Chief Financial Officer of the following companies:
a. Director - Big Sky Petroleum Ltd., an oil and gas company listed on the TSX-V.
b. Director - Galileo Petroleum Ltd., an oil and gas exploration company listed on the TSX-V.
c. Director - Strategem Capital Corp., an investment issuer listed on the TSX-V.
d. Director - Sutter Gold Mining Ltd., a gold exploration company listed on the TSX-V.
e. Director - Paget Minerals Ltd., an exploration company listed on the TSX-V.
f. Director - Almadex Minerals Limited, an exploration company listed on the TSX-V.
g. Chief Financial Officer - Affinor Growers Ltd., an agricultural technology company listed on the
CNSX.
h. Chief Financial Officer - Adamera Minerals Corp., an 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. He is also a director of Almadex Minerals Limited.
David Strang holds a Bachelor of Science in Applied Earth Sciences from Stanford University. David serves
as Director, CEO and President of Ero Copper Corporation. Previously, David served as Director, CEO and
President of Lumina Copper Corp. and Lumina Royalty Corp. He also served as CEO and President of Global
Copper Corp. and Lumina Resources Corp. Mr. Strang spends less than 5% of his time on the affairs of the
Company.
Korm Trieu is a Chartered Professional Accountant (CPA, CA) 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 approximately all of his business time on
the affairs of the Company and Almadex Minerals Limited of which he is also the Chief Financial Officer.
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 and Almadex Minerals Limited of which he is also
a director and the Vice President, Corporate Development.
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.
48
During Fiscal 2016, the Chairman was remunerated at hi Based Salary of $240,000 per annum and the Chief
Executive Officer was remunerated at his Base Salary of $265,000 per annum. The Chief Executive Officer’s
employment contract includes terms for two additional successive terms of 24 months each (the “Extended
Term”) ending December 31, 2018. Effective December 31, 2015, the Hawk Mountain Resources Ltd. contract
was terminated by mutual consent with the Company and the Chairman entered into a new employment contract
directly with the Company. The new employment contract includes a Base Salary of $240,000 per annum and
has an effective date of January 1, 2016. It has an initial two-year term and is renewable for two additional
successive terms of 24 months each (the “Extended Term”) ending December 31, 2021.
During Fiscal 2016, the Chief Financial Officer (“CFO”) was remunerated at his base salary of $185,000, and
the Vice President, Corporate Development (“VP”) was remunerated at his base salary of $175,000 per annum.
Each of the CFO’s and VP’s employment agreements have indefinite terms.
Under an Administrative Services Agreement between the Company and Almadex Minerals Limited, the
Company provides management services to Almadex. Almadex compensates the Company 30% of any shared
personnel remuneration and office overhead expenses. Therefore, Almaden currently recovers 30% of the
contractual compensation amounts for the Chairman, Chief Executive Officer, Chief Financial Officer and Vice
President, Corporate Development.
All non-management 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, or will receive compensation on termination.
Total compensation paid by the Company directly and/or indirectly to all directors and executive officers during
Fiscal 2016 was $796,475 (Fiscal 2015 - $789,408) after recovery by the Company of 30% of executive officer
compensation pursuant to the terms of the Administrative Services Agreement between the Company and
Almadex Minerals Limited.
49
Table No. 7
Summary Compensation Table
Annual Compensation
Name and
Principle Position
Fiscal
Year
Salary(1)
Bonus
Other Annual
Compensation
Restricted
Stock
Awards
Duane Poliquin
Chairman of the Board &
Director
Morgan Poliquin
President, Chief Executive
Officer & Director
Jack McCleary
Director
Joseph Montgomery
Former Director(10)
Gerald G. Carlson
Director
Barry W. Smee
Former Director(8)
Mark T. Brown
Director,
William J. Worrall
Director
James E. McInnes
Former Director
David Strang(11)
Director
2016
2015
2014
2016
2015
2014
2016
2015
2014
2016
2015
2014
2016
2015
2014
2016
2015
2014
2016
2015
2014
2016
2015
2014
2016
2015
2014
2016
$168,000
Nil
Nil
$185,500
$231,875
$265,000
Nil
Nil
Nil
$92,750
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Long-Term Compensation
Awards
Options/
SARS
Granted
(#)
550,000
485,000
Nil
700,000
965,000
400,000
218,000
207,000
Nil
Nil
145,000
Nil
100,000
237,000
50,000
Nil
Nil
Nil
68,000
232,000
25,000
5,000
145,000
Nil
Nil
Nil
Nil
400,000
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
Nil
Nil
Nil
Nil
Nil
Nil
Nil
$193,333(2)
$240,000(2)
Nil
Nil
Nil
$10,000(3)(5)
$10,000(3)(5)
$10,000(3)(5)
$7,000(3)
$7,000(3)
$10,000(3)(4)
$7,000(3)
$7,000(3)
$7,000(3)
Nil
$7,000(3)
$7,000(3)
$10,000(3)(4)
$11,200(3)(4)(6)
$7,000(3)
$7,000(3)
$7,000(3)
$4,550(3)
Nil
Nil
$2,450(3)
Nil
Korm Trieu
Chief Financial Officer
Dione Bitzer
Former Controller(9)
2016
2015
2014
2016
2015
2014
2016
2015
2014
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
(1) Since the effectiveness of the Plan of Arrangement with Almadex on July 31, 2015, Almadex has compensated the Company 30% of
any shared personnel’s fees and/or wages. The above table reflects only the compensation for each individual paid by Almaden after
recovery of such 30% from Almadex.
$129,500
$161,875
$185,000
Nil
Nil
$87,500
$122,500
$153,125
$48,125(7)
150,000
145,000
50,000
Nil
Nil
Nil
170,000
130,000
150,000
$38,850
Nil
Nil
Nil
Nil
Nil
$18,375
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Douglas McDonald
Vice President, Corporate
Development
(2) For geological services provided to the Company and general and administrative services provided by Hawk Mountain Resources Ltd.,
a private company of which Duane Poliquin is a shareholder. Effective December 31, 2015, the Hawk Mountain Resources Ltd.
contract was terminated by mutual agreement.
(3) Director’s fees.
(4) Audit Committee Chairman’s fees.
(5) Compensation Committee Chairman’s fees.
(6) For administrative services provided by Pacific Opportunity Capital Ltd., a company controlled by Mark T. Brown and his family.
(7) Commenced employment on September 22, 2014.
(8) Barry Smee resigned as a Director of the Company effective January 31, 2015.
(9) Dione Bitzer was not nominated as an officer in Fiscal 2015 and resigned on July 31, 2016.
(10) Joseph Montgomery resigned as a Director of the Company effective August 8, 2016.
(11) David Strang commenced as a Director of the Company effective August 8, 2016.
50
Remuneration on Termination
The Company has the following termination clauses within its executive employment contracts.
(1) Chairman
The Company entered into a new Executive Employment Contract (the “DP Agreement”) dated January 1,
2016, as amended by Amending Agreement dated April 1, 2016 (the “DP Agreement”) between the Company
and Duane Poliquin (the “Executive” under the DP Agreement) which replaces an expired 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, which was terminated by mutual agreement on
December 31, 2015. The DP Agreement will terminate or may be terminated for any one of the following
reasons:
(a)
Voluntarily by the Executive, 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
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 Executive Voluntarily or by the Company for Cause
If the Executive shall voluntarily terminate employment under the DP Agreement or if the employment of the
Executive 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
severance compensation will be paid.
Cause to terminate the Executive’s employment under the DP Agreement shall mean:
(a)
(b)
(c)
(d)
the repeated and demonstrated failure by the Executive to perform the Executive’s material duties
under the DP 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 by the Executive under the DP Agreement; or
the willful engagement by the Executive in misconduct which is materially injurious to the Company,
monetarily or otherwise; or
any other willful violation by the Executive of the provisions of the DP Agreement; or
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 DP Agreement for any reason except for
Cause or Disability 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
51
lump sum to the Executive’s Designate within 60 days of the Executive’s death. If no Executive’s Designate
survives the Executive, the entire amount shall be paid to the Executive’s estate. 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 DP Agreement, a Change in Control shall be deemed to have occurred if:
(i)
(ii)
(iii)
(iv)
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
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
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; or
the business or businesses of the Company for which the Executive’s services are principally
performed, are disposed of by the Company pursuant to a partial or complete liquidation, dissolution,
consolidation or merger of the Company, or a sale or transfer of all or a significant portion of the
Company’s assets.
Notwithstanding any other provisions in the DP 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 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.
For purposes of the DP Agreement, “Good Reason” shall mean, without the Executive’s express written
consent, any of the following:
(i)
(ii)
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 Executive’s Base Salary as in effect on the date of the DP
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 DP Agreement or at a rate
commensurate with that of other key executives of the Company;
52
(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 services with the
Company; or
(v)
the failure of the Company to obtain a satisfactory agreement from any successor to assume and
agree to perform the DP Agreement or, if the business of the Company for which the Executive’s
services are principally performed is sold or transferred, the purchaser or transferee of such
business shall fail to agree to provide the Executive with the same or a comparable position, duties,
remuneration and benefits for the Executive as provided immediately prior to the Change in
Control.
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 DP Agreement, then in addition to such
severance payment, the Executive 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 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
all claims and liabilities arising out of the Executive’s employment and termination thereof and including
confidentiality provisions, which waiver and release is satisfactory to the Company with respect to form,
substance and timeliness.
(2) President & CEO
The Executive Employment Contract dated January 29, 2013, as amended by Amending Agreement dated April
1, 2016 (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) voluntarily by the Executive, 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.
53
Cause to terminate the Executive’s employment shall mean:
(a)
(b)
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
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 within sixty (60) days of the Executive’s death. If no Executive’s
Designate survives the Executive, the entire amount shall be paid to the Executive’s estate. 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; or
54
(iv) the business or businesses of the Company for which the Executive’s services are principally
performed, are disposed of by the Company pursuant to a partial or complete liquidation, dissolution,
consolidation or merger of the Company, or a sale or transfer of all or a significant portion of the
Company’s assets.
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.
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
(v)
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 or transferred, the purchaser or transferee 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.
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
all claims and liabilities arising out of the Executive’s employment and termination thereof and including
55
confidentiality provisions, which waiver and release is satisfactory to the Company with respect to form,
substance and timeliness.
(3) CFO
The Employment Agreement dated May 24, 2011 as amended April 1, 2016 (the “KT Agreement”) between the
Company and Korm Trieu (the “Employee” under the KT Agreement) may be terminated for any one of the
following reasons:
(a) voluntarily by the Employee, upon at least sixty (60) days prior written notice of termination by the
Employee to the Company; or
(b) by the Company for cause; or
(c) without cause, upon payment of twelve (12) months of the Employee’s then current Base Salary to the
Employee; or
(d) upon the physical and/or mental impairment of the Employee.
Termination by the Employee Voluntarily or by the Company for Cause
If the Employee shall voluntarily terminate employment under the KT Agreement or if the employment of the
Employee 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 Employee’s employment shall mean:
(a)
(b)
the repeated and demonstrated failure by the Executive to perform the Employee’s material duties under
the KT Agreement, after demand for substantial performance is delivered by the Company to the
Employee that specifically identifies the manner in which the Company believes the Employee has not
substantially performed the Employee’s duties under the KT Agreement; or
the willful engagement by the Employee in misconduct which is materially injurious to the Company,
monetarily or otherwise; or
(c) any other willful violation by the Employee of the provisions of the KT Agreement; or
(d) the Employee is convicted of a criminal offence involving fraud or dishonesty.
Termination by the Company Without Cause
If the Company elects to terminate the Employee’s employment for reasons other than cause, the Company
shall pay the Employee, in one lump sum or in installments at the Company’s discretion, a severance payment
equal to twelve (12) months of the Employee’s then current Based Salary.
Termination upon the physical and/or mental impairment of the Employee
If the Company terminates the Employee’s employment for physical and/or mental impairment, the Company’s
financial obligation to the Employee is limited to that which the Employee would otherwise receive if the
Company terminated the Employee’s employment for no reason.
Termination Following Change in Control
For purposes of the KT 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
56
(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; or
(iv) the business or businesses of the Company for which the Employee’s services are principally
performed, are disposed of by the Company pursuant to a partial or complete liquidation, dissolution,
consolidation or merger of the Company, or a sale or transfer of all or a significant portion of the
Company’s assets.
Notwithstanding any other provisions in the KT Agreement regarding termination, if any of the events
described above constituting a Change in Control shall have occurred during the course of the KT Agreement,
upon the termination of the Employee’s employment (unless such termination is because of the Employee’s
Death or Disability, by the Company for cause or by the Employee other than for “Good Reason”, as defined
below) the Employee 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 two (2) times the Employee’s then current Base Salary.
For purposes of the KT Agreement, “Good Reason” shall mean, without the Employee’s express written
consent, any of the following:
(i)
the assignment to the Employee of any duties inconsistent with the status or authority of the
Employee’s office, or the Employee’s removal from such position, or a substantial alteration in the
nature or status of the Employee’s authorities or responsibilities from those in effect immediately
prior to the Change in Control;
(ii) a reduction by the Company in the Employee’s Base Salary as in effect on the date of the KT
Agreement or as the same may have been increased from time to time, or a failure by the Company to
increase the Employee’s Base Salary as provided for in the KT Agreement or at a rate commensurate
with that of other key employees of the Company;
(iii) the relocation of the office of the Company where the Employee 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 Employee 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 Employee’s business travel obligations prior to the Change in Control);
(iv) the failure by the Company to continue to provide the Employee with benefits at least as favourable
as those enjoyed by the Employee 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
Employee of any material fringe benefit enjoyed by the Employee at the time of the Change in
Control, or the failure by the Company to provide the Employee with the number of entitled vacation
days to which the Employee has earned on the basis of years of service with the Company; or
(v) the failure of the Company to obtain a satisfactory agreement from any successor to assume and agree
to perform the KT Agreement or, if the business of the Company for which the Employee’s services
are principally performed is sold or transferred, the purchaser or transferee of such business shall fail
to agree to provide the Employee with the same or a comparable position, duties, salary and benefits
as provided to the Employee by the Company immediately prior to the Change in Control.
57
Following a Change in Control during the course of the KT Agreement, the Employee shall be entitled to
terminate the Employee’s employment for Good Reason.
The Employee’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 Employee’s employment and termination thereof and including
confidentiality provisions, which waiver and release is satisfactory to the Company with respect to form,
substance and timeliness.
(4) Vice President, Corporate Development
The Employment Agreement dated September 22, 2014 as amended April 1, 2016 (the “DM Agreement”)
between the Company and Douglas McDonald (the “Employee” under the DM Agreement) may be terminated
for any one of the following reasons:
(a) voluntarily by the Employee, upon at least sixty (60) days prior written notice of termination by the
Employee to the Company; or
(b) by the Company for cause; or
(c) without cause, upon payment of twelve (12) months of the Employee’s then current Base Salary to the
Employee; or
(d) upon the physical and/or mental impairment of the Employee.
Termination by the Employee Voluntarily or by the Company for Cause
If the Employee shall voluntarily terminate employment under the DM Agreement or if the employment of the
Employee 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 Employee’s employment shall mean:
(a)
(b)
the repeated and demonstrated failure by the Employee to perform the Employee’s material duties under
the DM Agreement, after demand for substantial performance is delivered by the Company to the
Employee that specifically identifies the manner in which the Company believes the Employee has not
substantially performed the Employee’s duties under the DM Agreement; or
the willful engagement by the Employee in misconduct which is materially injurious to the Company,
monetarily or otherwise; or
(c) any other willful violation by the Employee of the provisions of the DM Agreement; or
(d) the Employee is convicted of a criminal offence involving fraud or dishonesty.
Termination by the Company Without Cause
If the Company elects to terminate the Employee’s employment for reasons other than cause, the Company
shall pay the Employee, in one lump sum or in installments at the Company’s discretion, a severance payment
equal to twelve (12) months of the Employee’s then current Base Salary.
Termination upon the physical and/or mental impairment of the Employee
If the Company terminates the Employee’s employment for physical and/or mental impairment, the Company’s
financial obligation to the Employee is limited to that which the Employee would otherwise receive if the
Company terminated the Employee’s employment for no reason.
Termination Following Change in Control
For purposes of the DM` Agreement, a change in control shall be deemed to have occurred if:
58
(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; or
(iv) the business or businesses of the Company for which the Employee’s services are principally
performed, are disposed of by the Company pursuant to a partial or complete liquidation, dissolution,
consolidation or merger of the Company, or a sale or transfer of all or a significant portion of the
Company’s assets.
Notwithstanding any other provisions in the DM Agreement regarding termination, if any of the events
described above constituting a Change in Control shall have occurred during the course of the DM Agreement,
upon the termination of the Employee’s employment (unless such termination is because of the Employee’s
Death or Disability, by the Company for cause or by the Employee other than for “Good Reason”, as defined
below) the Employee 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 two (2) times the Employee’s then current Base Salary.
For purposes of the DM Agreement, “Good Reason” shall mean, without the Employee’s express written
consent, any of the following:
(i)
the assignment to the Employee of any duties inconsistent with the status or authority of the
Employee’s office, or the Employee’s removal from such position, or a substantial alteration in the
nature or status of the Employee’s authorities or responsibilities from those in effect immediately
prior to the Change in Control;
(ii) a reduction by the Company in the Employee’s Base Salary as in effect on the date of the DM
Agreement or as the same may have been increased from time to time, or a failure by the Company to
increase the Employee’s Base Salary as provided for in the DM Agreement or at a rate commensurate
with that of other key employees of the Company;
(iii) the relocation of the office of the Company where the Employee 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 Employee 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 Employee’s business travel obligations prior to the Change in
Control);
(iv) the failure by the Company to continue to provide the Employee with benefits at least as favourable
as those enjoyed by the Employee 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
Employee of any material fringe benefit enjoyed by the Employee at the time of the Change in
Control, or the failure by the Company to provide the Employee with the number of entitled vacation
days to which the Employee has earned on the basis of years of service with the Company; or
59
(v)
the failure of the Company to obtain a satisfactory agreement from any successor to assume and
agree to perform the DM Agreement or, if the business of the Company for which the Employee’s
services are principally performed is sold or transferred, the purchaser or transferee of such business
shall fail to agree to provide the Employee with the same or a comparable position, duties, salary and
benefits as provided to the Employee by the Company immediately prior to the Change in Control.
Following a Change in Control during the course of the DM Agreement, the Employee shall be entitled to
terminate the Employee’s employment for Good Reason.
The Employee’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 Employee’s employment and termination thereof and including
confidentiality provisions, which waiver and release is satisfactory to the Company with 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 provides that stock options
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.
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 2016, Fiscal 2015 and Fiscal
2014 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 28, 2017 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.
60
Name
Duane Poliquin,
Chairman of the Board & Director
Morgan Poliquin
President, Director &
Chief Executive Officer
Jack McCleary
Director
Gerald G. Carlson
Director
Mark T. Brown
Director
William J. Worrall
Director
David Strang
Director
Korm Trieu
Chief Financial Officer
Douglas McDonald
Vice President, Corporate Development
Total Directors/Officers (9 persons)
Total Employees/Consultants (15 persons)
Total Directors/Officers/Employees/Consultants
Table No. 8
Stock Options Outstanding
Number of Options
Outstanding
100,000
165,000
500,000
50,000
100,000
300,000
Exercise Price
CDN$
$1.91
0.74
1.44
1.85
0.72
1.34
Expiry Date
05/04/2017
08/26/2017
06/08/2018
09/15/2018
12/11/2018
07/02/2019
315,000
500,000
700,000
300,000
250,000
150,000
350,000
25,000
100,000
68,000
50,000
207,000
25,000
115,000
50,000
50,000
72,000
50,000
50,000
25,000
115,000
100,000
50,000
18,000
25,000
117,000
115,000
250,000
5,000
30,000
400,000
75,000
115,000
75,000
150,000
30,000
50,000
100,000
20,000
30,000
150,000
6,687,000
1,368,000
8,055,000
0.74
2.31
1.44
0.72
1.04
1.32
1.34
1.91
1.44
1.91
1.85
1.35
1.91
0.74
1.44
1.85
0.72
1.04
1.34
1.91
0.74
2.22
1.44
1.91
1.04
1.34
0.74
1.46
1.91
0.72
1.91
1.98
0.74
1.74
1.44
0.72
1.04
0.74
1.44
0.72
1.68
08/26/2017
09/11/2017
06/08/2018
12/11/2018
01/02/2019
07/02/2019
07/02/2019
05/04/2017
06/08/2018
08/09/2018
09/15/2018
03/17/2019
05/04/2017
08/26/2017
06/08/2018
09/15/2018
12/11/2018
01/02/2019
07/02/2019
05/04/2017
08/26/2017
11/22/2017
06/08/2018
08/09/2018
01/02/2019
07/02/2019
08/26/2017
06/18/2018
08/09/2018
12/11/2018
08/09//2018
06/08/2017
08/26/2017
04/04/2018
06/08/2018
12/11/2018
01/02/2019
08/26/2017
06/08/2018
12/11/2018
12/11/2018
61
No funds were set aside or accrued by the Company during Fiscal 2016 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.
62
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. 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.
2. 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.
-
-
-
63
(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.
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.
64
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, 2016 there were six (6) 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.
Table No. 9
Meetings Attended
Director
Duane Poliquin
Morgan Poliquin
Jack McCleary
Joseph Montgomery(1)/David Strang(2)
Gerald G. Carlson
Mark T. Brown
William J. Worrall
Number
6
6
6
3 / 1
5
5
6
(1) Prior to August 8, 2016.
(2) After August 8, 2016 and attended the only meeting called since his appointment on November 8, 2016.
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 2016, six (6) 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.
65
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 has determined that a majority of directors, namely 5 directors, are independent - Jack
McCleary, David Strang, Gerald Carlson, William J. Worrall, and Mark T. Brown. Two directors – Duane
Poliquin and Morgan Poliquin – are not independent because, in addition to their being the Chairman and Chief
Executive Officer/President of the Company, respectively, they each have Executive Employment Contracts with
the Company and, therefore, they each have a material relationship with the Company. The basis for
determination of independence is under Canadian securities instrument NI 52-110 and NYSE MKT Exchange
Company Guide Rules.
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 position 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
revisions
at
www.almadenminerals.com.
the Company’s website
and Codes will be
the mandates
available on
to
Audit Committee
The members of the Audit Committee are Messrs. William Worrall, Gerald Carlson and Mark T. Brown. The Audit
Committee met four (4) times during Fiscal 2016. The full text of the initial Audit Committee Charter is an exhibit
to the 2003 20-F Annual Report filed 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 is an exhibit to the 2005 20-F
Annual Report filed with the Commission on March 30, 2006.
Nominating and Corporate Governance Committee
The members of the Nominating and Corporate Governance Committee are Jack McCleary, William Worrall and
Gerald Carlson. The Nominating and Corporate Governance Committee met one (1) time during Fiscal 2016. The
full text of the initial Corporate Governance Charter is an exhibit to the 2003 20-F Annual Report filed 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 is an exhibit to the 2005 20-F Annual Report filed with the
Commission on March 30, 2006.
66
Compensation Committee
The members of the Compensation Committee are Jack McCleary, William Worrall, Mark T. Brown and Gerald
Carlson. The Compensation Committee met six (6) times during Fiscal 2016 with Jack McCleary and William
Worrall attending all six (6) meetings and with Mark T. Brown and Gerald Carlson attending five (5) of the six (6)
meetings. The Responsibilities and Duties of the Compensation Committee is an exhibit to the 2005 20-F Annual
Report filed with the Commission on March 30, 2006.
Orientation and Continuing Education
The Nomination and Corporate Governance Committee is responsible for recommending to the Board an
orientation and education program for new directors.
Director Term Limits and other Mechanisms of Board Renewal
The Company has not adopted term limits or other mechanisms for Board renewal. The Company does not consider
it is yet appropriate to force any term limits or other mechanisms of Board renewal at this time.
Policies Regarding the Representation of Women on the Board
The Company plans to adopt a written policy with respect to the identification and nomination of women directors
(the “Diversity Policy”). The Diversity Policy will require that the Board consider diversity on the Board from a
number of aspects, including but not limited to gender, age, ethnicity and cultural diversity. In addition, when
assessing and identifying potential new members to join the Board or the Company’s executive team, the Board will
consider the current level of diversity on the Board and the executive team. As the Diversity Policy has not yet been
adopted, the Company is not yet able to measure its effectiveness.
Consideration of the Representation of Women in the Director Identification and Selection Process
Pursuant to the Diversity Policy, the Board will consider and evaluate the representation of women on the Board
when identifying and nominating candidates for election and re-election to the Board. The Company will focus its
search for new directors purely based on the qualification of potential candidates, regardless of their gender.
Consideration Given to the Representation of Women in Executive Officer Appointments
Pursuant to the Diversity Policy, the Board will consider and evaluate the representation of women in the
Company’s executive officer positions when identifying and nominating candidates for appointment as executive
officers. The Company will focus its search for new executive officers purely based on the qualification of potential
candidates, regardless of their gender.
The Company’s Targets Regarding the Representation of Women on the Board and in Executive Officer
Positions
The Company has not established a target for the representation of women on the Board or in executive officer
positions of the Company by a specific date. The Company does not think it is appropriate to set targets because the
Company focuses its search for new directors and executive officers purely based on the qualification of potential
candidates, regardless of their gender.
Number of Women on the Board and in Executive Officer Positions
As at the date of this Form 20-F Annual Report, none of the Company’s directors or executive officers are women.
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.
67
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 or engagement to undertake to abide by the COBE. Directors are 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, 2016, the Company operated with nine people in Canada, of which six 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 28, 2017, 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.
68
Table No. 10
Shareholdings of Directors and Executive Officers
Title of
Class
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Name of Beneficial Owner
Duane Poliquin
Morgan Poliquin
Jack McCleary
Gerald G. Carlson
David Strang
Mark T. Brown
William J. Worrall
Korm Trieu
Doug McDonald
Total Directors/Officers
Amounts and Nature of
Beneficial Ownership
3,814,036(1)10)
4,238,117(2)(10)
797,711(3)
439,700(4)
400,000(5)
495,000(6)
412,500(7)
502,500(8)
364,449(9)
11,464,013
Percent of
Class*
4.18%
4.59%
0.88%
0.49%
0.44%
0.55%
0.46%
0.56%
0.40%
12.55%
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
Of these shares 1,215,000 represent currently exercisable stock options, 300,000 represent currently exercisable warrants
and 69,300 of these shares are held indirectly by Hawk Mountain Resources Ltd., a private company of which Duane
Poliquin is a shareholder.
Of these shares 2,565,000 represent currently exercisable stock options. 83,600 of these shares are held indirectly through
Kohima Pacific Gold Corp., a company owned by Mr. Poliquin.
Of these shares 450,000 represent currently exercisable stock options. 38,500 of these shares are held indirectly by
Connemara Resource Ventures Ltd., a company owned by Mr. McCleary.
Of these shares 412,000 represent currently exercisable stock options.
Of these shares 400,000 represent currently exercisable stock options.
Of these shares 450,000 represent currently exercisable stock options. 20,000 of these shares are held indirectly by Pacific
Opportunity Capital Ltd. (“POC”), a company controlled by Mr. Brown and his family.
Of these shares 400,000 represent currently exercisable stock options.
Of these shares 495,000 represent currently exercisable stock options. 7,500 of these shares are held indirectly by Mr. Trieu’s
wife.
Of these shares, 300,000 represent currently exercisable stock options. 7,500 of those shares are held indirectly by Shari
Investments, an entity controlled by Mr. McDonald.
Pursuant to a Voting Trust Agreement (Exhibit 3 to this 20-F Annual Report), Duane Poliquin and Morgan Poliquin jointly hold
voting power over 6,979,275 of the Company’s common shares otherwise legally and beneficially owned by Mr. Ernesto
Echavarria, as well as over any common shares issued to Mr. Echavarria upon the exercise of his warrants to acquire an
additional 392,767 of the Company’s common shares.
*Based on 89,805,481 shares outstanding as of March 28, 2017 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 28, 2017, the only persons or companies beneficially owning more than 5% of the Company’s
voting securities.
69
Table No. 11
Shareholdings of Beneficial Owners
Title of
Class
Common
Common
(1)
(2)
(3)
Name of Beneficial Owner
Duane Poliquin
Morgan Poliquin
Amounts and Nature of
Beneficial Ownership
3,814,036(1)(3)
4,238,117(2)(3)
Percent of
Class*
4.18%
4.59%
Of these shares 1,215,000 represent currently exercisable stock options, 300,000 represent currently exercisable warrants
and 69,300 of these shares are held indirectly by Hawk Mountain Resources Ltd., a private company of which Duane
Poliquin is a shareholder.
Of these shares 2,565,000 represent currently exercisable stock options. 83,600 of these shares are held indirectly through
Kohima Pacific Gold Corp., a company owned by Mr. Poliquin.
Pursuant to a Voting Trust Agreement (Exhibit 3 to this 20-F Annual Report), Duane Poliquin and Morgan Poliquin jointly hold
voting power over 6,979,275 of the Company’s common shares otherwise legally and beneficially owned by Mr. Ernesto
Echavarria, as well as over any common shares issued to Mr. Echavarria upon the exercise of his warrants to acquire an
additional 392,767 of the Company’s common shares.
*Based on 89,805,481 shares outstanding as of March 28, 2017 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 Duane Poliquin operated through Hawk Mountain
Resources Ltd., a private company of which Duane Poliquin is a shareholder.
The costs of such services for Fiscal 2016 ended December 31, 2016 were $168,000, Fiscal 2015 ended
December 31, 2015 were $193,333, and Fiscal 2014 ended December 31, 2014 were $240,000.
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, after recovery of 30% of
executive officer compensation from Almadex Minerals Limited:
Salaries, fees and benefits
Share-based payments
Directors’ fees
February 28,
2017
$156,833
536,400
70,000
$763,233
December 31,
2016
$ 755,475
1,537,060
41,000
$2,333,535
December 31,
2015
$ 740,208(i)
725,165
48,000
$1,513,373
December 31,
2014
$ 738,125(i)
469,500
48,000
$1,255,625
(i) For the year ended December 31, 2015 and December 31, 2014, Hawk Mountain Resources Ltd.
(“Hawk Mountain”), a private company of which the Chairman of the Company is a shareholder, was
paid $193,333 and $240,000 respectively for geological services provided to the Company and is
recorded in general exploration expenses.
70
(b) Almadex Minerals Limited (“Almadex”)
Effective August 1, 2015, approximately 30% of administrative expenses is recovered from Almadex pursuant
to the Administrative Service Agreement.
During the year ended December 31, 2016, the Company received $464,498 (2015 - $181,405; 2014 - $Nil)
from Almadex for administrative services fees included in other income.
At December 31, 2016, the Company accrued $63,429 (2015 - $78,511) payable to Almadex for drilling
equipment rental services in Mexico.
At December 31, 2016, included in accounts receivable is $149,429 (2015 - $41,840) due from Almadex.
(c) Other related party transactions
(i) ATW Resources Ltd. (“ATW”)
Almaden owned a 50% interest in this company which holds title in trust for the ATW project.
(ii) Other
(a) During the year ended December 31, 2016, the Company paid a company controlled by a Mark Brown
$Nil (2015 - $1,200; 2014 - $Nil) for administrative services provided to the Company.
(b) During the year ended December 31, 2016, the Company employed the Chairman’s daughter for a
salary of $38,800 less statutory deductions (2015 - $43,225; 2014 - $34,050) 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.
71
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
$1.88
1.27
1.94
3.25
3.33
Table No. 13
Almaden Minerals Ltd.
Stock Trading Activity
The Toronto Stock Exchange
(expressed in C$)
High
$2.44
1.57
2.11
3.19
3.31
Year Ended
12/31/2016
12/31/2015
12/31/2014
12/31/2013
12/31/2012
Year Ended
12/31/2015
12/31/2015
12/31/2014
12/31/2013
12/31/2012
Low
$0.50
0.48
0.86
1.03
1.55
Low
$0.73
0.65
1.02
1.08
1.56
Table No. 14 lists the quarterly high and low prices for shares of Almaden Minerals Ltd. common stock on
NYSE MKT for the two most recent full financial years. Table No. 15 lists the quarterly high and low prices for
shares of Almaden Minerals Ltd. common stock on TSX for the two most recent full financial years.
72
Table No. 14
Almaden Minerals Ltd.
Stock Trading Activity
NYSE MKT
(expressed in US$)
Table No. 15
Almaden Minerals Ltd.
Stock Trading Activity
The Toronto Stock Exchange
(expressed in C$)
High
$1.54
1.88
1.67
0.81
0.73
0.85
0.95
1.27
1.35
1.64
1.52
1.94
High
$1.97
2.44
2.17
1.12
1.10
1.06
1.16
1.57
1.48
1.80
1.64
2.11
Quarter Ended
12/31/2016
09/30/2016
06/30/2016
03/31/2016
12/31/2015
09/30/2015
06/30/2015
03/31/2015
12/31/2014
09/30/2014
06/30/2014
03/31/2014
Quarter Ended
12/31/2016
09/30/2016
06/30/2016
03/31/2016
12/31/2015
09/30/2015
06/30/2015
03/31/2015
12/31/2014
09/30/2014
06/30/2014
03/31/2014
Low
$0.75
1.30
0.65
0.50
0.50
0.51
0.75
0.82
0.86
1.27
1.27
1.17
Low
$1.01
1.70
0.88
0.73
0.67
0.65
0.92
1.09
1.02
1.38
1.37
1.25
Table No.16 lists the high and low prices for shares of Almaden Minerals Ltd. common stock on NYSE MKT
for the most recent six months. Table No. 17 lists the high and low prices for shares of Almaden Minerals Ltd.
common stock on TSX for the most recent six months.
Table No. 16
Almaden Minerals Ltd.
Stock Trading Activity
NYSE MKT
(expressed in US$)
Month Ended
02/28/2017
01/31/2017
12/31/2016
11/30/2016
10/31/2016
09/30/2016
High
$1.30
1.11
1.20
1.54
1.40
1.75
Low
$1.02
0.95
0.75
1.04
1.17
1.30
73
Table No. 17
Almaden Minerals Ltd.
Stock Trading Activity
The Toronto Stock Exchange
(expressed in C$)
Month Ended
02/28/2017
01/31/2017
12/31/2016
11/30/2016
10/31/2016
09/30/2016
High
$1.70
1.45
1.60
1.97
1.85
2.22
Low
$1.33
1.27
1.01
1.40
1.56
1.71
The closing price of the Company’s common stock was $1.09 (US$) on the NYSE MKT and $1.48 (C$) on TSX on
February 28, 2017.
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, 2017, the shareholders' list for the Company’s common shares showed 239 registered shareholders
and 89,598,481 shares outstanding. 190 of these registered shareholders are U.S. residents, owning 19,674,581
shares representing 22% of the issued and outstanding shares of common stock. 36 of these registered shareholders
are Canadian residents, owning 69,029,771 shares representing 77% of the issued and outstanding shares of
common stock. 13 of these registered shareholders are of other countries, owning 1,026,978 shares representing 1%
of the issued and outstanding shares of common stock.
Table No. 18 lists changes, if any, in issued shares to March 28, 2017:
Table No. 18
Shares Issued to March 28, 2017
Balance, December 31, 2016
Balance, March 28, 2017
Item 10. Additional Information
Number
86,165,443
89,805,481
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 2016, Fiscal 2015 and Fiscal 2014. 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
74
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 are an exhibit to the 2005 20-F Annual Report filed with the Commission on March 30,
2006, and replaced 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
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.
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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.
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
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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 is an exhibit to the 2005 Form 20-F Annual Report filed 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 “BCBCA”): or (ii) a shareholder proposal made pursuant to
the provisions of the BCBCA.
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
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 an exhibit to the 2012 20-F Annual Report filed 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
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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 20-F 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 agreement was terminated by mutual agreement on December 31,
2015. The full text of the Executive Compensation Contract is filed as an exhibit to the 2012 20-F Annual
Report with the Commission on March 28, 2013.
3. Executive Compensation Contract dated effective as of January 29, 2013 as amended by Amending
Agreement dated April 1, 2016 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 20-F Annual Report with the Commission
on March 28, 2013 and of the Amending Agreement as an exhibit of this 20-F Annual Report.
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
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 20-F 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 20-F Annual Report with the Commission on March 25,
2014.
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7. Arrangement Agreement dated May 11, 2015 to spinout, pursuant to a statutory Plan of Arrangement,
Almaden’s early stage exploration projects, royalty interests and other non-core assets into a new public
Company called Almadex. On July 31, 2015, all conditions to the statutory Plan of Arrangement regarding the
spinout were satisfied or waived and the spinout was effective. Almaden’s shareholders approved the Plan of
Arrangement and exchanged their existing common shares of Almaden for one “new” Almaden common share
and 0.6 common share of Almadex. The full text of the Arrangement Agreement is filed as an exhibit to the
2015 20-F Annual Report with the Commission on March 31, 2016.
8. Administrative Services Agreement between the Company and Almadex Minerals Limited (“Almadex”)
dated May 15, 2015, as amended by First Amending Agreement dated December 16, 2015 (the “Agreement”).
Under the Agreement, the Company provides management services to Almadex as the sole and exclusive
manager, including the authority to manage the assets, operations, business, and administrative affairs of
Almadex. Almadex compensates the Company 30% of the Company’s actual monthly cost of rent for any
shared facilities, and 30% of any shared personnel’s fees and/or wages. Almadex also pays the Company any
reasonable fees or costs incurred on behalf of Almadex by the Company which were approved by Almadex.
The Agreement has an initial 5-year term, with subsequent automatic 1 year renewals unless terminated
pursuant to the terms permitted under the Agreement and include a Change of Control clause. If either party is
subject to Change of Control during the term of the Agreement, the Agreement shall automatically terminate
within 48 hours of the Change of Control unless agreed to in writing by both parties. The target of the Change
of Control shall then pay the other party $2 million as compensation for the unplanned termination of the
Company’s engagement. “Change of Control” means the date upon which, without the written concurrence of
the target of the Change of Control, any person (as that term is defined in the Securities Act (British Columbia))
makes and does not withdraw a take-over bid (as that term is defined in the Securities Act (British Columbia))
or acquires, directly or indirectly, that number of common shares of the target which equals or exceeds twenty
percent (20%) of the then issued common shares of the target. The full text of the Administrative Services
Agreement is filed as an exhibit to the 2015 20-F Annual Report with the Commission on March 31, 2016.
9. Termination Agreement dated effective December 31, 2015 between the Company and Hawk Mountain
Resources Ltd. for the services of Duane Poliquin as Executive Chairman. The full text of the Termination
Agreement is filed as an exhibit to the 2015 20-F Annual Report with the Commission on March 31, 2016.
10. Executive Employment Contract dated effective as of January 1, 2016 between the Company and Duane
Poliquin to serve 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 2015 20-F Annual Report with the Commission on March 31, 2016 and of the
Amending Agreement as an exhibit to this 20-F Annual Report.
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
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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.
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.
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This summary is based upon the provisions of the Income Tax Act of Canada and the regulations thereunder
(collectively, the “Canadian Tax Act" or “ITA”) and the Canada-United States Tax Convention (the
“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 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 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 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 eliminates Canadian tax on interest paid or deemed to be paid by the Company to U.S.
residents. 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
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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.
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, possibly 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. It is not intended to be, nor should it be construed to be, legal or tax advice to any U.S.
Holder or prospective holder and not an opinion or representation with respect to the U.S. Federal income tax
consequences to any U.S. 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. U.S. 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. (and not a tax resident of any other country), 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
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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
adjusted basis in the common shares and thereafter as gain from the sale or exchange of the common shares.
Unless the distribution constitutes “qualified dividend income” as defined in Section 1(h)(11), 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. If the distribution qualifies
as “qualified dividend income”, the distribution will be taxable as net capital gain where the U.S. holder 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 “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. 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 a U.S. Holder’s ability to
claim the foreign tax credit. 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.
Disposition of Common Shares of the Company
For U.S. tax purposes, 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. 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. Capital gain
will then be classified as a short-term or long-term capital gain or loss depending upon the holding period of the
U.S. Holder. Preferential tax rates apply to long-term capital gains of U.S. Holders which are individuals,
estates or trusts. 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 taxable 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.
Net Investment Tax
U.S. Holders may also be subject to the Net Investment Income Tax, which is imposed on certain U.S.
taxpayers’ income from investments, such as dividends, interest and capital gains. Individual taxpayers are
liable for a 3.8 percent Net Investment Income Tax on the lesser of their net investment income, or the amount
by which their modified adjusted gross income exceeds certain statutory thresholds based on their filing status.
83
U.S. Holders or prospective U.S. Holders should consult their tax advisors to determine if the Net Investment
Income Tax will apply in their individual circumstances.
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.
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. U.S. shareholder’s income or gain, with respect to a disposition or deemed disposition of PFIC
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
84
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.
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
85
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),
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.
U.S. Holder’s should consult with their tax advisors to determine if holding common shares in the Company
will create any other disclosure or reporting requirements for U.S. tax purposes.
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
Commission’s EDGAR web-site at www.sec.gov./edgar/searchedgar/companysearch.html.
Item 11. Quantitative and Qualitative Disclosures about Market Risk
The Company’s primary mineral exploration properties are located in Mexico. 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 loss by $165,000. A 10%
change in the Mexican peso exchange rate relative to the Canadian dollar would change the Company’s net loss
by $6,400.
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, 2016. This evaluation was conducted under the supervision and with the
86
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, 2016, 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.
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, 2016. 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 (2013) published by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). Based on its assessment, management concluded that, as of December 31, 2016, 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, 2016 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 20 years, and currently serves as a director of eight
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.
87
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 or engagement to undertake to abide by the COBE. Directors are 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.
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 Davidson &
Company LLP. Any services provided by Davidson & Company 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.
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,
2016
$38,000
4,330
-
-
December 31,
2015
$134,232
20,686
28,623
-
Audit fees
Audit-related fees
Tax fees
Other fees
Fiscal 2016 and Fiscal 2015 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
On January 4, 2016, the Company accepted the resignation of Deloitte LLP, Chartered Professional
Accountants, and appointed Davidson & Company LLP, Chartered Professional Accountants, as the Company’s
88
successor auditor. Deloitte LLP resigned on its own initiative. The resignation of the former auditor was
accepted by the Company’s Audit Committee and the Board of Directors. The appointment of the successor
auditor was made and approved by the Company’s Audit Committee and the Board of Directors. Deloitte LLP
identified an independence matter related to their audit for the year ended December 31, 2013. Deloitte LLP
discussed the matter with the Chair of the Audit Committee, and have stated they do not believe the
independence matter affects the impartiality, objectivity and integrity of the previously issued audit report or
underlying financial statements, or any financial statements issued or to be issued subsequent to the date of the
most recent financial statements covered by an audit report. The audit committee agrees with Deloitte’s
determination.
During the two most recent fiscal years, there were no disagreements between the Company and the current or
former auditors. The accountant’s report on the financial statements for each of the two most recent fiscal years
contained no adverse opinions or disclaimer of opinions. The Company did not consult with Davidson &
Company LLP during the two fiscal years prior to their engagement regarding the application of accounting
principles to any specified transaction or any accounting, auditing or financial reporting issue, or any matter that
was subject to a disagreement or reportable event.
The Company has provided Deloitte LLP with a copy of this disclosure and they have provided a letter which
agrees with the statements made by the Company. A copy of this letter has been filed as an exhibit to the
Company’s fiscal 2015 Form 20-F Annual Report filed with the Commission on March 31, 2016.
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.” 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.
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 expressed in Canadian Dollars (CDN$)
and are prepared in accordance and compliance with International Financial Reporting Standards (“IFRS”) as
issued by the International Accounting Standards Board (“IASB”).
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 reports on the consolidated financial statements, dated March
29, 2017
Consolidated statements of financial position at December 31, 2016 and 2015
Consolidated statements of comprehensive loss for the years ended December 31, 2016, 2015 and 2014
Consolidated statements of changes in equity for the years ended December 31, 2016, 2015 and 2014
Consolidated statements of cash flows for the years ended December 31, 2016, 2015 and 2014
Summary of significant accounting policies and other explanatory information
89
B. Index to Exhibits
1.
1.1
2.
3.
4.
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
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.
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 and filed 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 and filed 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 and filed 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 and filed 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 and filed with the Commission on June 20, 2013.
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 and filed with
the Commission on March 31, 2014.
Arrangement Agreement dated May 11, 2015 in connection with the Company’s statutory Plan of Arrangement
with Almadex and filed with the Commission on March 31, 2016.
Administrative Services Agreement between the Company and Almadex Minerals Limited dated May 15, 2015
and filed with the Commission on March 31, 2016.
First Amending Agreement to the May 15, 2015 Administrative Services Agreement between the Company and
Almadex Minerals Limited dated December 16, 2015 and filed with the Commission on March 31, 2016.
Termination Agreement effective December 31, 2015 between the Company and Hawk Mountain Resources
Ltd. and filed with the Commission on March 31, 2016.
Executive Employment Contract between the Company and Duane Poliquin dated effective January 1, 2016
and filed with the Commission on March 31, 2016.
4.10 Deloitte Letter to the Securities and Exchange Commission dated March 29, 2016 and filed with the
Commission on March 31, 2016.
4.11 Amending Agreement dated April 1, 2016 to the Executive Compensation Contract with Morgan Poliquin
dated January 29, 2013.
4.12 Amending Agreement dated April 1, 2016 to the Executive Employment Contract with Duane Poliquin dated
January 1, 2016.
List of foreign patents – N/A
Calculation of earnings per share – N/A
Explanation of calculation of ratios – N/A
List of subsidiaries
5.
6.
7.
8.
90
9.
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 filed 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 filed with
the Commission on March 28, 2013.
Multiple Voting Policy – adopted by the Board of Directors on May 7, 2013
- Incorporated by reference to the Company’s Form 20-F Annual Report for the year ended December 31,
2014 as filed with the Commission on March 30, 2015.
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
91
Consolidated Financial Statements of
Almaden Minerals Ltd.
For the years ended December 31, 2016, 2015 and 2014
Almaden Minerals Ltd.
December 31, 2016, 2015 and 2014
Table of contents
Independent Auditors’ Report
Consolidated statements of financial position
Consolidated statements of comprehensive loss
Consolidated statements of cash flows
Consolidated statements of changes in equity
1-3
4
5
6
7
Notes to the consolidated financial statements
8-42
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Directors of
Almaden Minerals Ltd.
We have audited the accompanying consolidated financial statements of Almaden Minerals Ltd., which comprise
the consolidated statements of financial position as at December 31, 2016 and 2015 and the consolidated statements
of comprehensive loss, cash flows, and changes in equity for the years ended December 31, 2016 and 2015, 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.
Auditors’ 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 auditors’ 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, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. 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, these consolidated financial statements present fairly, in all material respects, the financial position
of Almaden Minerals Ltd., as at December 31, 2016 and 2015 and its financial performance and its cash flows for
the years ended December 31, 2016 and 2015, in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
Comparative Information
The financial statements of Almaden Minerals Ltd. for the year ended December 31, 2014 (prior to adjustments as
described in Note 3(b) to the financial statements) were audited by another auditor who expressed an unqualified
opinion on those financial statements on March 30, 2015.
As part of our audit of the financial statements of Almaden Minerals Ltd. for the year ended December 31, 2016,
we also audited the adjustments described in Note 3(b) that were applied to the comparative financial statements for
the year ended December 31, 2014. In our opinion, such adjustments are appropriate and have been properly
applied. We were not engaged to audit, review, or apply any procedures to the financial statements of Almaden
Minerals Ltd. for the year ended December 31, 2014 other than with respect to the adjustments and, accordingly,
we do not express an opinion or any other form of assurance on the financial statements for the year ended
December 31, 2014 taken as a whole.
Vancouver, Canada
March 29, 2017
“DAVIDSON & COMPANY LLP”
Chartered Professional Accountants
2800 - 1055 Dunsmuir Street
4 Bentall Centre
P.O. Box 49279
Vancouver BC V7X 1P4
Canada
Tel: (604) 669-4466
Fax: (604) 685-0395
www.deloitte.ca
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Almaden Minerals Ltd.
We have audited, before the effects of the adjustments as discussed in Note 3(b) to the consolidated
financial statements, the consolidated statements of comprehensive loss, cash flows and changes in equity
for the year ended December 31, 2014 (the 2014 consolidated financial statements before the effects of
the adjustments discussed in Note 3(b) to the consolidated financial statements are not presented herein).
These financial statements are the responsibility of the Company’s management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States) and Canadian generally accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. The Company is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. Our audit included consideration of internal control
over financial reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's
internal control over financial reporting. Accordingly, we express no such opinion. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audit
provide a reasonable basis for our opinion.
In our opinion, such 2014 consolidated financial statements, before the effects of the adjustments as
discussed in Note 3(b) to the consolidated financial statements, present fairly, in all material respects, the
results of operations and their cash flows of Almaden Minerals Ltd. and subsidiaries for the year ended
December 31, 2014, in conformity with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
We were not engaged to audit, review, or apply any procedures to the adjustments as discussed in Note
3(b) to the consolidated financial statements and, accordingly, we do not express an opinion or any other
form of assurance about whether such retrospective adjustments are appropriate and have been properly
applied. Those retrospective adjustments were audited by other auditors.
/s/ Deloitte LLP
Chartered Professional Accountants
March 30, 2015
Vancouver, Canada
Almaden Minerals Ltd.
Consolidated statements of financial position
(Expressed in Canadian dollars)
ASSETS
Current assets
Cash and cash equivalents (Note 16)
Accounts receivable and prepaid expenses (Note 5)
Non-current assets
Deposit on mill equipment (Note 9)
Property, plant and equipment (Note 10)
Exploration and evaluation assets (Note 11)
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Non-current liabilities
Deferred income tax liability (Note 17)
Total liabilities
EQUITY
Share capital (Note 12)
Reserves (Note 12)
Deficit
Total equity
TOTAL EQUITY AND LIABILITIES
Commitments (Note 18)
Subsequent events (Note 22)
December 31,
2016
$
December 31,
2015
$
9,770,006
380,898
10,150,904
1,280,383
97,252
35,985,356
37,362,991
47,513,895
6,222,778
383,464
6,606,242
965,358
105,738
30,538,010
31,609,106
38,215,348
857,823
797,769
1,434,882
2,292,705
1,434,882
2,232,651
95,290,220
13,552,101
(63,621,131)
45,221,190
47,513,895
83,757,687
11,822,637
(59,597,627)
35,982,697
38,215,348
The accompanying notes are an integral part of these consolidated financial statements.
These consolidated financial statements are authorized for issue by the Board of Directors on March 28, 2017.
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)
Expenses
Professional fees
Salaries and benefits (Note 13(b))
Travel and promotion
Depreciation (Note 10)
Office and license (Note 13(b))
Rent (Note 13(b))
Stock exchange fees
Insurance
Transfer agent fees
Directors’ fees (Note 13(a))
General exploration expenses (Note 13(a))
Share-based payments (Note 12(d))
Other income (loss)
Interest and other income (Note 13(b))
Impairment of exploration and evaluation assets (Note 11)
Income on exploration and evaluation assets (Note 14)
Loss on investment in associate (Note 7)
Impairment of marketable securities (Note 6)
Impairment of investment in associate (Note 7)
Gain on transfer of spin-out assets (Note 2)
(Loss) gain on fair value of contingent shares receivable (Note 8)
Loss on sale of marketable securities
Loss on sale of property, plant and equipment (Note 10)
Foreign exchange gain (loss)
Loss before income taxes
Deferred income tax recovery (expense) (Note 17)
Net loss for the year
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
2016
$
512,659
1,381,060
259,840
27,039
120,972
146,759
23,389
60,499
23,370
41,000
1,467
1,869,010
4,467,064
550,271
-
-
-
-
-
-
-
-
(3,985)
(102,726)
443,560
(4,023,504)
-
(4,023,504)
Year Ended December 31,
2014
$
772,670
573,900
320,752
245,639
157,275
176,960
88,287
81,429
24,196
48,000
592,105
565,800
3,647,013
2015
$
1,089,276
799,566
264,128
131,486
150,844
175,583
115,294
70,202
31,830
48,000
432,764
950,740
4,259,713
303,403
(97,044)
32,920
(95,892)
(162,000)
(470,700)
3,115,422
(22,500)
-
(22,692)
129,671
2,710,588
(1,549,125)
404,600
(1,144,525)
253,991
(2,570,664)
55,111
(135,209)
(405,903)
(6,637,288)
-
24,900
(42,220)
-
(38,890)
(9,496,172)
(13,143,185)
(1,839,482)
(14,982,667)
-
-
-
(170,640)
239,515
(162,812)
(333,452)
42,413
281,928
Total comprehensive loss for the year
(4,023,504)
(1,477,977)
(14,700,739)
Basic and diluted net loss per share (Note 15)
(0.05)
(0.02)
(0.23)
The accompanying notes are an integral part of these consolidated 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 (recovery) expense
Loss on investment in associate
Depreciation
Loss on sale of marketable securities
Unrealized foreign exchange
(Gain) loss on fair value of contingent shares receivable
Impairment of marketable securities
Impairment of investment in associate
Impairment of exploration and evaluation assets
Loss on disposal of property, plant and equipment
Gain on transfer of spin-out assets
Share-based payments
Changes in non-cash working capital components
Accounts receivable and prepaid expenses
Trade and other payables
Net cash used in operating activities
Investing activities
Exploration and evaluation assets deposits
Net proceeds from sale of marketable securities
Deposit on mill equipment
Property, plant and equipment – purchase
Exploration and evaluation assets – costs
Net cash used in investing activities
Financing activities
Cash paid to Almadex pursuant to the plan of arrangement
Issuance of shares, net of share issue costs
Options exercised
Warrants and finders’ warrants exercised
Net cash from financing activities
Change in cash and cash equivalents
Cash and cash equivalents, beginning of year
Cash and cash equivalents, end of year
Supplemental cash and cash equivalents information – Note 16
2016
$
Year ended December 31,
2014
$
2015
$
(4,023,504)
(1,144,525)
(14,982,667)
-
-
27,039
-
9,575
-
-
-
-
3,985
-
1,869,010
(404,600)
95,892
131,486
-
(1,370)
22,500
162,000
470,700
97,044
22,692
(3,115,422)
950,740
1,839,482
135,209
245,639
42,220
(24,900)
405,903
6,637,288
2,570,664
-
-
565,800
2,566
(209,807)
(2,321,136)
(342,649)
39,546
(3,015,966)
31,242
(554,580)
(3,088,700)
-
-
(324,600)
(22,538)
(5,177,485)
(5,524,623)
-
4,091,646
143,490
7,157,851
11,392,987
683
-
(692,000)
(2,516)
(3,668,974)
(4,362,807)
(3,000,000)
8,428,953
-
-
5,428,953
137,645
39,343
-
(22,940)
(6,768,273)
(6,614,225)
-
5,880,750
-
-
5,880,750
3,547,228
6,222,778
9,770,006
(1,949,820)
8,172,598
6,222,778
(3,822,175)
11,994,773
8,172,598
The accompanying notes are an integral part of these consolidated financial statements.
Almaden Minerals Ltd.
Consolidated statements of changes in equity
(Unaudited – Expressed in Canadian dollars)
Balance, January 1, 2014
64,578,321
81,151,042
9,874,023
284,621
51,524
10,210,168
(43,470,435)
47,890,775
Share capital
Reserves
Number of
shares
Amount
payments Warrants
Share-based
Available-
for-sale
financial
assets
Total
reserves
$
$
$
$
$
Deficit
$
Total
$
Shares issued for cash on exercise of stock options
150,000
121,500
Fair value of cash stock options transferred to share capital
Share-based payments
Private placements, net
Finders' warrants issued pursuant to private placement
Total comprehensive loss for the year
Balance, December 31, 2014
Share-based payments
Private placements, net
Transfer of net assets pursuant to spin-out
Finders' warrants issued pursuant to private placement
Total comprehensive loss for the year
Balance, December 31, 2015
Share-based payments
Private placements, net
Finders' warrants issued pursuant to private placement
Shares issued for cash on exercise of finders’ warrants
Fair value of finders’ warrants transferred to share capital
Shares issued for cash on exercise of warrants
Shares issued for cash on exercise of stock options
68,728,321
87,083,931
10,372,323
299,982
333,452
11,005,757
(58,453,102)
39,636,586
-
-
950,740
-
-
-
67,500
-
4,000,000
5,743,889
-
-
-
-
8,926,666
8,229,361
-
-
(11,828,963)
-
-
-
78,062,984
83,757,687
11,323,063
499,574
-
-
1,869,010
3,229,082
4,073,728
-
35,200
-
-
27,104
5,984
4,592,667
7,130,747
182,000
143,490
-
-
-
-
-
-
-
(67,500)
565,800
-
-
-
-
-
-
-
15,361
-
-
-
-
-
-
(67,500)
565,800
-
15,361
-
-
-
-
-
121,500
-
565,800
5,743,889
15,361
-
281,928
281,928
(14,982,667)
(14,700,739)
180,267
-
19,325
-
-
-
-
-
-
-
-
17,918
-
(5,984)
-
-
-
-
-
-
-
-
-
-
-
950,740
180,267
-
19,325
-
-
-
-
-
-
950,740
8,409,628
(11,828,963)
19,325
273,358
(332,452)
(333,452)
(1,144,525)
(1,477,977)
-
-
-
-
-
-
-
-
-
-
-
-
-
11,822,637
(59,597,627)
35,982,697
1,869,010
-
17,918
-
(5,984)
-
-
(43,180)
-
(108,300)
-
-
-
-
-
-
-
-
-
-
1,869,010
4,073,728
17,918
27,104
-
7,130,747
143,490
-
-
-
-
(4,023,504)
(4,023,504)
13,552,101
(63,621,131)
45,221,190
Fair value of cash stock options transferred to share capital
-
43,180
(43,180)
Shares issued on cashless exercise of stock options
63,510
-
-
Fair value of cashless stock options transferred to share capital
Total comprehensive loss for the year
-
-
108,300
(108,300)
-
-
Balance, December 31, 2016
86,165,443
95,290,220
13,040,593
511,508
The accompanying notes are an integral part of these consolidated financial statements.
Shares issued pursuant to mill option agreement
407,997
273,358
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed 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 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 mineral projects and its principal asset is
the Ixtaca precious metals project located on its Tuligtic claim in Mexico. The Company has not yet
determined whether this project has 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.
Plan of arrangement
On July 31, 2015, the spin-out of Almadex Minerals Limited (“Almadex”) became effective as all
conditions to the statutory plan of arrangement (the “Plan of Arrangement”) were satisfied or waived.
Pursuant to the Plan of Arrangement, Almaden’s shareholders exchanged their existing common
shares of Almaden and received one “new” Almaden common share and 0.6 common shares of
Almadex.
The carrying value of the net assets transferred to Almadex, pursuant to the Plan of Arrangement
consisted of the following assets and liabilities:
Assets:
Accounts receivable and prepaid expenses
Marketable securities(1)
Inventory
Investment in associate
Reclamation deposit
Contingent share receivable
Property, plant and equipment
Exploration and evaluation assets
Total assets
Liabilities:
Trade and other payables
Carrying value of net assets
Fair value of net assets distributed
Gain on transfer of spin-out assets
$ 142,731
357,672
274,768
2,108,408
30,235
47,100
622,971
2,128,240
5,712,125
(49,748)
5,662,377
8,777,799
$ 3,115,422
(1) The carrying value of the marketable securities spun out on July 31, 2015, reflects their mark to
market fair value less an unrealized gain formerly included in reserves representing the accumulated
other comprehensive income on available-for-sale financial assets of $162,812.
8
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
2.
Plan of arrangement (Continued)
In accordance with IFRIC 17, Distribution of Non-cash Assets to Owners, the Company recognized
the distribution of net assets to Almaden shareholders at fair value with the difference between that
value and the carrying amount of the net assets recognized in the consolidated statement of
comprehensive loss.
The Plan of Arrangement resulted in a reduction of share capital amounting to $11,828,963
($8,777,799 fair value of net assets, $3,000,000 cash paid by Almaden, and $51,164 net contribution
from spin-out assets).
The fair value of the net assets distributed was based on the share price of Almadex on August 14,
2015, its first day of trading, of $0.20 per share multiplied by the total number of shares issued,
43,888,992.
Under the terms of the Plan of Arrangement, each issued and outstanding Almaden option and
warrant has been adjusted to compensate the option and warrant holders for the assets spun-out.
The exercise price paid has been allocated between the Company and Almadex on the same ratio
that the fair market value of the spin-out assets has, to the fair market value of the assets of the
Company. See Note 12 (c) and (d).
3.
Basis of presentation
(a) Statement of Compliance with International Financial Reporting Standards (“IFRS”)
These consolidated financial statements have been prepared in accordance and compliance with
IFRS as issued by the International Accounting Standards Board (“IASB”) and interpretations of the
International Financial Reporting Interpretations Committee (“IFRIC”).
(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, 2016.
Certain amounts in prior years have been reclassified to conform to the current period presentation.
(c) Functional currency
The functional and reporting currency of the Company and its subsidiaries is the Canadian dollar.
9
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
3.
Basis of Presentation (Continued)
(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.
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 analysis of the functional currency for each entity of the Company determined by
conducting an analysis of the consideration factors identified in IAS 21, “The Effect of
Changes in Foreign Exchange Rates”. 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 (Notes 11 and 17).
Estimates
o The recoverability of accounts receivable which is included in the consolidated
statements of financial position;
o The estimated annual gains or losses from income and dilution on the investment in
associate;
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
profit or loss;
o The value of the exploration and evaluation assets which is recorded in the consolidated
statements of financial position (Note 4(f));
10
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
3.
Basis of Presentation (Continued)
(d) Significant accounting judgments and estimates (continued)
Estimates (continued)
o The Company uses the Black-Scholes option pricing model to determine the fair value of
options and warrants in order to calculate share-based payments expense and the fair
value of finders’ warrants and stock options. Certain inputs into the model are estimates
that involve considerable judgment and are or could be affected by significant factors that
are out of the Company’s control;
o The provision for income taxes which is included in the profit or loss and the composition
of deferred income tax assets and liabilities included 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 (Note 4(f));
4.
Significant Accounting Policies
(a) Basis of consolidation
These consolidated financial statements include the accounts of the Company and its wholly-owned
subsidiaries as follows:
Jurisdiction
Nature of operations
Puebla Holdings Inc.
Minera Gorrion, S.A. de C.V.
Almaden America Inc.
Republic Resources Ltd.
Ixtaca Precious Metals Inc.
Pangeon Holdings Ltd.
Almaden de Mexico, S.A. de C.V.
Canada
Mexico
USA
Canada
Canada
Canada
Mexico
Mexico
Compania Minera Zapata, S.A. de C.V. Mexico
Mexico
(i)
(i)
(i)
(i)
(i)
(i) Minera Gavilan, S.A. de C.V.
(i)
(i) Minera Alondra, S.A. de C.V.
holding company
exploration company
exploration company
service company
holding company
holding company
exploration company
exploration company
exploration company
holding company
(i) Included in consolidation until July 31, 2015 due to the Plan of Arrangement (Note 2).
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 profit or loss is
included in profit or loss and its investments therein are adjusted by a like amount. Dividends
received from these investments are credited to the investment. The Company’s former 38.8%
interest in Gold Mountain Mining Corporation was accounted for using the equity method until the
Plan of Arrangement.
11
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
4.
Significant Accounting Policies (Continued)
(a) Basis of consolidation (continued)
Inter-company balances and transactions, including unrealized income and expenses arising from
inter-company transactions, are eliminated in preparing these consolidated financial statements.
Unrealized gains arising from transactions with equity accounted investees are eliminated against the
investment to the extent of the Company’s interest in the investee. Unrealized losses are eliminated
in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
(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 profit or 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 profit or loss.
12
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
4.
Significant Accounting Policies (Continued)
(c) Financial instruments (continued)
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 profit or
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.
Financial liabilities
The Company classifies its financial liabilities into one of two categories, depending on the purpose of
the liability. 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 profit or loss.
Other financial liabilities - This category includes trade and other payables, all of which are recognized
at amortized cost.
(d) Cash and cash equivalents
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.
(e) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment
losses, and are depreciated annually on a declining-balance basis at the following rates:
Automotive equipment
Furniture, fixtures and other
Computer hardware and software
Geological library
Field equipment
Drill equipment
30%
20%
30%
20%
20%
20%
13
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
4.
Significant Accounting Policies (Continued)
(f) Exploration and evaluation assets
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 from farm-out arrangements or recovery of costs against the cost of the related
claims. Acquisition costs include, but are not exclusive to land surface rights acquired. Deferred
exploration costs include, but are not exclusive to geological, geophysical studies, annual mining
taxes, exploratory drilling and sampling. At such time as commercial production commences, these
costs will be charged to profit or loss on a unit-of-production method based on proven and probable
reserves. The aggregate costs related to abandoned mineral claims are charged to profit or loss 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 exploration and evaluation asset 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.
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 profit or loss 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.
14
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
4.
Significant Accounting Policies (Continued)
(f) Exploration and evaluation assets (continued)
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 expenditures are 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 profit or loss.
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.
(g)
Impairment of property, plant and equipment
Property, plant and equipment are reviewed for impairment at least annually, or 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.
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 by way of recording an impairment
charge to profit or loss. 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.
15
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
4.
Significant Accounting Policies (Continued)
(h)
Income taxes
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized
in profit or loss except to the extent that it relates to items recognized directly in equity or in other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using
tax rates enacted at the reporting date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognized for the following temporary differences: the initial recognition of assets
or liabilities in a transaction that is not a business combination and that affects neither accounting nor
taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled
entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition,
deferred tax is not recognized for taxable temporary differences arising on the initial recognition of
goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary
differences when they reverse, based on the laws that have been enacted or substantively enacted by
the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income taxes levied by the same tax authority on the same
taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a
net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary
differences, to the extent that it is probable that future taxable profits will be available against which
they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that the related tax benefit will be realized.
(i) Share-based payments
The Company’s stock option plan allows Company employees, directors, officers and consultants to
acquire shares of the Company. The fair value of options granted is recognized as share-based
payment expense with a corresponding increase in equity reserves. An individual is classified as an
employee when the individual is an employee for legal or tax purposes (direct employee) or provides
services similar to those performed by a direct employee.
Fair value is measured at grant date, and each tranche is recognized using the graded vesting
method over the period during which the options vest. The fair value of the options granted is
measured using the Black-Scholes option pricing model, taking into account the terms and conditions
upon which the options were granted. At each financial position reporting date, the amount
recognized as an expense is adjusted to reflect the actual number of stock options that are expected
to vest. In situations where equity instruments are issued to consultants and some or all of the goods
or services received by the entity as consideration cannot be specifically identified, they are measured
at the fair value of the share-based payment. Otherwise, share-based payments are measured at the
fair value of goods or services received.
16
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
4.
Significant Accounting Policies (Continued)
(j) 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.
(k) Reclamation and closure cost obligations
Decommissioning and restoration provisions are recorded when a present legal or constructive
obligation exists as a result of past events where it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, and a reliable estimate of the
amount of the obligation can be made.
The amount recognized as a provision is the best estimate of the consideration required to settle the
present obligation at the reporting date, taking into account the risks and uncertainties surrounding
the obligation and discount rates. Where a provision is measured using the cash flows estimated to
settle the present obligation, its carrying amount is the present value of those cash flows discounted
for the market discount rate.
Over time the discounted liability is increased for the changes in the present value based on the
current market discount rates and liability risks. When some or all of the economic benefits required
to settle a provision are expected to be recovered from a third party, the receivable is recognized as
an asset if it is virtually certain that reimbursement will be received and the amount receivable can be
measured reliably.
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.
(l) 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 (Note
15).
17
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
4.
Significant Accounting Policies (Continued)
(m) Application of new and revised accounting standards effective January 1, 2016
The Company has applied the amendments to IFRSs included in the Annual Improvements to IFRSs
2010-2012 Cycle and 2011-2013 Cycle which were effective for annual periods beginning on or after
July 1, 2014. The amendments did not have an impact on the Company's consolidated financial
statements. The Company has not early adopted any other amendment, standard or interpretation
that has been issued by the IASB but is not yet effective.
The following new accounting standards and amendments which the Company adopted and are
effective for the Company's interim and annual consolidated financial statements commencing
January 1, 2016:
IFRS 7: Amended to require additional disclosures on transition from IAS 39 and IFRS 9.
(n) Future accounting standards
Certain pronouncements were issued by the IASB or IFRIC but are not yet effective as at
December 31, 2016. 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.
The following are the accounting standards issued but not yet effective.
Revenue recognition
IFRS 15 - In May 2014, the IASB issued IFRS 15 – Revenue from Contracts with Customers
("IFRS 15") which supersedes IAS 11 – Construction Contracts; IAS 18 – Revenue; IFRIC 13 –
Customer Loyalty Programmes; IFRIC 15 – Agreements for the Construction of Real Estate;
IFRIC 18 – Transfers of Assets from Customers; and SIC 31 – Revenue – Barter Transactions
involving Advertising Services. IFRS 15 establishes a single five-step model framework for
determining the nature, amount, timing and uncertainty of revenue and cash flows arising from a
contract with a customer. The standard is effective for annual periods beginning on or after
January 1, 2018, with early adoption permitted. The Company is currently considering the
impact, if any, of the standard on its future consolidated financial statements.
Financial instruments
IFRS 9 - In July 2014, the IASB issued the final version of IFRS 9 – Financial Instruments ("IFRS
9") to replace IAS 39 – Financial Instruments: Recognition and Measurement. IFRS 9 provides a
revised model for recognition and measurement of financial instruments and a single, forward-
looking 'expected loss' impairment model. IFRS 9 also includes a substantially reformed
approach to hedge accounting. The standard is effective for annual periods beginning on or after
January 1, 2018, with early adoption permitted. The Company is currently considering the
impact, if any, of the final standard on its future consolidated financial statements.
18
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
4.
Significant Accounting Policies (Continued)
(n) Future accounting standards (continued)
Leases
IFRS 16 - In January 2016, the IASB issued IFRS 16 – Leases ("IFRS 16") which replaces IAS
17 – Leases and its associated interpretative guidance. IFRS 16 applies a control model to the
identification of leases, distinguishing between a lease and a service contract on the basis of
whether the customer controls the asset being leased. For those assets determined to meet the
definition of a lease, IFRS 16 introduces significant changes to the accounting by lessees,
introducing a single, on-balance sheet accounting model that is similar to current finance lease
accounting, with limited exceptions for short-term leases or leases of low value assets. Lessor
accounting remains similar to current accounting practice. The standard is effective for annual
periods beginning on or after January 1, 2019, with early application permitted for entities that
apply IFRS 15. The Company is currently evaluating the impact the final standard is expected to
have on its consolidated financial statements. The Company is currently considering the impact,
if any, of the standard on its future consolidated financial statements.
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.
5.
Accounts receivable and prepaid expenses
Accounts receivable and prepaid expenses consist of the following:
Accounts receivable (Note 13(b))
Prepaid expenses
December 31, December 31,
2015
$ 235,983
147,481
$ 383,464
2016
$ 248,379
132,519
$ 380,898
At December 31, 2016, the Company has recorded value added taxes of $248,142 (2015 - $159,689)
included in exploration and evaluation assets as the value added tax relates to certain projects and
will be recovered when the assets are sold (Note 11).
6.
Marketable Securities
The Company formerly held marketable securities consisting of equity securities of publicly traded
companies, which were designated as available for sale, and valued at fair value. During the year
ended December 31, 2015, the Company determined that $162,000 (2014 - $405,903) of unrealized
losses previously recorded in other comprehensive income was a result of significant or prolonged
losses. These assets were transferred to Almadex as detailed in the Plan of Arrangement on July 31,
2015 (Note 2).
19
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
7.
Investment in Associate
Gold Mountain Mining Corporation (“Gold Mountain”)
The Company formerly held 26.75 million common shares of Gold Mountain. Almaden accounted for
this investment using the equity method as the Company had determined that significant influence
existed. Almaden had recorded its equity share of Gold Mountain’s loss during the year ended
December 31, 2015 in the amount of $95,892 (2014 - $135,209). During the year ended December
31, 2015, the Company wrote down its investment in associate to its fair value and recorded
impairment charges of $470,700 (2014 - $6,637,288) as the decline in value was considered
significant and prolonged. The investment in associate was transferred to Almadex as detailed in the
Plan of Arrangement on July 31, 2015 (Note 2).
The continuity of the Company’s investment in associate for the years ended December 31, 2015 and
2014 is as follows:
Balance, beginning of year
Company’s share of net loss
Impairment
Transfer to Almadex
Balance, end of year
2015
2,675,000
(95,892)
(470,700)
(2,108,408)
-
$
$
$
$
2014
9,447,497
(135,209)
(6,637,288)
-
2,675,000
The following table summarizes the financial information of Gold Mountain for its year ended
December 31, 2015 and 2014:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Revenue
Loss
2015
-
-
-
-
-
-
$
$
$
$
$
$
2014
3,085,070
27,661,031
40,827
1,664,608
9,953
379,047
$
$
$
$
$
$
8.
Contingent Shares Receivable
(a) Gold Mountain Mining Corporation
The Company formerly held contingent shares receivable in Gold Mountain. During the year ended
December 31, 2015, a gain on fair value adjustment of $Nil (2014 - $1,500) was recorded. This asset
was transferred to Almadex as detailed in the Plan of Arrangement on July 31, 2015 (Note 2).
(b) Goldgroup Mining Inc.
The Company formerly held contingent shares receivable in Goldgroup Mining Inc. During the year
ended December 31, 2015, a loss on fair value adjustment of $22,500 (2014 - $23,400) was
recorded. This asset was transferred to Almadex as detailed in the Plan of Arrangement on July 31,
2015 (Note 2).
20
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
9.
Deposit on mill equipment
On October 19, 2015, the Company entered into a Mill Purchase Option Agreement to acquire the
Rock Creek mill. Pursuant to the agreement, Almaden has the exclusive right and option to purchase
the mill for total cash payments of US$6,500,000, plus the issuance of 407,997 common shares
(issued with a fair value of $273,358), subject to adjustment in certain circumstances (the “Option”).
In order to exercise the Option, Almaden must make option payments according to the following
schedule:
Date
October 21, 2015
November 25, 2015
December 29, 2015
December 31, 2015
March 17, 2016
Unrealized foreign exchange
loss on deposit on mill
equipment
December 31, 2016
Payment Status
Cash paid
407,997 shares issued
Cash paid
Cash paid
USD
$ 250,000
250,000
250,000
CAD
$ 346,000
273,358
346,000
965,358
324,600
(9,575)
$1,280,383
On or before June 15, 2017
On or before June 15, 2018
Outstanding
Outstanding
$ 2,000,000
$ 3,750,000
$2,685,400
$5,035,125
The payments are not refundable upon termination of the option.
21
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
10.
Property, plant and equipment
Automotive
equipment
Furniture
and fixtures
and other
Computer
hardware
Computer
software
Geological
library
Field
equipment
Total
$
$
$
$
$
$
$
Cost
December 31, 2015
174,462
135,064
218,166
176,010
51,760
245,647
1,001,109
Additions
Disposals
-
(27,893)
-
-
13,285
-
9,253
-
-
-
-
-
22,538
(27,893)
December 31, 2016
146,569
135,064
231,451
185,263
51,760
245,647
995,754
Accumulated depreciation
December 31, 2015
167,604
130,695
198,221
144,943
48,018
205,890
895,371
Disposals
Depreciation
(23,908)
863
-
874
-
-
6,521
10,081
-
748
-
(23,908)
7,952
27,039
December 31, 2016
144,559
131,569
204,742
155,024
48,766
213,842
898,502
Carrying amounts
December 31, 2015
December 31, 2016
6,858
2,010
4,369
3,495
19,945
31,067
26,709
30,239
3,742
2,994
39,757
105,738
31,805
97,252
During the year ended December 31, 2016, the Company disposed property, plant and equipment
for $Nil proceeds and recorded a loss on disposal of property, plant and equipment of $3,985 in the
consolidated statements of comprehensive loss.
22
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
10.
Property, plant and equipment
Automotive
equipment
Furniture,
fixtures
and other
Computer
hardware
Computer
software
Geological
library
Field
equipment
Drill
equipment
$
$
$
$
$
$
$
Total
$
Cost
December 31, 2014
541,260
166,376
343,129
215,325
65,106
461,498
1,534,988
3,327,682
Additions
Disposal
-
-
1,329
1,187
-
(32,642)
(126,150)
(39,315)
-
-
-
(59,479)
-
-
2,516
(257,586)
December 31, 2015
541,260
135,063
218,166
176,010
65,106
402,019
1,534,988
3,072,612
Accumulated depreciation
December 31, 2014
455,039
157,273
302,583
167,320
60,202
339,880
965,014
2,447,311
Disposal
-
(28,532)
(116,703)
(36,778)
-
(52,881)
-
(234,894)
Depreciation
16,314
1,953
12,341
14,401
962
19,018
66,497
131,486
December 31, 2015
471,353
130,694
198,221
144,943
61,164
306,017
1,031,511
2,343,903
Transfer to Almadex
as per plan of
arrangement July 31,
2015
Carrying amounts
December 31, 2014
December 31, 2015
(63,049)
-
-
-
(200)
(56,245)
(503,477)
(622,971)
86,221
6,858
9,103
4,369
40,546
48,005
4,904
121,618
569,974
880,371
19,945
31,067
3,742
39,757
-
105,738
During the year ended December 31, 2015, the Company disposed property, plant and equipment
for $Nil proceeds and recorded a loss on disposal of property, plant and equipment of $22,692 in
the consolidated statement of comprehensive loss.
23
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
11.
Exploration and evaluation assets
Exploration and evaluation assets
Acquisition costs:
Opening balance - (December 31, 2015)
Additions
Closing balance - (December 31, 2016)
Deferred exploration costs:
Other
Property
Tuligtic
$
3,202,134
1,578,436
4,780,570
Opening balance - (December 31, 2015)
27,335,875
Costs incurred during the period
Drilling and related costs
Professional/technical fees
Claim maintenance/lease costs
Geochemical, metallurgy
Technical studies
Travel and accommodation
Geology, geophysics and exploration
Supplies and misc.
Water exploration
Reclamation, environmental
Value-added tax (Note 5)
Total deferred exploration costs during the period
Closing balance - (December 31, 2016)
Total exploration and evaluation assets
666,210
139,916
138,901
611,344
1,048,807
273,178
489,919
31,636
97,232
123,625
248,142
3,868,910
31,204,785
35,985,355
Total
$
3,202,135
1,578,436
4,780,571
27,335,875
666,210
139,916
138,901
611,344
1,048,807
273,178
489,919
31,636
97,232
123,625
248,142
3,868,910
31,204,785
$
1
-
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
35,985,356
During the year December 31, 2016, the Company entered into two option agreements to secure
land holdings on the Tuligtic project. The Company has the option to acquire a 100% ownership of
two land holdings for total cash payments of $25,000,000 Mexico pesos (MXN) as follow:
Dates
November 28, 2016
November 28, 2018
Payments (MXN)
$10,000,000
$15,000,000
CAD
$651,200
$976,500
Payment Status
Paid
Outstanding
Payments are not refundable upon termination of the option agreement.
24
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
11.
Exploration and evaluation assets (Continued)
Exploration and evaluation assets
Acquisition costs:
Opening balance - (December 31, 2014)
Additions
Tuligtic
$
El
Cobre
$
Other
Properties
$
Total
$
2,370,679
831,455
47,261
13,046
2,430,986
-
119
831,574
Closing balance - (December 31, 2015)
3,202,134
47,261
13,165
3,262,560
Deferred exploration costs:
Opening balance - (December 31, 2014)
24,287,724
1,456,727
469,321
26,213,772
Costs incurred during the period
Drilling and related costs
Professional/technical fees
Claim maintenance/lease costs
Geochemical, metallurgy
Technical studies
Travel and accommodation
Geology, geophysics and exploration
Supplies and misc.
Reclamation, environmental
Value-added tax (Note 5)
Recovery of exploration cost
Contribution from spin out assets
(1)
Impairment of deferred exploration costs
327,084
249,614
206,441
604,653
487,288
254,072
405,352
19,608
119,673
190,197
-
184,169
-
29,121
13,111
78,316
19,882
4,016
-
5,418
-
-
-
-
-
-
6,145
17,352
98,738
-
-
-
170
-
-
(30,508)
(2,950)
-
(97,044)
362,350
280,077
383,495
624,535
491,304
254,072
410,940
19,608
119,673
159,689
(2,950)
184,169
(97,044)
Total deferred exploration costs during the period
3,048,151
149,864
(8,097)
3,189,918
Closing balance - (December 31, 2015)
Less amount transferred to Almadex as per Plan of
Arrangement July 31, 2015
27,335,875
1,606,591
461,224
29,403,690
-
(1,653,852)
(474,388)
(2,128,240)
Total exploration and evaluation assets
30,538,009
-
1
30,538,010
(1) Contribution from spin-out assets relates to historical equipment rental fees paid by the Company
that were previously eliminated due to an intercompany relationship which is now a third party
relationship.
25
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
11. Exploration and evaluation assets (Continued)
The following is a description of the Company’s most significant property interests 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) Other Property
The Company holds a 40% carried interest in the Logan property located in the Yukon Territory,
Canada. The project is carried at a nominal value of $1.
12. Share capital and reserves
(a) Authorized share capital
At December 31, 2016, 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.
(b) Details of private placement and other issues of common shares in 2016 and 2015
On May 25, 2016, the Company closed a non-brokered private placement by the issuance of
3,229,082 units at a price of $1.35 per unit for gross proceeds to the Company of $4,359,260. 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 November 25, 2018. Share issue costs included a finder’s fee of
$147,925 in cash, and finders’ warrants to purchase up to 45,944 common shares at a price of $1.44
per common share until November 25, 2018. The fair value of the finders’ warrants was $17,918. In
connection with the private placement, the Company also incurred $119,689 in share issue costs.
These amounts were recorded as reduction to share capital. The proceeds of the private placement
were allocated entirely to share capital.
On November 25, 2015, the Company issued 407,997 common shares at a fair value of $0.67 per
share as a payment for the Mill Purchase Option Agreement (Note 9).
26
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
12.
Share capital and reserves (Continued)
(b) Details of private placement and other issues of common shares in 2016, 2015 and 2014
(continued)
On November 17, 2015, the Company closed a non-brokered private placement by the issuance of
4,506,666 units at a price of $0.75 per unit for gross proceeds to the Company of $3,380,000. 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 $1.00 per share until November 17, 2017. A finder’s fee of $73,550 in cash and finder’s
warrants to purchase up to 35,200 common shares at a price of $0.77 per common share until
November 17, 2017 was paid on a portion of the placement. The fair value of the finders’ warrants
was $5,984. In connection with the private placement, the Company also incurred $43,075 share
issue costs. $3,199,733 of the proceeds from the private placement was allocated to share capital,
and $180,267 to the warrants under the residual value method.
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 finder’s fee of $212,626 in cash and finder’s
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. The fair value of the finders’ warrants was
$13,341. In connection with the private placement, the Company also incurred $146,796 share issue
costs. The proceeds of the private placement were allocated entirely to share capital.
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
finders’ warrants was $15,361. 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.
27
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
12.
Share capital and reserves (Continued)
(c) Warrants
The continuity of warrants for the years ended December 31, 2016, 2015 and 2014 are as follows:
Exercise December 31,
Expired/ December 31,
price
$ 1.76
$ 1.12
$ 1.58
$ 1.32
$ 1.00
$ 0.77
$ 2.00
$ 1.44
Expiry date
February 11, 2016
February 11, 2016
July 17, 2016
July 17, 2016
November 17, 2017
November 17, 2017
November 25, 2018
November 25, 2018
Warrants outstanding
and exercisable
Weighted average
exercise price
2015
2,210,000
49,410
4,376,000
186,000
2,253,334
35,200
-
-
Granted
-
-
-
-
-
-
1,614,541
45,944
Exercised
-
-
(4,376,000)
-
(216,667)
(35,200)
-
-
cancelled
(2,210,000)
(49,410)
-
(186,000)
-
-
-
-
2016
-
-
-
-
2,036,667
-
1,614,541
45,944
9,109,944
1,660,485
(4,627,867)
(2,445,410)
3,697,152
$ 1.47
$ 1.98
$ 1.55
$ 1.71
$ 1.44
The weighted average remaining life of warrants outstanding at December 31, 2016 was 1.34 years
(2015 – 0.77 years).
Exercise December 31,
Expired/ December 31,
price
$ 1.50
$ 2.00
* $ 1.58
* $ 1.32
* $ 1.76
* $ 1.12
$ 1.00
$ 0.77
Expiry date
August 1, 2015
August 1, 2015
July 17, 2016
July 17, 2016
February 11, 2016
February 11, 2016
November 17, 2017
November 17, 2017
Warrants outstanding
and exercisable
Weighted average
exercise price
2014
48,000
2,000,000
4,376,000
186,000
-
-
-
-
Granted
-
-
-
-
2,210,000
49,410
2,253,334
35,200
Exercised
-
-
-
-
-
-
-
-
cancelled
(48,000)
(2,000,000)
-
-
-
-
-
-
2015
-
-
4,376,000
186,000
2,210,000
49,410
2,253,334
35,200
6,610,000
4,547,944
$ 1.70
$ 1.37
-
-
(2,048,000)
9,109,944
$ 1.99
$ 1.47
* On August 28, 2015, the Company adjusted the exercise price on outstanding warrants
proportionately to reflect the value transferred to Almadex. The weighted average exercise price as at
December 31, 2014 changed, from $1.65 to $1.70.
Expiry date
July 17, 2016*
July 17, 2016
August 1, 2015
August 1, 2015
Weighted average
exercise price
Exercise
Price
$ 1.50
$ 1.50
$ 1.50
$ 2.00
December 31,
2013
4,376,000
186,000
-
-
4,562,000
Granted
-
-
48,000
2,000,000
2,048,000
Exercised
-
-
-
-
-
Expired/
cancelled
-
-
-
-
-
December 31,
2014
4,376,000
186,000
48,000
2,000,000
6,610,000
$ 1.50
$ 1.99
-
-
$1.65
28
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
12.
Share capital and reserves (Continued)
(c) Warrants (continued)
* 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.
The weighted average fair value of finders’ warrants granted during the years ended December 31,
2016, 2015 and 2014 calculated using the Black-Scholes model at issue date, are as follows:
Weighted average assumptions used
Number
of
warrants
45,944
35,200
49,410
48,000
Date of issue
May 25, 2016
November 17, 2015
February 11, 2015
August 1, 2014
Fair value
per share
Risk free
interest
rate
Expected
life
(in years)
Expected
volatility
Expected
dividends
$ 0.39
$ 0.17
$ 0.27
$ 0.32
0.59%
0.38%
0.56%
1.00%
2
2
1
1
55.53%
47.77%
40.83%
49.30%
$Nil
$Nil
$Nil
$Nil
(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, 2016, the Company had reserved 766,544 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, 2016, 2015 and 2014 vested on the grant date.
29
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
12.
Share capital and reserves (Continued)
(d) Share purchase option compensation plan (continued)
The continuity of stock options for the year ended December 31, 2016, 2015 and 2014 are as follows:
Expiry date
May 6, 2016
June 8, 2016
July 14, 2016
August 15, 2016
October 10, 2016
January 6, 2017
May 4, 2017
June 8, 2017
August 26, 2017
September 11, 2017
November 22, 2017
April 4, 2018
May 6, 2018
June 8, 2018
June 18, 2018
June 29, 2018
August 9, 2018
September 15, 2018
December 11, 2018
December 11, 2018
December 11, 2018
January 2, 2019
July 2, 2019
July 2, 2019
Options outstanding
and exercisable
Weighted average
exercise price
(i)
(i)
Exercise
price
* $ 1.33
* $ 2.89
* $ 1.37
* $ 2.57
* $ 1.23
* $ 0.98
* $ 1.91
* $ 1.98
* $ 0.74
* $ 2.31
* $ 2.22
* $ 1.74
$ 1.41
$ 1.44
* $ 1.46
$ 1.71
$ 1.91
$ 1.85
$ 0.72
$ 1.68
$ 1.80
* $ 1.04
* $ 1.32
$ 1.19
Dec 31,
Granted
2015
-
65,000
-
2,145,000
-
130,000
-
150,000
-
150,000
-
1,180,000
-
200,000
-
75,000
-
1,445,000
-
500,000
-
100,000
-
90,000
-
100,000
- 1,915,000
-
15,000
491,000
170,000
-
150,000
20,000
-
-
60,000
250,000
-
-
-
756,000
-
-
375,000
150,000
-
Exercised
-
-
(120,000)
-
(150,000)
-
-
-
(135,000)
-
-
-
-
-
-
-
-
-
(32,000)
-
-
-
-
-
Dec 31,
Expired /
2016
cancelled
-
(65,000)
-
(2,145,000)
-
(10,000)
-
(150,000)
-
-
- 1,180,000
175,000
(25,000)
75,000
-
- 1,310,000
500,000
-
100,000
-
90,000
-
-
100,000
- 1,915,000
250,000
-
15,000
-
491,000
-
170,000
-
724,000
-
150,000
-
20,000
-
375,000
-
150,000
-
60,000
-
7,761,000 2,921,000
(437,000)
(2,395,000) 7,850,000
$ 1.65
$ 1.55
$ 1.08
$ 2.81
$ 1.29
30
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
12.
Share capital and reserves (Continued)
(d) Share purchase option compensation plan (continued)
(i). In accordance with the Company’s stock option plan, options holders exercised 105,000 and
150,000 stock options on a cashless basis at an exercise price of $1.37 and $1.23. The total number
of shares issued in connection with the cashless exercise of options was 63,510.
The weighted average remaining life of stock options outstanding at December 31, 2016 was 1.13
years (2015 – 1.41 years).
Exercise
price
Expiry date
$ 1.14
January 4, 2015
$ 2.26
February 22, 2015
$ 1.67
April 25, 2015
$ 1.00
June 21, 2015
$ 0.92
July 16, 2015
August 27, 2015
$ 2.22
September 20, 2015 * $ 2.34
November 22, 2015 * $ 2.40
* $ 1.33
May 6, 2016
* $ 2.89
June 8, 2016
* $ 1.37
July 14, 2016
* $ 2.57
August 15, 2016
* $ 1.23
October 10, 2016
* $ 0.98
January 6, 2017
* $ 1.91
May 4, 2017
* $ 1.98
June 8, 2017
August 26, 2017
* $.0.74
September 11, 2017 * $ 2.31
November 22, 2017 * $ 2.22
* $ 1.74
April 4, 2018
* $ 1.46
June 18, 2018
$ 0.72
December 11, 2018
* $ 1.04
January 2, 2019
July 2, 2019
* $ 1.32
Options outstanding
and exercisable
Weighted average
exercise price
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
Granted
-
-
-
-
-
-
-
-
-
-
-
-
-
1,180,000
-
-
1,445,000
-
-
-
-
756,000
-
-
Exercised
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Expired /
cancelled
(970,000)
(20,000)
(25,000)
(140,000)
(200,000)
(205,000)
(100,000)
(75,000)
-
(125,000)
(20,000)
-
-
-
(25,000)
-
-
-
-
-
-
-
-
-
December 31,
2015
-
-
-
-
-
-
-
-
65,000
2,145,000
130,000
150,000
150,000
1,180,000
200,000
75,000
1,445,000
500,000
100,000
90,000
250,000
756,000
375,000
150,000
6,285,000
3,381,000
$ 2.05
$ 0.82
-
-
(1,905,000)
7,761,000
$ 1.48
$ 1.65
* On August 20, 2015, the Company adjusted the exercise price on outstanding stock options
proportionately to reflect the value transferred to Almadex. The weighted average exercise price as at
December 31, 2014 changed, from $2.29 to $2.05.
31
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
12. Share Capital and Reserves (Continued)
(d) Share purchase option compensation plan (continued)
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
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
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
32
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
12.
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, 2016, 2015
and 2014, calculated using the Black-Scholes model at grant date, are as follows:
Weighted average assumptions used
Number
of options
Date of grant
60,000 December 21, 2016
20,000 November 2, 2016
150,000 October 6, 2016
170,000 September 15, 2016
491,000 August 9, 2016
15,000 June 29, 2016
1,915,000 June 8, 2016
100,000 May 6, 2016
756,000 December 11, 2015
1,445,000 August 26, 2015
1,180,000 January 6, 2015
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
Fair value
per share
$0.42
$0.69
$0.57
$0.70
$0.76
$0.87
$0.62
$0.52
$0.29
$0.20
$0.37
$0.40
$0.46
$0.83
$0.42
$0.76
Risk free
interest
rate
0.83%
0.54%
0.60%
0.58%
0.50%
0.54%
0.54%
0.54%
0.40%
0.53%
0.56%
0.99%
1.08%
1.47%
1.08%
1.43%
Expected
life
(in years)
2
2
2
2
2
2
2
2
3
2
2
2
2
5
2
5
Expected
volatility
70.18%
68.31%
68.47%
68.08%
67.52%
66.44%
64.68%
63.84%
55.79%
58.76%
52.37%
51.09%
52.55%
66.05%
52.61%
68.01%
Expected
dividends
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
$Nil
Total share-based payments expenses as a result of options granted and vested during the year ended
December 31, 2016 was $1,869,010 (2015 - $950,740; 2014 -$565,800)
33
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
13. 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. The net aggregate
compensation paid or payable to key management for services after recovery from Almadex (Note 13
(b)) is as follows:
December 31,
2016
December 31,
2015
December 31,
2014
Salaries, fees and benefits
Share-based payments
Directors’ fees
$
$
755,475 $
1,537,060
41,000
2,333,535 $
740,208
725,165
48,000
1,513,373
(i) $
$
(i)
738,125
469,500
48,000
1,255,625
(i) For the year ended December 31, 2015 and December 31, 2014, Hawk Mountain Resources
Ltd. (“Hawk Mountain”), a private company of which the Chairman of the Company is a
shareholder, was paid $193,333 and $240,000 respectively for geological services provided to
the Company and is recorded in general exploration expenses. The services agreement with
Hawk Mountain was terminated effective December 31, 2015. Effective January 1, 2016, the
Company entered into an employment contract with the Chairman directly.
(b) Almadex Minerals Ltd (“Almadex”)
Effective August 1, 2015, approximately 30% of administrative expenses is recovered from Almadex
pursuant to the Administrative Service Agreement.
During the year ended December 31, 2016, the Company received $464,498 (2015 - $181,405; 2014
- $Nil) from Almadex for administrative services fees included in other income.
At December 31, 2016, the Company accrued $63,429 (2015 - $78,511) payable to Almadex for
drilling equipment rental services in Mexico.
At December 31, 2016, included in accounts receivable is $149,429 (2015 - $41,840) due from
Almadex.
(c) Other related party transactions
i) ATW Resources Ltd. (“ATW”)
Almaden owned a 50% interest in this company which holds title in trust for the ATW project.
34
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
13. Related party transactions and balances (Continued)
(c) Other related party transactions (continued)
ii) Other
(a) During the year ended December 31, 2016, the Company paid a company controlled by a
Director of the Company, $Nil (2015 - $1,200; 2014 - $Nil) for administrative services provided to
the Company.
(b) During the year ended December 31, 2016, the Company employed the Chairman’s daughter for
a salary of $38,800 less statutory deductions (2015 - $43,225; 2014 - $34,050) for marketing and
administrative services provided to the Company.
14.
Income on Exploration and Evaluation Assets
Income on exploration and evaluation assets is comprised of the following:
2016
2015
$ - $ 32,920
$ - $ 32,920
Year ended December 31,
2014
$ 55,111
$ 55,111
During the year ended December 31, 2015, the Company received a 2014 British Columbia Mining
Exploration Tax Credit (“BCMETC”) refund from the formerly held Merit projects in British Columbia,
Canada.
During the year ended December 31, 2014, the Company reversed previous years’ exploration costs
as a result of a Canada Revenue Agency review of Almaden’s 2010 and 2011 BCMETC from various
grassroots mineral projects in British Columbia, Canada.
15.
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, 2016 was based on the
loss attributable to common shareholders of $4,023,504 (2015 - $1,144,525; 2014 - $14,982,667) and
a weighted average number of common shares outstanding of 82,322,754 (2015 – 73,248,803, 2014
– 66,331,061)
The calculation of diluted net loss per share for the year ended December 31, 2016, 2015 and 2014
did not include the effect of stock options and warrants as they are anti-dilutive.
35
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
16. Supplemental cash flow information
Supplemental information regarding non-cash transactions is as follows:
Investing and financing activities
Exploration and evaluation assets expenditures
included in trade and other payables
Contribution from spin-out assets; recognition of
Exploration and evaluation cost reclassified from
share capital
Residual value of warrants classified to reserves
from share capital
December 31,
2016
December 31,
2015
December 31,
2014
$ 535,254
$ 265,393
$ -
-
-
184,169
180,267
-
-
Fair value of finders’ warrants
17,918
19,325
15,361
Fair value of shares issued pursuant to mill option
agreement
-
273,358
Fair value of finders’ warrants transferred to share
capital on exercise of finders’ warrants
Fair value of cash stock options transferred to
share capital on exercise of options
Fair value of cashless stock options transferred to
share capital on exercise of options
5,984
43,180
108,300
-
-
-
-
-
67,500
-
Supplemental information regarding the split between cash and cash equivalents is as follows:
Cash
Term Deposits
December 31,
2016
December 31,
2015
$ 1,427,306
8,342,700
$ 9,770,006
$ 1,722,728
4,500,050
$ 6,222,778
36
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
17.
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:
Income(loss) before income taxes
Statutory rate
Expected income tax
Effect of different tax rates in foreign jurisdictions
Non-deductible share-based payments
Other permanent items
Change in deferred tax assets not recognized
Impact of change in expected manner of recovery
Share issuance costs
True-ups and other
Deferred income tax (recovery) expenses
December 31,
2016
$ (4,023,504)
26.00%
(1,046,111)
343
485,94
3
2,022
3,518,776
853,274
(39,241)
(3,775,006)
$ -
December 31,
2015
December 31,
2014
$ (1,549,125) $ (13,143,185)
26.00%
26.00%
(402,773)
(8,855)
247,192
(3,417,228)
(79,333)
147,108
213,166
(574,942)
(306,411)
(21,723)
449,746
$ (404,600)
251,520
3,832,705
1,128,469
(99,089)
75,330
$ 1,839,482
(b) The Company’s deferred income tax (recovery) 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 the Company’s spin-out (Note 2), 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, the Company has reflected the tax
impacts in the 2016 financial statements as follows:
Deferred tax assets
Non-capital losses
Deferred tax liabilities
Exploration and evaluation assets
Contingent shares receivable
December 31,
2016
December 31,
2015
$ 4,570,832
$ -
(6,005,714)
-
(6,005,714)
(1,434,882)
-
(1,434,882)
Net deferred tax liabilities
$ (1,434,882)
$ (1,434,882)
37
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
17.
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:
Non-capital loss carry forwards
Capital loss carry forwards
Exploration and evaluation assets
Share issue costs
Property, plant and equipment
Cumulative eligible capital deduction
Investment tax credit
December 31,
2016
December 31,
2015
$ 13,238,619
24,538,993
8,221,842
548,690
33,492
545,623
239,849
$ 47,367,108
$ 29,084,111
214,238
3,687,607
657,206
54,897
586,691
201,354
$ 34,486,104
At December 31, 2016, the Company had operating loss carry forwards available for tax purposes in
Canada of $13,184,889 (2015 - $11,718,566) which expire between 2032 and 2036 and in Mexico of
$15,415,208 (2015 - $17,365,545) which expire between 2022 and 2025.
18. Commitments
The Company has entered into an operating lease for office premises through August 30, 2017. On
January 2017, the Company signed a new office lease effective April 1, 2017 through to March 31,
2022.
As at December 31, 2016, the remaining payments for executive contracts and the operating lease
are due as follows:
2017
2018
2019
2020
2021
Total
Office lease
Executive contracts
$182,890
545,000
$727,890
$148,410
545,000
$693,410
$150,884
240,000
$390,884
$154,182
240,000
$394,182
$155,006
240,000
$395,006
$791,372
1,810,000
$2,601,372
38
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
19. Financial instruments
The fair values of the Company’s cash and cash equivalents, 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 rate risk and commodity and equity price risk.
(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, the US dollar and Mexican peso. The Company does not
invest in foreign currency contracts to mitigate the risks.
As at December 31, 2016, 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
$ 1,837,682
-
$ 1,837,682
Mexican peso
$ 69,768
65,048
$ 134,816
$ 187,513
$ 187,513
$ 70,841
$ 70,841
$ 1,650,169
$ 63,975
A 10% change in the US dollar exchange rate relative to the Canadian dollar would change
the Company’s net loss by $165,000.
A 10% change in the Mexican peso relative to the Canadian dollar would change the
Company’s net loss by $6,400.
(b)
Credit risk
The Company’s cash and cash equivalents are held in large Canadian financial institutions,
located in both Canada and Mexico. Cash equivalents mature at various dates during the
twelve months following the statement of financial position date. The Company’s excise tax
included in accounts receivables and prepaid expenses consists primarily of sales tax due
from the federal government of Canada.
39
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
19. Financial instruments (Continued)
(b)
Credit risk (Continued)
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, 2016, 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.
(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. The Company is exposed to varying
interest rates on cash and cash equivalents. The Company has no interest bearing debt.
A 1% change in the interest rate would change the Company’s net loss by $83,000.
(e)
Commodity and equity 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 monitors gold prices to determine the appropriate course of action to
be taken by the Company. Equity price risk is defined as the potential adverse impact on the
Company’s performance due to movements in individual equity prices or general movements
in the level of the stock market.
40
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
20. Management of capital
The Company considers its capital to consist of components of equity. 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.
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.
21. Segmented information
The Company operates in one reportable operating segment, being the acquisition and exploration of
mineral resource properties.
The Company’s non-current assets are located in the following geographic locations:
Canada
United States
Mexico
December 31,
2016
$ 89,950
1,280,383
36,969,158
$ 38,339,491
December 31,
2015
$ 96,610
965,358
30,547,138
$ 31,609,106
41
Almaden Minerals Ltd.
Notes to the consolidated financial statements
For the years ended December 31, 2016, 2015 and 2014
Expressed in Canadian dollars
22. Subsequent events
On February 7, 2017, the Company completed a $3.4 million non-brokered private placement
involving the issuance of 2,519,407 units at $1.35 per unit. Each unit consists of one common share
of the Company and one-half of one non-transferable common share purchase warrant. Each
Warrant allows the holder to purchase one common share of the Company at a price of $2.00 per
share until August 7, 2019.
On January 24, 2017, the Company received $100,000 on the exercise of 100,000 warrants with an
exercise price of $1.00.
On January 6, 2017 and March 17, 2017, stock option holders exercised 350,000, 115,000 and
92,000 stock options on a cashless basis at an exercise price of $0.98, $0.74, and $0.72 respectively
in accordance with the Company’s stock option plan. The total number of shares issued in connection
with the cashless exercise of options was 148,631.
On January 5, 2017 and January 6, 2017, the Company received $813,400 and $30,240 on the
exercise of 830,000 and 42,000 stock options with an exercise price of $0.72 and $0.98 respectively.
On January 11, 2017 and March 17, 2017, the Company granted to employees, officers and directors,
pursuant to its stock option plan, 1,427,000 and 207,000 stock options at exercise price of $1.34 and
$1.35 per share expiring on July 2, 2019 and March 17, 2019 respectively.
42
ALMADEN MINERALS LTD.
Corporate Organizational Chart
December 31, 2016
Almaden Minerals Ltd.
(“Almaden”)
Canada
TSX: AMM
NYSE MKT: AAU
Puebla Holdings Inc.
(“Puebla”)
Canada
100%
Minera Gorrión SA de CV
(“Gorrión”)
Mexico
49,999 shares
99.9%
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 29, 2017
/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 29, 2017
/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, 2016 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 29, 2017
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, 2016 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 29, 2017
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 29, 2017
By /s/Morgan Poliquin
Morgan Poliquin, CEO
92