Almaden minerals completes first-ever social impact assessment for Mexican mining project

Source: Streetwise Reports   12/20/2017

The CEO of Almaden Minerals, Dr. Morgan Poliquin, sits down with Gerardo Del Real of Resource Stock Digest to discuss the company's Social Impact Assessment for its Ixtaca project in Mexico.

Ixtapa Project Area, Mexico

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is President and CEO of Almaden Minerals Ltd. (AMM:TSX; AAU:NYSE), Dr. Morgan Poliquin. Morgan, how are you this afternoon?

Morgan Poliquin: Excellent, thank you very much. Thanks for having me on again. How are you?

Gerardo Del Real: I'm excellent as well, thank you so much for asking. Morgan, I want to take a quick second and congratulate you. You just announced the completion of a Social Impact Assessment at your Ixtaca project. Usually, when we chat, we're talking about drill results and we're talking about exploration upside and you're giving me a lesson in geology and how these systems develop and how you explore them and the origins. But today I think it's definitely a special interview, special to me. My family coming from Zacatecas, Mexico, has really caused me to take an appreciation for mining and the benefits of mining. And on the other end of it I also have a deep appreciation for how important it is to do it responsibly and do it correctly. So the announcement of this social impact assessment, which I believe is the first of its kind in the mining space, I think is a huge step towards doing things in a transparent way with respect to the community that you are working in.

And I want to talk about everything that went into that and some of the highlights. Could you please talk to me about what inspired you to take this extra step that, frankly, Almaden did not have to take.

Morgan Poliquin: Well, thanks for this opportunity. It's a real pleasure to talk about this subject, especially since I just returned from Ixtaca where we had a community information meeting and our annual year-end party with people in the region. Over 700 people attended, and we reviewed Ixtaca development plans and then had a large community meal together. We�re explorers, so the advantage of finding something like Ixtaca as part of an exploration program is you're the first there. We didn't take that good fortune lightly. It's our legacy and first impressions mean everything, as everyone knows. And we really believe, number one, in what we do. We really believe that mines are important and beneficial to society and that's the starting place with this. The fact is that mining is not well understood even here in a big city. People have rarely been to a mine, whereas everybody knows a bit about farming. That's the starting point, it's extremely important that you communicate what you're doing and you communicate the nature of the business that you're in because it is not something people encounter regularly.

But first of all, you start from a place of respect for property and human welfare. When you're prospecting it starts from requesting access to do that work and establishing that frame of reference. We can't, as I say in community meetings, we can't do anything without the support and acceptance of the people on whose land we may be working on in any project in Mexico, whether that be private property or ejido land. That's the starting place but in many parts of Mexico, as you pointed out, mining is extremely well understood. You're often exploring or developing right adjacent to existing mines. We accept that it is our job to describe what we're all about, what we do, and what mining's all about. Everything, the risks and the benefits of a mining development. We felt that it was extremely important that we really introduce people to what that would look like.

So, we engaged in a lot of educational efforts, because there aren't mines immediately adjacent to Ixtaca like there are in many parts of Mexico. So we took people to operating mines. We had a series of lectures where we brought in experts on subjects like human rights, like explosives and many aspects of mining and development. As the discovery developed and moved along it moved into an open discussion with tangible elements to it. We've taken almost 500 local folks in the area to operating mines. We, of course, employ locally and by owning our own drills we have trained a large group of people local to the deposit in those aspects of mining. And that helps.

But really, those mine tours and open transparent communication of what we're doing is the foundation for this study. As we move forward and move into advanced studies, resource, and of course we're working on a feasibility study now, we're moving toward permitting, as we've indicated before. You can't rest on your understanding of what the community's needs and concerns are. And, really, this is going to become the international standard for resource development and, frankly, any development, is that you have third parties come in and review those efforts of communication and demonstrate that people have felt that you're open, available, responsive, transparent and communicative about your project and that they have a forum to express all the things they need to express.

Ultimately, as I say, that's where projects are going, in this direction. We've always felt like we're one of the leaders. We're an entrepreneurial group with respect to geology and we want to be that way as well in terms of these elements which are just as important as the geology, of course. The founder of the company, my dad, is a farmer. He grew up in an area without power or running water in Saskatchewan and we feel more comfortable most of the time in places like Ixtaca where we're working than we do in urban environments. We really believe in what we're doing. We really believe that mining is a benefit. And, of course, it comes with risks and it comes with changes, like any other development does. Working together in a respectful, open way right from the get go is basically what this boils down to.

Of course, this study is a third party study. Sometimes people don't express everything to you directly and this allows for all third parties like financiers and activist groups, any independent social groups to be able to evaluate, not just take our word for it. That's really what this boils down to.

Gerardo Del Real: Now Morgan, before we get to talking about the findings, I want to talk about the process. The process is very important because as you mentioned this wasn't a study that was an in-house study that Almaden commissioned or paid for and was conducted by Almaden personnel. You engaged an arm�s length consultant in the spring of this year. Is that correct, Morgan?

Morgan Poliquin: That's right. Yes. We'd been in communication. You want to be doing it at the right stage in the project. And, of course, the big stage here for us was the prefeasibility study because it sets the mine plan. When we communicated the prefeasibility study in open dialogue with the community. So that was really the trigger point because that prefeasibility study is the mine plan moving forward we're doing the feasibility study on. We don't expect significant changes. And, of course, it's based on years of consultation that we've been doing. That's the stage at which we felt was the time to engage this.

Gerardo Del Real: Now the gentleman that completed the study I understand is a lawyer with a doctorate in constitutional law with a specialty in human rights. Is that correct, Morgan?

Morgan Poliquin: That's right, yes.

Gerardo Del Real: And so tell me, with his 20 years' experience, why did you decide to have him and the GMI consulting group, which is one of Mexico's most important, credible and influential groups in regards to consulting services to government and industry? Why bring someone of that caliber with that background? Was credibility a big issue for you, as far as how important it was?

Morgan Poliquin: This EVIS or social impact study is not required by law for mining, but it is for oil and gas, and other development projects. Certainly, we wanted to use the absolute best. As you asked me before it has to be a third party. Just as a resource or technical information, this is extremely critical information for investors and it needs to be done in an independent fashion. I'm a geological engineer, I'm always looking for who I think is the best to perform the duties and certainly we looked and we felt that this gentleman is extremely respected, both in Mexico and internationally. His credentials speak for themselves. In the news release we outlined, with his permission, outlined a number of his accomplishments. Credibility is very important when you're going to hire an independent contractor to do work like this.

Gerardo Del Real: Now I understand that the SIA was carried out by nine anthropologists, ethnologists, and sociologists from various universities, as outlined in the most recent news release. But the part that was very impressive to me is they actually lived in community homes within the area. This wasn't a study where nine very well-educated academics came in and spoke to somebody in the evening time and filled out a report and said, "Yes, these guys are doing it the right way. These guys and gals are doing things correctly." They actually lived in community homes. Can you explain that process to me?

Morgan Poliquin: I've learned about how these studies are conducted and I think that would be really amazing to our shareholders to understand. That's the concept, these are special people and they're doing very essential work for all parties, all stakeholders. It has to be done in a very respectful way that puts people at ease. The nature of it being independent, it's an organic process. Living with somebody and eating with them. These people didn't drive from the hotel in a BMW every day and show up with a clipboard. These people love what they do. They're anthropologists and have a great respect and want to get the information correct and the best way to do that is to live with people.

Gerardo Del Real: Excellent. I talked about the process and how important that was. But some of the findings that came as a result of this study include the fact that Almaden Minerals was found to be in compliance with best principles and international best practices. This part was interesting, and this goes back to the process. All the field work is backed up by audio, privacy notices and photographs which demonstrate the voluntary participation of the interviewees and their consent to be included in the study. You know, activism is important. Mining is important. Transparency, to me, is very important. And that part really sticks out to me. The fact that everything is backed up by audio and photographs and that everybody consented and there weren't any anonymous, either complaints or false praise to the men and women that actually lived in these community homes. Can you speak to that a bit?

Morgan Poliquin: Yes. It just makes sense to me. My background is more technical, I'm a scientist. Working in geology and rocks and things like that, it just makes sense to me. Social data has the qualitative component that an assay and a rock doesn't have. It either is one gram or it's not sort of a thing. Social data is more qualitative and it has to be conducted in a very respectful manner. But at the end of the day you're still gathering information and it has to be collected in this kind of a way, also documented. These are really special people that do this kind of work. The premise is they respect the people that they're living and speaking with and speaking to and they want the information to be accurate and reflective of the true views of the folks they're talking to.

Gerardo Del Real: You mentioned the mine tours earlier, and it's my understanding that when this study was initiated, at that time you had visited 22 mines and there had been a total, I believe, of over 440 people from the community. Can you explain that process a bit to people that may be new to the Almaden story or the approach there?

Morgan Poliquin: It's really different to do, but I think it has to be an essential practice moving forward. Mining is a tough business just from the engineering and geology side. We tend to operate in isolation, mining and exploration companies. We need to get together and do these things more as an industry because mining is poorly understood, particularly in areas where there aren't existing mines. And that's the case with Ixtaca. It's in a mining country and we're just a few hours' drive away from operating mines, but in the immediate area there aren't mines. Transparency for me meant not somebody like me pointing at a map. It meant seeing it for yourself. It comes back to we really believe in what we're doing. We really believe that mines can be done well and are an essential element of human activity and human society. Mining is not a political activity. It's an activity that's necessary. It's necessary for the economy, for the green economy in particular, but it's not well understood. Because mines are so small, in general terms, usually they don't occupy huge areas like agriculture does. Agriculture occupies 50%, I believe, in the United States. So, it's everywhere, people see it. But mining is in very specific locations and getting people out and seeing it firsthand.

We believe the people around the Ixtaca area are very capable of making their own decisions, but we want to put the best information in their hands. And that means going to see it for yourself, don't take our word for it. We believe in it so strongly that we think there's nothing better than going to see it for yourself, and that's a tremendous process to be involved with. We feel very fortunate that we're able to do that for people.

Gerardo Del Real: Now, Morgan, I can't let you go without asking about the Wheelchair Foundation. It's a cause that I know is very important to you and to Almaden, and something that I'm looking forward to participating in here in 2018. Some of the better people in our business, people like Jeff Phillips, have participated in the past and have donated generously. Can you talk a bit about the Wheelchair Foundation and the wheelchairs and just how that's worked, the partnership between Almaden and the Wheelchair Foundation in the past and what that looks like moving forward?

Morgan Poliquin: One of our shareholders introduced us to the foundation and its good work around the world. Quickly we recognized this is something that we can do and help with and work with several shareholders who are involved in it. These shareholders have donated a lot of money to this and seen the wonderful effects. So, we were very grateful for the opportunity, and certainly it's been one of the more emotional things that I've been involved with. You know, in remote places in Mexico and around the world people don't have access to wheelchairs often and it has a limiting effect on their lives. These are rugged wheelchairs, some of them are designed for children with very significant mobility limitations and it has the potential to change lives. So, it's something that we're very proud to be part of and grateful that our shareholders brought this to our attention.

Gerardo Del Real: Now I could go on for another ten or fifteen minutes, we could talk at length, but I want to make sure that everybody gives themselves an opportunity to go to Almaden's website. That website is AlmadenMinerals.com, under the community section. I encourage everyone to just get familiar with the approach that Almaden's taken. I know that you have a scholarship program set up for top performing local students. I know that Almaden's established several clubs. I saw that when I first visited the property last year. And, again, I can't say enough about the transparency and the respect with which you treat everybody. There will always be dissenting voices. There's dissenting voices within my family about what we're cooking this evening, right? And that's part of the course. But I do want to commend you on the transparency and taking the initiative to get this study commissioned.

Morgan Poliquin: Well, thank you very much. And that's quite right. We know that people have different views and opinions and we welcome them. We want to create a safe environment for people to express them and feel like they're welcome and their concerns are welcome. That's been the premise of this program all the way along, is that there's only one way that any mine in the world will be developed, and that's with communities local to the mine and with their support. That's also the right way that a mine will be developed. I don't think anybody expects a hundred percent buy in to anything in the world. But the key is to be respectful and open and communicative, and that's been our intention all the way along.

Gerardo Del Real: Morgan, thank you very, very much. Thank you for the opportunity.

For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. He brings his extensive experience to the public through Outsider Club, Resource Stock Digest, Junior Mining Monthly, and Junior Mining Trader.

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