 | Bio |
Over a period of forty-two years, Duane progressed from field work in isolated parts of Canada to project initiation and management, to investment analysis and decision making, to management of public companies and the discovery of several mines, resulting in profits for long-term shareholders and associates.
ian Institute of Mining and Metallurgy, and several other industry associations.Over a period of forty-two years, Duane progressed from field work in isolated parts of Canada to project initiation and management, to investment analysis and decision making, to management of public companies and the discovery of several mines, resulting in profits for long-term shareholders and associates.
For a year after graduating, Poliquin worked for Hudson Bay Exploration and Development in northern Manitoba, supervising staking and line-cutting crews and exploration drilling. While there, he assisted on EM surveys that led to the discovery of the White Lake copper deposit and was in charge of the discovery hole and subsequent development drilling on the Anderson Lake copper mine, in production since the mid-1960s to present, with initial reserves of about five million tons of four percent copper.
In June of 1963, Poliquin went to work for McPhar Geophysics Ltd. in Greece, consultants for Northcal Mines Limited, seeking new copper reserves around ancient mines. His group identified and assembled a land package for the Skouries porphyry copper deposit in northern Greece. In December of that year, Placer took over the Northcal copper properties and asked Poliquin to continue in charge of further development work on the Limogardi project.
After a stint of consulting to a variety of companies in the mid- to late ‘60s, working in all parts of Canada, the western United States, and northern Mexico, Poliquin went to work for the Kaiser Steel Corporation as a senior geologist in October 1968. He worked out of their Oakland, California office on steel-related projects, but while in Brisbane, Australia, one of the properties identified through his reconnaissance was the Kidston gold deposit. This was not pursued, though, as the JV partners were not interested in low-grade gold deposits in 1970.
Starting in April of 1970, Poliquin worked for Scurry Rainbow Oil Co. Ltd. as senior geologist of their metallics division, but later struck out on his own when he couldn't interest them in prospecting for gold deposits. In December of 1972, Poliquin formed Westley Mines Limited to finance the development of the Santa Fe property. This was a disseminated gold deposit in Nevada that he had identified and then assembled into a land package by staking and option. By 1980, under a joint venture agreement with a third party, about 12,000,000 tons grading 0.037 o/t Au and 3 o/t Ag had been blocked out and an offer was made by the JV partner to merge both interests back into Westley, and for them to purchase control of Westley.
Poliquin continued to prospect in western North America, employing a small hand-picked team that was very effective at identifying, acquiring and partially developing a number of properties. One of these was the Apex germanium-gallium property in Utah, which was sold to Musto Explorations Ltd. Musto spent $30 million putting the property into production, on a scale projected to be 20% of the world supply of these metals, and with a gross contained metal value of about $2 billion. Recovery difficulties and low prices resulted in its sale to Hecla. Recently Preussag and Teck-Cominco have bought the property.
In 1986, Poliquin's Almaden Resources Corporation was brought public on the Vancouver Stock Exchange. The company identified, acquired and sold the Trinidad gold property in Sinaloa, Mexico that was put into production by Eldorado Gold Mines Ltd. at an initial production rate of 30,000 ounces of gold per year from a heap leaching operation, with Almaden retaining a royalty. Poliquin then acquired control of another firm that owned the Siwash prospect, a small high-grade gold deposit in British Columbia, and shipped some high-grade material (about 3 ounces of gold per ton). In 2001, the two companies were amalgamated as Almaden Minerals Ltd., listed on the TSX. The company plans to remain focused on prospecting for gold and copper in the western half of North America. They currently have thirteen active joint ventures and an ongoing generative program for new projects.
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| Interview |
These "unsophisticated peasants" were buying British gold sovereigns. This was in the early ‘60s. So, I asked, "Why are you doing that?" They said that because they had been through so many civil wars and other woes, they knew about inflation. So I started reading up on gold, and became quite a gold bug.
ewan. Every spring, we had to pick rocks out of the fields. I was always looking at them, looking at fossils and things like that. And then there were some oil wells drilled, not on our farm, but on the adjacent farm. I used to get on my bike and go over there and sit with the geologist who was working on the oil rig. He'd show me rocks and cores. I didn't end up going into the oil business, though; I decided I wanted to be in the rock business. I got to the university and hard rocks fascinated me more than oil, so that's the direction I took.
XL: That's a great story. So, you went to school and after graduation, it seems you started doing notable work right out of the box. Did you make friends with professors who set you up with choice job opportunities?
Not really. There was a big worldwide expansion going on and there were more jobs than graduates [May, 1962]. We had just come through a recession and things were opening up. I had three or four job offers and picked the one-not the highest-paying one-but the one I'd learn the most at.
XL: Would you say the market is like that now? It certainly seems like there's a shortage of qualified personnel.
Definitely. More so, I would say. There's nobody going into it. My son [Morgan Poliquin, senior geological engineer and a director of Almaden Minerals] graduated from a class of two. The school I went to no longer offers the curriculum. A lot of the schools have shut those programs down. I read an article recently that said that in the United States, there are fewer mining engineers graduating than there are retiring every year, by quite a significant margin.
XL: Interesting. So, you graduated and started out with Hudson Bay Exploration, where you were involved in the discovery of the White Lake and Anderson Lake copper deposits. What was your role in those finds? Did either go into production?
Both of them went into production. For White Lake, I worked as part of a team doing geophysics. On Anderson, I was the engineer in charge of the drilling and the discovery hole, but it was also teamwork, others did geophysics, etc.
XL: After that, you went to Greece and, among other things, worked for Placer there for a couple years. What was that like?
It was a good learning experience for me, and it's where I picked up my fascination for gold. I was working on a porphyry copper project. We had about 40 local people working for us as helpers. They were very poor. Most of them didn't have store-bought clothes; they wore homespun. As they started getting cash-we always paid in cash, every week-the first thing a fellow would do was buy a nice dress for his wife. You'd start seeing him improve his life. She'd get a dress, he'd get some pants, and the kids would get some clothes. And then he'd get a watch-he'd always be flashing his watch, checking the time. And then it leveled off.
Every new guy we hired would go through that same process. I was curious, and I asked, "What are you guys doing with all your money?" They said, "Well, take us to town and we'll show you." I had a big old land rover, as the engineer on the project, so I filled it up with these local boys and we went to the nearest town-a town of about 50,000 people-and they guided me down some alleys to a black market. These "unsophisticated peasants" were buying British gold sovereigns. This was in the early ‘60s. So, I asked, "Why are you doing that?" They said that because they had been through so many civil wars and other woes, they knew about inflation. So I started reading up on gold, and became quite a gold bug.
XL: Then you worked as a consultant for a few years and ended up with Kaiser Steel in 1968, where you visited and recommended the Kidston gold deposit. Can you tell us about that?
Placer ended up mining Kidston, which produced about 3.5 million ounces of gold before it was closed in 2001. I had a mandate to look for copper, back in 1970 when I found it. Kaiser had a joint venture with Anglo American, and they weren't chasing gold-it was some years before gold went up. I did identify Kidston and report on it, but it wasn't of any interest to them.
XL: Then you put in a couple years with Scurry Rainbow Oil, and kicked a lot of rocks up and down the Americas?
Yes. I was responsible for the conception and initiation of projects in most parts of Canada, the western U.S., Alaska, and several states in Mexico. In Mexico, I ran a complete program of mine sampling, surveying, mapping, ore reserve studies, reserve projection and discounted cash flow studies, on a group of silver lead zinc copper mines operating at about 70 tons per day. Scurry didn't follow my recommendations to acquire the properties and increase the daily throughput, but the Mexican owners carried out my proposed programs, and the mines operated for around twenty more years at about 750 tons per day. But, you know ... I had my nose out for gold. When Nixon freed the price, I told my boss, "we should be looking for gold now!" He said, "No, copper is king and always will be." So I went off to chase gold on my own.
XL: When did you start your first public company?
My first public company was Westley Mines, which I started in 1974-a terrible time for the market. But we got it going, which was tougher than you can imagine, and right out of the box we found the Santa Fe disseminated gold deposit in Nevada, which ended up with a resource of 12 million tons of ore grading 0.037 ounces per ton gold and 3 ounces per ton silver. That became a producing mine, operated by Corona Mines, which became part of Homestake, and it was a very profitable operation.
XL: After that, but before starting Almaden, you made a number of discoveries-maybe the most famous being the Apex germanium-gallium property in Utah.
Yes, that was taken on by Adolf Lundin's Musto Explorations. They put the property into production as the world's only straight producer of these metals with a gross value of metal in the ground of around $1.5 billion; they had some difficulties with plant design and sold the whole project to another company and used the cash as part of the purchase price of the famous Bajo de la Alumbrera property in Argentina.
XL: So, you founded Almaden in 1986 and found the Trinidad property in Sinaloa, Mexico, which helped get the company going ...
Yes. It wasn't a big find, though it was quite rich, and it certainly helped us. We sold it to El Dorado for stock and a royalty. We made some money on that-it wasn't huge, but it was a legitimate discovery.
XL: By the way, why the name Almaden?
(Laughs) I hate to tell you in this post-9/11 world, but "Al" means "the" and "maden" means "mine" in Arabic. There's an Almaden mercury mine in Spain. It has been in almost continuous production-it's in production now-since the time of Hannibal. I thought that was a sign of permanence. You know, a few people have accused me of naming the company after a wine-have you heard of Almaden wine? When the Spanish owned California, they found some mercury in the Bay Area, not far from San Jose. They called the mine "New Almaden". That's where those vineyards and winery are now. So, it was actually named after a mine, not a wine.
XL: Funny... Okay, let's talk about the present. Help us understand Siwash. The deposit is in British Columbia, only three hours or so from Vancouver, in a find that's already seen production. We understand that it's high grade, but it seems rather small. Why is it important?
It's got people's attention because it was very high grade. It was found by a prospector who still works with us, Ed Balon, in the mid-'90s. The mine produced 51,000 ounces of gold out of 18,000 tons of rocks-just a little under 3 ounces per ton. In fact, we still have some of that gold in a vault right now. Ever since then, we've kept exploring Siwash and adding ounces. We think it can be quite a significant deposit, but it's narrow, and it takes a lot of drilling, because you don't add that many tons with each drill hole.
XL: So what essentially happened was that there was an initial bonanza vein that was mined, and now you're looking for its relatives in the immediate neighborhood?
What has already been mined was easy to rip out, a little batch process. But to make it into a continuous operation, you need to develop enough tonnage ahead of you that you're going to justify putting up a mill and producing on a continuous basis. So, we've been trying to develop more ore. When mining was on its backside here for the last few years, we drilled nearly every year, and managed to increase the tonnage somewhat every time we drilled, but they were smallish programs. Now that we're convinced that gold is in a long-term upward trend, we're getting more aggressive about it.
XL: And apparently, it's not just a vein, or vein system, but there's also a low-grade deposit?
We had an independent engineer playing around with the samples we'd done of all the little veinlets we'd found but had never done a tonnage estimate on-he said there was enough there to do a low-grade tonnage estimate, so we had him do a 43-101 compliant resource estimate for us. That was delivered to us earlier this year. We haven't done engineering to see if any of that would be mineable, but there is definitely a low-grade resource there, and we're drilling more holes to see if we can extend that as well.
XL: So, this is low grade because it consists of a bunch of small veins dispersed throughout the rock, not because it's an oxide deposit, right?
Exactly.
XL: Being purely speculative, if your dreams were to come true, how big might Siwash get?
I think it has potential to be a multi-million-ounce deposit.
XL: So, the 400,000 ounces you know are there now, that justifies the on-going work?
Right. We still have room to step out sideways from identified mineralization, which we're doing, and drilling a few deeper holes. We've drilled a few holes in a couple of other veins, but we're focused on two: the W-D vein and the Siwash vein itself.
XL. Any sense of when you'll understand the full value of Siwash?
Not to be flippant, but probably not until we're done mining it. With some deposits, it's not economic to keep trying to provide resources through the drill or to drill the deposit off before you start mining-the veins are narrow, so you'd have to sink a ton of drill holes to clearly map the full extent of the deposit. That money can be better spent just mining the deposit until it is no longer economic to do so. So, at Siwash, our goal is to prove up about 4 to 6 years of production (there may be 20 years of production available, but we're not going to spend the money to establish that in advance)...and then just keep on mining. Every year, we'll do enough expansion drilling to keep ahead by 4 to 6 years.
XL: What else is Almaden working on now?
Our work in Mexico is very important. We're in Mexico for two main reasons. One: Mexico went through its big socialist experiment and it wasn't working, so in 1992 they opened up to foreign investment by allowing foreigners to own 100% of a property. In addition, they went into the North American Free Trade Agreement. The provisions of NAFTA give you good security of title, which you don't have in a lot of other countries people are going into. We feel very comfortable working there under the NAFTA rules.
Two: the geology of Mexico is outstanding. If you understand the geology here in British Columbia-you know, the western part of North America, where the Pacific plate is being shoved under the North American plate-you understand the geology down there. It may have cactus or thornbush on it, instead of the pine trees we have here, but it's the same geology. So, if you understand it here, you can understand it there. You don't have to re-learn it. This makes us feel very comfortable working in Mexico, and we have a lot of projects there, like the Trinidad mine we found, one of our earliest successes.
There's a very good inventory of old known properties, and lots of new areas to prospect-you know, for the type of deposit the conquistadors weren't looking for: big, low-grade disseminated gold targets, porphyry copper, etc. There has been some more recent exploration for them, but they weren't historically looked for, and there are still lots of old historical workings that need modern exploration.
XL: How many properties are you working in Mexico?
We have over two dozen properties. Of those, we have a number dealt out to other juniors. Over the winter months, we expect at least four drill programs on separate properties. And we're developing more-we have the joint venture with BHP Billiton, looking for porphyry copper-gold deposits.
XL: How did the Billiton deal come about?
That was mostly to Morgan's credit. We had developed a theory of where to look for new porphyry deposits, and over a period of time and discussions Morgan had with them about our projects, the idea developed into a joint venture. They have reviewed all the projects and we're expecting to hear from them which ones they want to go for, very shortly.
XL: How shortly?
I would say, within the next few weeks. One of the things that's interesting about it is that if it's a straight gold property, they're not interested in it. They are so big, a gold property doesn't impact their bottom line like a porphyry copper does.
XL: That is interesting-what are the economics of that?
Porphyries are much bigger. They need size for it to impact their bottom line. They are not averse to gold, it's just that gold deposits are normally not big enough.
XL: So, what makes you different from all the other companies stampeding down to Mexico? Why Almaden?
Well, we've been working there steadily, since before it opened up. I was in Mexico in the early 1970s with Scurry Rainbow Oil Company. During the bad years, Almaden kept exploring aggressively and accumulating good properties at low prices. That's why we have so many that are now going to be drilled by others. We've also assembled a very good database on Mexico. In fact, we recently acquired all the exploration files of the New York & Honduras Rosario Mining Company. They were a big silver mining company, on the main board of the NYSE, and they explored all over Central America, including Mexico, all through the 20th Century-back to the 1890s, I believe. They had the Mochito mine in Honduras. We bought all their exploration files, and we've bought files on Mexico from other people and assembled them into one big database. We're using all the latest and best exploration techniques, including satellite imagery analysis, and integrate this with all the other data we have to identify new areas of interest.
XL: So, you're farther along than the late-comers?
I think so. Now everybody's going back to Mexico, and, hey, anybody can get lucky. But we've put a lot into it over the years, and we've got some damn good properties.
XL: Very good. What else is important about current operations?
We're still exploring here in Canada as well. The main thrust of our exploring is in Mexico-Morgan is handling that, and doing a hell of a job at it-but we've got lots of targets to drill this winter. And we're not just sitting back waiting for what we've already got to develop: we've got lots of quality leads and are looking to acquire more properties, especially gold properties here in BC.
XL: Do you mind being specific? What properties in BC and Mexico are the most exciting?
Siwash here in BC, of course, because it's got a resource and because it's been a producer, but the PV and Nick properties we dealt to another junior are pretty exciting as well. We've also acquired some other epithermal gold properties in a new belt in BC. In Mexico, one that has gotten a lot of attention is the El Pulpo property. And one that we think is going to be very exciting to see the drilling results from is Caballo Blanco, on which we expect drilling between now and Christmas. I think that has potential for a very large gold deposit. At Caballo Blanco, we're going to be drilling in some new areas that have never had drilling. There are three big alteration zones. The previous drilling was on one of those zones and there were some pretty good holes-including one with a meter and a half of 19 grams. But the other two zones on different parts of the property, several kilometers away, are just huge targets; it's going to be very exciting to see those results.
XL: Okay. What about the future, then? You're following the generative model. Are you always going to follow that model, or can you ever see becoming a producer?
You got me right between the eyes there. That's something we're thinking about right now. You've got to keep reinventing yourself. With the Siwash project, for example, we're methodically working our way towards production. We've still yet to do the feasibility studies, but we're working to expand the resource and progressing in that direction.
XL: But if a major came along with a good take-over bid, you concider it?
We'd have to look pretty hard at that, wouldn't we? Otherwise, we want to continue to expand what we're doing. We have all of these joint ventures, and we have to be flexible. On some deposits, we might end up going into production on a joint venture basis. Some are such that a major might want to buy out both Almaden and our JV partner. We're keeping our options open. I hope that doesn't sound like an evasive answer ...
XL: Well, sometimes with a market that's so fickle, you have to be flexible.
Definitely, yes. You've got to go where the market wants you to be, to some degree. There are at least 1,000 juniors, and most of them are darn good fundraisers, good promoters. I believe they want to do a good job, but they don't have the geological staff we do. We've got a peak technical staff here. There's Morgan and myself, both geological engineers, and we've got two other really good geologists working for us, as well as a couple more part-time geologists-just outstanding people-and some really good technicians. So we keep generating prospects, and there are a lot of companies that need good properties.
XL: One of the things we like to ask people with a track record of success like yours is what other companies out there look good to you. Besides Almaden, if you were buying for your portfolio, what would you buy?
(Laughs.) The fellows at Altius are doing a good job. I think the guys at Rimfire are working hard, doing good things. Jerry Carleson over at Copper Ridge Mining is, too.
Canico has a very exciting nickel deposit in Brazil.
XL: Great. Any final words for our readers?
Just follow gold.
XL: Terrific, thank you very much.
You're welcome.
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