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This week’s healthy pullback in Gold stocks has created even greater opportunities in the sector.

Almaden Minerals (AMM, TSX) owns 100% of the 14,000 hectare Ixtaca Gold-Silver deposit while sister company Almadex Minerals (AMZ, TSX-V) holds a 2% NSR on the project (we’re also very bullish on AMZ given its Au-Cu porphyry discovery in Mexico, and this morning the stock has bounced off strong support near 70 cents).

AMZ was recently added to the BMR Top Opportunities List at 70 cents; this morning we’re adding Almaden at $1.78 (its price as of 7:30 am Pacific) – thank you, Mr. Market, we love sales!

An alignment of the stars…

Knowing that far less than 1% of exploration stocks will graduate to become miners, the stars must really align to make it happen. Aside from Gold occurring in enough quantity and quality in the ground, it helps when Gold prices are perceived to be going higher. Of course, financing must be available to move forward with building a mine. Yet financing will rarely or never be available unless all the boxes are checked.

Even if the Gold deposit is exceptional, if it’s located under an ocean or in the North Pole, the “accessibility” box won’t get checked – deal breaker.

What are the boxes?…

The most important boxes relate to accessibility, power, water, rocks, metallurgy, financing, people, and community acceptance.

From the outside looking in, Almaden’s Ixtaca Gold-Silver deposit in Mexico appears to check all the boxes.

Let’s go down the list, checking them off one by one:

“Accessibility” – the project is located 2 to 3 hours from Mexico City and is accessible via paved roads, relatively flat-lying land;

“Power” – regional power sourced from the Laguna Verde nuclear power plant is available on site;

“Water” – the latest assessment of regional weather patterns suggests management of rainfall and runoff from within the project area will provide sufficient water for operations for the Ixtaca mine plan (natural springs could supplement if needed);

“Rocks” – the Ixtaca zone, an epithermal Gold-Silver deposit, occurs in deformed carbonate rocks.

“Metallurgy” – test work continues to indicate overall process recoveries to average 90% for Gold and Silver for limestone hosted mineralization (limestone comprises 91% of the metal produced);

“Financing” – on October 19, 2015, Almaden secured the option to purchase the Rock Creek mill, which only operated for several months before the mining operation was curtailed in 2008. The mill was built to process 7,000 tonnes per day and is in excellent condition. This smooth move reduced initial capex to approximately $100 million. Using $1,150 Gold and $16 Silver, the Ixtaca PEA shows an after-tax IRR of 30%;

“People” – this father-son Gold hunting team has a long track record of discovery and a superb reputation within the industry;

“Community Acceptance” – Almaden’s team is actively engaged in the local communities, continuous outreach is possible via its permanent community office in Santa Maria. To date it has taken a total of approximately 380 people on 19 separate mine tours. The company has employed up to 70 local people in its drilling program who live in the vicinity of the Ixtaca deposit. Local employees have made up virtually all the drilling staff, and have been trained on the job.

Going above and beyond the call of duty, on September 22, 2015 Almaden representatives presented 15 local students with academic scholarships.

Almaden has now awarded a total of 40 scholarships to local students.

If only every exploration and mining company attempted to treat surrounding communities with such respect.

Ixtaca priced 50% below industry average…

According to BMRs internal research, recent M&A transactions have averaged $64 per-ounce of Gold resources.

Almaden’s market cap is $150 million (CDN) as of yesterday’s close, and it has 86 million shares outstanding.

Its estimated Gold resource base including Measured, Indicated, and Inferred ounces stands at 4.2 million ounces.

Dividing Almaden’s $150 million market cap by 4.2 million ounces ounces of Gold resources we get almost $36 (our cost per ounce in-situ) – nearly 50% below the industry’s average M&A transaction price.

Bottom Line: It’s rare to find a quality asset backed by a quality team that checks all the boxes. Having these stars align precisely as Gold continues a new bull market is icing on the cake. Paying a price that’s 50% below industry average is the cherry on top!

Don’t expect Almaden to languish at these depressed levels forever. It has roughly $7.2 million cash on hand (more than 1 year’s worth) to fund regional drilling and advance Ixtaca to a Pre-Feasibility Study. Those two catalysts should serve to further increase confidence in the project’s economics and resource base.

Corporate Video Here>>> 6 Minute video that brings Almaden’s Ixtaca project to life

About the writer:  Daniel T. Cook, the newest member of the BMR team, is from the great state of Texas.  Daniel has a strong passion for the junior resource sector and has followed the Venture and broader markets with great interest since he bought his first stock 18 years ago at the age of 12.  He’s also a licensed investment professional who was a Bright Future’s Scholar at the University of Central Florida, graduating in 2010 with a major in Finance.  We know our readers will enjoy his material and benefit from his wisdom and insight.  We welcome him aboard!

Note:  Jon holds a share position in AMZ.

Gold has traded between $1,324 and $1,341 so far today…as of 10:30 am Pacific, bullion is down $11 an ounce at $1,326…Silver is off 23 cents to $18.55…Copper has slid 4 pennies to $2.09…Crude Oil has fallen $1.40 a barrel to $46.70 on an unexpected jump in inventories, while the U.S. Dollar Index has added one-fifth of a point to 94.77…

Commerzbank on Gold, which makes sense to us:  “Apart from this short-term factor (Fed), the environment for Gold and Silver remains positive.  The monetary policy pursued by the major central banks is and will for the foreseeable future remain ultra-expansionary. Even a 25-basis-point rate hike by the Fed would do little to change this. Around the world, bonds worth $12 trillion are meanwhile showing negative yields – something that has never happened before to this extent. Then there are the numerous political and geopolitical uncertainties, so any falls in the prices of Gold and Silver should prove short-lived.”

Recent hawkish comments from Fed policymakers have raised investors’ expectations that Yellen might adopt a less cautious tone on rates when she speaks at Jackson Hole Friday morning, and that’s a reason the TSX Gold Index has declined in 9 out of the last 10 sessions and below its 50-day moving average (SMA) for the first time since the late spring…the total decline (so far) has been 13.7%…the current swoon is similar to the drop in May under similar circumstances (bullish rhetoric from Fed officials) that totaled 14% and represented a tremendous buying opportunity in Gold shares…RSI(2) is at oversold levels on the Gold Index not seen at any point since late 2015 during Gold’s bottom…inexperienced, fearful investors are throwing high-quality Gold producers and exploration stocks overboard at precisely the wrong time, but that’s what makes a market…the next couple of trading sessions should prove extremely interesting…

According to the CME FedWatch tool, markets are pricing in a 21% chance (way too high) of a rate increase in September, and a 50% chance (also too high) of one in December…

Even in the very unlikely event the Fed were to hike rates next month, Gold would almost certainly push strongly to the upside afterward (just like it did in December, counter to what the so-called experts were predicting)…Daniel expands on this in today’s Daniel’s Den…

So what’s to fear?…

Tax Me, I’m Canadian!

The Fraser Institute is out with a new study that has found taxes, and not basic necessities like food, clothing, and housing, make up the largest expense for the average Canadian household…it found the average family paid over $34,000 in taxes of all sorts last year, including what it calls “hidden” business taxes that are passed along in the price of goods and services purchased…

That’s 42% of the average family income – going straight to governments…by comparison, the family paid almost 38% for food, clothing, and housing…

Alberta – Another Example Of The Perils of Socialism

Wow – Alberta, once the bastion of capitalism, economic opportunity and good governance, has fallen down the slippery slope of Big Government and socialism, as predicted…if millennials so enamored with Bernie Sanders, who has also pulled the Democratic Party even further to the left, would like an example of a North American jurisdiction that is going downhill faster than the speed of light through the types of policies that he and his ilk shamelessly peddle, look no further than Alberta…liberals (the former PC’s under Allison Redford) quietly started the process, and now the socialists under current Premier Rachel Notley have driven the nail into the coffin – they have turned this once dynamic engine of Canadian growth into “Albertastan”…a have-not province!…

Red ink was everywhere in the government’s first-quarter fiscal update for 2016-2017 yesterday with the province’s projected deficit expected to swell to $10.9 billion, despite higher than expected revenues due mostly to an uptick in Oil prices – how ironic…the NDP has also benefited from the largesse of the Liberals in Ottawa, with transfers nearly $650 million higher than forecast, but money is going out faster than it’s coming in…

And isn’t it interesting how Oil royalties in Albertastan are up but corporate tax revenues have plummeted by a staggering $900 million, contributing to the wider than anticipated deficit…astute economists warned the naïve NDP that hiking corporate taxes by 20% would give companies an incentive to relocate profits outside of Alberta to lower-taxed jurisdictions, and that’s exactly what has occurred – along with other negative impacts that have hurt, and will continue to degrade, investment and jobs…

With corporate taxes falling and spending going up and up and up, with no end in sight, Albertastan’s NDP is now accumulating larger per capita deficits than Ontario’s Liberals did in their worst debt-binging days of the last recession…scary!…Alberastan’s per-person budget deficit for 2016-17 is projected to be about $2,557 per person…adjusted for inflation ($2,290 in 2009 dollars), that’s still approximately 55% larger than Ontario’s deficit in 2009-10…

The NDP is spending like drunken sailors while tangling the province up in red tape, the same NDP approach that in neighboring British Columbia in the 1990’s created a huge outflow of human and investment capital from B.C. into Alberta (now the outflow is in the other direction – Christy Clark was even bragging recently about the number of Albertans coming to B.C. for jobs)…the Oil downturn that started in late 2014 would have hurt any government in power in Alberta, but the fact is the NDP made the situation far worse by hiking taxes, increasing spending and generally making the province a less friendly place in which to do business…

B.C. is a resource-rich province with many projects in development…it will benefit immensely from capital shifts (people and dollars) from Alberta…remember that!…so too will Saskatchewan where Brad Wall’s Conservatives are in stark contrast to the NDP clowns in Albertastan…

Alberta And Climate Change Fanaticism

Meanwhile, as Albertastan’s NDP rushes ahead with implementation of its “Climate Change Plan”, a new study provides another measure of its massive cost…

A proposed cap on Oil sands emissions would leave Oil worth hundreds of billions of dollars in the ground (why not, when we can simply continue importing Crude from hideous regimes in the Middle East who keep breeding Islamic terrorists?) while doing little to reduce global greenhouse gases…

According to the Fraser Institute study by Ken Green and Taylor Jackson, How Alberta’s Carbon Emission Cap Will Reduce Oil Sands Growth, the provincial government’s proposed cap of 100 megatonnes of emissions annually for the Oil sands sector would reduce its production potential by more than 3 billion barrels between 2025 and 2040, costing the Canadian economy more than $250 billion in lost production and resulting in a “meager” 0.035% reduction in global greenhouse gas emissions by 2040…

That’s right, a 0.035% reduction in global greenhouse gas emissions by 2040 at a cost to the Canadian economy of $250 billion – now isn’t that “progressive”!…

How can a government be trusted with a “Climate Change Plan” when its economic policies are so disastrous, the province’s #1 exports have become jobs and investment…

Quite simply, Alberta is yet another unfortunate example of how incompetent governments – calling themselves “progressive” – can quickly destroy wealth…investors beware…

Gold In Canadian Dollars

Gold in loonie terms remains on track to test measured Fib. resistance just below $1,900 by year-end  – yesterday it closed at $1,738, and this morning the metal has dropped a little more below its 50-day SMA…any dips below that SMA have proven to be excellent buying opportunities, and this time will be no exception in our view…

RSI(14) is a modest 59% – support has held at the 50% level throughout the entire year…

At some point we do expect the RSI(14) to reach well into overbought territory above 70% – that will be the time to lock in profits in preparation for a potential major correction…

In Today’s Morning Musings…

1. BMR investigation reveals promising overlooked area on Aben Resources‘ (ABN, TSX-V) Forrest Kerr Project…

2. A long-term Richmont Mines‘ (RIC, TSX) chart provides perspective on current dip in Gold stocks…

3. Daniel’s Den – games in the Gold market, and if only the Fed would be so kind to hike in September!…

Plus more…click here to read the rest of today’s Morning Musings and all BMR exclusive content, through a risk-free Pro, Gold or Basic package, or login with your username and password…