Company Quick10K Filing
Almaden Minerals
20-F 2019-12-31 Filed 2020-03-27
20-F 2018-12-31 Filed 2019-03-15
20-F 2017-12-31 Filed 2018-03-29
20-F 2016-12-31 Filed 2017-03-30
20-F 2015-12-31 Filed 2016-03-31
20-F 2014-12-31 Filed 2015-03-31
20-F 2013-12-31 Filed 2014-04-01
20-F 2012-12-31 Filed 2013-03-29
20-F 2011-12-31 Filed 2012-04-02
20-F 2010-12-31 Filed 2011-03-31
20-F 2009-12-31 Filed 2010-03-31

AAU 20F Annual Report

Part I
Item 1. Identity of Directors, Senior Management and Advisors
Item 4. Information on The Company
Item 5. Operating and Financial Review and Prospects
Item 6. Directors, Senior Management and Employees
Item 7. Major Shareholders and Related Party Transactions
Item 8. Financial Information
Item 9. Offer and Listing of Securities
Item 10. Additional Information
Item 11. Quantitative and Qualitative Disclosures About Market Risk
Item 12. Description of Securities Other Than Equity Securities
Part II
Item 13. Defaults, Dividend Arrearages and Delinquencies
Item 14. Material Modifications To The Rights of Securities Holders and Use of Proceeds
Item 15. Controls and Procedures
Item 16A. Audit Committee Financial Expert
Item 16B. Code of Ethics
Item 16C. Principal Accountant Fees and Services
Item 16D. Exemptions From The Listing Standards for Audit Committees
Item 16E. Purchases of Equity Securities By The Issuer and Affiliated Purchasers
Item 16F. Change in Registrant's Certifying Accountant
Item 16G. Corporate Governance
Item 16H. Mine Safety Disclosure
Part III
Item 17. Financial Statements
Item 18. Financial Statements
Item 19. Exhibits
EX-8 ex8.htm
EX-12.1 ex12_1.htm
EX-12.2 ex12_2.htm
EX-13.1 ex13_1.htm
EX-13.2 ex13_2.htm

Almaden Minerals Earnings 2011-12-31

Balance SheetIncome StatementCash Flow

20-F 1 form20f.htm ALMADEN MINERALS LTD. 20-F 12-31-2011 form20f.htm


UNITED STATES
SECURITIES AND EXCHANGE COMMISION
Washington, D.C. 20549
 
FORM 20-F
 
o
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, 2011
OR

o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR

o
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report _____________________

For the transition period from _____________________ to ____________________
 
Commission file number 001-32702
 
ALMADEN MINERALS LTD.
(Exact name of Registrant as specified in its charter)
 
British Columbia, Canada
(Jurisdiction of incorporation or organization)
 
750 West Pender Street, #1103, Vancouver, British Columbia V6C 2T8
(Address of principal executive offices)
 
Korm Trieu, ktrieu@almadenminerals.com, 750 West Pender Street, #1103, Vancouver, BC V6C 2T8
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
 
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class Name of each exchange on which registered
   
Common Stock without Par Value NYSE Amex
 
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.
 
59,122,321
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
 
o 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.
 
o Yes  x  No
 
Indicate by check mark weather the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
 x Yes  o  No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interac­tive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preced­ing 12 months (or for such shorter period that the Registrant was required to submit and post such files).
 
o  Yes  o  No
 
As a foreign private issuer that prepares its financial statements in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), the Registrant is required to submit to the SEC and post on its corporate website Interactive Data Files (as defined by Item 11 of Regulation S-T) pursuant to Rule 405 of Regulation S-T.
 
However, it is the view of the SEC’s Division of Corporation Finance and Office of the Chief Accountant that the Registrant is not required to submit to the SEC and post on its corporate website Interactive Data Files until the SEC specifies on its website an IFRS taxonomy for use by foreign private issuers in preparing their Interactive Data Files.
 
As of the submission date of this Annual Report on Form 20-F, the SEC has not specified an IFRS taxonomy for the Registrant to use in preparing its Interactive Data Files.
 
Indicate by check mark weather the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer o                                       Accelerated filer o                                       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 o International Financial Reporting Standards as issued by the International Accounting Standards Board x Other o
 
 
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.
 
o  Item 17   o  Item 18
 
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).
 
o  Yes  x  No
 
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDS DURING THE PAST FIVE YEARS)
 
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
 
o  Yes  o  No
 
 
3

 
 
 
 
Page
   
5
     
 
PART I
 
     
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51
     
67
     
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PART II
 
     
83
     
83
     
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84
85
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86
86
     
 
PART III
 
     
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86
     
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135
 
 
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 characterised by the alteration of original minerals to clays.
 
Arsenopyrite:  A sulphide of arsenic and iron with the chemical composition FeAsS.
 
Assay:  An analysis to determine the presence, absence or quantity of one or more components.
 
Axis:  An imaginary hinge line about which the fold limbs are bent. The axis of a fold can be at the top or bottom of the fold, can be tilted or horizontal.
 
Batholith:  An intrusion, usually granitic, which has a large exposed surface area and no observable bottom. Usually associated with orogenic belts.
 
Bathymetry survey:  A geophysical survey that uses echo sounding to determine water depth.
 
Breccia:  Rock consisting of more or less angular fragments in a matrix of finer-grained material or cementing material.
 
Brecciated:  Rock broken up by geological forces.
 
Bulk sample:  A very large sample, the kind of sample to take from broken rock or of gravels and sands when testing placer deposits.
 
Calc-silicate:   Calcium-bearing silicate minerals. These minerals are commonly formed as a result of the interaction of molten rock and its derived, hot hydrothermal fluids with very chemically reactive calcium carbonate (limestone). Calc-silicate minerals include garnet, pyroxene, amphibole and epidote. These minerals are commonly described as skarn and are genetically and spatially associated with a wide range of metals
 
Carbonate replacement deposit:   A style of silver lead zinc mineralization in limestones.
 
Chert:  A very fine grained siliceous rock.  Many limestones contain nodules and thin lenses of chert.
 
Chip sample:  A sample composed of discontinuous chips taken along a surface across a given line.
 
 
Claim:  That portion of public mineral lands, which a party has staked or marked out in accordance with provincial or state mining laws, to acquire the right to explore for the minerals under the surface.
 
Clastic:  Consisting of rock material that has been mechanically derived, transported, and deposited.  Such material is also called detrital.
 
Cleavage:  The tendency of a crystal to split, or break, along planes of structural weakness.
 
Columnar Jointing: A pattern of jointing that breaks rock into rough, six-sided columns.  Such jointing is characteristic of basaltic flows and sills and is believed to result from shrinkage during cooling.
 
Concordant Bodies:  Intrusive igneous bodies whose contacts are parallel to the bedding of the intruded rock.
 
Conglomerate: Rock composed of mostly rounded fragments which are of gravel size or larger in a finer grained matrix.
 
Craton:  A central stable region common to nearly all continents and composed chiefly of highly metamorphosed Precambrian rocks.
 
Cretaceous:  Geological time period between 136 and 64 million years ago.
 
Crystalline:  Means the specimen is made up of one or more groups of crystals.
 
Cut-off grade:  The minimum grade of mineralization used to establish quantitative and qualitative estimates of total mineralization.
 
Dacite: A fine grained acid volcanic rock, similar to rhyolite in which the feldspar is predominantly plagioclase.
 
Degradation:  The ongoing process of erosion in a stream.
 
Diabase:  Igneous hypabyssal rocks. The name is applied differently in different parts of the world leading to considerable confusion.
 
Diagenesis:  The changes that occur in a sediment during and after lithification.  These changes include compaction, cementation, replacement, and recrystallization.
 
Diamond drill:  A type of rotary drill in which the cutting is done by abrasion using diamonds embedded in a matrix rather than by percussion. The drill cuts a core of rock which is recovered in long cylindrical sections.
 
Dilution:  Results from the mixing in of unwanted gangue or waste rock with the ore during mining.
 
Dip:  Geological measurement of the angle of maximum slope of planar elements in rocks. Can be applied to beddings, jointing, fault planes, etc.
 
Discordant Bodies:  Intrusive igneous bodies whose contacts cut across the bedding, or other pre-existing structures, to the intruded rock.
 
Disseminated deposit:  Deposit in which the mineralization is scattered through a large volume of host rock, sometimes as separate mineral grains, or sometimes along joint or fault surfaces.
 
Dolomite:  A magnesium bearing limestone usually containing at least 15% magnesium carbonate.
 
Dunite:  An intrusive, monomineralic, ultramafic rock composed almost completely of magnesian olivine.
 
Dyke:  A tabular, discordant, intrusive igneous body.
 
 
Earn in:  The right to acquire an interest in a property pursuant to an Option Agreement.
 
Ejecta:  Pyroclastic material thrown out or ejected by a volcano. It includes ash, volcanic bombs, and lapilli.
 
Epithermal:  Epithermal deposits are a class of ore deposits that form generally less than 1 km from surface. These deposits, which can host economic quantities of gold, silver, copper, lead and zinc are formed as a result of the precipitation of ore minerals from up-welling hydrothermal fluids. There are several classes of epithermal deposits that are defined on the basis of fluid chemistry and resulting alteration and ore mineralogy. Fluid chemistry is largely controlled by the proximity to igneous intrusive rocks and as a result igneous fluid content.
 
Extrusive Rock:  Igneous rock that has solidified on the earth’s surface from volcanic action.
 
Fault:  A fracture in a rock where there had been displacement of the two sides.
 
Faults:  Breaks in rocks with noticeable movement or displacement of the rocks on either side of the break.
 
Feldspar:  A group of aluminum silicate minerals closely related in chemical composition and physical properties.  There are two major chemical varieties of feldspar:  the potassium aluminum, or potash, feldspars and the sodium-calcium-aluminum, or plagioclase, feldspars.  The feldspars possess a tetrahedral framework of silicon and oxygen, with the partial substitution of aluminum for the silicon.  They make up about 60 percent of the earth’s crust.
 
Felsic:  Light coloured 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 vapour phase (bubble) may show Brownian motion.
 
Folds:  Are flexures in bedded or layered rocks. They are formed when forces are applied gradually to rocks over a long period of time.
 
Fracture:  Breaks in a rock, usually due to intensive folding or faulting.
 
Gabbro:  A group of dark-colored, basic intrusive igneous rocks composed principally of basic plagioclase (commonly labradorite or bytownite) and clinopyroxene (augite), with or without olivine and orthopyroxene; also, any member of that group.  It is the approximate intrusive equivalent of basalt.  Apatite and magnetite or ilmenite are common accessory minerals.
 
Gambusino:  Small miners working without machinery.
 
Gangue:  Term used to describe worthless minerals or rock waste mixed in with the valuable minerals.
 
Geochemical Anomaly:  An area of elevated values of a particular element in soil or rock samples collected during the preliminary reconnaissance search for locating favourable metal concentrations that could indicate the presence of surface or drill targets.
 
Geochemistry:  The study of the chemistry of rocks, minerals, and mineral deposits.
 
Geophysics:  The study of the physical properties of rocks, minerals, and mineral deposits.
 
Gneiss:  A coarse grained metamorphic rock characterized by alternating bands of unlike minerals, commonly light bands of quartz and feldspar and dark bands of mica and hornblende.
 
Gossan:  The leached and oxidised near surface part of a sulphide mineral deposit, usually consisting largely of hydrated iron oxides left after copper and other minerals have been removed by downward leaching.
 
Gouge:  The finely ground rock that results from the abrasion along a fault surface.
 
 
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.
 
Gravity survey:  A geophysical survey which measures the variations of the earth’s gravitational field in order to differentiate between rocks of contrasting specific gravities.
 
Grid:  A network composed of two sets of uniformly spaced parallel lines, usually intersecting at right angles and forming squares, superimposed on a map, chart, or aerial photograph, to permit identification of ground locations by means of a system or coordinates and to facilitate computation of direction and distance and size of geologic, geochemical or geophysical features.
 
Hanging wall and Footwall: Terms used in reference to faults where when mining along a fault, your feet would be in the footwall side of the fault and the other side would be “hanging” over your head.
 
Hectare:  A square of 100 metres on each side.
 
Host rock:   The rock within which the ore deposit occurs.
 
Hydrothermal:  Of or pertaining to hot water, to the action of hot water, or to the products of this action, such as a mineral deposit precipitated from a hot aqueous solution; also, said of the solution itself.  “Hydrothermal” is generally used for any hot water, but has been restricted by some to water of magmatic origin.
 
Igneous:  Means a rock formed by the cooling of molten silicate material.
 
Ignimbrite:  The rock formed by the widespread deposition and consolidation of ash flows and nues ardentes.  The term includes welded tuff and nonwelded but recrystallized ash flows.
 
Induced polarization (I.P.) method:  The method used to measure various electrical responses to the passage of alternating currents of different frequencies through near-surface rocks or to the passage of pulses of electricity.
 
Intermediate:  An igneous rock made up of both felsic and mafic minerals (diorite).
 
Intrusion:  General term for a body of igneous rock formed below the surface.
 
Intrusive Rock:  Any igneous rock solidified from magma beneath the earth’s surface.
 
Joint venture agreement:  An agreement where the parties agree to the terms on which a property will be jointly explored, developed, and mined. (See also “Option agreement” and “Earn in”).
 
Jurassic:  Geological time period between 195 and 136 million years ago.
 
Kimberlite:  A kimberlite is a pipe-like volcano sourced from deep within the earth under extreme temperatures and pressures.  It is the host rock for diamonds and diamond indicator minerals such as kimberlitic ilmenites and garnets.
 
 
K-silicate: Potassium-bearing silicates. Potassium silicates are very common rock-forming minerals, however they are also formed by the interaction of hyrothermal fluids derived from the cooling intrusive rocks that are genetically and spatially associated with porphyry and epithermal deposits. Potassium feldspar (orthoclase) and potassium mica (biotite) are both commonly closely associated with copper-molybdenum ore in porphyry copper deposits.
 
K-spar: Potassium feldspar.
 
Lamprophyre:  A group of dike rocks in which dark minerals occur both as phenocrysts and in the groundmass and light minerals occur in the groundmass.  Essential constituents are biotite, hornblende, pyroxene, and feldspar or feldspathoids.  Most lamprophyres are highly altered.  They are commonly associated with carbonatites.
 
Lava:  Means an igneous rock formed by the cooling of molten silicate material which escapes to the earth’s surface or pours out onto the sea floor.
 
Limestone:  Sedimentary rock that is composed mostly of carbonates, the two most common of which are calcium and magnesium carbonates.
 
Lithosphere:  The crust and upper mantle, located above the asthenosphere and composing the rigid plates.
 
Mafic:  A general term used to describe ferromagnesian minerals. Rocks composed mainly of ferromagnesian minerals are correctly termed melanocratic.
 
Magma:  Naturally occurring molten rock material, generated within the earth and capable of intrusion and extrusion, from which igneous rocks have been derived through solidification and related processes.  It may or may not contain suspended solids (such as crystals and rock fragments) and/or gas phases.
 
Massive:  Implies large mass. Applied in the context of hand specimens of, for example, sulphide ores, it usually means the specimen is composed essentially of sulphides with few, if any, other constituents.
 
Metamorphic:  Means any rock which is altered within the earth’s crust by the effects of heat and/or pressure and/or chemical reactions.  Pertains to the process of metamorphism or to its results.
 
Metasediment:  A sediment or sedimentary rock that shows evidence of having been subjected to metamorphism.
 
Metavolcanic:  An informal term for volcanic rocks that show evidence of having been subject to metamorphism.
 
Mineral claim:  A legal entitlement to minerals in a certain defined area of ground.
 
Mineral Deposit or Mineralized Material:  A mineralized underground body which has been intersected by sufficient closely spaced drill holes and or underground sampling to support sufficient tonnage and average grade of metal(s) to warrant further exploration-development work.  This deposit does not qualify as a commercially mineable ore body (Reserves), as prescribed under Commission standards, until a final and comprehensive economic, technical, and legal feasibility study based upon the test results is concluded
 
Mineral:  A naturally occurring, inorganic, solid element or compound that possesses an orderly internal arrangement of atoms and a unique set of physical and chemical properties.
 
Mineralization:  Usually implies minerals of value occurring in rocks.
 
Monocline:  A structure in which a bed exhibits local steepening of otherwise uniform dip.
 
National Instrument 43-101: A rule developed by the Canadian Securities Administrators and administered by the provincial securities commissions that govern how issuers disclose scientific and technical information about their mineral projects to the public.  It covers oral statements as well as written documents and websites.  It requires that all disclosure be based on advice by a “qualified person” and in some circumstances that the person be independent of the issuer and the property.
 
 
Net profits interest:   A contractual granted right to some portion of the profits after deduction of expenses sometimes expressed as a form of royalty.
 
Net smelter returns:  Means the amount actually paid to the mine or mill owner from the sale of ore, minerals and other materials or concentrates mined and removed from mineral properties. A royalty based on net smelter returns usually provides cash flow that is free of any operating or capital costs and environmental liabilities.
 
Option agreement:  An agreement where the optionee can exercise certain options to acquire or increase an interest in a property by making periodic payments or share issuances or both to the optionor or by exploring, developing or producing from the optionor’s property or both.  Usually upon the acquisition of such interest, all operations thereafter are on a joint venture basis.
 
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.
 
Panel Sample:  A large volume/weight continuous rock chip sample collected over a definite area (e.g. 0.25m X 0.50m), and to a uniform depth (e.g. 2.5cm or 1 inch), on a mineral zone.  Panel sampling is generally employed in a trenching program to obtain more representative grades particularly of a narrow mineralized structure such as a vein.
 
Peridotite:  A coarse grained ultramafic rock commonly consisting of olivine and pyroxenes.
 
Phenocrysts:  An unusually large crystal in a relatively finer grained matrix.
 
Phonolite:  Any extrusive rock composed of alkali feldspar, mafic minerals and any feldspathoid, such as nepheline, leucite, or sodalite.
 
Pluton:  Term for an igneous intrusion, usually formed from magma.
 
Porphyry:  An igneous rock composed of larger crystals set within a finer ground mass.
 
Preliminary Economic Assessment:  A comprehensive study of the viability of a mineral project that has advanced to a stage where the mining method, in the case of underground mining, or the pit configuration, in the case of an open pit, has been established and an effective method of mineral processing has been determined, and includes a financial analysis  based on reasonable assumptions of technical, engineering, legal, operating, economic, social and environmental factors and the evaluation of 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.
 
Pyroclastic rock:  A rock of volcanic origin consisting of highly variable mixture of rock fragments, cinders and ashes and bits of crystals and glass.
 
 
Pyroxenites:  Ultramafic plutonic rock chiefly composed of pyroxene, with accessory hornblende, biotite, or olivine.
 
Quartz monzonite: A course grained, plutonic igneous rock that is normally pale pink, and composed of quartz, alkali feldspar, micas and accessory minerals.
 
Rare Earth:  A group of rare metallic chemical elements with consecutive atomic numbers of 57 to 71.
 
Reclamation bond:  A bond usually required by governmental mining regulations when mechanized work on a property is contemplated. Proceeds of the bond are used to reclaim any workings or put right any damage if reclamation undertaken does not satisfy the requirements of the regulations.
 
Reserve:  That part of a mineral deposit which could be economically extracted or produced at the time of the reserve determination.
 
Reserves:  A natural aggregate of one or more minerals which, at a specified time and place, may be mined and sold at a profit, or from which some part may be profitably separated.
 
Reverse circulation drill:   A rotary percussion drill in which the drilling mud and cuttings return to the surface through the drill pipe.
 
Rhyolite:  The fine grained equivalent of a granite.
 
Royalty interest:  A royalty, the calculation and payment of which is tied to some production unit such as tonne of concentrate or ounce of gold or silver produced. A common form of royalty interest is based on the net smelter return.
 
Sample:  Small amount of material that is supposed to be absolutely typical or representative of the object being sampled.
 
Sandstone:  Composed of sand-sized fragments cemented together. As a rule the fragments contain a high percentage of quartz.
 
Schist:  A strongly foliated crystalline rock, formed by dynamic metamorphism, that has well-developed parallelism of more than 50% of the minerals present, particularly those of lamellar or elongate prismatic habit, e.g. mica and hornblende.
 
Sedimentary: A rock formed from cemented or compacted sediments.
 
Sediments:   Are composed of the debris resulting from the weathering and breakup of other rocks that have been deposited by or carried to the oceans by rivers, or left over from glacial erosion or sometimes from wind action.
 
Selvage:  A marginal zone, as in a dyke or vein, having some distinctive feature of fabric or composition.
 
Sericite:   A fine-grained variety of mica occurring in small scales, especially in schists.
 
Shale:   An argillaceous rock consisting of silt or clay-sized particles cemented together. Most shales are quite soft, because they contain large amounts of clay minerals.
 
Shear zone:  Where a fault affects a width of rock rather than being a single clean break, the width of affected rock is referred to as the shear zone. The term implies movement, i.e. shearing.
 
Silicate:  Most rocks are made up of a small number of silicate minerals ranging from quartz (SiO2) to more complex minerals such as orthoclase feldspar (KAlSi3O8) or hornblende (Ca2Na(Mg,Fe)4(Al,Fe,Ti)Si8)22(OH)2).
 
 
Sill:  Tabular intrusion which is sandwiched between layers in the host rock.
 
Skarn:  A thermally altered impure limestone in which material has been added to the original rock.  Skarns are generally characterized by the presence of calcium and silica rich minerals. Many skarns contain sulphide minerals which in some cases can be of economic value.
 
Sonic drill:  A drill used to penetrate soft sediments where the drill advance by means of slow rotations and sonic vibrations. Samples of very soft material can be collected with this system.
 
Stock:  An igneous intrusive body of unknown depth with a surface exposure of less than 104 square kilometres.  The sides, or contacts, of a stock, like those of a batholith, are usually steep and broaden with depth.
 
Stockwork:  A mineral deposit consisting of a three-dimensional network of closely spaced planar or irregular veinlets.
 
Strike:  The bearing, or magnetic compass direction, of an imaginary line formed by the intersection of a horizontal plane with any planar surface, most commonly with bedding planes or foliation planes in rocks.
 
Sulphide minerals:  A mineral compound characterized by the linkage of sulfur with a metal or semimetal; e.g., galena.
 
Syncline:  A fold in which the bed has been forced down in the middle or up on the sides to form a trough.
 
Tailings:  Material rejected from a mill after recoverable valuable minerals have been extracted.
 
Tailings pond:  A pond where tailings are disposed of.
 
Till:  An unsorted sediment made up of clay, sand and boulders left in the wake of a glaciation.
 
Tonne:  Metric ton – 1,000 kilograms – equivalent to 1.1023 tons.
 
Tourmaline:  A group of minerals of general formula (Na,Ca)(Mg,Fe+2,Fe+3,Al,Li)3Al6(BO3)3Si6O18(OH)4; it sometimes contains fluorine in small amounts.  Also, any mineral of the tourmaline group.  Tourmaline occurs in 3-, 6-, or 9-sided prisms, usually vertically striated, or in compact or columnar masses; it is commonly found as an accessory mineral in granitic pegmatites, and is widely distributed in acid igneous rocks and in metamorphic rocks.  It can indicative of alteration associated with porphyry style mineralization.
 
Tremolite:  A white to dark-gray monoclinic mineral of the amphibole group: Ca2Mg5Si8O22(OH)2.  It occurs in long blade-shaped or short stout prismatic crystals, and also in columnar or fibrous masses, esp. in metamorphic rocks such as crystalline dolomitic limestone and talc schist.  It is a constituent of much commercial talc. alteration — usually referring to chemical reactions in a rock mass resulting from the passage of hydrothermal fluids.
 
Triassic: Geological time period between 225 and 195 million years ago.
 
Tuff:  A finer grained pyroclastic rock made up mostly of ash and other fine grained volcanic material.
 
Veins:  The mineral deposits that are found filling openings in rocks created by faults or replacing rocks on either side of faults.
 
Vuggy silica:  In a high sulphidation epithermal environment, the highly acidic waters have dissolved everything but silica resulting in a highly porous and pox marker rock which is a good host for gold deposition. It is an indicator mineralization typical of epithermal rocks.
 
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.
 

Notes Concerning Terminology Related to Resources and Reserves
The terms “mineral resource”, “measured mineral resource”, “indicated mineral resource”, “inferred mineral resource”, “mineral reserve”, “probable mineral reserve” and “proven mineral reserve” used in this Annual Report are Canadian mining terms as defined in accordance with National Instrument 43-101, Standards of Disclosure for Mineral Projects under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council.  On November 14, 2004 and November 27, 2010, CIM Council adopted an update to the CIM Definition Standards to reflect the more detailed guidance available and effect certain editorial changes required to maintain consistency with current regulations. This version of the CIM Definition Standards includes further editorial changes required to maintain compatibility with the new version of National Instrument 43-101 which is became 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, reserve is termed “mineral deposit”.
 
DEFINITIONS
 
Qualified Person
Mineral Resource and Mineral Reserve estimates and resulting Technical Reports 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 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 contributors are Qualified Persons with respect to the work for which they are taking responsibility and that such persons are provided adequate documentation.
 
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 recognised 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 judgement 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.
 
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.
 
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 any 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 our mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under United States 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 millimetre (mm) = 0.039 inches (in)
1.0 metre (m) = 3.28 feet (ft)
1.0 kilometre (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.
 
Glossary of Abbreviations
Ag:  Silver
Ag gm/t:  Silver grade measured in grams per metric tonne
                  Converts to ounces per ton by dividing by 34.286
Au:  Gold
Au gm/t:  Gold grade measured in grams per metric tonne
                  Converts to ounces per ton by dividing by 34.286
Ba:  Barium
Co:  Cobalt
 
 
CRD: Carbonate replacement deposit
Cu:  Copper
EIS: Environmental Impact Statement
Fe:  Iron
gpm: gallons per minute
gpt: grams per tonne
g/t:   grams per tonne
IP:  Induced Polarization geophysical survey
Ni:  Nickel
NSR: net smelter return royalty
opt: ounces per ton
Oz:  Troy ounce
Pb:  Lead
Pd:  Palladium
PGM: Platinum group minerals
Pt:  Platinum
S:   Sulphur
tpd: Tonnes per day
ton: Short ton (2,000 pounds)
tonne: Metric ton (1000 kilograms - 2204.62 pounds)
VLF: Very low frequency electromagnetic geophysical survey
VMS:  Volcanogenic massive sulphide
 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 20-F and the exhibits attached hereto contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern our anticipated results and developments in our operations in future periods, planned exploration and development of our properties, plans related to our business and other matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Statements concerning Mineral Reserve and Mineral Resource estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if a property is developed, and in the case of Mineral Reserve, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” (or the negative and grammatical variations of any of these terms and similar expressions) be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to differ from those expressed or implied by the forward-looking statements. Some of the important risks and uncertainties that could affect forward-looking statements are described further in the sections entitled “ITEM 3. KEY INFORMATION - Risk Factors”, “ITEM 4.B. INFORMATION ON THE COMPANY - Business Overview”, “ITEM 4. INFORMATION ON THE COMPANY - Property, Plants and Equipment” and “ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS” and in the exhibits attached to this Annual Report on Form 20-F. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the Company’s forward-looking statements. The Company’s forward-looking statements are based on beliefs, expectations and opinions of the Company’s management on the date the statements are made and the Company does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions change, except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.
 
Please consult the Company’s public filings at www.sedar.com and 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 2011, Fiscal 2010 and Fiscal 2009 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 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 with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).   Until December 31, 2008, the Company prepared its consolidated financial statements in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”).  Effective January 1, 2009 the Company adopted IFRS.
 
Pursuant to SEC Release No. 33-8879 “Acceptance from Foreign Private Issuers of Financial Statements Prepared in Accordance with International Reporting Standards Without Reconciliation to U.S. GAAP”, the Company includes selected financial data prepared in compliance with IFRS as issued by IASB without reconciliation to U.S. GAAP.
 
The basis of preparation is described in detail Note 2 to our consolidated financial statements.
 
Table No. 1
Selected Financial Data
(expressed in thousands of Canadian dollars, except share and per share data)

   
Year
   
Year
   
Year
 
   
Ended
   
Ended
   
Ended
 
   
12/31/2011
   
12/31/2010
   
12/31/2009
 
                   
Revenues
  $ 249     $ 234     $ 2,441  
Net income (loss)
    7,295       (3,465 )     (2,286 )
Basic net income (loss) per common share
    0.13       (0.07 )     (0.05 )
Diluted net income (loss) per common share
    0.12       (0.07 )     (0.05 )
Weighted average shares (000)
    57,269       51,188       45,847  
                         
Working capital
    30,513       29,187       14,530  
Mineral properties
    10,470       4,439       8,417  
Net assets
    53,340       35,694       25,171  
Total assets
    53,905       36,343       25,659  
Capital stock
    73,354       62,854       50,878  
Dividends declared per share
    0       0       0  
                         

Canadian/U.S. Dollar Exchange Rates
 
In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian dollars (CDN$).
 
Table No. 2 sets forth the exchange rate for the Canadian dollars at the end of the five most recent fiscal periods ended at December 31st, the average rates for the period, the range of high and low rates and the close for the period.  Table No. 3 sets forth the range of high and low rates for each month during the previous six months. For purposes of this table, the rate of exchange means the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.  The table sets forth the number of Canadian Dollars required under that formula to buy one U.S. Dollar.  The average rate means the average of the exchange rates on the last day of each month during the period.
 
 
Table No. 2
Canadian Dollar/U.S. Dollar Exchange Rates for Five Most Recent Financial Years
 
   
Average
   
High
   
Low
   
Close
 
Fiscal Year Ended 12/31/2011
  $ 0.99     $ 1.06     $ 0.94     $ 1.02  
Fiscal Year Ended 12/31/2010
    1.03       1.08       1.00       1.00  
Fiscal Year Ended 12/31/2009
    1.14       1.30       1.03       1.05  
Fiscal Year Ended 12/31/2008
    1.06       1.30       0.97       1.22  
Fiscal Year Ended 12/31/2007
    1.07       1.19       0.92       0.99  
 
Table No. 3
U.S. Dollar/Canadian Dollar Exchange Rates for Previous Six Months
 
   
September
2011
   
October
2011
   
November
2011
   
December
2011
   
January
2012
   
February
2012
 
High
  $ 1.04     $ 1.06     $ 1.05     $ 1.04     $ 1.03     $ 1.00  
Low
    0.98       0.99       1.01       1.01       1.00       0.99  
 
The exchange rate was $1.00 on March 23, 2012.
 
Risk Factors
 
General Risk Factors Attendant to Resource Exploration and Development
Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production.  The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environment protection, the combination of which factors may result in the Company not receiving an adequate return on investment capital.
 
Presently, the Company is in the exploration stage and there is no assurance that a commercially viable ore deposit (a reserve) exists in any of its properties or prospects until further exploration work is done and a comprehensive economic evaluation based upon that work is concluded. The Company has financed its operations principally through the sale of equity securities, entering into joint venture arrangements and the sale of its inventory of gold. The recoverability of mineral properties is dependent on the establishment of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete development and ultimately upon future profitable production or the realization of proceeds from the disposition of the properties.
 
Uncertainty in Discovering Commercially Mineable Ore Deposits
There is no certainty that the expenditures to be made by the Company in the exploration of its properties and prospects as described herein will result in discoveries of mineralized material in commercial quantities.  Most exploration projects do not result in the discovery of commercially mineable ore deposits and no assurance can be given that any particular level of recovery of ore reserves will in fact be realized or that any identified mineral deposit will ever qualify as a commercially mineable (or viable) ore body which can be legally and economically exploited. Estimates of reserves, mineral deposits and production costs can also be affected by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions.  In addition, the grade of ore ultimately mined may differ from that indicated by drilling results.  Short term factors relating to ore reserves, such as the need for orderly development of ore bodies or the processing of new or different grades, may also have an adverse effect on mining operations and on the results of operations.  There can be no assurance that minerals recovered in small-scale tests will be duplicated in large-scale tests under on-site conditions or in production scale.  Material changes in ore reserves, grades, stripping ratios or recovery rates may affect the economic viability of any project.
 
 
History of Net Losses, Lack of Cash Flow and Assurance of Profitability
The Company had net losses in a number of years since its date of incorporation.  Due to the nature of the Company’s business, there can be no assurance that the Company will be profitable. The Company had net income of $7,294,858 in Fiscal 2011 and net losses of $3,464,652 in Fiscal 2010 and $2,285,959 in Fiscal 2009.
 
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 2011 and 2010, revenue consisted of interest and other income from office rental and contract exploration services provided to third parties. During Fiscal 2009, the Company also had revenue from drilling services provided to third parties. Otherwise, the Company has had no prior year’s history of earnings or cash flow other than the NSR royalty from the La Trinidad Mine and the bulk sampling on the Elk gold property. The Company has not paid dividends on their shares since incorporation and the Company does not anticipate doing so in the foreseeable future.  Historically, the only source of funds available to the Company was through the sale of its equity shares and entering into joint venture agreements.  The only source of funds available to the Company is through the sale of its inventory of gold, the sale of its equity shares and entering into joint venture agreements. Any future additional equity financing would cause dilution to current stockholders.
 
Uncertainty of Obtaining Additional Funding Requirements
If the Company’s exploration programs are successful, additional capital will be required for the development of an economic ore body and to place it in commercial production.  The only sources of future funds presently available to the Company are the sale of its inventory of gold, sale of equity capital 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 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 usually seeks joint venture partners to fund in whole or in part exploration projects.  This dilutes the Company’s interest in properties it has acquired.
 
Mineral Prices May Not Support Corporate Profit
The mining industry in general is intensely competitive and there is no assurance that, even if commercial quantities of mineral resources are developed, a profitable market will exist for the sale of same.  Factors beyond the control of the Company may affect the marketability of any substances discovered.  The price of minerals is volatile over short periods of time, and is affected by numerous factors beyond the control of the Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates and global or regional consumption patterns, speculative activities and increased production due to improved mining techniques. Material changes in mineral prices may affect the economic viability of any project.
 
Environmental Regulations
The current and anticipated future operations of the Company, including development activities and commencement of production on its properties, require permits from various federal, territorial and local governmental authorities and such operations are and will be governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters.  Companies engaged in the development and operation of mines and related facilities generally experience increased costs, and delays in production and other schedules as a result of the need to comply with applicable laws, regulations and permits.  Such operations and exploration activities are also subject to substantial regulation under these laws by governmental agencies and may require that the Company obtain permits from various governmental agencies.  The Company believes it is in substantial compliance with all material laws and regulations which currently apply to its activities.  There can be no assurance, however, that all permits which the Company may require for construction of mining facilities and conduct of mining operations will be obtainable on reasonable terms or that such laws and regulations, or that new legislation or modifications to existing legislation, would not have an adverse effect on any exploration or mining project which the Company might undertake.
 
 
Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions.  Parties engaged in exploration and mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violation of applicable laws or regulations.
 
The enactment of new laws or amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a material adverse impact on the Company and cause increases in capital expenditures or production costs or reduction in levels of production at producing properties or require abandonment or delays in development of new mining properties.
 
As a requirement for performing certain exploration activities, the Company has $124,764 on deposit as reclamation bonds for exploration work and site disturbance on the Elk and other prospects in Canada and the United States.  These allocated funds have been deposited for the benefit of the Province of British Columbia and the State of Nevada until released upon approval from the Province and State after all necessary reclamation work on the properties has been performed.  If the reclamation is more prolonged and requires funds in addition to those already allocated, the Company could be forced to pay for the extra work and it could have a significant negative impact upon the Company’s financial position and operations.
 
No Guarantee of Title to Mineral Properties
While the Company has investigated title to all of its mineral properties and prospects, and, to the best of its knowledge, title to all of its properties and prospects in which it has the right to acquire or earn an interest are in good standing as of the date of this Annual Report, this should not be construed as a guarantee of title.  The properties and prospects may be subject to prior unregistered agreements or transfers unknown to the Company and title may be affected by undetected defects, e.g. defects in staking or acquisition process.
 
As there are unresolved native land claim issues in British Columbia and the Yukon Territory, the Company’s properties and prospects in these jurisdictions may be affected in the future.
 
If title is disputed, the Company will have to defend its ownership through the courts, which would likely be an expensive and protracted process and have a negative effect on the Company’s operations and financial condition.  In the event of an adverse judgment, the Company could lose its property rights.
 
Trading Volume
The relatively low trading volume of the Company’s shares reduces the liquidity of an investment in the Company’s shares. Due to the reduced liquidity in the secondary markets, shareholders may find it more difficult to sell their shares.
 
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 27, 2012 there were share purchase options outstanding allowing the holders of these options to purchase 5,430,000 shares of common stock.  Directors and officers of the Company hold 4,510,000 of these share purchase options.  An additional 920,000 share purchase options are held by employees and consultants of the Company. Given the fact that as of March 27, 2012 there were 59,122,321 shares of common stock outstanding, the exercise of all of the existing share purchase options would result in further dilution to the existing shareholders and could depress the price of the Company’s shares.  The exercise of all outstanding share purchase options would cause the number of issued and outstanding common shares to rise 8.5%.
 
 
No Proven Reserves
The properties and prospects in which the Company has an interest or the properties in which the Company has the right to earn an interest are in the exploratory stage only, are without a known body of ore and are not in commercial production. If the Company does not ultimately find a body of economically recoverable ore, it would either have to acquire additional exploration projects, or terminate is operations.
 
Uncertainty of Reserves and Mineralization Estimates
There are numerous uncertainties inherent in estimating proven and probable reserves and mineralization, including many factors beyond the control of the Company.  The estimation of reserves and mineralization is a subjective process and the accuracy of any such estimates is a function of the quality of available data and of engineering and geological interpretation and judgement.  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 limiting 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.
 
Foreign Incorporation and Civil Liabilities
The Company was created under amalgamation under the laws of the Province of British Columbia, Canada.  All of the Company’s directors and officers are residents of Canada and substantially all of the Company’s assets and its subsidiaries are located outside the United States. Consequently, it may be difficult for United States investors to effect service of process in the United States upon those directors and officers who are not residents of the United States, or to realize in the United States upon judgements of United States courts predicated upon civil liabilities under applicable United States laws.
 
Conflict of Interest
Some of the Company’s directors and officers are directors and officers of other natural resource or mining-related companies.  Duane Poliquin and Morgan Poliquin also serve as directors of Gold Mountain Mining Corporation.  James McInnes also serves as a director of Cosigo Resources Inc.  Joseph Montgomery also serves as a director of Infrastructure Materials Corp. and Cosigo Resources Inc.  Gerald Carlson also serves as a director and President of Windstorm Resources Inc., President of Iron South Mining Inc., a director of Blue Sky Uranium Corp., and a director of Tarsis Resources Ltd.  Barry Smee also serves as a director of Platinum Group Metals Ltd.  Mark Brown also serves as a director and CFO of Big Sky Petroleum Corporation and Pitchstone Exploration Ltd.  He also serves as a director of Avrupa Minerals Ltd. and Estrella Gold Corporation.  He also serves as a CFO for Tarsis Resources Ltd. These associations may give rise from time to time to conflicts of interest, as a result of which, the Company may miss the opportunity to participate in certain transactions.
 
Foreign Operations
The Company currently has exploration projects located in Mexico and the United States.  The Company’s foreign activities are subject to the risk normally associated with conducting business in foreign countries, including exchange controls and currency fluctuations, limitations on repatriation of earnings, 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 United States affecting foreign trade, investment and taxation.
 
Foreign Currency Fluctuations
At the present time, some of the Company’s activities are carried on outside of Canada.  Accordingly, it is subject to risks associated with fluctuations of the rate of exchange between the Canadian dollar and foreign currencies.
 
 
The Company is currently not engaged in currency hedging to offset any risk of exchange rate fluctuation and currently has no plans to engage in currency hedging.
 
Operating Hazards and Risks Associated with the Mining Industry
Mining operations generally involve a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Hazards such as unusual or unexpected geological formations and other conditions are involved.  Operations in which the Company has a direct or indirect interest will be subject to all the hazards and risks normally incidental to exploration, development and production of minerals, any of which could result in work stoppages, damage to or destruction of mines and other producing facilities, damage to or loss of life and property, environmental damage and possible legal liability for any or all damage or loss.  The Company may become subject to liability for cave-ins and other hazards for which it cannot insure or against which it may elect not to insure where premium costs are disproportionate to the Company’s perception of the relevant risks.  The payment of such insurance premiums and the incurring of such liabilities would reduce the funds available for exploration activities.
 
The Ability to Manage Growth
Should the Company be successful in its efforts to develop its mineral properties or to raise capital for such development or for the development of other mining ventures it will experience significant growth in operations. If this occurs management anticipates that additional expansion will be required in order to continue development. Any expansion of the Company’s business would place further demands on its management, operational capacity and financial resources.  The Company anticipates that it will need to recruit qualified personnel in all areas of its operations. There can be no assurance that the Company will be effective in retaining its current personnel or attracting and retaining additional qualified personnel, expanding its operational capacity or otherwise managing growth. The failure to manage growth effectively could have a material adverse effect on the Company’s business, financial condition and results of operations.
 
Lack of a Dividend Policy
The Company does not intend to pay cash dividends in the foreseeable future, as any earnings are expected to be retained for use in developing and expanding its business.  However, the actual amount of dividends which the Company may pay will remain subject to the discretion of the Company’s Board of Directors and will depend on results of operations, cash requirements and future prospects of the Company and other factors.
 
Competition
There is competition from other mining exploration companies with operations similar to those of the Company’s.  Many of the mining companies with which the Company competes have operations and financial strength many times greater than that of the Company.  Such competitors could outbid the Company for such projects, equipment or personnel, or produce minerals at a lower cost which would have a negative effect on the Company’s operations and financial condition.
 
Dependence on Key Personnel
The Company depends highly on the business and technical expertise of its management and key personnel, in particular, Duane Poliquin and Morgan Poliquin. There is little possibility that this dependence will decrease in the near term. As the Company’s operations expand, additional general management resources will be required, especially since the Company encounters risks that are inherent in doing business in several countries. In Fiscal 2007, the Company took out an accidental death insurance policy on Duane Poliquin with a $2,000,000 limit. However, the loss or unavailability of any of its key personnel could have a negative effect on the Company’s ability to operate effectively.
 
 
Item 4.     Information on the Company
 
History and Development of the Company
The head office of the Company is located at 750 West Pender Street, Suite 1103, Vancouver, British Columbia, Canada, V6C 2T8.  The registered and records office of the Company is 1199 West Hastings Street, Suite 950, Vancouver, British Columbia, Canada, V6E 3T5.
 
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 created by amalgamation under the laws of the Province of British Columbia of its predecessor companies, Almaden Resources Corporation and Fairfield Minerals Ltd., effective December 31, 2001.  The Company operates under the laws of the Business Corporations Act (British Columbia).
 
The Company’s common shares began trading on The Toronto Stock Exchange (“TSX”) under the symbol “AMM” on February 11, 2002 and on the American Stock Exchange, now the NYSE Amex, 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 five wholly-owned subsidiaries that were formed to hold properties in their respective jurisdictions.  These subsidiaries are:
 
 
Jurisdiction
 
Nature of operations
       
Almaden America Inc.
USA
 
exploration company
Republic Resources Ltd.
Canada
 
service company
Ixtaca Precious Metals Inc.
Canada
 
holding company
Almaden de Mexico, S.A. de C.V.
Mexico
 
exploration company
Minera Gavilan, S.A. de C.V.
Mexico
 
exploration company
Compania Minera Zapata, S.A. de C.V.
Mexico
 
exploration company
Minera Gorrion, S.A. de C.V.
Mexico
 
exploration company
 
At December 31, 2011, the Company owned a 50% share interest in ATW Resources Ltd. (“ATW”), a company incorporated in the Northwest Territories, Canada on January 6, 1993, a 14.8% share interest in Tarsis Resources Ltd. (formerly Tarsis Capital Corp.), a company incorporated in Alberta, Canada on October 21, 2005 and continued into British Columbia on June 2, 2008 and a 38.8% share interest in Gold Mountain Mining Corporation, a company incorporated in British Columbia, Canada on June 12, 2008 (formerly Beanstalk Capital Inc. and Set For Growth Developments Ltd.).
 
Business of the Company
The Company is engaged in the business of the acquisition, exploration and when warranted, development of mineral properties.  The Company has property interests in Canada, United States and Mexico. None of the Company’s property interests are beyond exploration stage.  Presently there is no assurance that any of the Company’s mining properties or prospects contain a commercially viable ore body (reserve) until further exploration work is done and final feasibility study based upon such work is concluded.  The Company is in the exploration stage and has not generated any revenues from operations.
 
 
Business Overview
 
Maintaining properties
 
The following is a general statement about government requirements for holding mineral properties in the jurisdictions where the Company works.
 
In Canada, mining law is a provincial or territorial matter. Maintaining a mineral property requires annual assessment work or cash in lieu of work. Prior to starting a work program, an application describing the program is submitted to the government authorities and this is then distributed for comment to various departments for review, such as fisheries or forestry, that may discern impact from the proposed work. The government has an obligation to consult with First Nation groups in the area that may have a land claim over the mineral claims, but this consultation is often delegated to the Company to handle. A memorandum of understanding may have to be negotiated with the First Nation before the government will issue a permit to work. If there is to be any environmental impact, an appropriate reclamation amount is determined and a bond is posted by the Company for this amount before the permit is issued.
 
In the United States, federal mining laws govern mining claims on federal land, including land administered by the Bureau of Land Management (“BLM”). A payment of US$140 per claim is payable to the BLM by September 1 of each year per twenty acre mining claim.  This is filed in advance for the upcoming assessment year.  Prior to any exploration activity, an Exploration Plan is submitted to the BLM that outlines the work program and describes any proposed land disturbance. Reclamation plans are also submitted and an appropriate bond to ensure such reclamation is done may have to be provided before the permit is issued.
 
In Mexico, mining law is a federal matter.  The government requires annual assessment work and expenditures per hectare which increase with the size and age of the claim.  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; State and Municipal governments have small participation in the permitting process. 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 climate in the Project Areas is marked by dry, cold winters and a distinct rainy season. The rainy season typically begins in May or June and continues until late September to October. In most years roads remain passable and exploration can be done throughout the rainy season. Seasonal changes do not have a material impact on our exploration expenditures.
 
 
Exploration Program Protocols
 
General Sample Handing and Quality Control Program for Exploration Programs
 
The Company employs a strict quality control program for samples taken during its exploration programs. For drilling programs a quality control program is in place which includes the insertion of blanks, field duplicates and certified standards into the sample stream.
 
Chain of Custody
Samples of rock and drill core and cuttings are sealed by the sampler and kept under control of a qualified person until they are shipped to a laboratory.
 
Sample Handling
Sample handling for drilling programs is described more fully below. Soil and stream sediment samplers have been trained to industry standard levels of sampling methodology. In general, the Company sieves stream sediment samples to -20 mesh in the field during preparation. Samplers are required to not wear any jewellery or clothing or use equipment which may contaminate the sample. All sample locations are geographically located at the time of sampling using the Global Positioning System. The Company has prepared standardized sample information cards for samplers to record information concerning the sample location, type and medium. Outcrop, float and dump rock samples are collected by geologists who record similarly ordered geologic information relating to the sample taken.
 
Blanks
Blank material, a sample of crushed and pulverized rock, known to contain very low or non detectable concentration of gold, is inserted as a pulp into the sample stream on an interval of every 20 samples. Blanks are intended to detect possible contamination.
 
Duplicates
During drill programs the company routinely includes a field duplicate into the sample stream, spaced at 20 sample intervals. Field duplicate samples are splits of drill core or reverse circulation cuttings from the sample interval. The resulting two field duplicate samples are submitted with separate sample numbers “blind” to the assay lab and separately treated as normal samples. The samples are taken randomly with no regard to rock type, geographic position or degree of alteration or mineralization. These field duplicated 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 metreage 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 metreage, written at the ends of the trays with a marker. An aluminum tag with the hole number, box number and metreage 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 coloured tape was stapled to the boxes to indicate the position and type of duplicate sample. A permanent aluminum tag with the sample number inscribed on them was stapled to the inside of the core box channel at the start of each sample interval. A cut line was marked on the core as a guide for sawing of half-core samples for assay. The cut line position is marked by fitting the ends of the core together, to align them as they came out of the hole, and using a ruler to draw a line down the core axis with a red wax pencil. This mark-up is done after the trays are photographed. Cut line positions are selected by the logging geologist to produce two halves with equal proportions of mineralization. Typically this is done by marking the cut line down the long axis of the ellipses described by the intersection of the veins with the core circumference. Each tray is digitally photographed before core cutting and sampling.
 
 
Core Logging
Before cutting and sampling the core, the following tables of data are recorded on paper and then entered into the Almaden drillhole 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, metres 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 metre 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:
 
The right hand side of the core (looking down the hole) was always sampled. After cutting, half the core was placed in a new plastic sample bag and half was placed back in the core box. Between each sample, the core saw and sampling table areas were washed to ensure no contamination between samples. Field duplicate, blank and analytical standards were added into the sample sequence as they were being cut. After cutting of samples containing visible gold, a piece of abrasive quartz sandstone was cut to clean the diamond blade.  This was done to prevent contamination of the following sample with gold that may have become smeared onto the blade.
 
Sample numbers were written on the outside of the sample bags twice and the tag from the sample book was placed inside the bag with the half core.  The bags were sealed using single-use plastic cable ties.
 
Sample numbers on the bags were checked against the numbers on the core box and the sample book.
The core cutting area is within the core logging shed and the logging geologists regularly checked the precision of the core cutting and sampling.  The sealed plastic sample bags were placed in large plastic twine (rice) sacks (usually between 8 and 10 samples per sack) and sealed using single-use plastic cable ties. The sacks were weighed and the sack number, sample numbers, sack weight and date written on the outside of the sacks.
 
Company’s Principal Properties
The Company has two principal property interests: (1) the Tuligtic prospect (100% interest) which includes the Ixtaca zone in Mexico, and (2) the El Cobre copper-gold prospect (100% interest).
 
The Company does not deem its other exploration projects to be material properties. The Company plans to conduct preliminary exploration on the projects however there are no current plans to conduct advanced exploration on these projects.
 
PRINCIPAL PROPERTIES INTERESTS
 
The Tuligtic Prospect – Mexico
 
Location and Access
The property is located roughly 82 kilometers north-northeast of the City of Puebla, the capital of the state of Puebla, and one of the five most important colonial cities in Mexico. Puebla City is located to the east of Mexico City and west of Mexico’s main port, Veracruz, on the main route between the two. The project is located east of Apizaco, an industrial centre located 51 kilometers north of Puebla City along Highway 119. The project area is most easily accessed via Highway 119 from Apizaco, Tlaxcala to the Ciudad Industrial Zicotencatl and 42 kilometers east along the paved road toward Ixtacamaxtitlan passing through the communities of Lázaro Cárdenas and Emiliano Zapata. A gravel road connects the paved highway with the town of Santa Maria 3.2 kilometers north of the bridge crossing the Rio Apulco. The Ixtaca Zone of the Tuligtic project, and drill sites, are located between the communities of Santa Maria and Zacatepec, a further 2.5 kilometers north along the recently graded gravel road. The 61 kilometers total distance from Apizaco can be driven in approximately 1.5 hours. The property can also be accessed by gravel roads from the NW via Chignahuapan, from the NE via Tezhuitán and Cuyoaco and from the south via Libres.
 
The towns of Santa Maria and Zacatepec are serviced by the national electricity grid and rare wired telephone lines and recently have cellular telephone coverage.
 
The climate of the region is temperate with temperatures averaging 10°C in December to 19°C in May-June. Annual precipitation averages over 600mm, three-quarters falling in the rainy season May through September. The project area is located in the Sierras Altas subprovince of the Sierra Madre Oriental at the northern edge of the Trans-Mexican Volcanic Belt (TMVB). The area is dominated by moderate- to steep-sided hills of altered volcanic rock and volcaniclastic sediments locally deeply incised to bedrock by intermittent streams. Elevation varies from 2300 meters above sea level in the south to 2800 masl in the north. The area is partially cultivated with corn, beans, vegetables and pasture land. Vegetation on non-cultivated land is dominated by either cactus or pines.
 
 
(MAP)
 
 
Claims and Title
The Tuligtic property consists of two claims held 100% by Compañía Minera Gorrion S.A. de C.V., a wholly-owned subsidiary of Almaden Minerals Limited. The claims, tabularized below, cover an area of over 14, 000 hectares and were staked subsequent to recognition of alteration during a helicopter-borne reconnaissance exploration program in 2001. Official title documents have been issued for both claims, the details of which are summarized below.
 
Claim Name
 
Claim Number
 
Valid Until Date
 
Area (hectares)
 
Location
Cerro Grande
    219469  
March 5, 2059
    11, 201.55  
Tetela de Ocampo Ixtacamaxtitlan Aquixtla, Pue.
Cerro Grande 2
    233434  
February 23, 2059
    3,028  
Zautla, Pue.
Total
              14, 229.55    
 
Geological Setting of the Tuligtic Project and Ixtaca Zone
The Tuligtic property is underlain by chevron-folded limestones, shales and sandstones of the Tamaulipas Formation intruded by Tertiary granodioritic plutons and smaller porphyritic bodies and dikes, all unconformably overlain by lithic rhyolite tuff of the Coyoltepec Pyroclastic Deposit.
 
Outcrops of the Tamaulipas Formation are rare in the centre of the property in the area of concentrated drilling. Chevron-folded medium-bedded limestones and shales form steep-sided canyons and cliffs in the southwest and north parts of the property. The limestones are locally altered to red-green garnet-diopside skarn near the contact with intrusions. The sedimentary rocks are intruded by a several plutonic phases comprising a regional and pre-mineral granodiorite body to the north which in turn was intruded by a complex multi-phase diorite to quartz diorite intrusive body. This latter intrusive complex has undergone classic porphyry-style potassic and phyllic alteration and veining associated with copper-molybdenum-gold mineralization. The sedimentary and plutonic rocks are overlain by two episodes of pyroclastic rocks: (1) intensely to texturally destructive argillic and silicic altered lithic-crystal tuffs and (2) unconsolidated post-mineral fine-grained brown ash.
 
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 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 wallrock 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 a 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.
 
 
The Ixtaca epithermal gold-silver vein zone is exposed roughly one kilometer to the south of the outcropping intrusive. At surface, it is characterized by friable, texturally destructive clay alteration developed in what is interpreted to have been a fine-grained volcaniclastic. Strataform zones of opaline silicification are associated with this alteration zone. Analysis of the argillic alteration indicated presence of kaolinite, alunite and cristobalite typical of alteration that forms above mineralization in active geothermal systems. Quartz-bladed calcite veins were been identified cropping out in limestone roughly 100 meters beneath the exposed tabular silica zones. Initial sampling as part of this study of these veins and from float boulders of breccia containing quartz vein fragments have returned anomalous values in gold and silver. Samples of strataform silicification and altered volcanic rocks returned anomalous values of Hg, As and Sb. These findings are consistent with a highly preserved low-sulfidation epithermal vein system. Drilling has shown that the limestone stratigraphy is comprised of lime mudstone units higher in the succession to shaley units deeper in the succession. Veins encountered in drilling appear to be sub parallel to dykes which cross cut the limestone succession. The dykes and their margins are commonly the locus of veining. The present drilling program has been designed to better understand the more densely veined portions of the vein zone, where higher grades have been recognized to be located, as well has defining the confines of veining.
 
Preliminary mineralogy shows that the veins are largely comprised of carbonate and lesser quartz. The veins variously mineralized with sulfides (pyrite-sphalerite-galena-minor chalcopyrite, rare arsenopyrite, pyrrhotite, possible relict marcasite?), local Ag sulfosalts or sulfides (possibly including but not restricted to, tetrahedrite, ruby silver, i.e. the proustite-pyrargyrite and/or pearcite-polybasite series, and acanthite), and native gold or electrum.
 
The Main Ixtaca zone of veining is thought to have a north-easterly trend which is the apparent trend of the dykes (060 azimuth). At present the Main Ixtaca Zone is interpreted to be sub-vertical with local variations. The drilling completed to date has traced mineralisation over 1,000 meters along this northeast trend. Based upon observations at surface and of core as drilling progresses, there seems to be a variety of veinlet orientations within the other parts of the Ixtaca zone.
 
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.
 
The Company conducted multiple surface geologically focused exploration programs which included surface geological and alteration mapping, prospecting and rock and stream sediment sampling. These programs identified two distinct styles of alteration and mineralization; copper porphyry style mineralization located in the north central part of the claim block and roughly one kilometer south, gold-silver epithermal vein style mineralization located in the south central part of the claim block. Subsequent programs of increasingly detailed grid based soil sampling and surface geophysics (induced polarization and magnetics) were carried out which defined targets within both areas of identified mineralization.
 
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 drillholes were oriented within thirty degrees of north south and located within a 200 by 300 meter area roughly in the central portion of the IP chargeability anomaly. These holes were selected based on intensely altered and quartz-veined porphyry exposed in the drainages in the central portion of the chargeability anomaly. The drilling program encountered sub economic porphyry mineralisation. 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 kilometers 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 a 1.67 meter interval that returned 60.66 g/t Au and 2112g/t Ag. Immediately after this discovery the Company initiated a follow-up drill program which had expanded to two drills by the end of 2010. In 2010 6,465.12 meters were drilled in 14 holes. In 2011 the program was expanded to four drills and a further 30,759.54 meters were drilled in 81 holes.
 
 
Present Condition of Project and 2012 Exploration Program
The property is without known reserves and the 2012 exploration program is exploratory in nature. The Company intends to produce the first resource estimate on the Ixtaca Zone in 2012 based on results of the current exploration program. At present over 30,000 meters of drilling has been planned for the 2012 exploration program which is underway with four drills operating.
 
Mr. Norm Dircks, P.Geo., a qualified person (“QP”) under the meaning of NI 43-101, is the QP and project manager of Almaden’s 2012 Ixtaca Zone exploration program. The analyses are presently carried out at ALS Laboratories of North Vancouver using industry standard analytical techniques. For gold, samples are first analysed by fire assay and atomic absorption spectroscopy (“AAS”). Samples that return values greater than 10 g/t gold using this technique are then re-analysed by fire assay but with a gravimetric finish. Silver is first analysed by 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 HF-HNO3-HCLO4 digestion with HCL leach and ICP-AES finish. Of these samples those that return silver values greater than 1,500 g/t are further analysed by fire assay with a gravimetric finish. Blanks, field duplicates and certified standards were inserted into the sample stream as part of Almaden’s quality assurance and control program which complies with National Instrument 43-101 requirements.
 
The El Cobre Prospect - Mexico
 
Location and Access
The property is located in the state of Veracruz roughly 75 kilometers northwest of the City of Veracruz. The property is accessible by road along the Pan American Highway (Federal Highway 180) north from Veracruz. Various roads provide access to the centre of the claim block. Logistically, it is extremely well situated with the Pan-American Highway located 3 kilometers to the east of the property and ready access to power (Laguna Verde Nuclear Power Plant located 15 kilometers north).
 
The topography on the property is rugged with elevations ranging from 10 m to 400 m.  Trees and scrub growth cover much of the hillsides, however, various trails and dirt roads provide good access to many parts of the property.
 
A warehouse and core facility has been established in the town of Tinajitas providing a base with good access to all parts of the property.
 
 
(MAP)
 
 
Claims and Title
 
Almaden Minerals Ltd., through its wholly owned Mexican subsidiary Minera Gavilan S.A. de C.V., owns a 100% interest in the El Cobre project subject to a 0.5% NSR payable to a third party, 50% of which may be purchased for $US1.5 MM. The below table shows the title numbers and expiry dates for the list of current titled claims.
 
Claim Name
 
Title Number
   
File Number
   
Area in Hectares
   
Expiry Date
 
CABALLO BLANCO III
    218457    
5/1/0667
      1145.00    
04/11/2052
 
CABALLO BLANCO V
    218955    
5/1/0674
      450.00    
27/01/2053
 
CABALLO BLANCO VIII
    223360       108/72       965.81    
02/12/2054
 
(GPO) REYNA NEGRA FRACCIÓN 2
    221152    
5/1/716
      65.97    
02/12/2053
 
RED. REYNA NEGRA FRACCIÓN 4
    224416    
05/02/2023
      25.15    
02/12/2053
 
C. B. X-b
    237405       108/120       2653.56    
08/12/2060
 
C. B. X-a
    237440       108/119       1721.00    
15/12/2060
 
 
Geological Setting of the El Cobre Project
Central Mexico is dominated by an east-west belt of Miocene to sub-recent calc-alkaline andesitic to dacitic volcanic rocks and active volcanoes known as the Trans Mexican Volcanic Belt (TMVB). At the eastern end of the TMVB, where the El Cobre Property is located, Quaternary basalts that are associated with the Eastern Alkalic Province cover Oligocene andesitic to basaltic volcanic rocks of the TMVB. The property itself is largely underlain by a sequence of andesitic to dacitic lithic tuffs, crystal tuffs and volcanic breccias. These volcanic centers are bound by and possibly in fault contact with basalt flows and related clastic rocks. Large arcuate faults are present and are interpreted to represent normal faults associated with caldera development. Fine-grained, magnetic monzonite and diorite intrusions and dykes have been identified in several locations on the property and these are interpreted to be the causative intrusions for the porphyry style mineralization identified on the project.
 
History of Past Work
To the Company’s knowledge no modern exploration was carried out on the project prior to Almaden’s acquisition of the property in 1994.
 
In 1994 Almaden Minerals Ltd., through its wholly owned subsidiary Minera Gavilan S.A. de C.V., signed an option agreement whereby Almaden had the option to acquire a 100% interest in the claims.  This option has been exercised.
 
From 1995 to 1998, Almaden Minerals Ltd completed extensive exploration work mainly concentrated on porphyry Cu-Au and Au-Ag vein targets in the El Cobre area. Surface work included extensive grid based soil sampling and ground induced polarization (IP) and magnetics geophysics. This work also included 17 RC drill holes designed to test soil geochemical and IP geophysical anomalies spatially associated with mineralized float and outcrop. The 17-hole reverse circulation drill program totalled 2,390 meters and was completed in the spring of 1998. Several zones of gold and silver mineralized quartz-barite veins were intersected including the zone in hole CB-4 which cut 40 meters of 1.4g/t gold and 9.0 g/t silver. Shallow drillholes into an intrusive returned 107 meters of 0.25g/t gold and 0.18% copper in one hole and 40 meters averaging 0.39g/t gold and 0.15% copper in another. Drill testing of a third zone with two holes returned 20 meters of 0.45g/t gold and 0.11% copper and 15 meters of 0.23g/t gold and 0.16% copper. Based on this work, it was interpreted that these holes tested the top of a porphyry system.
 
In 2001, Noranda optioned the Caballo Blanco property from Almaden and drilled 7 very widely spaced diamond drill holes totaling 1,641 meters. No significant copper mineralization was intersected and despite significant alteration and anomalous gold mineralization in several holes, Noranda terminated its option in the fall of 2002.
 
In 2002 the project was optioned to Comaplex Minerals Corp. under terms whereby Comaplex could earn a 60% interest in the project which Comaplex exercised in 2006. In 2004 Comaplex drilled two diamond drill holes on the El Cobre project for a total of 515.8 meters. This drilling confirmed the presence of significant porphyry style copper–gold mineralization. DDH 04CB1 drilled in an area that had shown significant results in the past returned 290 meters that averaged 0.39 g/t gold and 0.16% copper. The drill hole is associated with a prominent magnetic feature and a large gold soil anomaly. In 2007 Almaden purchased Comaplex Mineral’s 60% interest in the project in its entirety for a cash payment of US$1.25 Million.
 
 
In 2007 prospecting conducted by Almaden resulted in the discovery of a new zone of porphyry mineralization named Pedrero in the north part of the project.
 
Also in 2007 Almaden optioned the project to Canadian Gold Hunter Corp. under terms whereby Canadian Gold Hunter could earn a 70% interest in the project from Almaden. In 2008 Canadian Gold Hunter drilled 10 diamond drill holes on the project for a total of 2,837.14 meters. At Pedrero drilling confirmed the presence of porphyry mineralization. The final 41.15 meters of 08CBCN-019 graded 0.272% copper and 0.415 g/t gold before the hole was lost in a fault. Significant sections with strong quartz stockwork were encountered in hole 09CBCN-042 and the final 137 meters returned 0.105% copper and 0.100 g/t gold.
 
In 2010 NGEX Resources Inc. (successor to Canadian Gold Hunter Corp.) sold its option to acquire a 70% interest in the project to Goldgroup Mining at which point a 60 (Almaden) / 40 (Goldgroup Mining) joint venture was initiated. In 2011 Almaden acquired a 100% interest in the project as part of the consideration of the sale of Almaden’s interest in the adjacent Caballo Blanco project to Goldgroup Mining. Also in 2011 Almaden contracted a TITAN 24 deep earth imaging induced polarization survey on the project which was completed in January of 2012.
 
Present Condition of Project and 2012 Exploration Program
The property is without known reserves and the 2012 exploration program is exploratory in nature. From late November 2011 to January 2012 a TITAN 24 deep induced polarization surface geophysical program was conducted. For 2012 Almaden has planned an initial 3,500 diamond drilling program on the project designed to test the porphyry copper-gold targets defined by past work on the property.
 
The planned 2012 exploration program will be under the direction of Mr. Norm Dircks, P.Geo., a qualified person (“QP”) under the meaning of NI 43-101. It is anticipated that the analyses will be carried out using industry standard analytical techniques as follows: For gold, samples are first analysed by fire assay and atomic absorption spectroscopy (“AAS”). Samples that return values greater than generally 10 g/t gold using this technique are then re-analysed 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 generally 100 g/t silver by ICP-AES are then re analysed by HF-HNO3-HCLO4 digestion with HCL leach and ICP-AES finish. Of these samples those that return silver values greater than generally 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.
 
NON-PRINCIPAL PROPERTIES INTERESTS
 
The Company has assembled a portfolio of mineral exploration projects, including the Principal properties Tuligtic and El Cobre, through its ongoing grass roots exploration efforts. While the properties are largely at early stages of exploration they represent opportunities for the discovery of gold, silver and copper deposits. Almaden’s business model is to find and acquire mineral properties and develop them by seeking partnerships with third party exploration and development companies and retaining a carried interest.
 
 
The Tuligtic and El Cobre projects are considered principal properties because past drilling has confirmed the presence of significant mineralization that has a reasonable chance of being economic although as yet no resources have been defined on these projects. Non principal projects have not yet had drilling results that indicate the presence of significant mineralization. Nevertheless the non-material projects are deemed worthy of preliminary exploration and drilling. Below is a list of Non-Principal properties and their current status with respect to agreements with others. In 2011 Almaden carried out preliminary work programs on some of these Non-Principal projects including a geophysical survey at the Willow project in Nevada, USA and a geochemical survey on the ATW diamond prospect in Canada. Almaden hopes to advance all these Non-Principal projects with preliminary exploration programs in 2012, whether carried out by the Company or by partners. The Company may form new agreements to explore these projects and, if negative exploration results are received, drop projects on this list.
 
Name
Location
Interest
ATW
Canada
Joint Venture, 58.8% Interest
Elk
Canada
2% NSR Royalty
Dill
Canada
2% NSR Royalty
Logan
Canada
Joint Venture, 40% Interest
Merit
Canada
Optioned to Suburst Exploration
Munro Lake
Canada
100% owned
Nicoamen River
Canada
100% owned
Ponderosa
Canada
100% owned
Skoonka Creek
Canada
Joint Venture, 34.14% Interest
Yukon/BC Projects (8) Sold to Tarsis Resources
Canada
2% NSR Royalty
Black Jack Springs
USA
100% owned
BP
USA
100% owned
Monte Cristo
USA
100% owned
Newark Valley
USA
100% owned
Paradise Valley
USA
100% owned
Veta
USA
100% owned
Willow
USA
100% owned
Bufa
Mexico
2% NSR Royalty
Caballo Blanco
Mexico
1.5% NSR Royalty
Caldera
Mexico
Optioned to Windstorm Resources
Campanario
Mexico
100% owned
Cerro Colorado
Mexico
100% owned
El Chato
Mexico
100% owned
El Cobre
Mexico
100% owned
El Encuentro
Mexico
100% owned
El Realito
Mexico
100% owned
Erika
Mexico
2% NSR Royalty
Fuego
Mexico
100% owned
Joya
Mexico
100% owned
Lajas
Mexico
100% owned
Matehuapil
Mexico
Optioned to Golden Minerals Company
Mezquites
Mexico
100% owned
Ocotzingo
Mexico
100% owned
Picacho
Mexico
100% owned
San Carlos
Mexico
100% owned
San Pedro
Mexico
100% owned
Tanquecillos
Mexico
100% owned
Terrerillos
Mexico
100% owned
Tropico
Mexico
0.8% NSR Royalty
Tuligtic
Mexico
100% owned
Viky
Mexico
100% owned
Yago
Mexico
100% owned
 
 
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, 2011, 2010 and 2009 appearing under Item 17 – Financial Statements and listed under Item 19 – Exhibits.
 
The Company’s consolidated financial statements are stated in Canadian Dollars and have been prepared in accordance and compliance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IASB”) and the IFRS Interpretations Committee (“IFRIC”).
 
The Company is in the business of acquiring and exploring mineral properties and prospects in Canada, the United States and Mexico with the aim of developing them to a stage where they can be exploited at a profit or to arrange joint ventures whereby other companies provide, in whole or in part, funding for development and exploitation. At that stage, the Company’s operations would, to some extent, be dependent on the world market prices of any minerals mined. The Company does not have producing properties and operations on its properties and prospects are exploratory searches for mineable deposits.
 
Fiscal 2011 compared to Fiscal 2010
The Company’s operations during the year ended December 31, 2011 (“Fiscal 2011”) produced net income of $7,294,858 or $0.13 per share compared to a net loss of $3,464,652 or $0.07 per share for the fiscal year ended December 31, 2010 (“Fiscal 2010”).  The income is primarily due to the sale of the Elk and Caballo Blanco properties. In July 2011, the Company completed the sale of the Elk Gold Project to Gold Mountain Mining Corporation (“Gold Mountain”) for 35 million common shares of Gold Mountain and a 2% NSR. The Company then sold 8.25 million of the 35 million shares of Gold Mountain to third parties at $0.355 per share for proceeds of $2,928,750.  An additional 2,000,000 common shares will be held in escrow subject to the following conditions: 1,000,000 common shares upon the establishment of 1,000,000 ounces of measured or indicated reserves of gold on the property; and 1,000,000 common shares upon the establishment of an additional 1,000,000 ounces of measured or indicated reserves of gold on the property.  Any bonus shares not released from escrow within five years will be cancelled.  The Company has recorded the contingent share receivable at its fair value of $144,000.  In October 2011, the Company completed the sale of its 30% interest in the Caballo Blanco project to Goldgroup Mining Inc. (“Goldgroup”) for US$2.5 million cash, 7 million common shares of Goldgroup and a 1.5% NSR.  An additional 7 million shares will be issued to the Company under the following conditions: 1 million upon commencement of commercial production, 2 million upon measured and indicated resources including cumulative production reaching 2 million ounces of gold, 2 million shares upon measured, indicated and inferred resources including cumulative production reaching 5 million ounces of gold and 2 million shares upon measured, indicated and inferred resources including cumulative production reaching 10 million ounces of gold.  The Company recorded the contingent share receivable at its fair value of $518,700.Goldgroup also transferred to Almaden its 40% interest in the El Cobre property.  The Company now owns a 100% interest in the El Cobre subject to a sliding scale royalty payable to a third party.
 
During Fiscal 2011, the income on mineral property options totalled $15,072,485 from the sales discussed above.  During Fiscal 2010, the income on mineral property options consisted of the receipt of 6,000,000 shares of Lincoln Mining Corporation with a fair market value on receipt of $1,770,000 pursuant to the sale of the Company’s Bufa prospect and the receipt of 2,560,000 shares of Skeena Resources Ltd. with a fair market value on receipt of $153,600 pursuant to the sale of the Company’s 40% interest in the Tropico prospect.  Income on mineral property options consists of equity securities and/or cash payments received pursuant to mineral property option agreements and reflect the excess of market value, in the case of the marketable securities, at the time of receipt over the carrying value of the property.
 
During Fiscal 2011, the Company determined it no longer had significant influence over Tarsis.  As a result, the Company classified its interest in Tarsis to marketable securities from investment in associate and recognized a gain on reclassification in the amount of $1,077,223 which is included in gain (loss) on investment in associate.  Prior to this determination and reclassification the Company recognized a loss on dilution of $122,843 as a result of a private placement in Tarsis and recorded its equity share of Tarsis’ loss during Fiscal 2011of $25,193 which is also included in gain (loss) on investment in associate.  During Fiscal 2010, the Company recognized a loss of $151,926 in its equity investment in Tarsis. During Fiscal 2010, the Company recognized a loss of $168,449 on the deemed partial dilution of the Company’s investment in Tarsis from 27.6% to 16.7%.
 
 
Because the Company is an exploration company, it has no revenue from mining operations.  During Fiscal 2011 and 2010, revenue consisted primarily of interest income and other income from office rental and contract exploration services provided to third parties.
 
General and administrative expenses were $2,096,097 in Fiscal 2011, an increase from $1,493,611 in Fiscal 2010.  The most significant increase is in salaries and benefits with the hiring of a full-time CFO.  The Company participated in a number of investor conferences such as the New Orleans Investment Conference, the Agora Financial Symposium in Vancouver, the Precious Metals Summit 2011 in Colorado, the Prospectors and Developers Association Conference in Toronto and the World Resource Investment Conference in Vancouver.  The Chairman and CEO made presentations to potential investors in New York, Los Angeles and Minneapolis.  The Chairman also made presentations to potential investors in London and Paris. The Company also retained Casey Research for a sponsored profile on the Kitco Casey website and Michael S. Fulp for website sponsorship for part of the year.  Director’s fees totalling $33,000 were paid during both years ended December 31, 2011 and 2010.
 
General exploration expenses were $961,992 in the year ended December 31, 2011, compared to $646,358 in Fiscal 2010.  These expenditures vary according to management decisions on work to be done on any property.
 
Significant non-cash items in Fiscal 2011 include income on mineral property options and share-based payments. Share-based payments are recognized for stock options granted.  This expense is directly related to, and fluctuates based on, the number of options granted during any period.  Significant non-cash items in Fiscal 2010 include income on mineral property options, share-based payments and impairment of interests in mineral properties Impairments of interests in mineral properties fluctuate period to period based on management’s evaluation of the carrying value of each mineral property interest held at that time.
 
Fiscal 2010 compared to Fiscal 2009
The Company’s operations during the year ended December 31, 2010 (“Fiscal 2010”) produced a net loss of $3,464,652 or $0.07 per share compared to a net loss of $2,285,959 or $0.05 per share for the fiscal year ended December 31, 2009 (“Fiscal 2009”).  The increase in net loss was primarily due to the Company not earning other income from drill programs undertaken on behalf of third parties while utilizing the drill to advance its own properties and the non-cash expense of share-based compensation recorded on the grant of stock options.  Share-based compensation is directly related to, and fluctuates based on, the number of stock options granted and vested during any period.
 
During Fiscal 2010, the income on mineral property options consisted of the receipt of 6,000,000 shares of Lincoln Mining Corporation with a fair market value on receipt of $1,770,000 pursuant to the sale of the Company’s Bufa prospect and the receipt of 2,560,000 shares of Skeena Resources Ltd. with a fair market value on receipt of $153,600 pursuant to the sale of the Company’s 40% interest in the Tropico prospect.  During Fiscal 2009, the income on mineral property options consisted of the receipt of 100,000 shares of Skeena Resources Ltd. pursuant to a 2008 option agreement with a fair market value of $4,000 and the receipt of 200,000 shares of Lincoln Gold Corporation pursuant to a 2007 option agreement with a fair market value of $6,900 and the receipt of British Columbia mining exploration tax credit of $97,348 including interest.  Income on mineral property options consists of equity securities and/or cash payments received pursuant to mineral property option agreements and reflect the excess of market value, in the case of the marketable securities, at the time of receipt over the carrying value of the property.  During Fiscal 2010, the Company recognized a loss of $151,926 in its equity investment in Tarsis compared to a loss of $90,908 in Fiscal 2009.  During Fiscal 2010, the Company recognized a loss of $168,449 on the deemed partial dilution of the Company’s investment in Tarsis from 27.6% to 16.7%.  In Fiscal 2009, the Company recognized a loss of $196,476 on the deemed partial dilution of the Company’s investment from 33.2% to 27.6%.  During Fiscal 2009 the Company recognized a permanent impairment in the amount of $80,600.   In Fiscal 2010, the loss on the sale of the sale of securities was higher when compared to Fiscal 2009. The Company disposes of its equity securities when, in the view of management, favorable market conditions exist for any of its holdings.  During Fiscal 2010, the Company also recognized an income tax recovery of $305,766 from premiums on flow-through share issuances.   Also, the fluctuation in the exchange rate for the U.S. and Canadian dollars resulted in a smaller loss on foreign exchange in Fiscal 2010 when compared to Fiscal 2009.
 
 
Because the Company is an exploration company, it has no revenue from mining operations.  During Fiscal 2010 and 2009, revenue consisted primarily of other income from contract exploration services provided to third parties although revenue was significantly lower during the current year due to the Company not earning other income from drill programs undertaken on behalf of third parties while utilizing the drill to advance its own properties.
 
General and administrative expenses were $1,493,611 in Fiscal 2010, an increase from $1,291,253 in Fiscal 2009.  This increase is primarily due to increases in stock exchange fees and travel and promotion.  Stock exchange fees increased due to the increase in the Company’s share price. The Company participated in the Vancouver Resource Investment Conference, the Prospectors and Developers Association Conference in Toronto, the Atlanta Investment Conference, the Khandaker Mining World Institutional Conference in New York, the Casey Research Crisis & Opportunity Summit in Las Vegas, the Agora Financial Symposium and the New Orleans Investment Conference. The Company continued to retain Casey Research for a sponsored profile on the Kitco Casey website and also retained Michael S. Fulp for website sponsorship.
 
General exploration expenses were $646,358 in Fiscal 2010, comparable to $665,055 in Fiscal 2009.
 
Significant non-cash items in Fiscal 2010 include income on mineral property options, share-based compensation and write-down of interests in mineral properties.  Significant non-cash items in Fiscal 2009 include write-down of interests in mineral properties.  Write-downs of interests in mineral properties fluctuate period to period based on management’s evaluation of the carrying value of each mineral property interest held at that time.
 
Liquidity and Capital Resources
 
Fiscal 2011
 
At the end of Fiscal 2011, the Company had working capital of $30,513,403 including cash and cash equivalents of $21,184,159 compared to working capital of $29,187,035 including cash and cash equivalents of $16,087,832 and a short term investment of $2,000,000 at the end of Fiscal 2010. In addition, the market value of the Company’s inventory of gold bullion (1,597 ounces) at December 31, 2011 was $2,547,173 or $2,272,405 above book value as presented in the financial statements.
 
Management believes that the Company’s cash resources are sufficient to meet its working capital and mineral exploration requirements for the foreseeable future.  The Company has no long-term debt.
 
Cash used in operations in Fiscal 2011 was $3,568,646 (2010 - $1,539,439) after adjusting for non-cash activities.  Significant changes in non-cash items in the current period include income on mineral property options and share-based payments.  Significant changes in non-cash items in the comparable period include income on mineral property options, share-based payments and write-down of mineral properties which fluctuate period to period based on management’s evaluation of the carrying value of each mineral property interest held at that time.
 
Cash from investing activities in Fiscal 2011 was $1,402,531 (2010 – cash used of $6,993,557).  Significant items in the current period include expenditures on mineral property interests of $6,197,667 (2010 - $5,478,095), proceeds from mineral properties of $5,871,380 (2010 - $15,000) and the maturing of a short-term investment of $2,000,000 (2010 – purchase of short-term investment of $2,000,000).  Significant investments made in mineral property interests include drilling on the Tuligtic property in Mexico ($4,630,341), geophysical surveys undertaken on the El Cobre property in Mexico ($609,059), exploration on the ATW project in the Northwest Territories ($326,446) and the Willow project in Nevada (260,575).  Significant investments made in mineral property interests in the comparable period include camp construction and a drill program on the Elk gold property in BC ($2,514,617) and the staking of additional claims and drilling on the Tuligtic property in Mexico ($1,579,083).
 
 
During Fiscal 2011, the Company received a total of $7,262,442 net of share issue costs on closing a private placement financing of 100,000 common flow-through shares at a price of $4.00 per share, on the exercise of 2,030,000 stock options and on the exercise of 1,481,499 warrants.  During Fiscal 2010, the Company received $11,172,391 net of share issue costs on closing several private placement financings and the exercise of options and warrants and the income tax recovery discussed above.  One private placement consisted of 3,000,000 common shares at a price of $2.50 per share and its over-allotment of 450,000 common shares also at a price of $2.50 per share, one consisted of 1,003,821 common flow-through shares at a price of $1.20 per share with 49,997 broker’s warrants entitling the brokers to purchase 49,997 common non-flow-through shares until June 29, 2011 issued to brokers in consideration of their services, and one consisted of 350,000 units at a price of $1.00 per unit.  Each unit consists of one common flow-through share and one-half of a non-flow-through warrant with each whole warrant entitling the holder to purchase one additional common share at a price of $1.00 per share until March 16, 2011.  4,375 non-flow-through common shares and 2,625 flow-through common shares were issued to finders in respect of this placement.  And one consisted of 81,200 common flow-through shares at a price of $3.50 per share. 895,000 stock options and 740,658 warrants were also exercised during the year.
 
Fiscal 2010
At the end of Fiscal 2010, the Company had working capital of $29,187,035 including cash and cash equivalents of $16,087,832 and a short term investment of $2,000,000 compared to working capital of $14,529,582 including cash and cash equivalents of $13,142,671 at December 31, 2009. The increase in working capital and cash and cash equivalents is primarily due to several private placement financings and the exercise of options and warrants.  In addition, the market value of the Company’s inventory of gold bullion (1,597 ounces) at December 31, 2010 was $2,268,986 or $1,994,218 above book value as presented in the financial statements.     Should the Company dispose of all its marketable securities at one particular time, it may not realize the value stated on its balance sheet. Instead, the Company disposes of equities when favorable market conditions exist for any of its holdings.
 
The Company’s cash resources are sufficient to meet its anticipated working capital and mineral exploration requirements for 2011 and 2012.  The Company has no long-term debt.
 
Cash used in operating activities during Fiscal 2010 was $1,233,673 compared to $946,188 during Fiscal 2009.    Significant non-cash expenses are discussed above.
 
Cash flows from financing activities during Fiscal 2010 were $11,172,391 compared to $2,700,202 during Fiscal 2009.  The source of cash during Fiscal 2010 is from closing several private placement financings and the exercise of options and warrants. The Company also recognized an income tax recovery on premiums on flow-through shares issuances.  One private placement consisted of 3,000,000 common shares at a price of $2.50 per share and its over-allotment of 450,000 common shares also at a price of $2.50 per share, one consisted of 1,003,821 common flow-through shares at a price of $1.20 per share with 49,997 broker’s warrants entitling the brokers to purchase 49,997 common non-flow-through shares until June 29, 2011 issued to brokers in consideration of their services, and one consisted of 350,000 units at a price of $1.00 per unit.  Each unit consists of one common flow-through share and one-half of a non-flow-through warrant with each whole warrant entitling the holder to purchase one additional common share at a price of $1.00 per share until March 16, 2011.  4,375 non-flow-through common shares and 2,625 flow-through common shares were issued to finders in respect of this placement.  And one consisted of 81,200 common flow-through shares at a price of $3.50 per share. 895,000 stock options and 740,658 warrants were also exercised during the year.  Cash flows from financing activities during Fiscal 2009 were $2,700,202.  The source of cash during Fiscal 2009 is from the issuance of shares pursuant to two private placement financings.  One consisted of 226,316 units at a price of $0.95 per unit.  Each unit consists of one common flow-through share and one-half of a non-flow-through warrant with each whole warrant entitling the holder to purchase one additional common share at a price of $1.15 per share until March 31, 2010.  7,000 non-flow-through common shares were issued to a finder in respect of this placement.  The second consisted of 3,060,000 units at a price of $0.85 per share.  Each unit consists of one common share and one-half of a warrant with each whole warrant entitling the holder to purchase one additional common share at a price of $1.40 per share until December 17, 2011.  236,000 finder’s warrant entitling the finder to purchase 236,000 units at $0.85 per unit until December 17, 2011 was issued to a finder in respect of this placement. 154,000 stock options were also exercised during Fiscal 2009. Please see the consolidated statements of changes in equity and Note 9 to the consolidated financial statements for the year ended December 31, 2010 for further details.
 
 
Cash used for investing activities during Fiscal 2010 was $6,993,557 compared to $930,293 during Fiscal 2009.  During 2010, the Company made investments in mineral properties of $5,478,095 and received $15,000 pursuant to a property option agreement compared to investments in mineral properties of $1,119,474 and recovered $119,958 during Fiscal 2009.  During Fiscal 2010, the Company purchased a short-term investment of $2,000,000.   Significant investments during Fiscal 2010 include camp construction and a drill program on the Elk gold property in BC ($2,514,617), the staking of additional claims and drilling on the Tuligtic property in Mexico ($1,546,027), a drill program on the ATW diamond property in the Northwest Territories ($215,802) and drill programs undertaken on the San Carlos property ($254,181) and Viky property ($288,496) in Mexico. Investments made in mineral property interests in the comparable period include further evaluation on the ATW diamond property ($399,103), a drill program on the Tuligtic property ($855,200), a geological mapping and sampling program on the Caldera property ($154,765) and further evaluation of the Elk gold property ($322,384).  Significant investments during Fiscal 2009 include a drill program on the Tuligtic property in Mexico ($855,200), further evaluation on the ATW diamond property in the Northwest Territories ($399,103), further evaluation of the Elk gold property in B.C. ($322,384) and a geological mapping and sampling program on the Caldera property in Mexico ($154,765). Investments in mineral property interests are net of any proceeds received from option agreements and costs recovered or written-off to operations.
 
Fiscal 2009
At the end of Fiscal 2009, the Company had working capital of $14,529,582 including cash and cash equivalents of $13,142,671.  The increase in working capital and cash and cash equivalents is primarily due to two private placement financings and lower expenditures on mineral properties.  In addition, the market value of the Company’s inventory of gold bullion (1,597 ounces) at December 31, 2009 was $1,839,421 or $1,564,653 above book value as presented in the financial statements. The Company was assessed additional mineral tax of $197,233 plus interest of $84,638 by the British Columbia Ministry of Energy and Mines (the “Ministry”). The assessment related to the deductibility of certain expenditures between February 1, 1995 and January 31, 1997.  The Company appealed the Ministry’s decision and on July 3, 2009, the Supreme Court of British Columbia made judgement in favour of the Company.  The $281,871 the Company paid and expensed in order to reduce the exposure to interest charges was refunded with interest.  Costs were also awarded to the Company.
 
Cash used for operating activities during Fiscal 2009 was $946,188.  Significant non-cash expenses are discussed above.
 
Cash flows from financing activities during Fiscal 2009 were $2,700,202.  The source of cash during Fiscal 2009 is from the issuance of shares pursuant to two private placement financings.  One consisted of 226,316 units at a price of $0.95 per unit.  Each unit consists of one common flow-through share and one-half of a non-flow-through warrant with each whole warrant entitling the holder to purchase one additional common share at a price of $1.15 per share until March 31, 2010.  7,000 non-flow-through common shares were issued to a finder in respect of this placement.  The second consisted of 3,060,000 units at a price of $0.85 per share.  Each unit consists of one common share and one-half of a warrant with each whole warrant entitling the holder to purchase one additional common share at a price of $1.40 per share until December 17, 2011.  236,000 finder’s warrant entitling the finder to purchase 236,000 units at $0.85 per unit until December 17, 2011 was issued to a finder in respect of this placement.   154,000 stock options were also exercised during Fiscal 2009.
 
Cash used for investing activities during Fiscal 2009 was $930,293.  During Fiscal 2009, the Company made investments in mineral properties of $1,119,474 and recovered $119,958.  Significant investments during Fiscal 2009 include a drill program on the Tuligtic property in Mexico ($855,200), further evaluation on the ATW diamond property in the Northwest Territories ($399,103), further evaluation of the Elk gold property in B.C. ($322,384) and a geological mapping and sampling program on the Caldera property in Mexico ($154,765).
 
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
Many trend features discussed in Fiscal 2010 continue.  After a long period of low prices, metals rose to record levels and after several corrections, are again near their highs.  This appears to be related to demand from large developing nations that are stockpiling metals, securing long term contracts for concentrates and buying up properties and companies with undeveloped deposits. There is uncertainty as to how long this trend will continue, whether competition for resources will decrease or intensify and how any change might affect metal prices. There is uncertainty in currency exchange rates due to economic conditions around the world and how these might affect both costs and profits. These factors require frequent review of plans and budgets against a backdrop of fewer good exploration and development new projects along with the long term shortage of skilled exploration personnel.
 
 
Previous merger and acquisition activity in large organizations has slowed, at least in part because there are fewer large companies left and fewer that are vulnerable to takeover. This activity is expected to move down to intermediate and smaller companies with attractive assets. This creates difficulties in valuations for assets in relation to often depressed stock market prices.
 
Many junior exploration companies are having difficulty raising capital and those that do often do so at low prices resulting in significant dilution to shareholders.  Companies at the feasibility study stage or raising capital for production startup are finding that costs are increasing.
 
The price of both exploration and production companies focused on precious metals have underperformed when compared to the price of gold.  This has been attributed to various reasons such as the rise of funds that invest in precious metals which are capturing much of the investment interest in gold and silver.  This is no certainty that this will ever change.  Many in the investment and economic communities dispute the likelihood of inflationary or deflationary conditions and the effect of either on precious metal prices.  Any rise in interest rates might lower investment demand for gold and silver
 
The uncertain times have led to a need by 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 mining 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 not allowed.  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.  Even though metal mining does not have the large output of so called greenhouse gasses as some other industries and despite the unresolved science of and increasing doubt in the claims for global warming, many governments are pursuing regulations and taxes that could raise costs. As more and more stakeholders become interested in mining ventures there is an increasing need to maintain cooperation with valid concerned groups, the most important of which is the local community where the project is.
 
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, good exploration projects based on sound geological work continues.
 
The world may be slow to recover from current economic conditions and a further deterioration of these conditions remains a serious threat.  If such deterioration occurs, lower economic activity would probably also lower the demand for base metals but it is believed that precious metals will continue to be in demand as a store of value.
 
Off-balance Sheet Arrangements
The Company has no off-balance sheet arrangements other than the lease related to its office premises as disclosed below.
 
Contractual Obligations
The Company is obligated under an operating lease for its office premises with the following aggregate minimum lease payments to the expiration of the lease on January 31, 2016. The Company does have government requirements in work and/or taxes to maintain other claims held. The decision to keep or abandon such claims is not contractual but at the discretion of the Company. All other property option payments on the Company’s projects have been assumed by third parties who are earning their interests in the projects. During Fiscal 2007, the Company entered into contracts with the Chief Executive Officer and Chief Operating Officer (now the Chairman and Chief Executive Officer, respectively) for remuneration of $140,000 annually for two years, renewable for two additional successive terms of 24 months. Effective January 1, 2009, remuneration increased to $165,000 annually and the contracts will be renewed for additional successive terms of 24 months. Effective January 1, 2011, remuneration increased to $206,250 annually. During Fiscal 2007, the Company also entered into a Financial, Administrative and Executive Services Agreement with its Chief Financial Officer and a company controlled by him for a term of one year, renewable for additional successive terms of 12 months, for remuneration of $6,000 per month for the first three months and $5,000 per month thereafter. Effective May 30, 2011, the Financial, Administrative and Executive Service Agreement was terminated once Mark T. Brown became a Director of the Company. Table No. 4 lists the total contractual obligations as at December 31, 2011 for each period.
 
 
Table No. 4
Contractual Obligations of the Company
 
   
Payments due by period
 
                               
    
 
Total
   
less
than 1
 year
   
1 – 3
years
   
3 – 5
 Years
   
more
 than 5
 years
 
                               
Operating lease obligations
  $ 296,700     $ 67,000     $ 223,000     $ 6,700        
Executive contracts
  $ 450,000     $ 225,000     $ 225,000              
 
Contractual obligations of the Company in the above table exclude future option payments required to maintain the Company’s interest in certain mineral properties.
 
Forward-Looking Statements Safe Harbor
Certain statements contained in this annual report on Form 20-F regarding contractual obligations, future operating results or performance or business plans or prospects and any other statements not constituting historical fact are “forward-looking statements” subject to the safe harbor created by Section 27A of the Securities Act 1933 and Section 21E of the Securities Exchange Act 1934 and Canadian Securities Law. Where possible, the words “believe,” “expect,” “anticipate,” “intend,” “should,” “will,” “planned,” “estimated,” “potential,” “goal,” “outlook,” and similar expressions, as they relate to the Company, its management, or the Company’s property interests, have been used to identify such forward-looking statements. All forward-looking statements reflect only current beliefs and assumptions with respect to future business plans, prospects, decisions and results, and are based on information currently available to the Company. Accordingly, the statements are subject to significant risks, uncertainties and contingencies which could cause the Company’s actual business plans or prospects to differ materially from those expressed in, or implied by, these statements. Such risks, uncertainties and contingencies include, but are not limited to, general economic conditions. Additional factors that could cause the companies’ results to differ materially from those described in the forward-looking statements are described in detail in this annual report on Form 20-F under the heading Item 3: Key Information - Risk Factors. Unless required by law the Company does not undertake any obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
 
 
Significant Accounting Policies
 
(a)
Basis of consolidation
 
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as follows:
 
 
Jurisdiction
Nature of operations
     
Almaden America Inc.
USA
exploration company
Republic Resources Ltd.
Canada
service company
Ixtaca Precious Metals Inc.
Canada
holding company
Almaden de Mexico, S.A. de C.V.
Mexico
exploration company
Minera Gavilan, S.A. de C.V.
Mexico
exploration company
Compania Minera Zapata, S.A. de C.V.
Mexico
exploration company
Minera Gorrion, S.A. de C.V.
Mexico
exploration company
 
Investments where the Company has the ability to exercise significant influence are accounted for using the equity method.  Under this method, the Company’s share of the investee’s earnings or losses is included in operations and its investments therein are adjusted by a like amount.  Dividends received from these investments are credited to the investment. The Company’s 38.8% interest in Gold Mountain Mining Corporation is accounted for using the equity method. The Company accounts for its interest in jointly controlled assets by recognizing its share of the jointly controlled assets classified according to the nature of the assets.
 
Inter-company balances and transactions, including unrealised income and expenses arising from inter-company transactions, are eliminated in preparing the consolidated financial statements.  Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Company’s interest in the investee.  Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
 
(b)
Foreign currencies
 
Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on dates of transactions.  At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the statement of financial position.  Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
 
(c)
Financial instruments
 
 
Financial assets
 
The Company classifies its financial assets into one of the following categories, depending on the purpose for which the asset was acquired. The Company’s accounting policy for each category is as follows:
 
Fair value through profit or loss - This category comprises derivatives, including contingent shares receivable or assets acquired or incurred principally for the purpose of selling or repurchasing it in the near term. They are carried in the statement of financial position at fair value with changes in fair value recognized in net income (loss).
 
Loans and receivables - These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are carried at cost less any provision for impairment.  Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default.  The Company classifies its cash and cash equivalents and accounts receivable as “loans and receivables”.
 
 
Held-to-maturity investments - These assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Company’s management has the positive intention and ability to hold to maturity. These assets are measured at amortized cost using the effective interest method.  If there is objective evidence that the investment is impaired, determined by reference to external credit ratings and other relevant indicators, the financial asset is measured at the present value of estimated future cash flows.  Any changes to the carrying amount of the investment, including impairment losses, are recognized in net income (loss).
 
Available-for-sale - Non-derivative financial assets not included in the above categories and which include marketable securities are classified as available-for- sale. They are carried at fair value with changes in fair value recognized directly in other comprehensive income and equity. Where a decline in the fair value of an available-for-sale financial asset constitutes objective evidence of significant or prolonged decline in value, the amount of the loss is removed from equity and recognized in net income (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 for which the asset was acquired. The Company’s accounting policy for each category is as follows:
 
Fair value through profit or loss - This category comprises derivatives, or liabilities acquired or incurred principally for the purpose of selling or repurchasing it in the near term. They are carried in the statement of financial position at fair value with changes in fair value recognized in net income (loss).
 
Other financial liabilities: This category includes promissory notes, amounts due to related parties and trade and other payables, all of which are recognized at amortized cost.
 
(d)
Cash, cash equivalents and short-term investments
 
Cash equivalents include money market instruments which are readily convertible into cash or have maturities at the date of purchase of less than ninety days.  Short-term investments include money market instruments with terms to maturity exceeding ninety days.
 
(e)
Inventory
 
 
Inventory is valued at the lower of the average cost of mining and estimated net realizable value.
 
(f) 
Property, plant and equipment
 
Property, plant and equipment are stated at cost and are depreciated annually on a declining-balance basis at the following rates:
 
Automotive equipment
    30 %  
Computer hardware and software
    30 %  
Field equipment
    20 %  
Furniture and fixtures
    20 %  
Geological data library
    20 %  
Mill equipment
    30 %  
Drill equipment
    20 %  
Leasehold improvements
    20 % straight-line  
 
 
(g)
Revenue recognition
 
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.  Revenue is measured at the fair value of the consideration received, excluding discounts, rebates and other sales tax or duty.  The following specific recognition criteria must also be met before revenue is recognized:
 
 
Interest income
Revenue is recognized as interest accrues (using the effective interest rate, that is, the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset).
 
 
Other income
Revenue from other income is recognized upon completion of the services for which the measurement of the consideration can be reasonably assured and the ultimate collection is reasonably assured.
  
(h)
Exploration and evaluation
 
The Company is in the exploration stage with respect to its investment in mineral properties and accordingly follows the practice of capitalizing all costs relating to the acquisition of, exploration for and development of mineral claims to which the Company has rights and crediting all proceeds received for farm-out arrangements or recovery of costs against the cost of the related claims.  Such costs include, but are not exclusive to, geological, geophysical studies, exploratory drilling and sampling. At such time as commercial production commences, these costs will be charged to operations on a unit-of-production method based on proven and probable reserves.  The aggregate costs related to abandoned mineral claims are charged to operations at the time of any abandonment or when it has been determined that there is evidence of an impairment.
 
The Company considers the following facts and circumstances in determining if it should test exploration and evaluation assets for impairment:
 
a)     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.
 
b)     substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted or planned.
 
c)     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
 
d)     sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation assets is unlikely to be recovered in full from successful development or by sale.
 
An impairment charge relating to a mineral property is subsequently reversed when new exploration results or actual or potential proceeds on sale or farm-out of the property result in a revised estimate of the recoverable amount but only to the extent that this does not exceed the original carrying value of the property that would have resulted if no impairment had been recognized.  General exploration costs in areas of interest in which the Company has not secured rights are expensed as incurred.
 
The recoverability of amounts shown for exploration and evaluation assets is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain financing to complete development of the properties, and on future production or proceeds of disposition.
 
The Company recognizes in income costs recovered on mineral properties when amounts received or receivable are in excess of the carrying amount.
 
 
Upon transfer of “Exploration and evaluation costs” into “Mine Development”, all subsequent expenditure on the construction, installation or completion of infrastructure facilities is capitalised within “Mine development”.  After production starts, all assets included in “Mine development” are transferred to “Producing Mines”.
 
All capitalized exploration and evaluation expenditure is monitored for indications of impairment.
 
Where a potential impairment is indicated, assessments are performed for each area of interest.  To the extent that exploration expenditure is not expected to be recovered, it is charged to the results of operations.  Exploration areas where reserves have been discovered, but require major capital expenditure before production can begin, are continually evaluated to ensure that commercial quantities of reserves exist or to ensure that additional exploration work is underway as planned.
 
(i)
Impairment of property, plant and equipment and intangible assets
 
Property, plant and equipment and finite life intangible assets are reviewed for impairment if there is any indication that the carrying amount may not be recoverable. If any such indication is present, the recoverable amount of the asset is estimated in order to determine whether impairment exists. Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Any intangible asset with an indefinite useful life is tested for impairment annually and whenever there is an indication that the asset may be impaired.
 
An asset’s recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value, using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which estimates of future cash flows have not been adjusted.
 
If the recoverable amount of an asset or cash generating unit is estimated to be less than its carrying amount, the carrying amount is reduced to the recoverable amount. Impairment is recognized immediately as additional depreciation. Where an impairment subsequently reverses, the carrying amount is increased to the revised estimate of recoverable amount but only to the extent that this does not exceed the carrying value that would have been determined if no impairment had previously been recognized. A reversal is recognized as a reduction in the depreciation charge for the period.
 
(j)
Income taxes
 
Deferred tax is recorded using the liability method, recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit.  Deferred tax assets are recognized for all deductible temporary differences, unused tax losses and other income tax deductions to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.  Deferred tax assets and liabilities are not recognized if temporary differences arise from goodwill or from the initial recognition (other than a business combination) of other assets and liabilities in a transaction that affects neither taxable profit nor the accounting profit.
 
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, and interest in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
 
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realized, based on tax rates that have been enacted or substantively enacted by the end of the reporting period.  The measurement of deferred tax liabilities and assets reflect the tax consequences that would follow from the manner in which the Company expects to recover or settle the carrying amount of its assets and liabilities at the end of the reporting period.
 
 
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax liabilities and assets on a net basis.
 
Current and deferred income tax expense or recovery are recognized in net earnings except when they arise as a result of items recognized in other comprehensive income or directly in equity in the current or prior periods, in which case the related current and deferred income taxes are also recognized in other comprehensive income or directly in equity, respectively.
 
Any premium paid for flow-through shares in excess of market value of those shares without the flow-through feature is recorded as other liabilities at the time of issue and recognized as a component of tax recovery at the time the qualifying expenditures are made.
 
(k)
Share-based payments
 
The Company grants stock options to buy common shares of the Company to directors, officers, employees and consultants.  The board of directors grants such option for periods of up to five years, with vesting periods determined at the sole discretion of the board and at prices equal to the volume weighted average price for the five days immediately preceding the date the options were granted.
 
The fair value of the options is measured at the date the options are granted, using the Black-Scholes option pricing model, and is recognized over the period that the employees earn the options.  The fair value is recognized as an expense with a corresponding increase in equity settled employee compensation reserve.  The amount recognized as expense is adjusted to reflect the number of share options expected to vest.
 
(l)
Reclamation and closure cost obligations
 
An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the exploration, development or ongoing production of a mineral property interest.  Such costs arising for the decommissioning of plant and other site preparation work, discounted to their net present value, are provided for and capitalized at the start of each project to the carrying value of the asset, as soon as the obligation to incur such costs arises.  Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value.  These costs are charged against profit or loss over the economic life of the related asset, through amortization using either the unit-of-production or the straight line method.  The related liability is adjusted for each period for the unwinding of the discount rate and for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the obligation.  Costs for restoration of subsequent site damage which is created on an ongoing basis during production are provided for at their net present values and charged against profits as extraction progresses.
 
The Company has $104,000 of reclamation deposits held with the Ministry of Mines should any other reclamation and closure cost obligations arise from its obligations to undertake site reclamation and remediation in connection with its operating activities in British Columbia and $25,764 of reclamation deposits held with the State of Nevada should any asset retirement obligation arise from its obligations to undertake site reclamation and remediation in connection with its operating activities in Nevada.
 
When the Company enters into an option agreement on its mineral properties, as part of the option agreement, responsibility for any reclamation and remediation becomes the responsibility of the optionee.
 
(m)
Income (loss) per share
 
The Company presents the basic and diluted income (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 income (loss) per share is determined by adjusting the income (loss) attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares.
 
 
(n)
Non-current assets held for sale
 
Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale. Immediately before classification as held for sale, the assets, or components of a disposal group, are re-measured in accordance with the Company’s accounting policies. Thereafter generally the assets, or disposal group, are measured at the lower of their carrying amount and fair value less cost to sell.
 
Impairment losses on initial classification as held for sale and subsequent gains or losses on re-measurement are recognized in profit or loss. Gains are not recognized in excess of any cumulative impairment loss.
 
(o)
Adoption of new and revised standards and interpretations
 
The IASB issued a number of new and revised International Accounting Standards, IFRS amendments and related interpretations which are effective for the Company’s financial year beginning on or after January 1, 2012. For the purpose of preparing and presenting the financial statements for the relevant periods, the Company has consistently adopted all these new standards for the relevant reporting periods.  At the date of authorization of these financial statements, the IASB and IFRIC has issued the following new and revised Standards and Interpretations which are not yet effective for the relevant reporting periods:
 
(i) In December 2010, the IASB issued an amendment to IAS 12 – Income taxes that provide a practical solution to determining the recovery of investment properties as it relates to the accounting for deferred income taxes. This amendment is effective for annual periods beginning on or after July 1, 2011, with earlier adoption permitted.  In addition, amendments to IFRS 7 Financial Instruments: Disclosures are effective for annual periods beginning on or after July 1, 2011 and introduce enhanced disclosure around transfers of financial assets and associated risks. The Company does not anticipate that these amendments will have a significant impact on its condensed consolidated financial statements.
 
(ii) The following Standards are effective for annual periods beginning on or after January 1, 2013. The Company is assessing the impact of these standards.
 
IFRS 10 Consolidated Financial Statements will replace existing guidance on consolidation in IAS 27 Consolidated and Separate Financial Statements, and SIC 12 Consolidation – Special Purpose Entities.
 
IFRS 11 Joint Arrangements will replace IAS 31 Interests in Joint Ventures, and SIC 13 Jointly Controlled Entities – Non-monetary Contributions by Venturers.
 
IFRS 12 Disclosure of Interests in Other Entities is the new Standard for disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities.
 
IFRS 13 Fair Value Measurement was issued to remedy the inconsistencies in the requirements for measuring fair value and for disclosing information about fair value measurement in various current IFRSs.
 
IAS 27 Separate Financial Statements has been updated to require an entity presenting separate financial statements to account for those investments at cost or in accordance with IFRS 9 Financial Instruments.
 
IAS 28 Investments in Associates and Joint Ventures has been revised and it is to be applied by all entities that are investors with joint control of, or significant influence over, an investee.
 
(iii) The following Standard is effective for annual periods beginning on or after January 1, 2015. The Company is assessing the impact of this standard.
 
IFRS 9 Financial Instruments (‘‘IFRS 9’’) was issued to replace IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 addresses the classification and measurement of financial assets. IFRS 9 was subsequently reissued in October 2010, incorporating new requirements on accounting for financial liabilities.
 
 
Significant accounting judgments and estimates
 
The preparation of the 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 assessment that the Company has significant influence over the investment in Gold Mountain Mining Corporation (“Gold Mountain”) (See Note 7(ii) to the consolidated financial statements) which results in the use of  the equity accounting method for accounting for this investment.  In making their judgement, management considered the composition of the Board of Directors of its equity investment in Gold Mountain, the common directors and management between Gold Mountain and the Company and the intercompany transactions and relationship with Gold Mountain and concluded that significant influence exists.
 
o
In addition the Company determined in 2011 that it no longer has significant influence over its investment in Tarsis Resources Ltd. (See Note 7(i) to the consolidated financial statements).
 
o
The analysis of the functional currency for each entity of the Company.  In concluding that the Canadian dollar is the functional currency of the parent and its subsidiary companies, management considered the currency that mainly influences the cost of providing goods and services in each jurisdiction in which the Company operates.  As no single currency was clearly dominant, the Company also considered secondary indicators including the currency in which funds from financing activities are denominated and the currency in which funds are retained.
 
Estimates
 
 
o
the recoverability of amounts receivable and prepayments which are included in the consolidated statement of financial position;
 
o
the carrying value of the marketable securities and the recoverability of the carrying value which are included in the consolidated statement of financial position;
 
o
the carrying value of investments, and the estimated annual gains or losses recorded on investments from income and dilution, and the recoverability of the carrying value which are included in the consolidated statement of financial position;
 
o
the estimated useful lives of property, plant and equipment which are included in the consolidated statement of financial position and the related depreciation included in the consolidated statement of comprehensive loss;
 
o
the estimated value of the exploration and development costs which is recorded in the statement of financial position;
 
o
the inputs used in accounting for share purchase option expense in the consolidated statement of comprehensive loss;
 
o
the provision for income taxes which is included in the consolidation statements of comprehensive loss and composition of deferred income tax assets and liabilities included in the consolidated statement of financial position at December 31, 2011;
 
 
 
o
the inputs used in determining the net present value of the liability for asset retirement obligation included in the consolidated statement of financial position;
 
o
the inputs used in determining the various commitments and contingencies accrued in the consolidated statement of financial position;
 
o
the assessment of indications of impairment of each mineral property and related determination of the net realizable value and write-down of those properties where applicable;
 
o
the estimated fair value of contingent share payments receivable in the event that Gold Mountain achieves some or all of the specified resource and production levels described in Note 9(a) of the consolidated financial statements; and
 
o
the estimated fair value of contingent share payments receivable in the event that Goldgroup Mining Inc. achieves some or all of the specified resource and production levels described in Note 9(d) of the consolidated financial statements.
 
Item 6.     Directors, Senior Management and Employees
 
Table No. 5 lists the directors and senior management of the Company. The directors have served in their respective capacities since their election and/or appointment and will serve until the next annual general meeting or until a successor and senior management of the Company are 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
Name
 
Age
 
Date First Elected or Appointed
 
James Duane Poliquin
  71  
February 1, 2002(4)
 
James E. McInnes(1)
  74  
February 1, 2002(4)
 
John D. McCleary(2)(3)
  71  
February 1, 2002(4)
 
Joseph Montgomery(1)(2)(3)
  84  
February 1, 2002(4)
 
Morgan Poliquin
  40  
February 1, 2002(4)
 
Gerald G. Carlson(1)(2)(3)
  66  
February 1, 2002(4)
 
Barry W. Smee
  66  
July 6, 2006
 
Mark T. Brown
  43  
May 30, 2011
 
  (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
 
Duane Poliquin has been a director of Almaden Resources Corporation since September 1980, James E. McInnes since December 1985, Jack McCleary since June 1991 and Morgan Poliquin since June 1999.
 
Duane Poliquin and James E. McInnes were directors of Fairfield Minerals Ltd. since June 1996, Joseph Montgomery since July 2000 and Gerald G. Carlson since July 1998.
 
Table No.6 lists the Executive Officers of the Company.  The Executive Officers serve at the pleasure of the Board of Directors, subject to the terms of executive compensation agreements hereinafter described.  All Executive Officers are residents and citizens of Canada.
 
Table No. 6
Executive Officers of the Company
Name
Position
 
Age
 
Date First Appointed
 
James Duane Poliquin
Chairman of the Board
  71  
February 1, 2002
(4)
Morgan Poliquin
President and Chief Executive Officer
  40  
March 1, 2007
 
Korm Trieu
Chief Financial Officer
  46  
May 30, 2011
 
Dione Bitzer
Controller
  51  
February 1, 2002
(4)
 
and Secretary
     
June 9, 2008
 
(4)  Date of issue of the Certificate of Amalgamation
 
Duane Poliquin was appointed an Officer of Almaden Resources Corporation in September 1980 and of Fairfield Minerals Ltd. in June 1996. Dione Bitzer was appointed an Officer of Fairfield Minerals Ltd. in March 2001.
 
Duane Poliquin is a registered professional geological engineer with over 50 years experience in mineral exploration and he is the founding shareholder of Almaden Resources Corporation. He gained international experience working with major mining companies where he participated in the discovery of several important mineral deposits. Mr. Poliquin has held executive positions and directorships with several junior resource companies over his career.  He was founder and President of Westley Mines Ltd. when that company discovered the Santa Fe gold deposit in Nevada.  Mr. Poliquin spends virtually all of his time on the affairs of the Company.  He also serves as a director of Gold Mountain Mining Corporation.
 
James E. McInnes is a retired lawyer and a former geologist with over 40 years experience in mineral exploration and mining law. He has held executive positions with several junior resource companies over his career. Mr. McInnes spend 25% of his time on the affairs of the Company. He also serves as a director of  Cosigo Resources Inc., a diamond and gold exploration company listed on the TSX-V.
 
John D. (Jack) McCleary is a registered professional geologist with 40 years experience in petroleum and mineral exploration. He has held executive positions with several junior resource companies over his career and for several years was a Vice President of Dominion Securities Ltd. He served as a director and President of Canadian Hydro Developers Inc. until December 1995 at which time he retired and as a director and President of Troymin Resources Ltd. until April 2003 at which time Troymin amalgamated with Santoy Resources Ltd. where he served as a director for 5 years. Mr. McCleary spends less than 5% of his time on the affairs of the Company.

 
Joseph Montgomery, Ph.D., P.Eng. is a professional engineer registered with the Association of Professional Engineers and Geoscientists of B.C. He has over 40 years experience in the mineral industry primarily as a consultant in base and precious metals, industrial metals and gemstones. He is President of Montgomery Consultants Ltd. and is on the Advisory Board of the Canadian Institute of Gemology. He spends less than 10% of his time on the affairs of the Company. Mr. Montgomery also serves as a director of Infrastructure Materials Corp, an industrial materials company listed on the US OTCBB and of Cosigo Resources Inc., a diamond and gold exploration company listed on the TSX-V.
 
Morgan Poliquin, Ph.D., P.Eng., is a registered professional geological engineer with 16 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 of the affairs of the Company directing its exploration programs.  He also serves as a director of Gold Mountain Mining Corporation.

 
Gerald G. Carlson, Ph.D., P.Eng, has been involved in mineral exploration and junior exploration company management for over 40 years. Mr. Carlson has a B.A.Sc. from the University of Toronto, a M.Sc. from Michigan Technological University and Ph.D. from Dartmouth College. He is a past President of AME BC (formerly the B.C. and Yukon Chamber of Mines), President of the Society of Economic Geologists Canada Foundation and a member of the Professional Engineers and Geoscientists of British Columbia, the Professional Engineers of the Yukon Territory and the Canadian Institute of Mining, Metallurgy & Petroleum. Mr. Carlson spends less than 5% of his time on the affairs of the Company. He also serves as a director and President of Windstorm Resources Inc., a gold and copper exploration company listed on the TSX-V, President of Iron South Mining Inc. and a director of the following companies:
 
 
a.
Blue Sky Uranium Corp., a uranium exploration company listed on the TSX-V.
 
b.
Tarsis Resources Ltd., a mineral exploration company listed on the TSX-V.
 
Barry W. Smee is a consulting geochemist based in British Colombia. He obtained a B.Sc. in chemistry and geology from the University of Alberta, and a Ph.D. in geochemistry from the University of New Brunswick. He has designed and managed commercial analytical laboratories and worked in academia, government and industry for over 40 years. He has authored or co-authored over 50 scientific papers on geochemical and quality control topics. Barry formed Smee and Associates Consulting Ltd., a privately owned geochemical consulting company in 1990 through which he has actively promoted the use of Quality Control protocols in mineral exploration, comprehensive due diligence procedures, and the intelligent use of modern geochemical methods. Dr. Smee spends less than 5% of his time on the affairs of the Company. He also serves as a director of Platinum Group Metals Ltd., a platinum exploration company listed on the TSX and NYSE Amex.
 
 
Mark T. Brown is a Chartered Accountant and earned a Bachelor’s Degree in Commerce from the University of British Columbia in 1990.  Mr. Brown received his Chartered Accountant’s designation in 1993 while working at Price Waterhouse, Chartered Accountants.  From 1994 to 1997, he was the controller of two TSE 300 mining companies, one after the other, each of which produced in excess of 100,000 ounces of gold annually.  At the end of 1997, Mr. Brown joined Pacific Opportunity Capital Ltd. which was set up to provide business financial support, both administratively and for transactions and negotiations, to public and private emerging companies. Mr. Brown spends approximately 5% of his time on the affairs of the Company.  He also serves as a director and CFO of the following companies:
 
 
a.
Big Sky Petroleum Corporation, an oil and gas exploration company listed on the TSX-V.
 
b.
Pitchstone Exploration Ltd., a uranium exploration company listed on the TSX-V.
 
Mr. Brown also serves as a director of the following companies:
 
 
a.
Avrupa Minerals Ltd., a base metals exploration company listed on the TSX-V.
 
b.
Estrella Gold Corporation, a gold exploration company listed on the TSX-V.
 
Mr. Brown also serves as CFO of the following companies:
 
 
a.
Tarsis Resources Ltd., a mineral exploration company listed on the TSX-V.
 
Korm Trieu is a Chartered Accountant and holds a Bachelor of Science degree from the University of British Columbia and has spent over 15 years in corporate finance, administration and tax services, primarily in the natural resource, financial service and real estate sectors.  From 2008-2011, he served as Vice President Finance for Sprott Resource Lending Corp. where he oversaw the Finance and Administration departments of a natural resource lending company.  Mr. Trieu spends all of his business time on the affairs of the Company.
 
Dione Bitzer is a Certified Management Accountant with over 20 years accounting experience with junior exploration companies. She has held executive positions with several junior resource companies.  Miss Bitzer spends all of her business time on the affairs of the Company.
 
There are no arrangements or understandings with any two or more directors or executive officers pursuant to which any such person was selected as a director or executive officer. Duane Poliquin, Chairman of the Board and Director, is the father of Morgan Poliquin, President, Chief Executive Officer and Director.
 
During Fiscal 2008, the Compensation Committee conducted an Executive and Directors Compensation Review which resulted in the recommendations that remuneration of both the Chief Executive Officer (now Chairman) and Chief Operating Officer (now Chief Executive Officer) be increased to $165,000 each annually and all Directors be compensated $5,000 yearly and the Chair of the Audit Committee to be compensated $3,000 yearly, effective January 1, 2009.  During 2010, the Compensation Committee conducted a further Executive and Directors Compensation Review which resulted in the recommendations that remuneration of both the Chairman and Chief Executive Officer be increased to $206,250 each annually effective January 1, 2011.  There was no increase to Directors or Chair of the Audit Committee compensation.  Previously the Company had no formal plan for compensating its directors for their service in their capacity as directors. The Compensation Committee also recommended that, with respect to Director stock options, up to 250,000 options be granted to each non-management Director. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the Board of Directors. The Board of Directors may award special remuneration to any director undertaking any special services on behalf of the Company other than services ordinarily required of a director. Other than indicated below no director received any compensation for his services as a director, including committee participation and/or special assignments.
 
Total compensation paid by the Company directly and/or indirectly to all directors and executive officers during Fiscal 2011 was $872,372.
 

Table No. 7
Summary Compensation Table
                                                 
Annual Compensation
   
Long-Term Compensation
 
Name and Principle Position
 
Fiscal Year
   
Salary
   
Bonus
   
Other Annual Compensation
   
Awards Restricted Stock Awards
   
Options/ SARS Granted (#)
   
LTIP Payouts
   
All Other Compensation
 
Duane Poliquin
    2011    
Nil
   
Nil
   
Nil
   
Nil
      560,000    
Nil
    $ 298,525 (1)
Chairman of the Board &
    2010    
Nil
   
Nil
   
Nil
   
Nil
   
Nil
   
Nil
    $ 208,100 (1)
Director
    2009    
Nil
   
Nil
   
Nil
   
Nil
      100,000    
Nil
    $ 189,200 (1)
James E. McInnes
    2011    
Nil
   
Nil
   
Nil
   
Nil
           
Nil
    $ 5,000 (2)
Director
    2010    
Nil
   
Nil
   
Nil
   
Nil
      100,000    
Nil
    $ 5,000 (2)
      2009    
Nil
   
Nil
   
Nil
   
Nil
   
Nil
   
Nil
    $ 5,000 (2)
Jack McCleary
    2011    
Nil
   
Nil
   
Nil
   
Nil
           
Nil
    $ 5,000 (2)
Director
    2010    
Nil
   
Nil
   
Nil
   
Nil
      150,000    
Nil
    $ 5,000 (2)
      2009    
Nil
   
Nil
   
Nil
   
Nil
   
Nil
   
Nil
    $ 5,000 (2)
Joseph Montgomery
    2011    
Nil
   
Nil
   
Nil
   
Nil
      225,000    
Nil
    $ 5,000 (2)
Director
    2010    
Nil
   
Nil
   
Nil
   
Nil
      100,000    
Nil
    $ 5,000 (2)
      2009    
Nil
   
Nil
   
Nil
   
Nil
   
Nil
   
Nil
    $ 5,000 (2)
Morgan Poliquin
    2011     $ 206,250     $ 94,800    
Nil
   
Nil
      650,000    
Nil
   
Nil
 
President, Director &
    2010     $ 165,000    
Nil
   
Nil
   
Nil
      550,000    
Nil
   
Nil
 
Chief Executive Officer
    2009     $ 165,000     $ 8,000    
Nil
   
Nil
      150,000    
Nil
   
Nil
 
Gerald G. Carlson
    2011    
Nil
   
Nil
   
Nil
   
Nil
      50,000    
Nil
    $ 5,000 (2)
Director
    2010    
Nil
   
Nil
   
Nil
   
Nil
      75,000    
Nil
    $ 5,000 (2)
      2009    
Nil
   
Nil
   
Nil
   
Nil
   
Nil
   
Nil
    $ 5,000 (2)
Barry W. Smee
    2011    
Nil
   
Nil
   
Nil
   
Nil
      125,000    
Nil
    $ 10,000 (2)(3)
Director
    2010    
Nil
   
Nil
   
Nil
   
Nil
      100,000    
Nil
    $ 5,000 (2)
      2009    
Nil
   
Nil
   
Nil
   
Nil
   
Nil
   
Nil
    $ 8,780 (2)(3)
Mark T. Brown
    2011    
Nil
   
Nil
   
Nil
   
Nil
      25,000    
Nil
    $ 26,325 (6)
Director, former Chief Financial
    2010    
Nil
   
Nil
   
Nil
   
Nil
      75,000    
Nil
    $ 60,000 (6)
Officer
    2009    
Nil
   
Nil
   
Nil
   
Nil
   
Nil
   
Nil
    $ 60,000 (6)
Donald M. Lorimer
    2011    
Nil
   
Nil
   
Nil
   
Nil
   
Nil
   
Nil
    $ 8,000 (2)(5)
Former Director
    2010    
Nil
   
Nil
   
Nil
   
Nil
      100,000    
Nil
    $ 8,000 (2)(5)
      2009    
Nil
   
Nil
   
Nil
   
Nil
      50,000    
Nil
    $ 8,000 (2)(5)
Marc Blythe
    2011    
Nil
   
Nil
   
Nil
   
Nil
   
Nil
   
Nil
    $ 24,938 (5)
Former Vice-President-Mining
    2010    
Nil
   
Nil
   
Nil
   
Nil
      75,000    
Nil
    $ 55,875 (5)
      2009    
Nil
   
Nil
   
Nil
   
Nil
   
Nil
   
Nil
    $ 52,875 (5)
Korm Trieu
    2011     $ 88,084     $ 15,000    
Nil
   
Nil
      150,000    
Nil
   
Nil
 
Chief Financial Officer
    2010       N/A       N/A       N/A       N/A       N/A       N/A       N/A  
      2009       N/A       N/A       N/A       N/A       N/A       N/A       N/A  
Dione Bitzer
    2011     $ 73,950     $ 6,500    
Nil
   
Nil
      125,000    
Nil
   
Nil
 
Controller & Secretary
    2010     $ 72,555     $ 6,000    
Nil
   
Nil
      35,000    
Nil
   
Nil
 
      2009     $ 70,920     $ 4,000    
Nil
   
Nil
   
Nil
   
Nil
   
Nil
 
(1)
For geological services provided to the Company and general and administrative services provided by Hawk Mountain Resources Ltd., a company owned by Duane Poliquin and his wife.
(2)
Director’s fees.
(3)
For consulting services provided by Smee & Associates Consulting Ltd., a company owned by Barry Smee and his wife.
(4)
Audit Chairman fee.
(5)
For technical services provided to the Company.
(6)
For financial and administrative services provided by Pacific Opportunity Capital Ltd., a company controlled by Mark T. Brown and his family.
 
Remuneration for Termination
 
The Company has the following termination clauses within its executive compensation contracts.
 
The Executive Compensation Contract dated April 12, 2007 between the Company and Duane Poliquin (“Executive”) and Hawk Mountain Resources Ltd. (“Management Company”) will terminate or may be terminated for any one of the following reasons:
 
a)  
voluntary, upon at least three months prior written notice of termination by the Management Company  to the Company; or
b)
by the Company for Cause; or
 
 
c)  
without Cause, as hereinafter defined in Section 9, upon at least three months prior written notice of termination by the Company to the Management Company; or
d)
upon the death or disability of the Executive, as hereinafter defined in Section 10; or
e)
upon retirement by the Executive.
 
Termination by the Management Company Voluntarily or by the Company for Cause
 
If the Management Company shall voluntarily terminate the providing the services of the Executive under this Agreement or if the employment of the Management Company is terminated by the Company for Cause, then all compensation and benefits as heretofore provided shall terminate immediately upon the effective date of termination and no special severance compensation will be paid.
 
Cause to terminate the Management Company’s employment shall mean:
 
a)  
the repeated and demonstrated failure by the Executive or the Management Company to perform the Executive or the Management Company’s material duties under this Agreement, after demand for substantial performance is delivered by the Company that specifically identifies the manner in which the Company believes the Executive or the Management Company has not substantially performed the Executive or the Management Company’s duties under this Agreement; or
b)
the willful engagement by the Executive or the Management Company in misconduct which is materially injurious to the Company, monetarily or otherwise;
c)
any other willful violation by the Executive or the Management Company of the provisions of this Agreement; or
d)
the Executive or the Management Company is convicted of a criminal offence involving fraud or dishonesty.
 
Termination by the Company Without Cause
 
If the Company shall terminate the Management Company’s employment under this Agreement for any reason except for Cause (as defined in paragraph 8) then, upon the effective date of termination, the Company shall pay the Management Company in one lump sum an amount equal to two (2) times the Management Company’s then current Base Fee. All the benefits provided to the Executive shall be continued as if the Executive was still an Executive of the Company for a period of twelve (12) months from the date of termination 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 Management Company’s employment are otherwise terminated, the Company shall pay the Management Company, an amount of compensation equal to six (6) months of the Management Company’s then current Base Fee and all the Executive 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 the Executive of the Company.  If such termination is due to the Executive’s Death, payment shall be made in one lump sum to the Management Company. If such termination is due to the Executive’s Disability, payment shall be made in one lump sum to the Management Company within sixty (60) days of the Executive’s Disability.  The compensation provided under this paragraph shall be in addition to that payable from any insurance coverage providing compensation upon Death or Disability.
 
Termination Following Change in Control
 
 
(a)
For purposes of this 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 Date), individuals who at the beginning of such period constituted on the Board of Effective 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.
 
 
(b)
Notwithstanding any other provisions in this Agreement regarding termination, if any of the events described above constituting a Change in Control shall have occurred during the Term or an Extended Term, upon the termination of the Management Company’s services (unless such termination is because of the Executive’s Death or Disability, by the Company for Cause or by the Executive other than for “Good Reason”, as defined below) the Management Company shall be entitled to and will receive no later than the fifteenth (15th) day following the date of termination a lump sum severance payment equal to three (3) times the Management Company’s then current Base Fee. In addition, all benefits then applicable to the Executive shall be continued for a period of eighteen (18) months after the date of termination.
 
 
(c)
For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s express written consent, any of the following:
 
 
(i)
the assignment of the Executive of any duties inconsistent with the status or authority of the Executive’s office, or the Executive