HIGH-SULPHIDATION EPITHERMAL QUARTZ-ALUNITE GOLD SILVER DEPOSITS

& THE CABALLO BLANCO PROJECT, MEXICO

By Morgan Poliquin, M.Sc., P.Eng.

Geological Engineer and Director
Almaden Minerals Ltd.

Suite 1103-750 West Pender St, Vancouver, B.C., Canada, V6C 2T8.
ph: 604 689-7644 fax: 604 689-7645 email: info@almadenminerals.com; www. almadenminerals.com
EPITHERMAL SYSTEMS
The association of gold mineralization with volcanic and geothermal hot spring activity has long been recognized by
prospectors and geologists. We now know that this association is a consequence of the hot magmas which not only
produce volcanic eruptions and volcanic rocks but also are the source of the hot fluids that transport gold and other
metals and may in fact be the source of gold itself. Fluids emanating from a molten magma are extremely hot and
under high pressure deep below the surface. As these fluids rise, they mix with surface waters and change the
composition of the rocks with which they come into contact. This process is known as alteration. Eventually the
fluids breach the surface and form either acidic lakes known as fumaroles common in the craters of volcanoes or
dilute, neutral hot springs like those at Yellowstone or the Geysers in California. These two different surface
manifestations – acidic lakes or neutral hot springs – reflect two different fluid types that each result from the two
different paths taken by the magma as it rises to the surface. Both form gold deposits and are known respectively as
low- and high-sulphidation gold deposits. In both subtypes gold will largely be precipitated from 2.5 kilometers depth
to surface.

Recognizing that gold precipitates

near the surface in these
systems, the great American
geologist Waldemar Lindgren
coined the term epithermal in
1933, epi meaning shallow and
thermal referring to the heated
fluid. The chemist Werner
Giggenbach further subdivided
epithermal gold deposits into low
and high sulphidation types
(illustrated right 1 ). Low and high
do not refer to each type’s relative
amount of sulphide minerals (metal complexes of sulfur with metals). Rather the distinction is based on the different
sulfur to metal ratio within the sulphide minerals of each subtype. While this discussion deals with high-sulphidation
epithermal systems, it is worth mentioning that low-sulphidation systems also form economic gold deposits although
they develop under vastly different chemical conditions.

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HIGH-SULPHIDATION DEPOSITS
High-sulphidation deposits result from fluids (dominantly gases such as SO2, HF, HCl) channeled directly from a hot
magma. The fluids interact with groundwater and form strong acids. These acids rot and dissolve the surrounding
rock leaving only silica behind, often in a sponge-like formation known as vuggy silica. Gold and sometimes copper-
rich brines that also ascend from the magma then precipitate their metals within the spongy vuggy silica bodies. The
shape of these mineral deposits is generally determined by the distribution of vuggy silica. Sometimes the vuggy
silica can be widespread if the acid fluids encountered a broad permeable geologic unit. In this case it is common to
find large bulk-tonnage mines with lower grades.

The acidic fluids are progressively neutralized by the rock the further they move away from the fault. The rocks in turn
are altered by the fluids into progressively more neutral-stable minerals the further away from the fault. As a result,
definable zones of alteration minerals are almost always are formed in shell-like layers around the fault zone.
Typically the sequence is to move from vuggy silica (the centre of the fault) progressing through quartz-alunite to
kaolinite-dickite, illite rich rock, to chlorite rich rock at the outer reaches of alteration. Alunite (a sulphate mineral) and
kalonite, dickite, illite and chlorite (clay minerals) are generally whitish to yellowish in colour. The clay and sulphate
alteration (referred to as acid-sulphate alteration) in high-sulphidation systems can leave huge areas, sometimes up
to 100 square kilometers of visually impressive coloured rocks.
ALTERATION IN A HIGH-SULPHIDATION SYSTEM:

In contrast, low-sulphidation veins are formed when the fluids interact with greater amounts of groundwater as they
rise from the hot magma. The protracted boiling of the fluids in low-sulphidation systems produces high grade gold
(greater than one ounce gold per ton) and silver deposits. The fluids interact with the surrounding rock for a much
longer period of time than the quickly channeled high-sulphidation fluids. As a result, the fluids become dilute and

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neutralized and the silica dissolves. The silica is later precipitated in the veins as quartz, often sealing the fissure
closed. When this occurs, the pressure of the gases underneath the sealed fault builds until the seal is ruptured,
which provokes catastrophic boiling and the precipitation of gold. After this explosive boiling event, passive conditions
return, and quartz precipitates once again. This cyclical process results in the well-known banded texture of the
quartz-adularia veins typical of low-sulphidation vein systems. Quartz-adularia veins can contain high-grade gold
(greater than one ounce gold per ton) and silver deposits, over vertical intervals of generally 300 to 600 metres.
Within this vertical dimension, high gold grades can make for a large amount of easy to mine gold in a narrow
compact area.
ALTERATION IN A HIGH-SULPHIDATION SYSTEM:

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HIGH-SULPHIDATION GOLD-SILVER DEPOSITS IN OR NEAR PRODUCTION TODAY
Yanacocha, Peru

The Yanacocha deposit is operated by Newmont Gold Corp. It is one of if not the largest high-sulphidation deposit in
the world and one of the largest gold deposits of any geologic type. Reserves stand at 128 Million Tonnes of 1.0 g/t
or roughly 34.2 Million ounces of gold. The deposit is hosted by volcanic rocks, largely fine grained andesitic tuffs
and flows. The figures below and on the following page illustrate a plan and cross section view respectively of the
mineralized areas of the Yanacocha deposit. The cross section illustrates diamond drill intersection in grams per
tonne (g/t) gold. 2 Note how the gold is distributed within areas of vuggy silica and quartz-alunite alteration (red and
pink colours) which are surrounded by clay alteration.

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 A A’
COR-59 COR-56 COR-69

Fresh
Rock
Silica
Granular Clay
Silica 3400
24m at 10.9g/t Massive
18m at 8.5g/t
10m at 9.1g/t

Clay

44m at 17.7g/t

3200
Intrusive 42m at 13.18g/t
Oxide
Sulfide
+0.2g/t Au
0 100
COR-66
Meters

Pierina, Peru
The Pierina gold deposit is located in Peru and is operated by Barrick Gold Corp. Gold is found in a succession of
volcanic rock rocks that consist of andesite lavas overlain by rhyodacite pumice and lithic tuffs (permeable rocks).
The gold and silver is predominantly found in the permeable pumice tuff, with lesser amounts in the overlying lithic
tuff and the underlying andesite. The high-grade areas of the deposit are associated with vuggy silica alteration. This
alteration type is surrounded by quartz-alunite and argillic alteration. Ore-grade mineralization in the pumice tuff
occurs over intervals of more than 260 meters. The area of currently known mineralization at Pierina measures
approximately 450 meters wide by 1,200 meters long and is presently open to the southeast. Over 95% of the known
mineralization at Pierina is oxide. However, sulphide feeder zones have been intersected at the bottom of the
deposit. At present Barrick Gold Corp. has defined reserves of over 65 Million Tonnes at an average grade of 1.3 g/t
gold.

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High-Sulphidation Epithermal Deposits in Mexico
Mexico is particularly well endowed with epithermal low-sulphidation vein systems. In contrast, high-sulphidation gold
deposits have not been as well developed. This is likely due in large part to the fact that high-sulphidation systems
tend to occur as large bulk-tonnage deposits, which requires advanced technology to discover and mine, whereas
the high-grade narrow veins typical of low-sulphidation deposits were more easily explored during Mexico’s early
mining history. However, in the last decade two significant high-sulphidation systems have been identified in Mexico
and are entering production. Reserves are tabularized below.

Mine Name, State Estimated Production Gold Grade Silver Grade

El Sauzal, Chihuahua 18.19 Mt 3.3 g/t 3.7 g/t
Mulatos, Sonora 36.4Mt 1.64 g/t
*Note Mt denotes million tonnes, g/t grams per tonne

THE CABALLO BLANCO HIGH-SULPHIDATION EPITHERMAL SYSTEM

The property is located 75 kilometers north-northwest of the city of Veracruz on the Gulf Coast of Mexico and is
roughly 10 kilometers by 15 kilometers in size. Logistically, it is extremely well situated with the Pan-American
highway running through the east end of the property and ready access to power (Laguna Verde Nuclear Power
Plant) and ocean vessel port facilities. In January, 2003, Comaplex signed a Letter of Agreement with Almaden
Minerals Corporation whereby Comaplex can earn a 60% interest in the Caballo Blanco gold property in eastern
Mexico by incurring exploration expenditures of $2.0 million US over 4 years.

The property is largely underlain by a sequence of volcanic rocks consisting of andesitic to dacitic lithic tuffs, crystal
tuffs and volcanic breccias. These volcanic centers are intruded by fine-grained, magnetic monzonite and diorite
intrusions and dykes have been identified in several locations on the property. Large areas of clay and sulphate
alteration cored by vuggy and massive silica have been identified on the property. Three main areas of alteration and
mineralization have been mapped and are referred to as the Northern Zone, the Central Grid Zone and the Highway
Zone. The Central Grid Zone is interpreted to represent an area of deeper erosion where copper porphyry style
mineralization has been identified while the Northern and Highway Zones are interpreted to represent large, well
preserved high-sulphidation epithermal systems.

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Previous Work
From 1995 to 1998, Almaden Minerals Ltd. completed extensive exploration that concentrated on porphyry Cu-Au
and Au-Ag vein targets in the Central Grid Zone (CGZ). The 1998 work included 17 RC drill holes (2390 meters) that
tested soil geochemical and IP geophysical anomalies spatially associated with mineralized float and outcrop.
Preliminary surface work was completed in 1999 on the Highway and Northern Zones. Several zones of gold and
silver mineralized quartz-barite veins were intersected. Two shallow drillholes into an intrusive in the Central Grid
Area intersected 107 meters of 0.25 gmt gold and 0.18% copper in one hole and 40 meters averaging 0.39 gmt gold
and 0.15% copper in another. Based on this work, it was interpreted that these holes were just touching the top of the
system.

In 2001, Noranda optioned the Caballo Blanco property from Almaden and drilled 7 diamond drillholes 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. It is noteworthy that Noranda was
singularly looking for a large copper deposit and their focus was not on gold.

Recent Exploration
After optioning the property from Almaden, Comaplex completed three exploration programs on the property during
the spring and summer of 2003. These programs concentrated on the Highway and Northern Zones and included
detailed alteration mapping, aided by the use of Almaden’s portable infrared mineral analyzer (PIMA), rock sampling,
an induced polarization-restivity (IP-R) survey and a magnetic survey. This work outlined two areas of extensive
alteration and mineralization characteristic of high-sulphidation epithermal gold systems. Concurrent with this
program, noted explorationist, Jeff Hedenquist visited the property on Comaplex's request to review the geology and
alteration of the prospects and to assist Comaplex in best focusing their exploration efforts on the property.

ALTERATION AND MINERALIZATION

Central Grid Zone

The CGZ is mainly a zone of clay - silica alteration. Numerous zones of quartz vein float have been identified in the
area in the past and the distribution of the vein float was mapped and sampled over the entire area, which is
approximately 3km by 2 km. Comaplex completed additional sampling of the vein float with the vast majority of the
samples assaying greater than 1 g/t and up to 25 g/t Au. Silver is locally present and most samples were highly
anomalous in Cu, Pb and Zn. The mineralized quartz-vein float in the CGZ shares characteristics and settings that
are typical of intermediate sulfidation veins, commonly associated with and adjacent to lithocaps of high-sulfidation
deposits. The vein float may be indicative of a larger vein deposit at depth and their structural control and depth
potential are being assessed.

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Highway Zone
In the Highway Zone is a 3km x 4km area which exhibits a zone pattern of alteration and mineralization from
innermost multiple silica core zones (vuggy quartz and silicified vuggy quartz), to quartz-alunite (advanced argillic), to
kaolinite and/or dactite to illite (argillic), to propylitic margins. Rock samples from the Highway Zone are generally low
(<200 ppb) with local high gold values of up to 2 g/t. IP surveying identified an extensive area of high
chargeability/low resistivity which correlates well with kaolinite – dickite - alunite (minor quartz) altered zones. High
resistivity anomalies generally correlate with inner zone quartz-alunite, vuggy quartz and massive quartz horizons.
The survey indicates these latter zones are linear and vertical in nature and could represent the feeder zones to the
alteration system.

The zones of vuggy silica, coincident low chargeability and high resistivity have not been drill tested by Comaplex;
however, a diamond drill hole was completed by Noranda at the southern end of the zone, into the clay alteration, in
2001. This hole had several interesting gold intersections including stockwork quartz veining from 51.35 to 84 meters
depth within which a 6 meter section averaged 1.42 g/t gold. A sample in the same hole within a zone of lower
temperature argillic alteration (from 192-195 meters) averaged 2.5 g/t gold, and the final sample of the hole from
212.0 to 212.5 meters depth returned a gold value of 4.98 g/t gold. The hole was lost at this point due to poor drilling
conditions.

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Northern Zone

In the Northern Zone, exploration has defined a large (roughly 6 km x 6 km) area of silica to advanced argillic to
argillic alteration. Multiple large zones of vuggy to silicified, locally brecciated vuggy quartz, may represent multiple
feeders to the alteration system. Past sampling by Almaden in this area returned isolated gold values up to 11 g/t.
However, very little work was carried out at that time.
location of geophysical IP
line 85+500 (shown
below) and surface
samples up to 4.7 g/t gold

Rock samples collected by Comaplex from one of the vuggy silica core zones located in the eastern end of the zone
in July, 2003 returned gold values up to 1.2 g/t gold. A preliminary IP-R survey completed in this area outlined a
large, very high resistivity feature that extends to depth. Proximal low chargeability suggests oxidation of the system.
In January, 2005 Almaden and Comaplex staff have sampled one of several areas of outcrop of vuggy silica and
quartz-alunite acid sulphate alteration. Thirty-two rock chip samples were collected over a roughly 35 by 100 meter
area of vuggy silica. These samples averaged 0.62 g/t gold and ranged from 0.01 to 4.67 g/t gold. Eleven samples
returned gold grades above 0.50 g/t gold and six above 1.00 g/t gold.

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 IP SECTION 84500 NORTHERN ZONE:

Surface
samples up to
4.7 g/t gold

Large
resistivity high

Chargeability high

These results, which are interpreted to represent the gold content of a very high level in a well preserved high-
sulphidation epithermal system, are considered by Almaden to be very encouraging. The area sampled on surface is
spatially immediately above significant resistivity highs identified in a ground geophysical induced polarization (IP)
survey previously carried out by Comaplex. The IP survey also identified high chargeability responses associated
with the high resistivity responses at depth. This data suggests that resistive, vuggy silica material, similar to that
sampled in outcrop, is oxidized at surface and may extend to considerable depth.

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Footnotes and References:

1 Taken from White, N C and Hedenquist,J W, 1994, Epithermal environments and styles of mineralization; variations and their causes, and
guidelines for exploration, In: Epithermal gold mineralization of the Circum-Pacific; geology, geochemistry, origin and exploration; II.Siddeley-G
(editor), Journal of Geochemical Exploration. 36; 1-3, Pages 445-474. 1990.
2
Taken from Newmont Gold Corp.’s website, www.newmont.com.

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