Hi JimmyP,
You made some excellent points! You’re right about the chess game aspect. My thought is that when you study about porphyries, porphyry-skarn complexes and all of the adnexal structures that may or may not be temporally or spatially related to porphyries i.e. breccias, mantos, epi- and meso-vein systems, magma chambers, etc., I like to look at the common denominator, the magma chamber itself that gave rise to all of these structures. This way you can go from the knowns like the grades of the meso-veins to estimating the unknowns like the grades of an underlying never been drilled porphyry. The grades within any porphyry will never match any high-grade mesothermal vein because the ore will be disseminated into tiny veinlets and stockworks. A porphyry deposit will, however, often be amenable to bulk mining techniques which are often less expensive on a per ounce mined basis than an underground mine UNLESS the grades in the underground vein deposit are extremely high and the widths of the veins of decent dimensions.
When those ultra-hot hydrothermal fluids and gases reached the critical pressure level (the lithostatic pressure level) to blow a hole in the roof/carapace of the magma chamber they flowed upwards into a variety of areas into a variety of different host rock scenarios. If they filled up cracks or faults in the rock and then cooled and solidified, we call them “veins”. If they encountered porous limestone and cooled and solidified and “replaced” the limestone (a “replacement deposit”) we call them skarns. If they found porous rocks in horizontal layers and cooled and solidified, we call them “mantos” or “stratabound” deposits. After millions of years of various waves and phases of this activity and the whole process peters out, we’ll call the relict magma chamber and the area near its former roof a “porphyry”.
If you find a bunch of extremely high-grade veins, some making it to surface and others not, then you can kind of intuit that the gigantic magma chamber (the one underlying Yellowstone is 50-miles long) they came out of probably had some pretty good grades associated with it. There are magma chambers that are completely barren but they can’t “impregnate” the associated veins, breccias, skarns and mantos that they gave birth to with wonderful grades like those at the ADL. In regards to the porphyry areas, recall that hyperspectral satellite imaging survey done by C.S. Perez that showed a massive 7 km swath of “about a dozen” intrusives aligned in a SW to NE direction along the plateau and its southern downslope. Perez reported cited the presence of at least 2 porphyries and most assuredly a “world class deposit” containing hundreds of millions of tonnes of ore just within its top 200 meters. Perez had all of the work previously done at the ADL dating back to the 1950s. Perez didn’t know that there was an extremely high-grade mesothermal vein system associated with this 7 Km swath of intrusives.
I sense that a deal on the porphyry portions of the ADL could happen at any time or, for that matter, could be a ways in the distance. I put a porphyry deal with a major or a consortium of majors into the FREE MONEY category. My 4 kids already have a healthy base position in Medinah/Auryn. I’m telling them to wait for some FREE MONEY. Certain events will trigger a FREE MONEY environment for those prepared to act quickly and those that have done their due diligence. If we had a press release at “X” moment in time stating that a large deal was done on the porphyry structures with a major or consortium of majors, then the stocks are going to run. Period. How far I can’t tell you but if an investor is quick to act then there will be FREE MONEY available.
If Auryn were to suddenly announce that they had intersected “X” number of these “massive” veins they are referring to and that the average widths are “Y” meters and the average grade is “Z” gpt gold then there will be a time period in which FREE MONEY will be handed out to those that are prepared. The visibility of a pathway from zero production to being a “mid-sized producer” is right in front of our faces. From their due diligence, investors will know the triggers for FREE MONEY. Those that have followed the story and done their due diligence will have an advantage over those that haven’t. With Medinah, the length of the FREE MONEY period might be longer because many potential investors won’t have accounts open at a firm that will take Medinah orders. This has no doubt put a temporary damper on the share price of Medinah because some investors don’t want to go through the hassles of finding a broker/dealer willing to take a buy order for Medinah shares. “AUMC” will get these buy orders which will open up the gap in share price between Medinah and “AUMC” which will then close again as investors able to buy “MDMN” will note how much cheaper it is to buy a percentage point of the ADL through buying “MDMN” versus “AUMC”.
What I’m telling my kids is to get comfortable with the visibility of a pathway to producing a whole bunch of ounces of gold at a very low cost on a “per ounce” basis. Then just wait for the FREE MONEY sign to light up. We TMP forum participants that are all wrapped up with this story forget that 99.9% of the mining investment community have never heard of Medinah/Auryn.
In regards to Hochschild, I’m still scratching my head. I know for a fact that a premier underground vein miner like Hoch would love a seat at the table for developing the mesothermal veins. Sometimes, I wonder if their executing a JV on the LDM was done to get an inside view of what’s going on at the mesothermal front. Before signing the final draft of their agreement with Auryn, they spent some serious money on reviewing all of the core samples from the previous work done at the LDM. They apparently liked what they saw so they signed the definitive agreement. We don’t know what they did on site except for the fact that they did 6-line kilometers of IP/IR.
What the property owners want to prevent from happening is allowing a mid-tier like Hoch from simply “inventorying” the property, because they have an “option” on it which has value. The agreement typically states that Hoch would have to spend “X” amount per year during the option period. If Hoch didn’t have that amount in their budget, then they would have to provide all of the information they gathered from their studies and present it to Auryn. The information from an IP/IR study does not usually provide information of going through with the agreement or not. It typically results in information that would tell the geoscientists where to target any drilling efforts where the big bucks are spent. Apparently, the IP/IR survey did identify 3 targets worthy of spending the big bucks on. That’s the promising news. For some reason, apparently Hoch wasn’t willing to pay for and perform the drilling. Did this have to do with the fact that they’re getting into the “Rare earth” minerals business in a big way? I don’t know. Did Hoch feel that this money would be better spent on some of their development projects that were further along and closer to generating cash flow? I don’t know. Auryn took the information that Hoch generated and said that they were contemplating doing the drilling themselves and thereby keeping 100% ownership of the property. So, something got identified that was worthy of spending some serious bucks on but it does not appear that it will be Hoch’s bucks unless they’re technically in compliance with the terms of the deal and they’re just playing out the clock. I don’t recall a PR stating that they walked from the deal.
One theory might be that if a deal is struck on the Pegaso Nero porphyry projects then perhaps the LDM would be incorporated into that deal. Hoch may or may not want to be a party to that deal. At some point, there will be a master plan to attack all of the non-mesothermal vein aspects of the ADL including the LDM and the Pegaso Nero. It wouldn’t make a lot of sense for Hoch, an underground miner, to go nuts on the LDM in an underground fashion only to learn that the master plan decided to attack the LDM in a different fashion. If it appeared that the LDM property had a chance to be incorporated into any open pit configuration involving the Pegaso Nero then any underground activities by Hoch at the LDM might screw up that plan and the ECONOMICS of the overall plan. We’ve seen this before with Non-Auryn properties to the north of the ADL. SERNAGEOMIN doesn’t like open pit mines being built on top of existing underground adits and tunnels. It’s a safety issue. So, who the heck knows? Some serious cash flow from the mesothermal veins could easily cover drilling 3 holes at the LDM. This information then might be helpful in determining how to attack the Pegaso Nero.
